HBT Financial, Inc. Announces Fourth Quarter 2023 Financial Results
Quarterly Cash Dividend Increased to $0.19 per Share
*Fourth Quarter Highlights*· *Net income of **$18.4 million**, or **$0.58** per diluted share; return on average assets (ROAA) of **1.46%**; return on average stockholders' equity (ROAE) of **15.68%**; and return on average tangible common equity (ROATCE)*^*(1)** of **18.96%*
· *Adjusted net income*^*(1)** of **$19.3 million**; or **$0.60** per diluted share; adjusted ROAA*^*(1)** of **1.53%**; adjusted ROAE*^*(1)** of **16.38%**; and adjusted ROATCE*^*(1)** of **19.81%*
· *Asset quality remained strong with nonperforming assets to total assets of **0.17%*
· *Net interest margin of **3.93%** and net interest margin (tax-equivalent basis)*^*(1)** of **3.99%*
BLOOMINGTON, Ill., Jan. 24, 2024 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial” or “HBT”), the holding company for Heartland Bank and Trust Company, today reported net income of $18.4 million, or $0.58 diluted earnings per share, for the fourth quarter of 2023. This compares to net income of $19.7 million, or $0.62 diluted earnings per share, for the third quarter of 2023, and net income of $13.1 million, or $0.46 diluted earnings per share, for the fourth quarter of 2022.
J. Lance Carter, President and Chief Executive Officer of HBT Financial, said, “We had a very good fourth quarter to complete an excellent year. We continued to produce strong profitability with an adjusted ROAA^(1) of 1.53%, an adjusted ROATCE^(1) of 19.81% and adjusted diluted earnings per share^(1) of $0.60. We were able to improve liquidity and increase deposits, excluding brokered deposits, by 4.2% for the quarter by bringing the majority of our wealth management customers’ deposits onto our balance sheet. Even without our wealth management customers’ deposits, total deposits, excluding brokered deposits, increased by $29.4 million, or 0.7%. Loan growth remained solid at 1.8% for the quarter while we maintained strong credit quality with non-performing assets at only 0.17% of total assets. Although net interest margin (tax-equivalent basis)^(1) declined to 3.99% in the quarter, we believe that the pace of net interest margin decreases will moderate in the first quarter of 2024. With the recent drop in interest rates, our accumulated other comprehensive income (loss) increased by $21.3 million, which when coupled with strong earnings retention, drove a 9.3% increase in our tangible book value per share^(1). All capital metrics increased and can support continued organic growth or future acquisitions. We believe this quarter continues to demonstrate our ability to produce strong profitability results, maintain a solid balance sheet, and enhance our franchise value.”
____________________________________
[^(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
*Adjusted Net Income*
In addition to reporting GAAP results, the Company believes non-GAAP measures such as adjusted net income and adjusted earnings per share, which adjust for acquisition expenses, branch closure expenses, gains (losses) on sale of closed branch premises, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $19.3 million, or $0.60 adjusted diluted earnings per share, for the fourth quarter of 2023. This compares to adjusted net income of $20.3 million, or $0.63 adjusted diluted earnings per share, for the third quarter of 2023, and adjusted net income of $13.9 million, or $0.48 adjusted diluted earnings per share, for the fourth quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures).
*Cash Dividend*
On January 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.19 per share on the Company’s common stock (the “Dividend”). The Dividend is payable on February 13, 2024 to shareholders of record as of February 6, 2024. This represents an increase of $0.02 from the previous quarterly dividend of $0.17 per share.
Mr. Carter noted, “Our strong financial performance and balance sheet enable us to increase our quarterly dividend by $0.02 per share, or 11.8%, while maintaining sufficient capital to support the continued growth of the Company.”
*Net Interest Income and Net Interest Margin*
Net interest income for the fourth quarter of 2023 was $47.1 million, a decrease of 2.5% from $48.3 million for the third quarter of 2023. The decrease was primarily attributable to an increase in funding costs which were partially offset by higher yields on loans and a more favorable interest-earning asset mix.
Relative to the fourth quarter of 2022, net interest income increased 11.6% from $42.2 million. The increase was primarily attributable to the increase in average interest-earning assets following the Town and Country Financial Corporation (“Town and Country”) merger completed in the first quarter of 2023 and higher yields on interest-earning assets which were partially offset by an increase in funding costs.
Net interest margin for the fourth quarter of 2023 was 3.93%, compared to 4.07% for the third quarter of 2023, and net interest margin (tax-equivalent basis)^(1) for the fourth quarter of 2023 was 3.99% compared to 4.13% for the third quarter of 2023. The decrease was primarily attributable to higher funding costs with the cost of funds increasing to 1.26% for the fourth quarter of 2023, compared to 0.96% for the third quarter of 2023, partially offset by higher yields on loans and a more favorable interest-earning asset mix.
Relative to the fourth quarter of 2022, net interest margin decreased from 4.10%. This decrease was primarily attributable to higher funding costs.
