[10-Q] HBT Financial, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
HBT Financial (HBT) reported solid Q3 2025 results with net income of $19.8 million and diluted EPS of $0.63, up from $18.2 million and $0.57 a year ago. Net interest income rose to $50.0 million from $47.7 million as deposit interest expense declined year over year. Provision for credit losses was $0.6 million, roughly flat versus last year. Noninterest income increased to $9.8 million, aided by higher wealth management fees, while noninterest expense was $32.5 million, reflecting stable operating costs and a $0.4 million loss on debt extinguishment.
Balance sheet quality improved: accumulated other comprehensive loss narrowed to $27.1 million from $46.8 million at year-end, and deposits totaled $4.35 billion. Loans were $3.40 billion versus $3.47 billion at December 31, 2024, with the allowance at $41.9 million. The company paid $0.21 per-share in dividends and repurchased 39,631 shares during the quarter. Strategically, HBT agreed to acquire CNB Bank Shares, Inc. for approximately 5.5 million HBT shares plus $33.8 million in cash; CNBN holders are expected to own about 15% post-close. Closing is anticipated in Q1 2026, subject to shareholder and regulatory approvals.
Positive
- None.
Negative
- None.
Insights
Earnings edged higher; OCI improved; pending CNBN deal adds scale.
HBT Financial delivered modest year-over-year EPS growth to $0.63 as net interest income improved and funding costs eased. Credit costs remained low with a $0.6 million provision, and fee income was steady, led by wealth management. Operating expenses were contained, with a small loss tied to debt extinguishment.
On the balance sheet, AOCI improved as securities marks recovered, supporting tangible capital. Loans declined to $3.40 billion, while deposits stood at $4.35 billion, pointing to conservative balance sheet positioning. The allowance for credit losses of $41.9 million provides loss-absorption capacity across portfolios.
The announced acquisition of CNB Bank Shares combines stock (about 5.5 million shares) and
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2025
OR
For the transition period from ______ to
Commission file number: 001-39085
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
( | |||||
(Address of principal executive offices, including zip code) | (Registrant’s telephone number, including area code) | ||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 23, 2025, there were 31,431,924 shares outstanding of the registrant’s common stock, $0.01 par value.
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TABLE OF CONTENTS
HBT Financial, Inc.
| Page | ||||||||
PART I. FINANCIAL INFORMATION | 3 | |||||||
Item 1. | Consolidated Financial Statements | 3 | ||||||
Consolidated Balance Sheets | 3 | |||||||
Consolidated Statements of Income | 4 | |||||||
Consolidated Statements of Comprehensive Income | 5 | |||||||
Consolidated Statement of Changes in Stockholders’ Equity | 6 | |||||||
Consolidated Statements of Cash Flows | 8 | |||||||
Notes to Consolidated Financial Statements | 10 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 50 | ||||||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 84 | ||||||
Item 4. | Controls and Procedures | 86 | ||||||
PART II. OTHER INFORMATION | 87 | |||||||
Item 1. | Legal Proceedings | 87 | ||||||
Item 1A. | Risk Factors | 87 | ||||||
Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 87 | ||||||
Item 3. | Defaults Upon Senior Securities | 87 | ||||||
Item 4. | Mine Safety Disclosures | 87 | ||||||
Item 5. | Other Information | 88 | ||||||
Item 6. | Exhibits | 88 | ||||||
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report are forward-looking statements. Forward-looking statements may include statements relating to our plans, strategies and expectations, near-term loan growth, net interest margin, mortgage banking profits, wealth management fees, expenses, asset quality, capital levels, continued earnings, and liquidity. Forward-looking statements are generally identifiable by use of the words "believe," "may," "will," "should," "could," "expect," "estimate," "intend," "anticipate," "project," "plan" or similar expressions. Forward-looking statements are frequently based on assumptions that may or may not materialize and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or prospects include, but are not limited to:
•the strength of the local, state, national, and international economies and financial markets (including effects of inflationary pressures and supply chain constraints);
•effects on the U.S. economy resulting from the threat or implementation of, or changes to, existing policies and executive orders including tariffs, immigration policy, regulatory or other governmental agencies, foreign policy and tax regulations;
•the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East), or other adverse 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;
•new and revised accounting policies and practices, as may be adopted by state and federal regulatory banking agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board;
•changes in local, state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to bank failures;
•the imposition of tariffs or other governmental policies impacting the value of products produced by the Company's commercial borrowers;
•changes in interest rates and prepayment rates of the Company’s assets;
