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CST: 22/10/2020 04:15:57   

HBT Financial, Inc. Announces Third Quarter 2019 Financial Results

350 Days ago

Third Quarter Highlights

  • Net income of $17.4 million; Return on average assets (ROAA) of 2.18%; return on average stockholders' equity (ROAE) of 20.00%; and return on average tangible common equity (ROATCE) (1) of 21.76%

  • C Corp equivalent net income of $13.1 million; C Corp equivalent ROAA of 1.64%; C Corp equivalent ROAE of 15.05%; and C Corp equivalent ROATCE (1) of 16.37%

  • Adjusted C Corp equivalent net income (1) of $14.3 million; adjusted C Corp equivalent ROAA (1) of 1.79%; adjusted C Corp equivalent ROAE (1) of 16.45%; and adjusted C Corp equivalent ROATCE (1) of 17.90%

  • Initial public offering priced on October 10, 2019

                                                       

(1)   See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below for a discussion of non-GAAP financial measures and reconciliations to GAAP financial measures.

BLOOMINGTON, Ill., Nov. 06, 2019 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company and State Bank of Lincoln, today reported net income of $17.4 million, or $0.97 diluted earnings per share, for the third quarter of 2019.  This compares to net income of $14.6 million, or $0.81 diluted earnings per share, for the second quarter of 2019, and net income of $17.6 million, or $0.98 diluted earnings per share, for the third quarter of 2018.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “Our third quarter results reflect continued execution on our strategy of prudent growth, disciplined expense management, and strong asset quality.  This formula continues to produce a superior level of profitability.  We are very pleased to have completed our initial public offering.  Becoming a public company is an important next chapter in our history, but our focus remains squarely on understanding our clients’ needs and delivering the products and services that help them achieve their financial goals.  By remaining consistent with our core values, we believe that we will continue to enhance the value of our franchise over the long term.”

C Corp Equivalent Net Income and Adjusted C Corp Equivalent Net Income

The Company has historically operated as an S Corporation for U.S. federal and state income tax purposes.  Following the completion of the initial public offering, the Company will be treated as a C Corporation (“C Corp”) for federal and state income tax purposes.  For comparison, the Company reports its C Corp equivalent financial results, which does not reflect the additional shares issued in the initial public offering (the “IPO”) for periods prior to the IPO.

For the third quarter of 2019, the Company reported C Corp equivalent net income of $13.1 million, or $0.73 diluted earnings per share.  This compares to C Corp equivalent net income of $11.1 million, or $0.62 diluted earnings per share, for the second quarter of 2019, and C Corp equivalent net income of $13.2 million, or $0.73 diluted earnings per share, for the third quarter of 2018.

In addition to reporting C Corp equivalent results, the Company believes adjusted C Corp equivalent results, which adjust for mortgage servicing right fair value adjustments, gains (losses) on sales of securities, and certain non-recurring items, provide investors with additional insight into its operational performance. The Company reported adjusted C Corp equivalent net income of $14.3 million, or $0.80 diluted earnings per share, for the third quarter of 2019.  This compares to adjusted C Corp equivalent net income of $14.3 million, or $0.79 diluted earnings per share, for the second quarter of 2019, and adjusted C Corp equivalent net income of $13.1 million, or $0.73 diluted earnings per share, for the third quarter of 2018 (see "Reconciliation of GAAP to Non-GAAP Financial Measures" tables).

Net Interest Income

Net interest income for the third quarter of 2019 was $33.1 million, a decrease of 2.3% from $33.9 million for the second quarter of 2019. The decrease was primarily attributable to a decline in net interest margin.

Relative to the third quarter of 2018, net interest income increased $0.5 million, or 1.7%.  The increase was primarily attributable to a higher net interest margin.

Net Interest Margin

Net interest margin for the third quarter of 2019 was 4.31%, compared to 4.36% for the second quarter of 2019.  The decrease was primarily attributable to a decline in average loan yields.

Relative to the third quarter of 2018, net interest margin increased from 4.22%. The increase was primarily attributable to higher loan and securities yields.

The Federal Open Market Committee lowered Federal Funds Target rates for the first time in 11 years on July 31, 2019 and then again in September 2019 and October 2019, for a combined decrease of 75 basis points which we expect to continue to put downward pressure on our net interest margin.

Noninterest Income

Noninterest income for the third quarter of 2019 was $7.6 million, an increase of 3.2% from $7.3 million for the second quarter of 2019.  The growth was primarily attributable to increases in service charges on deposit accounts, wealth management fees, and gain on sale of mortgage loans. Partially offsetting these increases were lower gains on foreclosed and other assets and modest securities losses.

In the third quarter of 2019, the Company recorded a fair value adjustment to mortgage servicing rights that negatively impacted noninterest income by $860,000, compared to a fair value adjustment that negatively impacted noninterest income by $1.1 million in the second quarter of 2019.

Relative to the third quarter of 2018, noninterest income decreased 9.8% from $8.4 million.  The decline was attributable to a larger negative fair value adjustment to mortgage servicing rights in the third quarter of 2019, the loss of revenue from title insurance activities, and unfavorable market value adjustments on equity securities between the two quarters.