____________________________________
[^(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
*Noninterest Income*
Noninterest income for the fourth quarter of 2023 was $9.2 million, a decrease of 3.0% from $9.5 million for the third quarter of 2023. The decrease was primarily attributable to a negative mortgage servicing rights fair value adjustment of $1.2 million during the fourth quarter of 2023, partially offset by the absence of $0.8 million of losses realized on the sale of debt securities during the third quarter of 2023. Additionally, the $0.5 million increase in wealth management fees was primarily due to an increase in farmland brokerage commissions.
Relative to the fourth quarter of 2022, noninterest income increased 16.7% from $7.9 million. The increase was primarily attributable to the Town and Country merger completed in the first quarter of 2023 which contributed to a $0.6 million increase in mortgage servicing income, a $0.4 million increase in wealth management fees, and a $0.1 million increase in card income.
*Noninterest Expense*
Noninterest expense for the fourth quarter of 2023 was $30.4 million, a 0.9% decrease from $30.7 million for the third quarter of 2023. The decrease was broad-based and the result of continued expense management discipline with a $0.5 million decrease in marketing expenses largely offset by a $0.4 million increase in other noninterest expense.
Relative to the fourth quarter of 2022, noninterest expense decreased 8.2% from $33.1 million, primarily attributable to the absence of $8.2 million of accruals related to settled legal matters previously disclosed and included in the fourth quarter of 2022 results, partially offset by the addition of Town and Country’s operations.
Acquisition-related expenses recognized are summarized below. No acquisition-related expenses were recognized subsequent to the second quarter of 2023, and we do not expect material acquisition-related expenses related to Town and Country in subsequent quarters.
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*PROVISION FOR CREDIT LOSSES* $ — $ — $ — $ 5,924 $ —
*NONINTEREST EXPENSE*
Salaries — — — 3,584 —
Furniture and equipment — — — 39 —
Data processing — — 304 2,031 304
Marketing and customer relations — — — 24 —
Loan collection and servicing — — — 125 —
Legal fees and other noninterest expense — — 326 1,964 788
*Total noninterest expense* — — 630 7,767 1,092
*Total acquisition-related expenses* $ — $ — $ 630 $ 13,691 $ 1,092
*Loan **Portfolio*
Total loans outstanding, before allowance for credit losses, were $3.40 billion at December 31, 2023, compared with $3.34 billion at September 30, 2023 and $2.62 billion at December 31, 2022. The $61.6 million increase from September 30, 2023 was primarily attributable to higher line usage in our commercial and industrial portfolio as well as one larger new $23.0 million funding in our multifamily portfolio, both of which were partially offset by a reduction in our commercial real estate – non-owner occupied portfolio due to a variety of payoffs from real estate sales. Higher line usage in our commercial and industrial portfolio was driven in part by the seasonal increase in grain elevator line balances as well as $13.2 million drawn on two customers’ lines which were funded shortly before and paid off shortly after year-end.
*Deposits*
Total deposits were $4.40 billion at December 31, 2023, compared with $4.20 billion at September 30, 2023 and $3.59 billion at December 31, 2022. The $203.4 million increase from September 30, 2023 was primarily attributable to bringing the majority of our wealth management customer deposits on balance sheet, which increased money market deposits by $144.0 million, and a $29.9 million increase in brokered deposits.
*Asset Quality*
Nonperforming loans totaled $7.9 million, or 0.23% of total loans, at December 31, 2023, compared with $6.7 million, or 0.20% of total loans, at September 30, 2023, and $2.2 million, or 0.08% of total loans, at December 31, 2022. Additionally, of the $7.9 million of nonperforming loans held as of December 31, 2023, $2.6 million is either wholly or partially guaranteed by the U.S. Government. The $1.2 million increase in nonperforming loans from September 30, 2023 was primarily attributable to one commercial real estate - non-owner occupied retail credit moved to nonaccrual, partially offset by a reduction in one-to-four family residential nonaccrual loans.
The Company recorded a provision for credit losses of $1.1 million for the fourth quarter of 2023. The provision for credit losses primarily reflects a $0.9 million increase in required reserves resulting from changes in economic and qualitative factors, a $0.6 million increase in required reserves driven by growth and changes in the loan portfolio, and a $0.4 million decrease in specific reserve.
The Company had net charge-offs of $0.5 million, or 0.06% of average loans on an annualized basis, for the fourth quarter of 2023, compared to net recoveries of $0.1 million, or 0.01% of average loans on an annualized basis, for the third quarter of 2023, and net recoveries of $0.9 million, or 0.14% of average loans on an annualized basis, for the fourth quarter of 2022.
The Company’s allowance for credit losses was 1.18% of total loans and 510% of nonperforming loans at December 31, 2023, compared with 1.16% of total loans and 582% of nonperforming loans at September 30, 2023. In addition, the allowance for credit losses on unfunded lending-related commitments totaled $3.8 million as of December 31, 2023, compared with $4.4 million as of September 30, 2023.
*Capital*
Tangible common equity to tangible assets^(1) increased to 8.19% as of December 31, 2023, from 7.64% as of September 30, 2023, and tangible book value per share^(1) increased by $1.10 to $12.90 as of December 31, 2023, when compared to September 30, 2023. These increases were primarily due to an increase in our accumulated other comprehensive income (loss) as a result of the recent drop in interest rates as well as strong earnings retention.