•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;
•technological changes implemented by us and other parties, including our third-party vendors, which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence;
•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;
•the loss of key executives and employees, talent shortages and employee turnover;
•changes in consumer spending;
•unexpected outcomes or costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company;
•the economic impact on the Company and its customers of climate change, natural disasters and of exceptional weather occurrences such as tornadoes, floods and blizzards;
•fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates;
•credit risks and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio (including commercial real estate loans) and large loans to certain borrowers;
•the overall health of the local and national real estate market;
•the ability to maintain an adequate level of allowance for credit losses on loans;
•the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure;
•the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company’s cost of funds;
•the level of nonperforming assets on our balance sheets;
•interruptions involving our information technology and communications systems or third-party servicers;
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•the occurrence of fraudulent activity, breaches or failures of our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud;
•the effectiveness of the Company’s risk management framework and internal disclosure controls and procedures;
•our asset quality and any loan charge-offs;
•the effects of changes in interest rates on our net interest income, net interest margin, our investments, our loan originations, and our modeling estimates relating to interest rate changes;
•our access to sources of liquidity and capital to address our liquidity needs;
•our inability to receive dividends from the Bank, pay dividends to our common stockholders or satisfy obligations as they become due;
•the effects of problems encountered by other financial institutions;
•our ability to achieve organic loan and deposit growth and the composition of such growth;
•our ability to successfully develop and commercialize new or enhanced products and services;
•current and future business, economic and market conditions in the United States (“U.S.”) generally or in the States of Illinois and Iowa in particular;
•the geographic concentration of our operations in the States of Illinois and Iowa;
•our ability to attract and retain customer deposits;
•our ability to maintain the Bank’s reputation;
•possible impairment of our goodwill and other intangible assets;
•market perceptions associated with certain aspects of our business;
•the possibility that stockholders of CNB Bank Shares, Inc. ("CNBN") may not approve the merger agreement between HBT and CNBN with respect to the proposed merger transaction;
•the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all;
•potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction;
•the diversion of management time on transaction-related issues;
•the ultimate timing, outcome and results of integrating the operations of CNBN into those of HBT;
•the effects of the merger in HBT’s future financial condition, results of operations, strategy and plans;
•regulatory approvals of the transaction;
•the effects of the current U.S. government shutdown, including the impact of prolonged closures or staffing reductions at government agencies effecting our business;
•our ability to meet our obligations as a public company, including our obligations under Section 404 of the Sarbanes-Oxley Act of 2002;
•the ability of the Company to manage the risks associated with the foregoing as well as anticipated; and
•the factors discussed in "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" or elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange (“SEC”) Commission on March 7, 2025.
These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | |||||||||||
| (dollars in thousands, except per share data) | September 30, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Interest-bearing deposits with banks | |||||||||||
| Cash and cash equivalents | |||||||||||
| Debt securities available-for-sale, at fair value | |||||||||||
Debt securities held-to-maturity (fair value of $ | |||||||||||
| Equity securities with readily determinable fair value | |||||||||||
| Equity securities with no readily determinable fair value | |||||||||||
| Restricted stock, at cost | |||||||||||
| Loans held for sale | |||||||||||
| Loans, before allowance for credit losses | |||||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Loans, net of allowance for credit losses | |||||||||||
| Bank owned life insurance | |||||||||||
| Bank premises and equipment, net | |||||||||||
| Bank premises held for sale | |||||||||||
| Foreclosed assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Mortgage servicing rights, at fair value | |||||||||||
| Investments in unconsolidated subsidiaries | |||||||||||
| Accrued interest receivable | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing | $ | $ | |||||||||
| Interest-bearing | |||||||||||
| Total deposits | |||||||||||
| Securities sold under agreements to repurchase | |||||||||||
| Federal Home Loan Bank advances | |||||||||||
| Subordinated notes | |||||||||||