Noninterest Expense

Noninterest expense for the third quarter of 2019 was $22.3 million, compared with $24.6 million for the second quarter of 2019.  The decrease was primarily attributable to lower employee benefits expense, as second quarter of 2019 results included a $3.3 million charge associated with the termination of the supplemental executive retirement plan (SERP) compared to the third quarter of 2019 which included a charge of $0.8 million associated with the termination of the SERP.

Relative to the third quarter of 2018, noninterest expense increased 1.7% from $21.9 million. The increase was primarily due to a $0.8 million charge during the third quarter of 2019 associated with the termination of the SERP which was not present during the third quarter of 2018.

Loan Portfolio

Total gross loans outstanding were $2.17 billion at September 30, 2019, compared with $2.20 billion at June 30, 2019 and $2.14 billion at September 30, 2018.  The $32.1 million decline in loans from June 30, 2019 was primarily due to the following items:

  • A $26.0 million decrease in construction and land development balances resulting from the payoff of a number of large construction loans following the completion and sale of the projects by borrowers.  Total outstanding commitments for construction and land development loans were approximately the same at both period ends.
  • A $11.7 million decrease in balances on lines of credit to grain elevator customers, which is a typical seasonal decline in the third quarter.
  • $8.3 million in payoffs and paydowns of non-performing loans during the quarter.

Deposits

Total deposits were $2.70 billion at September 30, 2019, compared with $2.77 billion at June 30, 2019, and $2.74 billion at September 30, 2018.  The $69.7 million decrease in total deposits from June 30, 2019 was primarily due to the following items:

  • A $30.3 million decrease in time deposits, as the Company continues to deemphasize higher cost deposit categories.
  • A planned decrease of $22.6 million in one higher priced interest-bearing demand account.

Asset Quality

Nonperforming loans totaled $19.1 million, or 0.88% of total loans, at September 30, 2019, compared with $25.1 million, or 1.14% of total loans, at June 30, 2019, and $21.4 million, or 1.00% of total loans, at September 30, 2018.

Net charge-offs for the third quarter of 2019 were $0.5 million, or 0.08% of average loans on an annualized basis.

The Company recorded a provision for loan losses of $0.7 million for the third quarter of 2019, which was primarily driven by the level of net charge-offs in the quarter.  The Company’s allowance for loan losses was 1.05% of total loans and 119.34% of nonperforming loans at September 30, 2019, compared with 1.02% of total loans and 89.98% of nonperforming loans at June 30, 2019.

Capital

At September 30, 2019, the Company exceeded all regulatory capital requirements under Basel III and was considered to be ‘‘well-capitalized’’, as summarized in the following table:

       
  September 30,  Well Capitalized
  2019 Regulatory Requirements
Total capital to risk-weighted assets  14.88 10.00%
Tier 1 capital to risk-weighted assets  13.97 8.00%
Tier 1 leverage ratio  11.02 5.00%
Common equity Tier 1 capital  12.51 6.50%
Total stockholders' equity to total assets  11.02 % NA
Tangible common equity to tangible assets (1)  10.23 NA

                                               
(1) see "Reconciliation of Non-GAAP Financial Measures" tables

Completion of Initial Public Offering

On October 10, 2019, the Company priced its initial public offering (the “IPO”), and issued 8,300,000 shares of its common stock at a price to the public of $16.00 per share on October 16, 2019.  On October 29, 2019, the underwriters purchased an additional 1,129,794 shares pursuant to the exercise of their option to purchase additional shares from HBT Financial at the initial public offering price, less underwriting discounts and commissions. In total, HBT sold 9,429,794 shares of common stock in the initial public offering, raising total net proceeds, after deducting estimated underwriting discounts and commissions and offering expenses payable by the Company, of approximately $138 million.

On October 22, 2019, the Company paid a $170 million distribution to its pre-IPO stockholders, using the net proceeds of the initial public offering and the proceeds of dividends from Heartland Bank and Trust Company and State Bank of Lincoln.

About HBT Financial, Inc.

HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company and State Bank of Lincoln. The banks provide a comprehensive suite of business, commercial, wealth management and retail banking products and services to businesses, families and local governments throughout Central and Northeastern Illinois through 64 branches. As of September 30, 2019, HBT had total assets of $3.2 billion, total loans of $2.2 billion, and total deposits of $2.7 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back nearly 100 years.

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), originated loans and acquired loans, efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, adjusted C Corp equivalent net income, adjusted C Corp equivalent return on average assets, adjusted C Corp equivalent return on average stockholders' equity, and adjusted C Corp equivalent 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 includes "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, including but not limited to statements about the Company’s plans, objectives, future performance, goals and future earnings levels.  These statements are subject to many risks and uncertainties, including changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission.  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.  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" or "continue," 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.