During the fourth quarter of 2023, the Company repurchased 78,312 shares of its common stock at a weighted average price of $17.94 under its stock repurchase program. The Company’s Board of Directors authorized a new stock repurchase program that took effect upon the expiration of the Company’s prior stock repurchase program on January 1, 2024. The new stock repurchase program will be in effect until January 1, 2025 and authorizes the Company to repurchase up to $15 million of its common stock.
____________________________________
[^(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
*January 2024 Bond **Sales*
In January 2024, the Company recognized $3.4 million of net losses on the sale of $66.8 million of municipal securities with the proceeds used to reduce wholesale funding sources. The book yield of the securities sold was 1.87% and the average life was 6.7 years.
*About HBT Financial, Inc.*
HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. HBT provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Illinois and Eastern Iowa through 67 full-service branches. As of December 31, 2023, HBT had total assets of $5.1 billion, total loans of $3.4 billion, and total deposits of $4.4 billion.
*Non-GAAP Financial Measures*
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, return on average tangible common equity, adjusted net income, adjusted earnings per share, adjusted return on average assets, adjusted return on average stockholders' equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the "Reconciliation of Non-GAAP Financial Measures" tables.
*Forward-Looking Statements*
Readers should note that in addition to the historical information contained herein, this press release contains, and future oral and written statements of the Company and its management may contain, "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or “should,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: (i) the strength of the local, state, national and international economies (including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the Israeli-Palestinian conflict and the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB (including the Company’s adoption of the current expected credit losses (“CECL”) methodology); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out and the recent and potential additional rate increases by the Federal Reserve); (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xix) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
*CONTACT:*
Peter Chapman
HBTIR@hbtbank.com
(309) 664-4556
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*As of or for the Three Months Ended* *Year Ended December 31,*
(dollars in thousands, except per share data) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
Interest and dividend income $ 61,411 $ 59,041 $ 44,948 $ 228,999 $ 153,054
Interest expense 14,327 10,762 2,765 37,927 7,180
Net interest income 47,084 48,279 42,183 191,072 145,874
Provision for credit losses 1,113 480 (653 ) 7,573 (706 )
Net interest income after provision for credit losses 45,971 47,799 42,836 183,499 146,580
Noninterest income 9,205 9,490 7,889 36,046 34,717
Noninterest expense 30,387 30,671 33,110 130,964 105,107
Income before income tax expense 24,789 26,618 17,615 88,581 76,190
Income tax expense 6,343 6,903 4,475 22,739 19,734
Net income $ 18,446 $ 19,715 $ 13,140 $ 65,842 $ 56,456
Earnings per share - Diluted $ 0.58 $ 0.62 $ 0.46 $ 2.07 $ 1.95
Adjusted net income ^(1) $ 19,272 $ 20,279 $ 13,886 $ 78,182 $ 55,805
Adjusted earnings per share - Diluted ^(1) 0.60 0.63 0.48 2.46 1.93
Book value per share $ 15.44 $ 14.36 $ 12.99
Tangible book value per share ^(1) 12.90 11.80 11.94
Shares of common stock outstanding 31,695,828 31,774,140 28,752,626
Weighted average shares of common stock outstanding 31,708,381 31,829,250 28,752,626 31,626,308 28,853,697
*SUMMARY RATIOS*
Net interest margin * 3.93 % 4.07 % 4.10 % 4.09 % 3.54 %
Net interest margin (tax-equivalent basis) * ^(1)(2) 3.99 4.13 4.17 4.15 3.60
Efficiency ratio 52.70 % 51.85 % 65.85 % 56.49 % 57.72 %
Efficiency ratio (tax-equivalent basis) ^(1)(2) 52.09 51.25 64.94 55.81 56.93
Loan to deposit ratio 77.35 % 79.63 % 73.05 %
Return on average assets * 1.46 % 1.58 % 1.23 % 1.34 % 1.32 %
Return on average stockholders' equity * 15.68 17.02 14.17 14.60 14.73
Return on average tangible common equity * ^(1) 18.96 20.70 15.45 17.63 16.02
Adjusted return on average assets * ^(1) 1.53 % 1.62 % 1.30 % 1.59 % 1.31 %
Adjusted return on average stockholders' equity * ^(1) 16.38 17.51 14.98 17.34 14.56
Adjusted return on average tangible common equity * ^(1) 19.81 21.29 16.33 20.94 15.83
*CAPITAL*
Total capital to risk-weighted assets 15.33 % 15.09 % 16.27 %
Tier 1 capital to risk-weighted assets 13.42 13.18 14.23
Common equity tier 1 capital ratio 12.12 11.88 13.07
Tier 1 leverage ratio 10.49 10.34 10.48
Total stockholders' equity to total assets 9.65 9.14 8.72
Tangible common equity to tangible assets ^(1) 8.19 7.64 8.06
*ASSET QUALITY*
Net charge-offs (recoveries) to average loans 0.06 % (0.01)% (0.14)% 0.01 % (0.08)%
Allowance for credit losses to loans, before allowance for credit losses 1.18 1.16 0.97
Nonperforming loans to loans, before allowance for credit losses 0.23 0.20 0.08
Nonperforming assets to total assets 0.17 0.16 0.12
____________________________________
* Annualized measure.