| Junior subordinated debentures issued to capital trusts | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (Note 15) | |||||||||||
| Stockholders' Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Surplus | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Treasury stock at cost, | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| INTEREST AND DIVIDEND INCOME | |||||||||||||||||||||||||||||
| Loans, including fees: | |||||||||||||||||||||||||||||
| Taxable | $ | $ | $ | $ | |||||||||||||||||||||||||
| Federally tax exempt | |||||||||||||||||||||||||||||
| Debt securities: | |||||||||||||||||||||||||||||
| Taxable | |||||||||||||||||||||||||||||
| Federally tax exempt | |||||||||||||||||||||||||||||
| Interest-bearing deposits in bank | |||||||||||||||||||||||||||||
| Other interest and dividend income | |||||||||||||||||||||||||||||
| Total interest and dividend income | |||||||||||||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Deposits | |||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | |||||||||||||||||||||||||||||
| Borrowings | |||||||||||||||||||||||||||||
| Subordinated notes | |||||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | |||||||||||||||||||||||||||||
| Total interest expense | |||||||||||||||||||||||||||||
| Net interest income | |||||||||||||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | |||||||||||||||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||||||||
| Card income | |||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||
| Service charges on deposit accounts | |||||||||||||||||||||||||||||
| Mortgage servicing | |||||||||||||||||||||||||||||
| Mortgage servicing rights fair value adjustment | ( | ( | ( | ( | |||||||||||||||||||||||||
| Gains on sale of mortgage loans | |||||||||||||||||||||||||||||
| Realized gains (losses) on sales of securities | ( | ( | ( | ||||||||||||||||||||||||||
| Unrealized gains (losses) on equity securities | ( | ( | |||||||||||||||||||||||||||
| Gains (losses) on foreclosed assets | ( | ||||||||||||||||||||||||||||
| Gains (losses) on other assets | ( | ( | ( | ( | |||||||||||||||||||||||||
| Income on bank owned life insurance | |||||||||||||||||||||||||||||
| Other noninterest income | |||||||||||||||||||||||||||||
| Total noninterest income | |||||||||||||||||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||||||||||||
| Salaries | |||||||||||||||||||||||||||||
| Employee benefits | |||||||||||||||||||||||||||||
| Occupancy of bank premises | |||||||||||||||||||||||||||||
| Furniture and equipment | |||||||||||||||||||||||||||||
| Data processing | |||||||||||||||||||||||||||||
| Marketing and customer relations | |||||||||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | |||||||||||||||||||||||||||||
| FDIC insurance | |||||||||||||||||||||||||||||
| Loan collection and servicing | |||||||||||||||||||||||||||||
| Foreclosed assets | |||||||||||||||||||||||||||||
| Other noninterest expense | |||||||||||||||||||||||||||||
| Total noninterest expense | |||||||||||||||||||||||||||||
| INCOME BEFORE INCOME TAX EXPENSE | |||||||||||||||||||||||||||||
| INCOME TAX EXPENSE | |||||||||||||||||||||||||||||
| NET INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
| EARNINGS PER SHARE - BASIC | $ | $ | $ | $ | |||||||||||||||||||||||||
| EARNINGS PER SHARE - DILUTED | $ | $ | $ | $ | |||||||||||||||||||||||||
| WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | |||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| NET INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
| OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||||||||
| Unrealized gains on debt securities available-for-sale | |||||||||||||||||||||||||||||
| Reclassification adjustment for losses on sale of debt securities available-for-sale realized in income | |||||||||||||||||||||||||||||
| Reclassification adjustment for amortization of net unrealized losses on debt securities transferred to held-to-maturity | |||||||||||||||||||||||||||||
| Unrealized gains (losses) on derivative instruments | ( | ||||||||||||||||||||||||||||
| Reclassification adjustment for net settlements on derivative instruments | ( | ( | ( | ||||||||||||||||||||||||||
| Total other comprehensive income, before tax | |||||||||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||||||||
| Total other comprehensive income | |||||||||||||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
(Unaudited)
| Common Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | Shares Outstanding | Amount | Surplus | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cash dividends and dividend equivalents ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends and dividend equivalents ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)
(Unaudited)
(Unaudited)
| Common Stock | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | Shares Outstanding | Amount | Surplus | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units, net of tax withholdings | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cash dividends and dividend equivalents ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Cumulative effect of change in accounting principle (ASU 2023-02) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units, net of tax withholdings | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cash dividends and dividend equivalents ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