CONTACT:
Matthew Keating
HBTIR@hbtbank.com
(310) 622-8230


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

                               
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
INTEREST AND DIVIDEND INCOME   (dollars in thousands, except per share amounts)
Loans, including fees:                              
Taxable   $  29,308     $  29,886     $  30,063     $  28,625     $  28,226  
Federally tax exempt      684        736        710        704        749  
Securities:                              
Taxable      3,572        3,801        3,922        3,655        3,619  
Federally tax exempt      1,395        1,512        1,552        1,670        1,758  
Interest-bearing deposits in bank      662        599        687        580        362  
Other interest and dividend income      15        16        15        14        18  
Total interest and dividend income      35,636        36,550        36,949        35,248        34,732  
                               
INTEREST EXPENSE                              
Deposits      2,000        2,111        1,983        1,672        1,619  
Securities sold under agreements to repurchase      17        17        14        16        13  
Borrowings      —        4        3        8        29  
Subordinated debentures      478        487        497        476        470  
Total interest expense      2,495        2,619        2,497        2,172        2,131  
Net interest income      33,141        33,931        34,452        33,076        32,601  
PROVISION FOR LOAN LOSSES      684        1,806        776        3,906        1,238  
Net interest income after provision for loan losses      32,457        32,125        33,676        29,170        31,363  
                               
NONINTEREST INCOME                              
Card income      1,985        1,996        1,832        1,954        1,848  
Service charges on deposit accounts      2,111        1,931        1,763        2,078        2,157  
Wealth management fees      1,676        1,493        2,047        2,087        1,695  
Mortgage servicing      795        818        729        861        755  
Mortgage servicing rights fair value adjustment      (860 )      (1,120 )      (1,002 )      355        (93 )
Gains on sale of mortgage loans      992        660        525        666        855  
Gains (losses) on securities      (73 )      36        79        (2,813 )      180  
Gains (losses) on foreclosed assets      (20 )      169        (17 )      (479 )      (251 )
Gains (losses) on sales of other assets      (29 )      368        605        580        (13 )
Title insurance activity      —        38        129        276        335  
Other noninterest income      1,005        957        797        864        939  
Total noninterest income      7,582        7,346        7,487        6,429        8,407  
                               
NONINTEREST EXPENSE                              
Salaries      12,335        11,597        12,407        13,091        12,264  
Employee benefits      2,224        4,731        1,359        1,522        1,492  
Occupancy of bank premises      1,785        1,638        1,837        1,776        1,822  
Furniture and equipment      545        716        789        693        695  
Data processing      1,471        1,390        1,162        1,299        1,265  
Marketing and customer relations      801        1,103        933        1,125        974  
Amortization of intangible assets      335        376        376        390        389  
FDIC insurance      8        208        219        214        241  
Loan collection and servicing      547        612        742        720        625  
Foreclosed assets      196        165        164        100        247  
Other noninterest expense      2,056        2,025        2,224        2,510        1,923  
Total noninterest expense      22,303        24,561        22,212        23,440        21,937  
INCOME BEFORE INCOME TAX EXPENSE      17,736        14,910        18,951        12,159        17,833  
INCOME TAX EXPENSE      299        305        215        239        241  
NET INCOME   $  17,437     $  14,605     $  18,736     $  11,920     $  17,592  
                               
EARNINGS PER SHARE - BASIC   $  0.97     $  0.81     $  1.04     $  0.66     $  0.98  
EARNINGS PER SHARE - DILUTED   $  0.97     $  0.81     $  1.04     $  0.66     $  0.98  
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING      18,027,512        18,027,512        18,027,512        18,027,512        18,027,512  
                               
C CORP EQUIVALENT INFORMATION                              
Historical income before income tax expense   $  17,736     $  14,910     $  18,951     $  12,159     $  17,833  
C Corp equivalent income tax expense      4,614        3,784        4,915        2,965        4,605  
C Corp equivalent net income   $  13,122     $  11,126     $  14,036     $  9,194     $  13,228  
                               
C CORP EQUIVALENT EARNINGS PER SHARE - BASIC   $  0.73     $  0.62     $  0.78     $  0.51     $  0.73  
C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED   $  0.73     $  0.62     $  0.78     $  0.51     $  0.73  


HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Balance Sheets

                               
    As of
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
    (dollars in thousands, except share data)
ASSETS                        
Cash and due from banks   $  19,969     $  17,151     $  17,984     $  21,343     $  19,567  
Interest-bearing deposits with banks      134,972        124,575        142,518        165,536        73,543  
Cash and cash equivalents      154,941        141,726        160,502        186,879        93,110  
                               
Interest-bearing time deposits with banks      248        248        248        248        248  
Securities available-for-sale, at fair value      618,120        651,967        681,233        679,526        704,346  
Securities held-to-maturity      99,861        108,829        116,745        121,715        124,786  
Equity securities      4,436        4,030        3,994        3,261        3,271  
Restricted stock, at cost      2,425        2,425        2,719        2,719        2,719  
Loans held for sale      7,608        5,303        2,496        2,800        4,508  
                               
Gross loans      2,171,014        2,203,096        2,183,322        2,144,257        2,139,139  
Allowance for loan losses      (22,761 )      (22,542 )      (21,013 )      (20,509 )      (21,171 )
Loans, net of allowance for loan losses      2,148,253        2,180,554        2,162,309        2,123,748        2,117,968  
                               
Bank premises and equipment, net      54,105        53,993        54,185        54,736        54,283  
Bank premises held for sale      121        149        208        749        804  
Foreclosed assets      6,574        9,707        10,151        9,559        10,176  
Goodwill      23,620        23,620        23,620        23,620        23,620  
Core deposit intangible assets, net      4,366        4,701        5,077        5,453        5,843  
Mortgage servicing rights, at fair value      7,936        8,796        9,916        10,918        10,563  
Investments in unconsolidated subsidiaries      1,165        1,165        1,165        1,165        1,165  
Accrued interest receivable      14,816        14,609        15,256        15,300        16,176  
Other assets      18,018        12,338        7,843        7,173        7,027  
Total assets   $  3,166,613     $  3,224,160     $  3,257,667     $  3,249,569     $  3,180,613  
                               
