HBT Financial, Inc. Announces Second Quarter 2023 Financial Results
HBT Financial, Inc. (NASDAQ: HBT) reported net income of $18.5 million, or $0.58 diluted earnings per share, for the second quarter of 2023, showing an increase from the first quarter of 2023 and the second quarter of 2022. J. Lance Carter, President and CEO, expressed satisfaction with the financial performance, citing strong returns and a solid net interest margin. The company also reported adjusted net income of $18.8 million, or $0.58 adjusted diluted earnings per share, for the second quarter of 2023. Net interest income increased by 4.3% from the first quarter of 2023, and noninterest income increased by 33.3%. Noninterest expense decreased by 5.5% from the first quarter of 2023. The total loans outstanding and total deposits increased from the previous year, while asset quality remained strong. The company also repurchased shares of its common stock under its stock repurchase program.
Positive
Strong net income and earnings per share for the second quarter of 2023
Increase in net interest income and noninterest income
Decrease in noninterest expenses from the first quarter of 2023
Growth in total loans outstanding and total deposits
Strong asset quality and a solid net interest margin
Successful stock repurchase program with remaining authorization
07/24/2023 - 07:05 AM
Second Quarter Highlights
Net income of $18.5 million , or $0.58 per diluted share; return on average assets (ROAA) of 1.49% ; return on average stockholders' equity (ROAE) of 16.30% ; and return on average tangible common equity (ROATCE) (1) of 19.91% Adjusted net income (1) of $18.8 million ; or $0.58 per diluted share; adjusted ROAA (1) of 1.51% ; adjusted ROAE (1) of 16.57% ; and adjusted ROATCE (1) of 20.23% Asset quality remained strong with nonperforming assets to total assets of 0.21% Net interest margin of 4.16% and net interest margin (tax equivalent basis) (1) of 4.22% ________________________(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
BLOOMINGTON, Ill., July 24, 2023 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial” or “HBT”), the holding company for Heartland Bank and Trust Company, today reported net income of $18.5 million , or $0.58 diluted earnings per share, for the second quarter of 2023. This compares to net income of $9.2 million , or $0.30 diluted earnings per share, for the first quarter of 2023, and net income of $14.1 million , or $0.49 diluted earnings per share, for the second quarter of 2022.
J. Lance Carter, President and Chief Executive Officer of HBT Financial, said, “I had the honor of being named CEO of HBT Financial and Heartland Bank and Trust Company during the second quarter. I look forward to continuing to work closely with Fred Drake, Executive Chairman; the rest of Board of Directors; and our executive team to deliver the consistently solid financial performance to which we are accustomed. I am very pleased with our financial performance for the second quarter of 2023. With a ROAA of 1.49% and a ROATCE of 19.91% , we continue to produce strong returns. Our granular deposit base and excellent credit quality continue to support our strong results. Although we continue to see pressure on deposit pricing, we were able to maintain a solid net interest margin of 4.16% , down only 4 basis points from last quarter. We completed our system conversion for our Town and Country Financial Corporation (“Town and Country”) acquisition and have fully integrated the Town and Country team. We look forward to recognizing the enhanced long-term value provided by the increased scale and new markets that this acquisition has provided.”
Adjusted Net Income
In addition to reporting GAAP results, the Company believes adjusted net income and adjusted earnings per share, which adjust for acquisition expenses, branch closure expenses, gains (losses) on sale of closed branch premises, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $18.8 million , or $0.58 adjusted diluted earnings per share, for the second quarter of 2023. This compares to adjusted net income of $19.9 million , or $0.64 adjusted diluted earnings per share, for the first quarter of 2023, and adjusted net income of $13.8 million , or $0.48 adjusted diluted earnings per share, for the second quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables).
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2023 was $48.9 million , an increase of 4.3% from $46.8 million for the first quarter of 2023. The increase was primarily attributable to the increase in earning assets following the Town and Country merger completed on February 1, 2023 and higher yields on interest-earning assets. Partially offsetting this improvement was an increase in funding costs.
Relative to the second quarter of 2022, net interest income increased 42.2% from $34.4 million . The increase was primarily attributable to higher yields on interest-earning assets and the increase in average interest-earning assets following the Town and Country merger.
Net interest margin for the second quarter of 2023 was 4.16% , compared to 4.20% for the first quarter of 2023, and net interest margin (tax equivalent basis) for the second quarter of 2023 was 4.22% compared to 4.26% for the first quarter of 2023. The decrease was primarily attributable to higher funding costs with the cost of funds increasing to 0.71% for the second quarter of 2023, compared to 0.47% for the first quarter of 2023, which outpaced the increased asset yields which rose by 19 basis points to 4.83% . Acquired loan discount accretion contributed 9 basis points to net interest margin during the second quarter of 2023 and 7 basis points during the first quarter of 2023.