| Net income | $ | $ | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation expense | |||||||||||||||||
| Provision for credit losses | |||||||||||||||||
| Net amortization of debt securities | |||||||||||||||||
| Deferred income tax expense | |||||||||||||||||
| Stock-based compensation | |||||||||||||||||
| Net accretion of discount and deferred loan fees on loans | ( | ( | |||||||||||||||
| Net realized loss on sales of securities | |||||||||||||||||
| Net unrealized loss (gain) on equity securities | ( | ||||||||||||||||
| Net loss on disposals of bank premises and equipment | |||||||||||||||||
| Net gain on sales of bank premises held for sale | ( | ||||||||||||||||
| Impairment losses on bank premises held for sale | |||||||||||||||||
| Net gain on sales of foreclosed assets | ( | ( | |||||||||||||||
| Write-down of foreclosed assets | |||||||||||||||||
| Amortization of intangibles | |||||||||||||||||
| Decrease in fair value of mortgage servicing rights | |||||||||||||||||
| Net loss on extinguishment of subordinated debt | |||||||||||||||||
| Amortization of discount and issuance costs on subordinated notes and debentures | |||||||||||||||||
| Amortization of discount on Federal Home Loan Bank advances | |||||||||||||||||
| Amortization of premium on time deposits | ( | ||||||||||||||||
| Mortgage loans originated for sale | ( | ( | |||||||||||||||
| Proceeds from sale of mortgage loans | |||||||||||||||||
| Net gain on sale of mortgage loans | ( | ( | |||||||||||||||
| Increase in cash surrender value of bank owned life insurance | ( | ( | |||||||||||||||
| Decrease in accrued interest receivable | |||||||||||||||||
| Decrease in other assets | |||||||||||||||||
| Increase (decrease) in other liabilities | ( | ||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
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HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
| Proceeds from maturities of interest-bearing time deposits with banks | |||||||||||||||||
| Purchase of interest-bearing time deposits with banks | ( | ||||||||||||||||
| Proceeds from sales of debt securities | |||||||||||||||||
| Proceeds from sales and redemptions of equity securities | |||||||||||||||||
| Proceeds from paydowns, maturities, and calls of debt securities | |||||||||||||||||
| Purchase of debt securities | ( | ( | |||||||||||||||
| Purchase of equity securities | ( | ( | |||||||||||||||
| Purchase of loans | ( | ( | |||||||||||||||
| Net decrease in loans | |||||||||||||||||
| Proceeds from redemption of restricted stock | |||||||||||||||||
| Purchases of bank premises and equipment | ( | ( | |||||||||||||||
| Proceeds from sales of bank premises and equipment | |||||||||||||||||
| Proceeds from sales of bank premises held for sale | |||||||||||||||||
| Proceeds from sales of foreclosed assets | |||||||||||||||||
| Net cash provided by investing activities | |||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
| Net increase (decrease) in deposits | ( | ||||||||||||||||
| Net decrease in repurchase agreements | ( | ( | |||||||||||||||
| Proceeds from long-term Federal Home Loan Bank advances | |||||||||||||||||
| Repayment of long-term Federal Home Loan Bank advances | ( | ( | |||||||||||||||
| Repayment of subordinated notes | ( | ||||||||||||||||
| Taxes paid related to the vesting of restricted stock units | ( | ( | |||||||||||||||
| Repurchase of common stock | ( | ( | |||||||||||||||
| Cash dividends and dividend equivalents paid | ( | ( | |||||||||||||||
| Net cash used in financing activities | ( | ( | |||||||||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | |||||||||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | |||||||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | |||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||||||||
| Cash paid for interest | $ | $ | |||||||||||||||
| Net cash paid for income taxes | $ | $ | |||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES | |||||||||||||||||
| Transfers of loans to foreclosed assets | $ | $ | |||||||||||||||
| Transfers of bank premises and equipment to bank premises held for sale | $ | $ | |||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited)
9
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 1 – ACCOUNTING POLICIES
Basis of Presentation
HBT Financial, Inc. (“HBT Financial” or the “Company”) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (“Heartland Bank” or the “Bank”). The Bank provides a comprehensive suite of financial products and services to consumers, businesses, and municipal entities throughout Illinois and eastern Iowa. Additionally, the Company is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory agencies.
The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) interim reporting requirements. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to rules and regulations of the SEC. These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025.
The unaudited consolidated financial statements include all normal, recurring adjustments necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.
Use of Estimates
The accompanying consolidated financial statements have been prepared in conformity with GAAP. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the periods then ended.
Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for credit losses.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or stockholders’ equity.