[^(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
[^(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.]
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Consolidated Statements of Income*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands, except per share data) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*INTEREST AND DIVIDEND INCOME*
Loans, including fees:
Taxable $ 52,060 $ 49,640 $ 35,839 $ 191,008 $ 120,343
Federally tax exempt 1,125 1,072 952 4,189 3,135
Securities:
Taxable 6,377 6,451 6,421 25,962 23,368
Federally tax exempt 888 978 1,184 4,225 4,569
Interest-bearing deposits in bank 786 714 504 3,020 1,541
Other interest and dividend income 175 186 48 595 98
*Total interest and dividend income* 61,411 59,041 44,948 228,999 153,054
*INTEREST EXPENSE*
Deposits 11,227 7,211 849 25,135 2,511
Securities sold under agreements to repurchase 148 35 10 255 36
Borrowings 1,534 2,108 880 7,128 967
Subordinated notes 470 470 470 1,879 1,879
Junior subordinated debentures issued to capital trusts 948 938 556 3,530 1,787
*Total interest expense* 14,327 10,762 2,765 37,927 7,180
*Net interest income* 47,084 48,279 42,183 191,072 145,874
*PROVISION FOR CREDIT LOSSES* 1,113 480 (653 ) 7,573 (706 )
*Net interest income after provision for credit losses* 45,971 47,799 42,836 183,499 146,580
*NONINTEREST INCOME*
Card income 2,717 2,763 2,642 11,043 10,329
Wealth management fees 2,885 2,381 2,485 9,883 9,155
Service charges on deposit accounts 2,016 2,040 1,701 7,846 7,072
Mortgage servicing 1,156 1,169 593 4,678 2,609
Mortgage servicing rights fair value adjustment (1,155 ) 23 (293 ) (1,615 ) 2,153
Gains on sale of mortgage loans 401 476 194 1,526 1,461
Realized gains (losses) on sales of securities — (813 ) — (1,820 ) —
Unrealized gains (losses) on equity securities 221 (46 ) 33 160 (414 )
Gains (losses) on foreclosed assets 58 550 (122 ) 501 (314 )
Gains (losses) on other assets 5 52 17 166 136
Income on bank owned life insurance 158 153 42 573 164
Other noninterest income 743 742 597 3,105 2,366
*Total noninterest income* 9,205 9,490 7,889 36,046 34,717
*NONINTEREST EXPENSE*
Salaries 15,738 15,644 13,278 67,453 51,767
Employee benefits 2,379 2,616 2,126 10,037 8,325
Occupancy of bank premises 2,458 2,573 1,893 9,918 7,673
Furniture and equipment 655 667 633 2,790 2,476
Data processing 2,565 2,581 2,167 12,352 7,441
Marketing and customer relations 1,169 1,679 867 5,043 3,803
Amortization of intangible assets 720 720 140 2,670 873
FDIC insurance 575 512 276 2,280 1,164
Loan collection and servicing 431 345 278 1,402 1,049
Foreclosed assets 17 76 33 251 293
Other noninterest expense 3,680 3,258 11,419 16,768 20,243
*Total noninterest expense* 30,387 30,671 33,110 130,964 105,107
*INCOME BEFORE INCOME TAX EXPENSE* 24,789 26,618 17,615 88,581 76,190
*INCOME TAX EXPENSE* 6,343 6,903 4,475 22,739 19,734
*NET INCOME* $ 18,446 $ 19,715 $ 13,140 $ 65,842 $ 56,456
*EARNINGS PER SHARE - BASIC* $ 0.58 $ 0.62 $ 0.46 $ 2.08 $ 1.95
*EARNINGS PER SHARE - DILUTED* $ 0.58 $ 0.62 $ 0.46 $ 2.07 $ 1.95
*WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING* 31,708,381 31,829,250 28,752,626 31,626,308 28,853,697
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Consolidated Balance Sheets*
(dollars in thousands) *December 31, 2023* *September 30, 2023* *December 31, 2022*
*ASSETS*
Cash and due from banks $ 26,256 $ 24,757 $ 18,970
Interest-bearing deposits with banks 114,996 87,156 95,189
Cash and cash equivalents 141,252 111,913 114,159
Interest-bearing time deposits with banks 509 500 —
Debt securities available-for-sale, at fair value 759,461 753,163 843,524
Debt securities held-to-maturity 521,439 527,144 541,600
Equity securities with readily determinable fair value 3,360 3,106 3,029
Equity securities with no readily determinable fair value 2,505 2,300 1,977
Restricted stock, at cost 7,160 11,165 7,965
Loans held for sale 2,318 3,563 615
Loans, before allowance for credit losses 3,404,417 3,342,786 2,620,253
Allowance for credit losses (40,048 ) (38,863 ) (25,333 )
Loans, net of allowance for credit losses 3,364,369 3,303,923 2,594,920
Bank owned life insurance 23,905 23,747 7,557
Bank premises and equipment, net 65,150 64,713 50,469
Bank premises held for sale — 35 235
Foreclosed assets 852 1,519 3,030
Goodwill 59,820 59,820 29,322
Intangible assets, net 20,682 21,402 1,070
Mortgage servicing rights, at fair value 19,001 20,156 10,147
Investments in unconsolidated subsidiaries 1,614 1,614 1,165
Accrued interest receivable 24,534 23,447 19,506
Other assets 55,239 58,538 56,444
*Total assets* $ 5,073,170 $ 4,991,768 $ 4,286,734
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Deposits:
Noninterest-bearing $ 1,072,407 $ 1,086,877 $ 994,954