LIABILITIES AND STOCKHOLDERS' EQUITY                              
Liabilities                              
Deposits:                              
Noninterest-bearing   $  649,316     $  662,405     $  661,527     $  664,876     $  625,332  
Interest-bearing      2,054,742        2,111,363        2,159,916        2,131,094        2,114,322  
Total deposits      2,704,058        2,773,768        2,821,443        2,795,970        2,739,654  
                               
Securities sold under agreements to repurchase      32,267        35,646        40,528        46,195        45,900  
Subordinated debentures      37,566        37,550        37,533        37,517        37,501  
Other liabilities      43,786        37,326        29,570        29,491        27,701  
Total liabilities      2,817,677        2,884,290        2,929,074        2,909,173        2,850,756  
                               
Stockholders' Equity                              
Common stock:                              
Voting      3        3        3        3        3  
Series A nonvoting      178        178        178        178        178  
Surplus      32,288        32,288        32,288        32,288        32,288  
Retained earnings      311,055        302,984        298,131        315,234        314,166  
Accumulated other comprehensive income (loss)      8,431        7,436        1,012        (4,288 )      (13,759 )
Less cost of treasury stock held:                              
Voting      (1,667 )      (1,667 )      (1,667 )      (1,667 )      (1,667 )
Series A nonvoting      (1,352 )      (1,352 )      (1,352 )      (1,352 )      (1,352 )
Total stockholders’ equity      348,936        339,870        328,593        340,396        329,857  
Total liabilities and stockholders’ equity   $  3,166,613     $  3,224,160     $  3,257,667     $  3,249,569     $  3,180,613  
                               
Share Data                              
Ending number shares of common stock outstanding      18,027,512        18,027,512        18,027,512        18,027,512        18,027,512  


HBT Financial, Inc.
Consolidated Financial Summary

                               
    9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
    (Dollars in thousands)
LOANS                              
Commercial and industrial   $  340,650   $  352,326   $  363,918   $  360,501   $  353,105
Agricultural and farmland      205,041      208,923      207,817      209,875      206,117
Commercial real estate - owner occupied      239,805      244,954      250,274      255,074      265,409
Commercial real estate - non-owner occupied      552,262      543,444      556,386      533,910      518,919
Multi-family      191,646      191,734      146,374      135,925      122,558
Construction and land development      210,939      236,902      223,489      237,275      242,666
One-to-four family residential      321,947      323,135      321,224      313,108      322,459
Municipal, consumer, and other      108,724      101,678      113,840      98,589      107,906
Total loans, before allowance for loan losses   $  2,171,014   $  2,203,096   $  2,183,322   $  2,144,257   $  2,139,139


                               
    9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
    (Dollars in thousands)
DEPOSITS                              
Noninterest-bearing   $  649,316   $  662,405   $  661,527   $  664,876   $  625,332
Interest-bearing demand      800,471      815,770      819,313      856,919      820,488
Money market      463,444      472,738      453,117      427,730      425,909
Savings      426,707      428,439      435,353      421,698      424,927
Time      364,120      394,416      452,133      424,747      442,998
Total deposits   $  2,704,058   $  2,773,768   $  2,821,443   $  2,795,970   $  2,739,654



HBT Financial, Inc.
Consolidated Financial Summary

                                                 
    Three Months Ended
    September 30, 2019   June 30, 2019   September 30, 2018
    Average
Balance
  Interest   (2)
Yield/Cost
  Average
Balance
  Interest   (2)
Yield/Cost
  Average
Balance
  Interest   (2)
Yield/Cost
ASSETS   (dollars in thousand)
Gross loans   $  2,191,230     $  29,992   5.47 %   $  2,196,934     $  30,622   5.58 %   $  2,143,577     $  28,975   5.41 %
Securities      745,532        4,967   2.67 %      786,759        5,313   2.70 %      851,324        5,377   2.53 %
Deposits with banks      136,635        662   1.94 %      125,263        599   1.91 %      91,474        362   1.58 %
Other      2,425        15   2.37 %      2,439        16   2.64 %      2,719        18   2.56 %
Total interest-earning assets      3,075,822     $  35,636   4.63 %      3,111,395     $  36,550   4.70 %      3,089,094     $  34,732   4.50 %
Allowance for loan losses      (22,326 )                (21,250 )                (20,263 )          
Noninterest-earning assets      149,146                  146,208                  151,753            
Total assets   $  3,202,642               $  3,236,353               $  3,220,584            
                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                                
Liabilities                                                
Interest-bearing deposits:                                                
Interest-bearing demand   $  812,526     $  347   0.17 %   $  826,715     $  411   0.20 %   $  820,619     $  377   0.18 %
Money market      468,139        497   0.42 %      455,454        489   0.43 %      438,784        165   0.15 %
Savings      428,447        70   0.07 %      433,125        69   0.06 %      428,725        70   0.07 %
Time      383,070        1,086   1.13 %      411,514        1,142   1.11 %      453,543        1,007   0.89 %
Total interest-bearing deposits      2,092,182        2,000   0.38 %      2,126,808        2,111   0.40 %      2,141,671        1,619   0.30 %
Securities sold under agreements to repurchase      35,757        17   0.19 %      40,851        17   0.17 %      42,034        13   0.12 %
Borrowings      33        —   2.42 %      549        4   2.62 %      5,880        29   1.97 %
Subordinated debentures      37,561        478   5.09 %      37,544        487   5.19 %      37,495        470   5.01 %
Total interest-bearing liabilities      2,165,533     $  2,495   0.46 %      2,205,752     $  2,619   0.47 %      2,227,080     $  2,131   0.38 %
Noninterest-bearing deposits      651,085                  662,731                  634,960            
Noninterest-bearing liabilities      37,274                  29,257                  26,393            
Total liabilities      2,853,892                  2,897,740                  2,888,433            
Stockholders' Equity      348,750                  338,613                  332,151            
Total liabilities and stockholders’ equity   $  3,202,642               $  3,236,353               $  3,220,584            
                                                 