Subsequent Events
In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
Recent Legislation
On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and development expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. This legislation is not expected to have a material impact on the Company's consolidated results of operations or financial position.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 expands income tax disclosure requirements. The amendments require annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign, income tax expense (benefit) from continuing operations disaggregated by federal (national), state, and foreign. The amendments also eliminate certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. The amendments in this update are effective for years beginning after December 15, 2024. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. Early adoption is permitted. This standard did not have a material impact on the Company’s consolidated results of operations or financial position.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 provides more decision-useful information about a public entity's expenses by requiring additional detail on expenses reported in income statements. Under the ASU, public entities will provide detailed disclosure in interim and annual periods of specified categories underlying certain expense captions. The ASU requires public entities to apply the amendments prospectively, with an option to use retrospective application. The amendments in this update are effective for years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. This standard is not expected to have a material impact on the Company's consolidated results of operations or financial position.
NOTE 2 – BUSINESS COMBINATIONS
CNB Bank Shares, Inc.
On October 20, 2025, HBT Financial and CNB Bank Shares, Inc. ("CNBN"), the holding company for CNB Bank & Trust, N.A. ("CNB Bank"), jointly announced the signing of a merger agreement pursuant to which HBT Financial will acquire CNBN and CNB Bank. The combined company will have increased density in the central Illinois, Chicago MSA, and St. Louis MSA markets.
Under the terms of the merger agreement, total consideration consists of approximately 5.5 million shares of HBT Financial's common stock and $33.8 million in cash. CNBN shareholders may elect to receive either (i) 1.0434 shares of HBT Financial's common stock for each share of CNBN, or (ii) $27.73 per share in cash, or (iii) a combination of cash and stock consideration, subject to adjustment and to the election and proration provisions in the merger agreement. Upon closing the transaction, shareholders of CNBN are expected to hold approximately 15 % of HBT Financial's outstanding common stock.
The transaction is expected to close in the first quarter of 2026, subject to customary closing conditions, approval of CNBN shareholders, and regulatory approvals. There were no significant acquisition expenses related to the planned acquisition of CNBN during the three and nine months ended September 30, 2025 and 2024.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 3 – SECURITIES
Debt Securities
The amortized cost and fair values of debt securities, with gross unrealized gains and losses and allowance for credit losses, are as follows:
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||
| Available-for-sale: | ||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| U.S. government agency | ( | |||||||||||||||||||||||||||||||
| Municipal | ( | |||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||
| Agency residential | ( | |||||||||||||||||||||||||||||||
| Agency commercial | ( | |||||||||||||||||||||||||||||||
| Corporate | ( | |||||||||||||||||||||||||||||||
| Total available-for-sale | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Allowance for Credit Losses | |||||||||||||||||||||||||||
| Held-to-maturity: | ||||||||||||||||||||||||||||||||
| U.S. government agency | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| Municipal | ( | |||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||
| Agency residential | ( | |||||||||||||||||||||||||||||||
| Agency commercial | ( | |||||||||||||||||||||||||||||||
| Total held-to-maturity | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value | |||||||||||||||||||||||||||
| Available-for-sale: | ||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| U.S. government agency | ( | |||||||||||||||||||||||||||||||
| Municipal | ( | |||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||
| Agency residential | ( | |||||||||||||||||||||||||||||||
| Agency commercial | ( | |||||||||||||||||||||||||||||||
| Corporate | ( | |||||||||||||||||||||||||||||||
| Total available-for-sale | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Allowance for Credit Losses | |||||||||||||||||||||||||||
| Held-to-maturity: | ||||||||||||||||||||||||||||||||
| U.S. government agency | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
| Municipal | ( | |||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||
| Agency residential | ( | |||||||||||||||||||||||||||||||
| Agency commercial | ( | |||||||||||||||||||||||||||||||
| Total held-to-maturity | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||
As of September 30, 2025 and December 31, 2024, the Bank had debt securities with a carrying value of $515.6 million and $468.8 million, respectively, which were pledged to secure public deposits, securities sold under agreements to repurchase, available borrowing capacity, and for other purposes required or permitted by law.