Relative to the second quarter of 2022, net interest margin increased from 3.34% . This increase was primarily attributable to higher yields on interest-earning assets. Acquired loan discount accretion contributed 3 basis points to net interest margin, during the second quarter of 2022.
Noninterest Income
Noninterest income for the second quarter of 2023 was $9.9 million , an increase of 33.3% from $7.4 million for the first quarter of 2023. The increase was primarily attributable to the absence of realized losses on sales of securities of $1.0 million included in the first quarter of 2023 results as well as a $0.8 million change in the mortgage servicing rights fair value adjustment. Additionally, increases in card income of $0.2 million and mortgage servicing income of $0.2 million primarily reflect the addition of Town and Country’s operations for the first full quarter.
Relative to the second quarter of 2022, noninterest income increased 15.9% from $8.6 million . The increase was primarily attributable to the Town and Country merger with a $0.6 million increase in mortgage servicing income, a $0.2 million increase in card income, and a $0.1 million increase in service charges on deposit accounts.
Noninterest Expense
Noninterest expense for the second quarter of 2023 was $34.0 million , a 5.5% decrease from $35.9 million for the first quarter of 2023. Acquisition-related noninterest expenses totaled $0.6 million during the second quarter of 2023, compared to $7.1 million during the first quarter of 2023. Excluding acquisition-related noninterest expenses, the $4.6 million increase in noninterest expense was primarily attributable to $0.8 million of legal fees and $0.8 million of accruals related to pending legal matters previously disclosed and incurred during the second quarter of 2023 that were not present in the first quarter of 2023 results. Settlements have been reached with plaintiffs in these matters which are now pending final court approval. Additionally, the second quarter of 2023 results included a full quarter’s impact of Town and Country’s operations.
Relative to the second quarter of 2022, noninterest expense increased 42.5% from $23.8 million , primarily attributable to the addition of Town and Country’s operations, additional legal costs and settlement accrual.
Acquisition-related expenses during the first and second quarter of 2023 are summarized below. There were no acquisition-related expenses during the second quarter of 2022. We do not expect material acquisition-related expenses related to Town and Country in subsequent quarters.
Three Months Ended June 30, 2023 March 31, 2023 (dollars in thousands) PROVISION FOR CREDIT LOSSES $ — $ 5,924 NONINTEREST EXPENSE Salaries 66 3,518 Furniture and equipment 39 — Data processing 176 1,855 Marketing and customer relations 10 14 Loan collection and servicing 125 — Legal fees and other noninterest expense 211 1,753 Total noninterest expense 627 7,140 Total acquisition-related expenses $ 627 $ 13,064
Loan Portfolio
Total loans outstanding, before allowance for credit losses, were $3.24 billion at June 30, 2023, compared with $3.20 billion at March 31, 2023 and $2.45 billion at June 30, 2022. The $49.1 million increase from March 31, 2023 was primarily attributable to a $52.8 million increase in commercial and industrial loans driven by new loan fundings and the purchase of $37.0 million of loans from two new strategic partners. The $53.9 million decrease in the construction and development loans was generally driven by the completion of a number of sizeable projects that are now amortizing and have been moved into other real estate loan categories, with the largest being a $29.5 million project that moved to the commercial real estate - non-owner occupied category. Additionally, we received a payoff on a $12.4 million substandard relationship in the commercial real estate - non-owner occupied category.
Deposits
Total deposits were $4.16 billion at June 30, 2023, compared with $4.31 billion at March 31, 2023 and $3.70 billion at June 30, 2022. The $146.0 million decrease from March 31, 2023 was primarily attributable to decreases in balances held in existing retail and business accounts partially offset by a seasonal increase in public fund account balances and the addition of $51.0 million of brokered deposits. Additionally, a higher than historical average net deposit inflow on March 31, 2023, as referenced in our first quarter of 2023 investor presentation, included $36 million related to one account which was withdrawn at the beginning of the second quarter of 2023.
Asset Quality
Nonperforming loans totaled $7.5 million , or 0.23% of total loans, at June 30, 2023, compared with $6.5 million , or 0.20% of total loans, at March 31, 2023, and $3.4 million , or 0.14% of total loans, at June 30, 2022. The $1.0 million increase in nonperforming loans from March 31, 2023 was primarily attributable to a $1.3 million increase in nonaccrual one-to-four family residential real estate loans.
The Company recorded a negative provision for credit losses of $0.2 million for the second quarter of 2023. The negative provision for credit losses primarily reflects a $1.1 million decrease in specific reserves, a $1.1 million increase in required reserves driven by growth of the loan portfolio and unfunded commitments, a $0.4 million decrease in required reserves resulting from changes in economic and qualitative factors, a $0.2 million increase in reserves on debt securities available-for-sale, related to one bank subordinated debt security, and net recoveries of $0.1 million .
The Company had net recoveries of $0.1 million , or (0.01)% of average loans on an annualized basis, for the second quarter of 2023, compared to net recoveries of $0.1 million , or (0.02)% of average loans on an annualized basis, for the first quarter of 2023, and net recoveries of $0.1 million , or (0.01)% of average loans on an annualized basis, for the second quarter of 2022.