Interest-bearing 3,329,030 3,111,191 2,592,070
Total deposits 4,401,437 4,198,068 3,587,024
Securities sold under agreements to repurchase 42,442 28,900 43,081
Federal Home Loan Bank advances 12,623 177,650 160,000
Subordinated notes 39,474 39,454 39,395
Junior subordinated debentures issued to capital trusts 52,789 52,774 37,780
Other liabilities 34,909 38,671 45,822
*Total liabilities* 4,583,674 4,535,517 3,913,102
*Stockholders' Equity*
Common stock 327 327 293
Surplus 295,877 295,483 222,783
Retained earnings 269,051 256,050 232,004
Accumulated other comprehensive income (loss) (57,163 ) (78,432 ) (71,759 )
Treasury stock at cost (18,596 ) (17,177 ) (9,689 )
*Total stockholders’ equity* 489,496 456,251 373,632
*Total liabilities and stockholders’ equity* $ 5,073,170 $ 4,991,768 $ 4,286,734
*SHARES OF COMMON STOCK OUTSTANDING* 31,695,828 31,774,140 28,752,626
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
(dollars in thousands) *December 31, 2023* *September 30, 2023* *December 31, 2022*
*LOANS*
Commercial and industrial $ 427,800 $ 386,933 $ 266,757
Commercial real estate - owner occupied 295,842 297,242 218,503
Commercial real estate - non-owner occupied 880,681 901,929 713,202
Construction and land development 363,983 371,158 360,824
Multi-family 417,923 388,742 287,865
One-to-four family residential 491,508 488,655 338,253
Agricultural and farmland 287,294 275,239 237,746
Municipal, consumer, and other 239,386 232,888 197,103
*Total loans* $ 3,404,417 $ 3,342,786 $ 2,620,253
(dollars in thousands) *December 31, 2023* *September 30, 2023* *December 31, 2022*
*DEPOSITS*
Noninterest-bearing deposits $ 1,072,407 $ 1,086,877 $ 994,954
Interest-bearing deposits:
Interest-bearing demand 1,145,092 1,134,721 1,139,150
Money market 803,381 673,780 555,425
Savings 608,424 623,083 634,527
Time 627,253 564,634 262,968
Brokered 144,880 114,973 —
*Total interest-bearing deposits* 3,329,030 3,111,191 2,592,070
*Total deposits* $ 4,401,437 $ 4,198,068 $ 3,587,024
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Three Months Ended* *December 31, 2023* *September 30, 2023* *December 31, 2022*
(dollars in thousands) *Average Balance* *Interest* *Yield/Cost ** *Average Balance* *Interest* *Yield/Cost ** *Average Balance* *Interest* *Yield/Cost **
*ASSETS*
Loans $ 3,374,451 $ 53,185 6.25 % $ 3,296,703 $ 50,712 6.10 % $ 2,600,746 $ 36,791 5.61 %
Securities 1,282,773 7,265 2.25 1,324,686 7,429 2.22 1,396,401 7,605 2.16
Deposits with banks 84,021 786 3.71 77,595 714 3.65 76,507 504 2.61
Other 7,505 175 9.23 9,347 186 7.90 5,607 48 3.37
Total interest-earning assets 4,748,750 $ 61,411 5.13 % 4,708,331 $ 59,041 4.97 % 4,079,261 $ 44,948 4.37 %
Allowance for credit losses (38,844 ) (38,317 ) (25,404 )
Noninterest-earning assets 292,543 294,818 188,942
*Total assets* $ 5,002,449 $ 4,964,832 $ 4,242,799
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Interest-bearing deposits:
Interest-bearing demand $ 1,140,438 $ 1,228 0.43 % $ 1,160,654 $ 761 0.26 % $ 1,125,877 $ 177 0.06 %
Money market 684,197 2,885 1.67 682,772 2,026 1.18 572,718 379 0.26
Savings 610,767 417 0.27 639,384 249 0.15 640,668 53 0.03
Time 599,293 4,773 3.16 519,683 3,275 2.50 266,117 240 0.36
Brokered 140,963 1,924 5.42 66,776 900 5.34 — — —
Total interest-bearing deposits 3,175,658 11,227 1.40 3,069,269 7,211 0.93 2,605,380 849 0.13
Securities sold under agreements to repurchase 34,282 148 1.71 33,807 35 0.41 51,703 10 0.08
Borrowings 114,220 1,534 5.33 157,908 2,108 5.30 92,120 880 3.79
Subordinated notes 39,464 470 4.72 39,444 470 4.72 39,384 470 4.73
Junior subordinated debentures issued to capital trusts 52,782 948 7.13 52,767 938 7.05 37,770 556 5.84
Total interest-bearing liabilities 3,416,406 $ 14,327 1.66 % 3,353,195 $ 10,762 1.27 % 2,826,357 $ 2,765 0.39 %
Noninterest-bearing deposits 1,081,795 1,105,472 1,023,355
Noninterest-bearing liabilities 37,440 46,564 25,220
*Total liabilities* 4,535,641 4,505,231 3,874,932
*Stockholders' Equity* 466,808 459,601 367,867
*Total liabilities and stockholders’ equity* $ 5,002,449 $ 4,964,832 $ 4,242,799
Net interest income/Net interest margin^(1) $ 47,084 3.93 % $ 48,279 4.07 % $ 42,183 4.10 %
Tax-equivalent adjustment^(2) 666 0.06 675 0.06 698 0.07
Net interest income (tax-equivalent basis)/
Net interest margin (tax-equivalent basis)^(2) (3) $ 47,750 3.99 % $ 48,954 4.13 % $ 42,881 4.17 %
Net interest rate spread^(4) 3.47 % 3.70 % 3.98 %
Net interest-earning assets^(5) $ 1,332,344 $ 1,355,136 $ 1,252,904
Ratio of interest-earning assets to interest-bearing liabilities 1.39 1.40 1.44
Cost of total deposits 1.05 % 0.69 % 0.09 %
Cost of funds 1.26 0.96 0.28
____________________________________
* Annualized measure.