The amortized cost and fair value of debt securities by contractual maturity, as of September 30, 2025, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| Available-for-Sale | Held-to-Maturity | ||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Due in 1 year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after 1 year through 5 years | |||||||||||||||||||||||
| Due after 5 years through 10 years | |||||||||||||||||||||||
| Due after 10 years | |||||||||||||||||||||||
| Mortgage-backed: | |||||||||||||||||||||||
| Agency residential | |||||||||||||||||||||||
| Agency commercial | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following table presents gross unrealized losses and fair value of debt securities available-for-sale that do not have an associated allowance for credit losses as of September 30, 2025 and December 31, 2024, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position:
| September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Investments in a Continuous Unrealized Loss Position | ||||||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| Available-for-sale: | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| U.S. government agency | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Municipal | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Agency commercial | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Corporate | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total available-for-sale | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Investments in a Continuous Unrealized Loss Position | ||||||||||||||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| Available-for-sale: | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| U.S. government agency | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Municipal | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Agency commercial | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Corporate | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total available-for-sale | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
As of September 30, 2025, there were 564 debt securities in an unrealized loss position for a period of twelve months or more, and 28 debt securities in an unrealized loss position for a period of less than twelve months.
U.S. Treasury, U.S. government agency, and agency mortgage-backed securities are considered to have no risk of credit loss as they are either explicitly or implicitly guaranteed by the U.S. government. The changes in fair value in these portfolios are considered to be primarily driven by changes in market interest rates and other non-credit risks, such as prepayment and liquidity risks.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Municipal securities include general obligation bonds which have a very low historical default rate due to issuers generally having taxing authority to service the debt and represent approximately 76 % of the total fair value of our municipal securities portfolio as of September 30, 2025. The remainder of the municipal securities are also of high credit quality with ratings of Aa3/AA- or better. The Company evaluates credit risk through monitoring credit ratings and reviews of available financial data. The changes in fair value in municipal securities were considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks. The estimated allowance for credit losses for the municipal debt securities held-to-maturity was deemed insignificant.
Corporate securities include investment grade corporate and bank subordinated debt securities. The Company evaluates credit risk through monitoring credit ratings, reviews of available issuer financial data, and sector trends. The changes in fair value in corporate securities were considered to be primarily driven by changes in market interest rates and other non-credit risks, such as call and liquidity risks.
As of September 30, 2025, the Company did not intend to sell the debt securities that are in an unrealized loss position, and it was more likely than not that the Company would recover the amortized cost prior to being required to sell the debt securities.
Accrued interest on debt securities is excluded from the estimate of credit losses and totaled $5.3 million and $5.1 million as of September 30, 2025 and December 31, 2024, respectively.
Sales of debt securities were as follows during the three and nine months ended September 30:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Proceeds from sales | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gross realized gains | |||||||||||||||||||||||||||||
| Gross realized losses | ( | ( | ( | ||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Equity Securities
Equity securities with readily determinable fair values are measured at fair value with changes in fair value recognized in unrealized gains (losses) on equity securities on the consolidated statements of income. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.
The initial cost and carrying values of equity securities, with cumulative net unrealized gains and losses were as follows:
| September 30, 2025 | ||||||||||||||
| (dollars in thousands) | Readily Determinable Fair Value | No Readily Determinable Fair Value | ||||||||||||
| Initial cost | $ | $ | ||||||||||||
| Cumulative net unrealized gains (losses) | ( | |||||||||||||
| Carrying value | $ | $ | ||||||||||||
| December 31, 2024 | ||||||||||||||
| (dollars in thousands) | Readily Determinable Fair Value | No Readily Determinable Fair Value | ||||||||||||
| Initial cost | $ | $ | ||||||||||||
| Cumulative net unrealized gains (losses) | ( | |||||||||||||
| Carrying value | $ | $ | ||||||||||||
As of September 30, 2025 and December 31, 2024, the cumulative net unrealized losses on equity securities with no readily determinable fair value reflect impairments of $0.2 0.2 no
Unrealized gains (losses) on equity securities were as follows during the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Readily determinable fair value | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
| No readily determinable fair value | |||||||||||||||||||||||||||||
| Unrealized gains (losses) on equity securities | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 4 – LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES
Major categories of loans are summarized as follows:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Commercial and industrial | $ | $ | |||||||||
| Commercial real estate - owner occupied | |||||||||||
| Commercial real estate - non-owner occupied | |||||||||||
| Construction and land development | |||||||||||
| Multi-family | |||||||||||
| One-to-four family residential | |||||||||||
| Agricultural and farmland | |||||||||||
| Municipal, consumer, and other | |||||||||||
| Loans, before allowance for credit losses | |||||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Loans, net of allowance for credit losses | $ | $ | |||||||||
Allowance for Credit Losses
Management estimates the allowance for credit losses using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The discounted cash flow method is used to estimate expected credit losses for all loan categories, except for consumer loans where the weighted average remaining maturity method is utilized.