The Company’s allowance for credit losses was 1.17% of total loans and 502% of nonperforming loans at June 30, 2023, compared with 1.21% of total loans and 595% of nonperforming loans at March 31, 2023.
Stock Repurchase Program
During the second quarter of 2023, the Company repurchased 229,502 shares of its common stock at a weighted average price of $18.07 under its stock repurchase program. The Company’s Board of Directors have authorized the repurchase of up to $15 million of HBT Financial common stock under its stock repurchase program in effect until January 1, 2024. As of June 30, 2023, the Company had $9.3 million remaining under the current stock repurchase authorization.
About HBT Financial, Inc.
HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. HBT provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Illinois and Eastern Iowa through 67 full-service branches. As of June 30, 2023, HBT had total assets of $5.0 billion , total loans of $3.2 billion , and total deposits of $4.2 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 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 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); (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.
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HBT Financial, Inc. Unaudited Consolidated Financial Summary As of or for the Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands, except per share data) Interest and dividend income $ 56,768 $ 51,779 $ 35,757 $ 108,547 $ 69,092 Interest expense 7,896 4,942 1,384 12,838 2,791 Net interest income 48,872 46,837 34,373 95,709 66,301 Provision for credit losses (230 ) 6,210 145 5,980 (439 ) Net interest income after provision for credit losses 49,102 40,627 34,228 89,729 66,740 Noninterest income 9,914 7,437 8,551 17,351 18,594 Noninterest expense 33,973 35,933 23,842 69,906 47,999 Income before income tax expense 25,043 12,131 18,937 37,174 37,335 Income tax expense 6,570 2,923 4,852 9,493 9,646 Net income $ 18,473 $ 9,208 $ 14,085 $ 27,681 $ 27,689 Earnings per share - Basic $ 0.58 $ 0.30 $ 0.49 $ 0.88 $ 0.96 Earnings per share - Diluted 0.58 0.30 0.49 0.88 0.95 Adjusted net income (1) $ 18,772 $ 19,859 $ 13,836 $ 38,631 $ 26,063 Adjusted earnings per share - Basic (1) 0.59 0.64 0.48 1.23 0.90 Adjusted earnings per share - Diluted (1) 0.58 0.64 0.48 1.22 0.90 Book value per share $ 14.15 $ 14.02 $ 12.97 Tangible book value per share (1) 11.58 11.45 11.90 Shares of common stock outstanding 31,865,868 32,095,370 28,831,197 Weighted average shares of common stock outstanding 31,980,133 30,977,204 28,891,202 31,481,439 28,938,634 SUMMARY RATIOS Net interest margin * 4.16 % 4.20 % 3.34 % 4.18 % 3.21 Net interest margin (tax equivalent basis) * (1)(2) 4.22 4.26 3.39 4.24 3.26 Efficiency ratio 56.57 % 65.27 % 54.97 % 60.74 % 55.96 Efficiency ratio (tax equivalent basis) (1)(2) 55.89 64.43 54.22 59.99 55.23 Loan to deposit ratio 77.91 % 74.13 % 66.23 % Return on average assets * 1.49 % 0.78 % 1.32 % 1.15 % 1.29 Return on average stockholders' equity * 16.30 8.84 14.92 12.73 14.23 Return on average tangible common equity * (1) 19.91 10.45 16.25 15.31 15.45 Adjusted return on average assets * (1) 1.51 % 1.69 % 1.29 % 1.60 % 1.22 Adjusted return on average stockholders' equity * (1) 16.57 19.08 14.66 17.77 13.40 Adjusted return on average tangible common equity * (1) 20.23 22.55 15.96 21.36 14.55 CAPITAL Total capital to risk-weighted assets 15.03 % 15.11 % 16.76 % Tier 1 capital to risk-weighted assets 13.12 13.16 14.59 Common equity tier 1 capital ratio 11.78 11.79 13.36 Tier 1 leverage ratio 10.07 10.29 10.05 Total stockholders' equity to total assets 9.06 8.98 8.85 Tangible common equity to tangible assets (1) 7.54 7.45 8.18 ASSET QUALITY Net charge-offs (recoveries) to average loans, before allowance for credit losses (0.01 ) % (0.02 ) % (0.01 ) % (0.01 ) % (0.10 ) Allowance for credit losses to loans, before allowance for credit losses 1.17 1.21 1.01 Nonperforming loans to loans, before allowance for credit losses 0.23 0.20 0.14 Nonperforming assets to total assets 0.21 0.20 0.15