[^(1) Net interest margin represents net interest income divided by average total interest-earning assets.]
[^(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.]
[^(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
[^(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.]
[^(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.]
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Year Ended* *December 31, 2023* *December 31, 2022*
(dollars in thousands) *Average Balance* *Interest* *Yield/Cost* *Average Balance* *Interest* *Yield/Cost*
*ASSETS*
Loans $ 3,231,736 $ 195,197 6.04 % $ 2,514,549 $ 123,478 4.91 %
Securities 1,350,528 30,187 2.24 1,403,016 27,937 1.99
Deposits with banks 84,544 3,020 3.57 197,030 1,541 0.78
Other 8,217 595 7.24 3,529 98 2.77
Total interest-earning assets 4,675,025 $ 228,999 4.90 % 4,118,124 $ 153,054 3.72 %
Allowance for credit losses (37,504 ) (24,703 )
Noninterest-earning assets 290,383 176,452
*Total assets* $ 4,927,904 $ 4,269,873
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*Liabilities*
Interest-bearing deposits:
Interest-bearing demand $ 1,188,680 $ 3,130 0.26 % $ 1,141,402 $ 607 0.05 %
Money market 669,118 7,352 1.10 582,514 813 0.14
Savings 661,424 1,033 0.16 650,385 208 0.03
Time 481,466 10,784 2.24 283,232 883 0.31
Brokered 52,724 2,836 5.38 — — —
Total interest-bearing deposits 3,053,412 25,135 0.82 2,657,533 2,511 0.09
Securities sold under agreements to repurchase 35,450 255 0.72 51,554 36 0.07
Borrowings 139,817 7,128 5.10 26,468 967 3.65
Subordinated notes 39,434 1,879 4.76 39,355 1,879 4.77
Junior subordinated debentures issued to capital trusts 51,489 3,530 6.86 37,746 1,787 4.73
Total interest-bearing liabilities 3,319,602 $ 37,927 1.14 % 2,812,656 $ 7,180 0.26 %
Noninterest-bearing deposits 1,113,300 1,051,187
Noninterest-bearing liabilities 44,074 22,724
*Total liabilities* 4,476,976 3,886,567
*Stockholders' Equity* 450,928 383,306
*Total liabilities and stockholders’ equity* $ 4,927,904 4,269,873
Net interest income/Net interest margin^(1) $ 191,072 4.09 % $ 145,874 3.54 %
Tax-equivalent adjustment^(2) 2,758 0.06 2,499 0.06
Net interest income (tax-equivalent basis)/
Net interest margin (tax-equivalent basis)^(2) (3) $ 193,830 4.15 % $ 148,373 3.60 %
Net interest rate spread^(4) 3.76 % 3.46 %
Net interest-earning assets^(5) $ 1,355,423 $ 1,305,468
Ratio of interest-earning assets to interest-bearing liabilities 1.41 1.46
Cost of total deposits 0.60 % 0.07 %
Cost of funds 0.86 0.19
____________________________________
[^(1) Net interest margin represents net interest income divided by average total interest-earning assets.]
[^(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.]
[^(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.]
[^(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.]
[^(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.]