Net interest income/Net interest margin (4)         $  33,141   4.31 %         $  33,931   4.36 %         $  32,601   4.22 %
Tax-equivalent adjustment (3)            559   0.07 %            606   0.08 %            677   0.09 %
Net interest income (tax-equivalent basis)/Net interest margin (tax-equivalent basis) (1) (3)         $  33,700   4.38 %         $  34,537   4.44 %         $  33,278   4.31 %
Net interest rate spread (5)               4.17 %               4.23 %               4.12 %
Net interest-earning assets (6)   $  910,289               $  905,643               $  862,014            
Ratio of interest-earning assets to interest-bearing liabilities      1.42                  1.41                  1.39            
Cost of deposits               0.29 %               0.30 %               0.23 %

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


HBT Financial, Inc.
Consolidated Financial Summary

                                 
    Nine Months Ended
    September 30, 2019   September 30, 2018
    Average
Balance
  Interest   (2)
Yield/Cost
  Average
Balance
  Interest   (2)
Yield/Cost
ASSETS   (dollars in thousand)
Gross loans   $  2,184,263     $  91,387   5.58 %   $  2,129,043     $  84,705   5.30 %
Securities      779,375        15,754   2.70 %      877,086        16,288   2.48 %
Deposits with banks      131,209        1,948   1.98 %      107,997        1,137   1.40 %
Other      2,527        46   2.41 %      2,789        54   2.56 %
Total interest-earning assets      3,097,374     $  109,135   4.70 %      3,116,915     $  102,184   4.37 %
Allowance for loan losses      (21,346 )                (19,771 )          
Noninterest-earning assets      147,972                  160,676            
Total assets   $  3,224,000               $  3,257,820            
                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                
Liabilities                                
Interest-bearing deposits:                                
Interest-bearing demand   $  821,848     $  1,175   0.19 %   $  826,311     $  964   0.16 %
Money market      455,469        1,356   0.40 %      448,266        491   0.15 %
Savings      428,865        207   0.06 %      436,913        213   0.07 %
Time      408,972        3,356   1.09 %      445,826        2,547   0.76 %
Total interest-bearing deposits      2,115,154        6,094   0.38 %      2,157,316        4,215   0.26 %
Securities sold under agreements to repurchase      39,542        48   0.16 %      37,631        32   0.11 %
Borrowings      378        7   2.60 %      19,535        252   1.72 %
Subordinated debentures      37,544        1,462   5.19 %      37,479        1,319   4.69 %
Total interest-bearing liabilities      2,192,618     $  7,611   0.46 %      2,251,961     $  5,818   0.34 %
Noninterest-bearing deposits      654,818                  652,149            
Noninterest-bearing liabilities      31,720                  25,712            
Total liabilities      2,879,156                  2,929,822            
Stockholders' Equity      344,844                  327,998            
Total liabilities and stockholders’ equity   $  3,224,000               $  3,257,820            
                                 
Net interest income/Net interest margin (4)         $  101,524   4.37 %         $  96,366   4.12 %
Tax-equivalent adjustment (3)            1,775   0.08 %            2,020   0.09 %
Net interest income (tax-equivalent basis)/Net interest margin (tax-equivalent basis) (1) (3)         $  103,299   4.45 %         $  98,386   4.21 %
Net interest rate spread (5)               4.24 %               4.03 %
Net interest-earning assets (6)   $  904,756               $  864,954            
Ratio of interest-earning assets to interest-bearing liabilities      1.41                  1.38            
Cost of deposits               0.29 %               0.20 %

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


HBT Financial, Inc.
Consolidated Financial Summary

                               
    9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018
    (Dollars in thousands)
NONPERFORMING ASSETS                              
Nonaccrual   $  18,977     $  25,051        13,877        15,876        20,783  
Past due 90 days or more, still accruing (1)      95        2        53        37        629  
Total nonperforming loans      19,072        25,053        13,930        15,913        21,412  
Foreclosed assets      6,574        9,707        10,151        9,559        10,176  
Total nonperforming assets   $  25,646     $  34,760     $  24,081     $  25,472     $  31,588  
                               
NONPERFORMING ASSETS (Originated) (2)                              
Nonaccrual   $  11,268     $  15,985        8,619        10,329        13,683  
Past due 90 days or more, still accruing      95        2        53        37        629  
Total nonperforming loans      11,363        15,987        8,672        10,366        14,312  
Foreclosed assets      1,048        1,510        1,439        1,395        1,975  
Total nonperforming (originated)   $  12,411     $  17,497     $  10,111     $  11,761     $  16,287  
                               