________________________* 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 Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 INTEREST AND DIVIDEND INCOME (dollars in thousands, except per share data) Loans, including fees: Taxable $ 47,149 $ 42,159 $ 27,843 $ 89,308 $ 54,649 Federally tax exempt 1,040 952 679 1,992 1,341 Securities: Taxable 6,518 6,616 5,663 13,134 10,312 Federally tax exempt 1,162 1,197 1,138 2,359 2,178 Interest-bearing deposits in bank 781 739 420 1,520 579 Other interest and dividend income 118 116 14 234 33 Total interest and dividend income 56,768 51,779 35,757 108,547 69,092 INTEREST EXPENSE Deposits 4,323 2,374 506 6,697 1,075 Securities sold under agreements to repurchase 34 38 8 72 17 Borrowings 2,189 1,297 1 3,486 2 Subordinated notes 469 470 469 939 939 Junior subordinated debentures issued to capital trusts 881 763 400 1,644 758 Total interest expense 7,896 4,942 1,384 12,838 2,791 Net interest income 48,872 46,837 34,373 95,709 66,301 PROVISION FOR CREDIT LOSSES (230 ) 6,210 145 5,980 (439 ) Net interest income after provision for credit losses 49,102 40,627 34,228 89,729 66,740 NONINTEREST INCOME Card income 2,905 2,658 2,714 5,563 5,118 Wealth management fees 2,279 2,338 2,322 4,617 4,611 Service charges on deposit accounts 1,919 1,871 1,792 3,790 3,444 Mortgage servicing 1,254 1,099 661 2,353 1,319 Mortgage servicing rights fair value adjustment 141 (624 ) 366 (483 ) 2,095 Gains on sale of mortgage loans 373 276 326 649 913 Realized gains (losses) on sales of securities — (1,007 ) — (1,007 ) — Unrealized gains (losses) on equity securities 7 (22 ) (153 ) (15 ) (340 ) Gains (losses) on foreclosed assets (97 ) (10 ) (7 ) (107 ) 33 Gains (losses) on other assets 109 — (43 ) 109 150 Income on bank owned life insurance 147 115 41 262 81 Other noninterest income 877 743 532 1,620 1,170 Total noninterest income 9,914 7,437 8,551 17,351 18,594 NONINTEREST EXPENSE Salaries 16,660 19,411 12,936 36,071 25,737 Employee benefits 2,707 2,335 1,984 5,042 4,428 Occupancy of bank premises 2,785 2,102 1,741 4,887 3,801 Furniture and equipment 809 659 623 1,468 1,175 Data processing 2,883 4,323 1,990 7,206 3,643 Marketing and customer relations 1,359 836 1,205 2,195 2,056 Amortization of intangible assets 720 510 245 1,230 490 FDIC insurance 630 563 298 1,193 586 Loan collection and servicing 348 278 278 626 435 Foreclosed assets 97 61 31 158 163 Other noninterest expense 4,975 4,855 2,511 9,830 5,485 Total noninterest expense 33,973 35,933 23,842 69,906 47,999 INCOME BEFORE INCOME TAX EXPENSE 25,043 12,131 18,937 37,174 37,335 INCOME TAX EXPENSE 6,570 2,923 4,852 9,493 9,646 NET INCOME $ 18,473 $ 9,208 $ 14,085 $ 27,681 $ 27,689 EARNINGS PER SHARE - BASIC $ 0.58 $ 0.30 $ 0.49 $ 0.88 $ 0.96 EARNINGS PER SHARE - DILUTED $ 0.58 $ 0.30 $ 0.49 $ 0.88 $ 0.95 WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 31,980,133 30,977,204 28,891,202 31,481,439 28,938,634
HBT Financial, Inc. Unaudited Consolidated Financial Summary Consolidated Balance Sheets June 30, March 31, June 30, 2023 2023 2022 (dollars in thousands) ASSETS Cash and due from banks $ 28,044 $ 35,244 $ 25,478 Interest-bearing deposits with banks 81,764 141,868 134,553 Cash and cash equivalents 109,808 177,112 160,031 Interest-bearing time deposits with banks — 249 — Debt securities available-for-sale, at fair value 822,788 854,622 924,706 Debt securities held-to-maturity 533,231 536,429 548,236 Equity securities with readily determinable fair value 3,152 3,145 3,103 Equity securities with no readily determinable fair value 2,275 1,980 1,952 Restricted stock, at cost 11,345 4,991 2,813 Loans held for sale 8,829 5,130 5,312 Loans, before allowance for credit losses 3,244,655 3,195,540 2,451,826 Allowance for credit losses (37,814 ) (38,776 ) (24,734 ) Loans, net of allowance for credit losses 3,206,841 3,156,764 2,427,092 Bank owned life insurance 23,594 23,447 7,474 Bank premises and equipment, net 65,029 65,119 51,433 Bank premises held for sale 35 235 319 Foreclosed assets 3,080 3,356 2,891 Goodwill 59,876 59,876 29,322 Intangible assets, net 22,122 22,842 1,453 Mortgage servicing rights, at fair value 20,133 19,992 10,089 Investments in unconsolidated subsidiaries 1,614 1,614 1,165 Accrued interest receivable 19,900 20,301 14,263 Other assets 62,158 56,617 32,324 Total assets $ 4,975,810 $ 5,013,821 $ 4,223,978 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits: Noninterest-bearing $ 1,125,823 $ 1,218,888 $ 1,028,790 Interest-bearing 3,038,700 3,091,633 2,673,196 Total deposits 4,164,523 4,310,521 3,701,986 Securities sold under agreements to repurchase 38,729 34,919 51,091 Federal Home Loan Bank advances 177,572 75,183 — Subordinated notes 39,435 39,415 39,356 Junior subordinated debentures issued to capital trusts 52,760 52,746 37,747 Other liabilities 51,939 50,939 19,989 Total liabilities 4,524,958 4,563,723 3,850,169 Stockholders' Equity Common stock 327 327 293 Surplus 294,875 294,441 222,087 Retained earnings 241,777 228,782 212,506 Accumulated other comprehensive income (loss) (70,662 ) (62,175 ) (52,820 ) Treasury stock at cost (15,465 ) (11,277 ) (8,257 ) Total stockholders’ equity 450,852 450,098 373,809 Total liabilities and stockholders’ equity $ 4,975,810 $ 5,013,821 $ 4,223,978 SHARE INFORMATION Shares of common stock outstanding 31,865,868 32,095,370 28,831,197
HBT Financial, Inc. Unaudited Consolidated Financial Summary June 30, March 31, June 30, 2023 2023 2022 (dollars in thousands) LOANS Commercial and industrial $ 385,768 $ 333,013 $ 249,839 Commercial real estate - owner occupied 303,522 317,103 228,997 Commercial real estate - non-owner occupied 882,598 854,024 656,093 Construction and land development 335,262 389,142 332,041 Multi-family 375,536 362,672 269,452 One-to-four family residential 482,442 482,732 325,047 Agricultural and farmland 259,858 243,357 230,370 Municipal, consumer, and other 219,669 213,497 159,987 Loans, before allowance for credit losses $ 3,244,655 $ 3,195,540 $ 2,451,826 PPP LOANS (included above) Commercial and industrial $ 22 $ 25 $ 2,823 Agricultural and farmland — — 9 Total PPP Loans $ 22 $ 25 $ 2,832
June 30, March 31, June 30, 2023 2023 2022 (dollars in thousands) DEPOSITS Noninterest-bearing $ 1,125,823 $ 1,218,888 $ 1,028,790 Interest-bearing demand 1,181,187 1,270,454 1,162,292 Money market 730,652 662,088 581,058 Savings 657,506 738,719 654,953 Time 469,355 420,372 274,893 Total deposits $ 4,164,523 $ 4,310,521 $ 3,701,986
HBT Financial, Inc. Unaudited Consolidated Financial Summary Three Months Ended June 30, 2023 March 31, 2023 June 30, 2022 Average Interest Yield/ Average Interest Yield/ Average Interest Yield/ (dollars in thousands) ASSETS Loans $ 3,238,774 $ 48,189 5.97 % $ 3,012,320 $ 43,111 5.80 % $ 2,467,851 $ 28,522 4.64 % Securities 1,384,180 7,680 2.23 1,411,613 7,813 2.24 1,422,096 6,801 1.92 Deposits with banks 84,366 781 3.71 92,363 739 3.24 240,692 420 0.70 Other 8,577 118 5.52 7,425 116 6.33 2,809 14 2.07 Total interest-earning assets 4,715,897 $ 56,768 4.83 % 4,523,721 $ 51,779 4.64 % 4,133,448 $ 35,757 3.47 % Allowance for credit losses (39,484 ) (33,301 ) (24,579 ) Noninterest-earning assets 299,622 274,870 177,433 Total assets $ 4,976,035 $ 4,765,290 $ 4,286,302 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Interest-bearing deposits: Interest-bearing demand $ 1,224,285 $ 683 0.22 % $ 1,230,644 $ 458 0.15 % $ 1,159,077 $ 144 0.05 % Money market 675,530 1,516 0.90 634,608 935 0.60 582,016 110 0.08 Savings 687,014 189 0.11 709,862 178 0.10 661,661 52 0.03 Time 447,146 1,935 1.74 356,779 803 0.91 284,880 200 0.28 Total interest-bearing deposits 3,033,975 4,323 0.57 2,931,893 2,374 0.33 2,687,634 506 0.08 Securities sold under agreements to repurchase 34,170 34 0.40 39,619 38 0.38 51,057 8 0.07 Borrowings 173,040 2,189 5.07 113,896 1,297 4.62 440 1 1.34 Subordinated notes 39,424 469 4.78 39,403 470 4.83 39,346 469 4.79 Junior subordinated debentures issued to capital trusts 52,752 881 6.70 47,586 763 6.50 37,738 400 4.26 Total interest-bearing liabilities 3,333,361 $ 7,896 0.95 % 3,172,397 $ 4,942 0.63 % 2,816,215 $ 1,384 0.20 % Noninterest-bearing deposits 1,145,089 1,121,365 1,072,883 Noninterest-bearing liabilities 43,080 49,316 18,673 Total liabilities 4,521,530 4,343,078 3,907,771 Stockholders' Equity 454,505 422,212 378,531 Total liabilities and stockholders’ equity $ 4,976,035 $ 4,765,290 $ 4,286,302 Net interest income/Net interest margin (1) $ 48,872 4.16 % $ 46,837 4.20 % $ 34,373 3.34 % Tax-equivalent adjustment (2) 715 0.06 702 0.06 598 0.05 Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3) $ 49,587 4.22 % $ 47,539 4.26 % $ 34,971 3.39 % Net interest rate spread (4) 3.88 % 4.01 % 3.27 % Net interest-earning assets (5) $ 1,382,536 $ 1,351,324 $ 1,317,233 Ratio of interest-earning assets to interest-bearing liabilities 1.41 1.43 1.47 Cost of total deposits 0.41 % 0.24 % 0.05 % Cost of funds 0.71 0.47 0.14