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
(dollars in thousands) *December 31, 2023* *September 30, 2023* *December 31, 2022*
*NONPERFORMING ASSETS*
Nonaccrual $ 7,820 $ 6,678 $ 2,155
Past due 90 days or more, still accruing^(1) 37 — 1
*Total nonperforming loans* 7,857 6,678 2,156
Foreclosed assets 852 1,519 3,030
*Total nonperforming assets* $ 8,709 $ 8,197 $ 5,186
Nonperforming loans that are wholly or partially guaranteed by the U.S. Government $ 2,641 $ 1,968 $ 133
Allowance for credit losses $ 40,048 $ 38,863 $ 25,333
Loans, before allowance for credit losses 3,404,417 3,342,786 2,620,253
*CREDIT QUALITY RATIOS*
Allowance for credit losses to loans, before allowance for credit losses 1.18 % 1.16 % 0.97 %
Allowance for credit losses to nonaccrual loans 512.12 581.96 1,175.55
Allowance for credit losses to nonperforming loans 509.71 581.96 1,175.00
Nonaccrual loans to loans, before allowance for credit losses 0.23 0.20 0.08
Nonperforming loans to loans, before allowance for credit losses 0.23 0.20 0.08
Nonperforming assets to total assets 0.17 0.16 0.12
Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets 0.26 0.25 0.20
____________________________________
[^(1) Prior to 2023, excludes loans acquired with deteriorated credit quality that are past due 90 or more days and accruing. Such loans totaled $145 thousand as of December 31, 2022.]
*HBT Financial, Inc.*
*Unaudited Consolidated Financial Summary*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*ALLOWANCE FOR CREDIT LOSSES*
Beginning balance $ 38,863 $ 37,814 $ 25,060 $ 25,333 $ 23,936
Adoption of ASC 326 — — — 6,983 —
PCD allowance established in acquisition — — — 1,247 —
Provision for credit losses 1,661 983 (653 ) 6,665 (706 )
Charge-offs (626 ) (412 ) (169 ) (1,359 ) (684 )
Recoveries 150 478 1,095 1,179 2,787
*Ending balance* $ 40,048 $ 38,863 $ 25,333 $ 40,048 $ 25,333
Net charge-offs (recoveries) $ 476 $ (66 ) $ (926 ) $ 180 $ (2,103 )
Average loans 3,374,451 3,296,703 2,600,746 3,231,736 2,514,549
Net charge-offs (recoveries) to average loans * 0.06 % (0.01)% (0.14)% 0.01 % (0.08)%
____________________________________
* Annualized measure. *Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*PROVISION FOR CREDIT LOSSES*
Loans ^(1) $ 1,661 $ 983 $ (653 ) $ 6,665 $ (706 )
Unfunded lending-related commitments ^(1) (548 ) 297 — 908 —
Debt securities — (800 ) — — —
*Total provision for credit losses* $ 1,113 $ 480 $ (653 ) $ 7,573 $ (706 )
____________________________________
[^(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger during the first quarter of 2023.]
*Reconciliation of Non-GAAP Financial Measures –*
*Adjusted Net Income and Adjusted Return on Average Assets*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
Net income $ 18,446 $ 19,715 $ 13,140 $ 65,842 $ 56,456
Adjustments:
Acquisition expenses ^(1) — — (630 ) (13,691 ) (1,092 )
Gains (losses) on sales of closed branch premises — — — 75 141
Realized gains (losses) on sales of securities — (813 ) — (1,820 ) —
Mortgage servicing rights fair value adjustment (1,155 ) 23 (293 ) (1,615 ) 2,153
Total adjustments (1,155 ) (790 ) (923 ) (17,051 ) 1,202
Tax effect of adjustments 329 226 177 4,711 (551 )
Total adjustments after tax effect (826 ) (564 ) (746 ) (12,340 ) 651
Adjusted net income $ 19,272 $ 20,279 $ 13,886 $ 78,182 $ 55,805
Average assets $ 5,002,449 $ 4,964,832 $ 4,242,799 $ 4,927,904 $ 4,269,873
Return on average assets * 1.46 % 1.58 % 1.23 % 1.34 % 1.32 %
Adjusted return on average assets * 1.53 1.62 1.30 1.59 1.31
____________________________________
* Annualized measure.
[^(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger during the first quarter of 2023.]
*Reconciliation of Non-GAAP Financial Measures – *
*Adjusted Earnings Per Share*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands, except per share amounts) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*Numerator:*
Net income $ 18,446 $ 19,715 $ 13,140 $ 65,842 $ 56,456
Earnings allocated to participating securities ^(1) (10 ) (10 ) (15 ) (36 ) (66 )
Numerator for earnings per share - basic and diluted $ 18,436 $ 19,705 $ 13,125 $ 65,806 $ 56,390
Adjusted net income $ 19,272 $ 20,279 $ 13,886 $ 78,182 $ 55,805
Earnings allocated to participating securities ^(1) (9 ) (10 ) (16 ) (42 ) (65 )
Numerator for adjusted earnings per share - basic and diluted $ 19,263 $ 20,269 $ 13,870 $ 78,140 $ 55,740
*Denominator:*
Weighted average common shares outstanding 31,708,381 31,829,250 28,752,626 31,626,308 28,853,697
Dilutive effect of outstanding restricted stock units 139,332 137,187 91,905 111,839 65,619
Weighted average common shares outstanding, including all dilutive potential shares 31,847,713 31,966,437 28,844,531 31,738,147 28,919,316
*Earnings per share - Basic* $ 0.58 $ 0.62 $ 0.46 $ 2.08 $ 1.95
*Earnings per share - Diluted* $ 0.58 $ 0.62 $ 0.46 $ 2.07 $ 1.95
*Adjusted earnings per share - Basic* $ 0.61 $ 0.64 $ 0.48 $ 2.47 $ 1.93
*Adjusted earnings per share - Diluted* $ 0.60 $ 0.63 $ 0.48 $ 2.46 $ 1.93
____________________________________
[^(1) The Company has granted certain restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.]