NONPERFORMING ASSETS (Acquired) (2)                              
Nonaccrual   $  7,709     $  9,066     $  5,258     $  5,547     $  7,100  
Past due 90 days or more, still accruing (1)      —        —        —        —        —  
Total nonperforming loans      7,709        9,066        5,258        5,547        7,100  
Foreclosed assets      5,526        8,197        8,712        8,164        8,201  
Total nonperforming assets (acquired)   $  13,235     $  17,263     $  13,970     $  13,711     $  15,301  
                               
Allowance for loan losses   $  22,761     $  22,542     $  21,013     $  20,509     $  21,172  
                               
Gross loans   $  2,171,014     $  2,203,096     $  2,183,322     $  2,144,257     $  2,139,139  
Gross loans (originated) (2)      1,987,265        2,005,250        1,974,840        1,923,859        1,904,600  
Gross loans (acquired) (2)      183,749        197,846        208,482        220,398        234,539  
                               
CREDIT QUALITY RATIOS                              
Allowance for loan losses to gross loans     1.05 %     1.02 %     0.96 %     0.96 %     0.99 %
Allowance for loan losses to nonperforming loans     119.34 %     89.98 %     150.85 %     128.88 %     98.88 %
Nonperforming loans to gross loans     0.88 %     1.14 %     0.64 %     0.74 %     1.00 %
Nonperforming assets to gross assets     0.81 %     1.08 %     0.74 %     0.78 %     0.99 %
Nonperforming assets to gross loans and foreclosed assets     1.18 %     1.57 %     1.10 %     1.18 %     1.47 %
                               
CREDIT QUALITY RATIOS (Originated) (2)                              
Nonperforming loans to gross loans     0.57 %     0.80 %     0.44 %     0.54 %     0.75 %
Nonperforming assets to gross loans and foreclosed assets     0.62 %     0.87 %     0.51 %     0.61 %     0.85 %
                               
CREDIT QUALITY RATIOS (Acquired) (2)                              
Nonperforming loans to gross loans     4.20 %     4.58 %     2.52 %     2.52 %     3.03 %
Nonperforming assets to gross loans and foreclosed assets     6.99 %     8.38 %     6.43 %     6.00 %     6.30 %

                                                 
(1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days totaling $0.7 million, $0.5 million, $2.5 million, $2.7 million, and $2.9 million as of September 30, 2019, June 30, 2019, March 30, 2019, December 31, 2018, September 30, 2018, respectively.
(2) Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs to average loans (originated and acquired), nonperforming loans to total loans (originated and acquired), and nonperforming assets to total loans and other real estate owned (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.


HBT Financial, Inc.
Consolidated Financial Summary

                                           
    Three Months Ended   Nine Months Ended September 30, 
    9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018   2019     2018  
ALLOWANCE FOR LOAN LOSSES   (dollars in thousands)
Beginning balance   $  22,542     $  21,013     $  20,509     $  21,171     $  20,345     $  20,509     $  19,765  
Provision      684        1,806        776        3,906        1,238        3,266        1,791  
Charge-offs      (937 )      (966 )      (533 )      (4,953 )      (662 )      (2,436 )      (1,532 )
Recoveries      472        689        261        385        250        1,422        1,147  
Ending balance   $  22,761     $  22,542     $  21,013     $  20,509     $  21,171     $  22,761     $  21,171  
                                           
Net charge-offs (recoveries)   $  465     $  277     $  272     $  4,568     $  412     $  1,014     $  385  
Net charge-offs (recoveries) - (originated) (1)      224        (238 )      196        2,778        239        182        359  
Net charge-offs (recoveries) - (acquired) (1)      241        515        76        1,790        173        832        26  
                                           
Net charge-offs to average gross loans     0.08 %     0.05 %     0.05 %     0.85 %     0.08 %     0.06 %     0.02 %
Net charge-offs to average gross loans (originated) (1)     0.04 %     -0.05 %     0.04 %     0.58 %     0.05 %     0.01 %     0.03 %
Net charge-offs to average gross loans (acquired) (1)     0.51 %     1.00 %     0.14 %     3.10 %     0.28 %     0.54 %     0.01 %
                                           
Average gross loans   $  2,191,230     $  2,196,934     $  2,164,330     $  2,138,839     $  2,143,577     $  2,184,263     $  2,129,043  
Average gross loans (originated) (1)      2,001,803        1,990,015        1,946,035        1,907,503        1,895,859        1,979,383        1,862,206  
Average gross loans (acquired) (1)      189,427        206,919        218,295        231,336        247,718        204,880        266,837  

                                                 
(1) Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs to average loans (originated and acquired), nonperforming loans to total loans (originated and acquired), and nonperforming assets to total loans and other real estate owned (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.