________________________* Annualized measure. (1) Net interest margin represents net interest income divided by average total interest-earning assets. (2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5% . (3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures. (4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. (5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
HBT Financial, Inc. Unaudited Consolidated Financial Summary Six Months Ended June 30, 2023 June 30, 2022 Average Interest Yield/ Average Interest Yield/ (dollars in thousands) ASSETS Loans $ 3,126,173 $ 91,300 5.89 % $ 2,487,320 $ 55,990 4.54 % Securities 1,397,821 15,493 2.24 1,372,284 12,490 1.84 Deposits with banks 88,343 1,520 3.47 305,053 579 0.38 Other 8,004 234 5.89 2,775 33 2.43 Total interest-earning assets 4,620,341 $ 108,547 4.74 % 4,167,432 $ 69,092 3.34 % Allowance for credit losses (36,410 ) (24,340 ) Noninterest-earning assets 287,314 171,624 Total assets $ 4,871,245 $ 4,314,716 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Interest-bearing deposits: Interest-bearing demand $ 1,227,447 $ 1,141 0.19 % $ 1,151,495 $ 286 0.05 % Money market 655,182 2,451 0.75 590,098 231 0.08 Savings 698,375 367 0.11 655,645 102 0.03 Time 402,212 2,738 1.37 297,706 456 0.31 Total interest-bearing deposits 2,983,216 6,697 0.45 2,694,944 1,075 0.08 Securities sold under agreements to repurchase 36,879 72 0.39 52,050 17 0.07 Borrowings 143,632 3,486 4.89 470 2 1.01 Subordinated notes 39,414 939 4.81 39,335 939 4.82 Junior subordinated debentures issued to capital trusts 50,183 1,644 6.61 37,730 758 4.05 Total interest-bearing liabilities 3,253,324 $ 12,838 0.80 % 2,824,529 $ 2,791 0.20 % Noninterest-bearing deposits 1,133,292 1,075,387 Noninterest-bearing liabilities 46,181 22,466 Total liabilities 4,432,797 3,922,382 Stockholders' Equity 438,448 392,334 Total liabilities and stockholders’ equity $ 4,871,245 4,314,716 Net interest income/Net interest margin (1) $ 95,709 4.18 % $ 66,301 3.21 % Tax-equivalent adjustment (2) 1,417 0.06 1,127 0.05 Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3) $ 97,126 4.24 % $ 67,428 3.26 % Net interest rate spread (4) 3.94 % 3.14 % Net interest-earning assets (5) $ 1,367,017 $ 1,342,903 Ratio of interest-earning assets to interest-bearing liabilities 1.42 1.48 Cost of total deposits 0.33 % 0.06 % Cost of funds 0.59 0.14
________________________* Annualized measure. (1) Net interest margin represents net interest income divided by average total interest-earning assets. (2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5% . (3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures. (4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. (5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
HBT Financial, Inc. Unaudited Consolidated Financial Summary June 30, March 31, June 30, 2023 2023 2022 (dollars in thousands) NONPERFORMING ASSETS Nonaccrual $ 7,534 $ 6,508 $ 3,248 Past due 90 days or more, still accruing (1) 1 10 182 Total nonperforming loans 7,535 6,518 3,430 Foreclosed assets 3,080 3,356 2,891 Total nonperforming assets $ 10,615 $ 9,874 $ 6,321 Allowance for credit losses $ 37,814 $ 38,776 $ 24,734 Loans, before allowance for credit losses 3,244,655 3,195,540 2,451,826 CREDIT QUALITY RATIOS Allowance for credit losses to loans, before allowance for credit losses 1.17 % 1.21 % 1.01 % Allowance for credit losses to nonaccrual loans 501.91 595.82 761.51 Allowance for credit losses to nonperforming loans 501.84 594.91 721.11 Nonaccrual loans to loans, before allowance for credit losses 0.23 0.20 0.13 Nonperforming loans to loans, before allowance for credit losses 0.23 0.20 0.14 Nonperforming assets to total assets 0.21 0.20 0.15 Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets 0.33 0.31 0.26
________________________(1) Prior to 2023, excludes loans acquired with deteriorated credit quality that are past due 90 or more days and accruing. Such loans totaled $23 thousand as of June 30, 2022.
Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 ALLOWANCE FOR CREDIT LOSSES ON LOANS (dollars in thousands) Beginning balance $ 38,776 $ 25,333 $ 24,508 $ 25,333 $ 23,936 Adoption of ASC 326 — 6,983 — 6,983 — PCD allowance established in acquisition — 1,247 — 1,247 — Provision for credit losses (1,080 ) 5,101 145 4,021 (439 ) Charge-offs (179 ) (142 ) (159 ) (321 ) (293 ) Recoveries 297 254 240 551 1,530 Ending balance $ 37,814 $ 38,776 $ 24,734 $ 37,814 $ 24,734 Net charge-offs (recoveries) $ (118 ) $ (112 ) $ (81 ) $ (230 ) $ (1,237 ) Average loans, before allowance for credit losses 3,238,774 3,012,320 2,467,851 3,126,173 2,487,320 Net charge-offs (recoveries) to average loans, before allowance for credit losses * (0.01 ) % (0.02 ) % (0.01 ) % (0.01 ) % (0.10 ) %
________________________* Annualized measure.
Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 PROVISION FOR CREDIT LOSSES (dollars in thousands) Loans (1) $ (1,080 ) $ 5,101 $ 145 $ 4,021 $ (439 ) Unfunded lending-related commitments (1) 650 509 — 1,159 — Debt securities 200 600 — 800 — Total provision for credit losses $ (230 ) $ 6,210 $ 145 $ 5,980 $ (439 )
________________________(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 Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands) Net income $ 18,473 $ 9,208 $ 14,085 $ 27,681 $ 27,689 Adjustments: Acquisition expenses (1) (627 ) (13,064 ) — (13,691 ) — Gains (losses) on sales of closed branch premises 75 — (18 ) 75 179 Realized gains (losses) on sales of securities — (1,007 ) — (1,007 ) — Mortgage servicing rights fair value adjustment 141 (624 ) 366 (483 ) 2,095 Total adjustments (411 ) (14,695 ) 348 (15,106 ) 2,274 Tax effect of adjustments 112 4,044 (99 ) 4,156 (648 ) Less adjustments, after tax effect (299 ) (10,651 ) 249 (10,950 ) 1,626 Adjusted net income $ 18,772 $ 19,859 $ 13,836 $ 38,631 $ 26,063 Average assets $ 4,976,035 $ 4,765,290 $ 4,286,302 $ 4,871,245 $ 4,314,716 Return on average assets * 1.49 % 0.78 % 1.32 % 1.15 % 1.29 % Adjusted return on average assets * 1.51 1.69 1.29 1.60 1.22
________________________* 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 Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands, except per share data) Numerator: Net income $ 18,473 $ 9,208 $ 14,085 $ 27,681 $ 27,689 Earnings allocated to participating securities (1) (11 ) (5 ) (17 ) (16 ) (34 ) Numerator for earnings per share - basic and diluted $ 18,462 $ 9,203 $ 14,068 $ 27,665 $ 27,655 Adjusted net income $ 18,772 $ 19,859 $ 13,836 $ 38,631 $ 26,063 Earnings allocated to participating securities (1) (10 ) (13 ) (17 ) (23 ) (32 ) Numerator for adjusted earnings per share - basic and diluted $ 18,762 $ 19,846 $ 13,819 $ 38,608 $ 26,031 Denominator: Weighted average common shares outstanding 31,980,133 30,977,204 28,891,202 31,481,439 28,938,634 Dilutive effect of outstanding restricted stock units 99,850 69,947 53,674 84,981 48,688 Weighted average common shares outstanding, including all dilutive potential shares 32,079,983 31,047,151 28,944,876 31,566,420 28,987,322 Earnings per share - Basic $ 0.58 $ 0.30 $ 0.49 $ 0.88 $ 0.96 Earnings per share - Diluted $ 0.58 $ 0.30 $ 0.49 $ 0.88 $ 0.95 Adjusted earnings per share - Basic $ 0.59 $ 0.64 $ 0.48 $ 1.23 $ 0.90 Adjusted earnings per share - Diluted $ 0.58 $ 0.64 $ 0.48 $ 1.22 $ 0.90