*Reconciliation of Non-GAAP Financial Measures – *
*Net Interest Income and Net Interest Margin (Tax-equivalent Basis)*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*Net interest income (tax-equivalent basis)*
Net interest income $ 47,084 $ 48,279 $ 42,183 $ 191,072 $ 145,874
Tax-equivalent adjustment ^(1) 666 675 698 2,758 2,499
Net interest income (tax-equivalent basis) ^(1) $ 47,750 $ 48,954 $ 42,881 $ 193,830 $ 148,373
*Net interest margin (tax-equivalent basis)*
Net interest margin * 3.93 % 4.07 % 4.10 % 4.09 % 3.54 %
Tax-equivalent adjustment * ^(1) 0.06 0.06 0.07 0.06 0.06
Net interest margin (tax-equivalent basis) * ^(1) 3.99 % 4.13 % 4.17 % 4.15 % 3.60 %
Average interest-earning assets $ 4,748,750 $ 4,708,331 $ 4,079,261 $ 4,675,025 $ 4,118,124
____________________________________
* Annualized measure.
[^(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.]
*Reconciliation of Non-GAAP Financial Measures – *
*Efficiency Ratio (Tax-equivalent Basis)*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*Efficiency ratio (tax-equivalent basis)*
Total noninterest expense $ 30,387 $ 30,671 $ 33,110 $ 130,964 $ 105,107
Less: amortization of intangible assets 720 720 140 2,670 873
*Noninterest expense excluding amortization of intangible assets* $ 29,667 $ 29,951 $ 32,970 $ 128,294 $ 104,234
*Net interest income* $ 47,084 $ 48,279 $ 42,183 $ 191,072 $ 145,874
Total noninterest income 9,205 9,490 7,889 36,046 34,717
*Operating revenue* 56,289 57,769 50,072 227,118 180,591
Tax-equivalent adjustment ^(1) 666 675 698 2,758 2,499
*Operating revenue (tax-equivalent basis) *^*(1)* $ 56,955 $ 58,444 $ 50,770 $ 229,876 $ 183,090
Efficiency ratio 52.70 % 51.85 % 65.85 % 56.49 % 57.72 %
Efficiency ratio (tax-equivalent basis) ^(1) 52.09 51.25 64.94 55.81 56.93
____________________________________
[^(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.]
*Reconciliation of Non-GAAP Financial Measures – *
*Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share*
(dollars in thousands, except per share data) *December 31, 2023* *September 30, 2023* *December 31, 2022*
*Tangible Common Equity*
Total stockholders' equity $ 489,496 $ 456,251 $ 373,632
Less: Goodwill 59,820 59,820 29,322
Less: Intangible assets, net 20,682 21,402 1,070
*Tangible common equity* $ 408,994 $ 375,029 $ 343,240
*Tangible Assets*
Total assets $ 5,073,170 $ 4,991,768 $ 4,286,734
Less: Goodwill 59,820 59,820 29,322
Less: Intangible assets, net 20,682 21,402 1,070
*Tangible assets* $ 4,992,668 $ 4,910,546 $ 4,256,342
Total stockholders' equity to total assets 9.65 % 9.14 % 8.72 %
Tangible common equity to tangible assets 8.19 7.64 8.06
Shares of common stock outstanding 31,695,828 31,774,140 28,752,626
Book value per share $ 15.44 $ 14.36 $ 12.99
Tangible book value per share 12.90 11.80 11.94
*Reconciliation of Non-GAAP Financial Measures – *
*Return on Average Tangible Common Equity, *
*Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity*
*Three Months Ended* *Year Ended December 31,*
(dollars in thousands) *December 31,*
*2023* *September 30,*
*2023* *December 31,*
*2022* *2023* *2022*
*Average Tangible Common Equity*
Total stockholders' equity $ 466,808 $ 459,601 $ 367,867 $ 450,928 $ 383,306
Less: Goodwill 59,820 59,875 29,322 57,266 29,322
Less: Intangible assets, net 21,060 21,793 1,134 20,272 1,480
*Average tangible common equity* $ 385,928 $ 377,933 $ 337,411 $ 373,390 $ 352,504
Net income $ 18,446 $ 19,715 $ 13,140 $ 65,842 $ 56,456
Adjusted net income 19,272 20,279 13,886 78,182 55,805
Return on average stockholders' equity * 15.68 % 17.02 % 14.17 % 14.60 % 14.73 %
Return on average tangible common equity * 18.96 20.70 15.45 17.63 16.02
Adjusted return on average stockholders' equity * 16.38 % 17.51 % 14.98 % 17.34 % 14.56 %
Adjusted return on average tangible common equity * 19.81 21.29 16.33 20.94 15.83
____________________________________
* Annualized measure.