HBT Financial, Inc.
Consolidated Financial Summary

                               
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
    (dollars in thousands, except share and per share data)
EARNINGS AND PER SHARE DATA                              
Net income   $  17,437     $  14,605     $  18,736     $  11,920     $  17,592  
Earnings per share - Basic and diluted      0.97        0.81        1.04        0.66        0.98  
                               
C Corp equivalent net income (3)   $  13,122     $  11,126     $  14,036     $  9,194     $  13,228  
C Corp equivalent earnings per share - Basic and diluted (3)      0.73        0.62        0.78        0.51        0.73  
                               
Ending number shares of common stock outstanding      18,027,512        18,027,512        18,027,512        18,027,512        18,027,512  
                               
Weighted average shares of common stock outstanding      18,027,512        18,027,512        18,027,512        18,027,512        18,027,512  
                               
PERFORMANCE RATIOS                              
Return on average assets (2)     2.18 %     1.81 %     2.32 %     1.48 %     2.18 %
Return on average stockholders' equity (2)     20.00 %     17.25 %     21.59 %     14.14 %     21.19 %
                               
Net interest margin (2)     4.31 %     4.36 %     4.44 %     4.29 %     4.22 %
Efficiency ratio     53.94 %     58.59 %     52.07 %     58.35 %     52.55 %
                               
C Corp equivalent return on average assets (2) (3)     1.64 %     1.38 %     1.74 %     1.14 %     1.64 %
C Corp equivalent return on average stockholders' equity (2) (3)     15.05 %     13.14 %     16.17 %     10.91 %     15.93 %
                               
NON-GAAP INFORMATION                              
Adjusted C Corp equivalent net income (1)   $  14,343     $  14,308     $  14,359     $  10,874     $  13,132  
Adjusted C Corp equivalent earnings per share - Basic and diluted (1) (4)      0.80        0.79        0.80        0.60        0.73  
                               
Net interest margin (tax equivalent basis) (1) (2)     4.38 %     4.44 %     4.52 %     4.37 %     4.31 %
Efficiency ratio (tax equivalent basis) (1)     53.21 %     57.74 %     51.32 %     57.42 %     51.69 %
                               
Adjusted C Corp equivalent return on average assets (1) (2)     1.79 %     1.77 %     1.78 %     1.35 %     1.63 %
Adjusted C Corp equivalent return on average stockholders' equity (1) (2)     16.45 %     16.90 %     16.54 %     12.90 %     15.81 %
                               
Return on average tangible common equity (1) (2)     21.76 %     18.84 %     23.55 %     15.49 %     23.27 %
C Corp equivalent return on average tangible common equity (1) (2) (3)     16.37 %     14.35 %     17.64 %     11.95 %     17.49 %
Adjusted C Corp equivalent return on average tangible common equity (1) (2)     17.90 %     18.46 %     18.05 %     14.13 %     17.37 %

                                                
(1) See "Reconciliation of Non-GAAP Financial Information" below for reconciliation of non-GAAP measure to their most comparable GAAP measures.
(2) Annualized measure.
(3) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period.


Reconciliation of Non-GAAP Financial Measures –
Adjusted C Corp Equivalent Net Income and Adjusted C Corp Equivalent Return on Average Assets
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
    (dollars in thousands, except share and per share data)
Net income   $  17,437     $  14,605     $  18,736     $  11,920     $  17,592  
                               
C Corp equivalent net income (3)   $  13,122     $  11,126     $  14,036     $  9,194     $  13,228  
Adjustments:                              
Net earnings (losses) from closed or sold operations, including gains on sale (1)      (3 )      (14 )      550        98        (35 )
Charges related to termination of certain employee benefit plans      (845 )      (3,316 )      —        —        —  
Realized gains (losses) on sales of securities      —        —        —        (2,803 )      262  
Mortgage servicing rights fair value adjustment      (860 )      (1,120 )      (1,002 )      355        (93 )
Total adjustments      (1,708 )      (4,450 )      (452 )      (2,350 )      134  
C Corp equivalent tax effect of adjustments      487        1,268        129        670        (38 )
Less adjustments after C Corp equivalent tax effect      (1,221 )      (3,182 )      (323 )      (1,680 )      96  
Adjusted C Corp equivalent net income   $  14,343     $  14,308     $  14,359     $  10,874     $  13,132  
                               
Average assets   $  3,202,642     $  3,236,353     $  3,233,293     $  3,217,545     $  3,220,584  
                               
Return on average assets (2)     2.18 %     1.81 %     2.32 %     1.48 %     2.18 %
C Corp equivalent return on average assets (2) (3)     1.64 %     1.38 %     1.74 %     1.14 %     1.64 %
Adjusted C Corp equivalent return on average assets (2)     1.79 %     1.77 %     1.78 %     1.35 %     1.63 %
                               
Weighted average shares of common stock outstanding      18,027,512        18,027,512        18,027,512        18,027,512        18,027,512  
                               
Earnings per share - Basic and Diluted   $  0.97     $  0.81     $  1.04     $  0.66     $  0.98  
C Corp equivalent Earnings per share - Basic and Diluted (3)      0.73        0.62        0.78        0.51        0.73  
Adjusted C Corp equivalent earnings per share - Basic and diluted      0.80        0.79        0.80        0.60        0.73  

                                                
(1) Closed or sold operations include HB Credit Company, HBT Insurance, and First Community Title Services, Inc.
(2) Annualized measure.
(3) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period.