________________________(1) The Company has granted certain restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.
Reconciliation of Non-GAAP Financial Measures – Net Interest Income and Net Interest Margin (Tax Equivalent Basis) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands) Net interest income (tax equivalent basis) Net interest income $ 48,872 $ 46,837 $ 34,373 $ 95,709 $ 66,301 Tax-equivalent adjustment (1) 715 702 598 1,417 1,127 Net interest income (tax equivalent basis) (1) $ 49,587 $ 47,539 $ 34,971 $ 97,126 $ 67,428 Net interest margin (tax equivalent basis) Net interest margin * 4.16 % 4.20 % 3.34 % 4.18 % 3.21 % Tax-equivalent adjustment * (1) 0.06 0.06 0.05 0.06 0.05 Net interest margin (tax equivalent basis) * (1) 4.22 % 4.26 % 3.39 % 4.24 % 3.26 % Average interest-earning assets $ 4,715,897 $ 4,523,721 $ 4,133,448 $ 4,620,341 $ 4,167,432
________________________* Annualized measure. (1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5% .
Reconciliation of Non-GAAP Financial Measures – Efficiency Ratio (Tax Equivalent Basis) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands) Efficiency ratio (tax equivalent basis) Total noninterest expense $ 33,973 $ 35,933 $ 23,842 $ 69,906 $ 47,999 Less: amortization of intangible assets 720 510 245 1,230 490 Adjusted noninterest expense $ 33,253 $ 35,423 $ 23,597 $ 68,676 $ 47,509 Net interest income $ 48,872 $ 46,837 $ 34,373 $ 95,709 $ 66,301 Total noninterest income 9,914 7,437 8,551 17,351 18,594 Operating revenue 58,786 54,274 42,924 113,060 84,895 Tax-equivalent adjustment (1) 715 702 598 1,417 1,127 Operating revenue (tax equivalent basis) (1) $ 59,501 $ 54,976 $ 43,522 $ 114,477 $ 86,022 Efficiency ratio 56.57 % 65.27 % 54.97 % 60.74 % 55.96 % Efficiency ratio (tax equivalent basis) (1) 55.89 64.43 54.22 59.99 55.23
________________________(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5% .
Reconciliation of Non-GAAP Financial Measures – Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share June 30, March 31, June 30, 2023 2023 2022 (dollars in thousands, except per share data) Tangible common equity Total stockholders' equity $ 450,852 $ 450,098 $ 373,809 Less: Goodwill 59,876 59,876 29,322 Less: Intangible assets, net 22,122 22,842 1,453 Tangible common equity $ 368,854 $ 367,380 $ 343,034 Tangible assets Total assets $ 4,975,810 $ 5,013,821 $ 4,223,978 Less: Goodwill 59,876 59,876 29,322 Less: Intangible assets, net 22,122 22,842 1,453 Tangible assets $ 4,893,812 $ 4,931,103 $ 4,193,203 Total stockholders' equity to total assets 9.06 % 8.98 % 8.85 % Tangible common equity to tangible assets 7.54 7.45 8.18 Shares of common stock outstanding 31,865,868 32,095,370 28,831,197 Book value per share $ 14.15 $ 14.02 $ 12.97 Tangible book value per share 11.58 11.45 11.90
Reconciliation of Non-GAAP Financial Measures – Return on Average Tangible Common Equity, Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, 2023 2023 2022 2023 2022 (dollars in thousands) Average tangible common equity Total stockholders' equity $ 454,505 $ 422,212 $ 378,531 $ 438,448 $ 392,334 Less: Goodwill 59,876 49,352 29,322 54,643 29,322 Less: Intangible assets, net 22,520 15,635 1,597 19,097 1,720 Average tangible common equity $ 372,109 $ 357,225 $ 347,612 $ 364,708 $ 361,292 Net income $ 18,473 $ 9,208 $ 14,085 $ 27,681 $ 27,689 Adjusted net income 18,772 19,859 13,836 38,631 26,063 Return on average stockholders' equity * 16.30 % 8.84 % 14.92 % 12.73 % 14.23 % Return on average tangible common equity * 19.91 10.45 16.25 15.31 15.45 Adjusted return on average stockholders' equity * 16.57 % 19.08 % 14.66 % 17.77 % 13.40 % Adjusted return on average tangible common equity * 20.23 22.55 15.96 21.36 14.55
________________________* Annualized measure.
What is the net income reported by HBT Financial for the second quarter of 2023?
HBT Financial reported net income of $18.5 million, or $0.58 diluted earnings per share, for the second quarter of 2023.
Who is the President and CEO of HBT Financial?
J. Lance Carter is the President and CEO of HBT Financial.
What were the key financial highlights for HBT Financial in the second quarter of 2023?
The key financial highlights for HBT Financial in the second quarter of 2023 include strong net income, adjusted net income, net interest income, noninterest income, and a decrease in noninterest expenses.
Did HBT Financial repurchase any shares of its common stock during the second quarter of 2023?
Yes, HBT Financial repurchased 229,502 shares of its common stock at a weighted average price of $18.07 during the second quarter of 2023.
What was the total loans outstanding and total deposits for HBT Financial at the end of the second quarter of 2023?
The total loans outstanding were $3.24 billion, and total deposits were $4.16 billion at the end of the second quarter of 2023.