Reconciliation of Non-GAAP Financial Measures - Net Interest Margin (Tax Equivalent Basis)
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
Net interest income (tax equivalent basis)   (dollars in thousands)
Net interest income   $  33,141     $  33,931     $  34,452     $  33,076     $  32,601  
Tax-equivalent adjustment (1)      559        606        610        641        677  
Net interest income (tax equivalent basis)  (1)   $  33,700     $  34,537     $  35,062     $  33,717     $  33,278  
                               
Net interest margin (tax equivalent basis)                              
Net interest margin (2)     4.31 %     4.36 %     4.44 %     4.29 %     4.22 %
Tax-equivalent adjustment (1) (2)     0.07 %     0.08 %     0.08 %     0.08 %     0.09 %
Net interest margin (tax equivalent basis) (1) (2)     4.38 %     4.44 %     4.52 %     4.37 %     4.31 %
                               
Average interest-earning assets   $  3,075,822     $  3,111,395     $  3,105,216     $  3,086,641     $  3,089,094  
                               
    Nine Months Ended                  
    September 30, 2019   September 30, 2018                  
      (dollars in thousands)                  
Net interest income (tax equivalent basis)                              
Net interest income   $  101,524     $  96,366                    
Tax-equivalent adjustment (1)      1,775        2,020                    
Net interest income (tax equivalent basis)  (1)   $  103,299     $  98,386                    
                               
Net interest margin (tax equivalent basis)                              
Net interest margin (2)     4.37 %     4.12 %                  
Tax-equivalent adjustment (1) (2)     0.08 %     0.09 %                  
Net interest margin (tax equivalent basis) (1) (2)     4.45 %     4.21 %                  
                               
Average interest-earning assets   $  3,097,374     $  3,116,915                    

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


Reconciliation of Non-GAAP Financial Measures - Efficiency Ratio (Tax Equivalent Basis)
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
Efficiency ratio (tax equivalent basis)   (dollars in thousands)
Total noninterest expense   $  22,303     $  24,561     $  22,212     $  23,440     $  21,937  
Less: amortization of intangible assets      335        376        376        390        389  
Adjusted noninterest expense   $  21,968     $  24,185     $  21,836     $  23,050     $  21,548  
                               
Net interest income   $  33,141     $  33,931     $  34,452     $  33,076     $  32,601  
Total noninterest income      7,582        7,346        7,487        6,429        8,407  
Operating revenue      40,723        41,277        41,939        39,505        41,008  
Tax-equivalent adjustment (1)      559        606        610        641        677  
Operating revenue (tax-equivalent basis) (1)   $  41,282     $  41,883     $  42,549     $  40,146     $  41,685  
                               
Efficiency ratio     53.94 %     58.59 %     52.07 %     58.35 %     52.55 %
Efficiency ratio (tax equivalent basis) (1)     53.21 %     57.74 %     51.32 %     57.42 %     51.69 %

                                                
(1) On a C Corp 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 , Adjusted C Corp Equivalent Return
on Average Stockholders' Equity and Adjusted C Corp Equivalent Return on Tangible Common Equity
    As of
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
Tangible Common Equity   (dollars in thousands, except share and per share data)
Total stockholders' equity   $  348,936     $  339,870     $  328,593     $  340,396     $  329,857  
Less: Goodwill      23,620        23,620        23,620        23,620        23,620  
Less: Core deposit intangible assets, net      4,366        4,701        5,077        5,453        5,843  
Tangible common equity   $  320,950     $  311,549     $  299,896     $  311,323     $  300,394  
                               
Tangible Assets                              
Total assets   $  3,166,613     $  3,224,160     $  3,257,667     $  3,249,569     $  3,180,613  
Less: Goodwill      23,620        23,620        23,620        23,620        23,620  
Less: Core deposit intangible assets, net      4,366        4,701        5,077        5,453        5,843  
Tangible assets   $  3,138,627     $  3,195,839     $  3,228,970     $  3,220,496     $  3,151,150  
                               
Total stockholders' equity to total assets     11.02 %     10.54 %     10.09 %     10.48 %     10.37 %
Tangible common equity to tangible assets     10.23 %     9.75 %     9.29 %     9.67 %     9.53 %


                               
    Three Months Ended
    September 30, 2019   June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018
Average Tangible Common Equity   (dollars in thousands)
Total stockholders' equity   $  348,750     $  338,613     $  347,157     $  337,114     $  332,151  
Less: Goodwill      23,620        23,620        23,620        23,620        23,620  
Less: Core deposit intangible assets, net      4,561        4,919        5,301        5,663        6,070  
Average tangible common equity   $  320,569     $  310,074     $  318,236     $  307,831     $  302,461  
                               
Net income   $  17,437     $  14,605     $  18,736     $  11,920     $  17,592  
C Corp equivalent net income (2)      13,122        11,126        14,036        9,194        13,228  
Adjusted C Corp equivalent net income      14,343        14,308        14,359        10,874        13,132  
                               
Return on average stockholders' equity (1)     20.00 %     17.25 %     21.59 %     14.14 %     21.19 %
C Corp equivalent return on average stockholders' equity (1) (2)     15.05 %     13.14 %     16.17 %     10.91 %     15.93 %
Adjusted C Corp equivalent return on average stockholders' equity (1)     16.45 %     16.90 %     16.54 %     12.90 %     15.81 %
                               
Return on average tangible common equity (1)     21.76 %     18.84 %     23.55 %     15.49 %     23.27 %
C Corp equivalent return on average tangible common equity (1) (2)     16.37 %     14.35 %     17.64 %     11.95 %     17.49 %
Adjusted C Corp equivalent return on average tangible common equity (1)     17.90 %     18.46 %     18.05 %     14.13 %     17.37 %

                                                
(1) Annualized measure.
(2) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period.

 

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