At September 30, 2025, the economic forecast used by management anticipates a mild slowdown for the fourth quarter of 2025 followed by a gradual increase in economic activity over the remainder of the four quarter forecast period. The forecast has the unemployment rate increasing slightly during the fourth quarter of 2025 then decreasing slightly in 2026, while gross domestic product ("GDP") growth slows during the fourth quarter of 2025 and then increases in 2026. After the forecast period, the Company reverts to long-term averages over a 4-quarter reversion period. Additionally, management has made qualitative adjustments to the loss estimates to reflect other factors that influence credit losses.
17
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables detail activity in the allowance for credit losses:
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
18
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Gross charge-offs, further sorted by origination year, were as follows during the three months ended September 30, 2025 and 2024.
| Gross Charge-Offs for the Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Charge-Offs for the Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
19
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Gross charge-offs, further sorted by origination year, were as follows during the nine months ended September 30, 2025 and 2024.
| Gross Charge-Offs for the Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Charge-Offs for the Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
20
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables present loans and the related allowance for credit losses by category:
| September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Loan balances: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Individually evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Individually evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Commercial and Industrial | Commercial Real Estate Owner Occupied | Commercial Real Estate Non-owner Occupied | Construction and Land Development | Multi-Family | One-to-four Family Residential | Agricultural and Farmland | Municipal, Consumer, and Other | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| Loan balances: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Individually evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collectively evaluated for impairment | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Individually evaluated for impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
21
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables present collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| Amortized Cost | Allowance for Credit Losses | |||||||||||||||||||||||||||||||
| Primary Collateral Type | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Real Estate | Vehicles | Other | Total | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Amortized Cost | Allowance for Credit Losses | |||||||||||||||||||||||||||||||
| Primary Collateral Type | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Real Estate | Vehicles | Other | Total | ||||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Accrued interest on loans is excluded from the estimate of credit losses and totaled $18.1 million and $19.6 million as of September 30, 2025 and December 31, 2024, respectively.
22
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Past Due and Nonaccrual Status
Past due status is based on the contractual terms of the loan. Typically, loans are placed on nonaccrual when they reach 90 days past due, or when, in management’s opinion, there is reasonable doubt regarding the collection of the amounts due through the normal means of the borrower. Interest accrued and unpaid at the time a loan is placed on nonaccrual status is reversed from interest income. Interest payments received on nonaccrual loans are recognized in accordance with our significant accounting policies. Once a loan is placed on nonaccrual status, the borrower must generally demonstrate at least six months of payment performance and we must believe that all remaining principal and interest is fully collectible, before the loan is eligible to return to accrual status.
The following tables present loans by category based on current payment and accrual status:
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| Accruing Interest | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Current | 30 - 89 Days Past Due | 90+ Days Past Due | Nonaccrual | Total Loans | |||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Accruing Interest | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Current | 30 - 89 Days Past Due | 90+ Days Past Due | Nonaccrual | Total Loans | |||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
23
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables present nonaccrual loans with and without a related allowance for credit losses:
| September 30, 2025 | ||||||||||||||||||||
| (dollars in thousands) | Nonaccrual With Allowance for Credit Losses | Nonaccrual With No Allowance for Credit Losses | Total Nonaccrual | |||||||||||||||||
| Commercial and industrial | $ | $ | $ | |||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Multi-family | ||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||
| (dollars in thousands) | Nonaccrual With Allowance for Credit Losses | Nonaccrual With No Allowance for Credit Losses | Total Nonaccrual | |||||||||||||||||
| Commercial and industrial | $ | $ | $ | |||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||
| Multi-family | ||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
24
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Credit Quality Indicators
The Company assigns a risk rating to all loans and periodically performs detailed internal reviews of all loans that are part of relationships with over $750 thousand in total exposure to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. Risk ratings are reviewed annually, at a minimum, and on an as needed basis depending on the specific circumstances of the loan. These risk ratings are also subject to review by the Company’s regulators, external loan review, and internal loan review. Risk ratings are grouped into the following major categories:
Pass – a pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.
Pass-Watch – a pass-watch loan is still considered a "pass" credit and is not a classified or criticized asset, but is a reflection of a borrower who exhibits credit weaknesses or downward trends warranting close attention and increased monitoring. These potential weaknesses may result in deterioration of the repayment prospects for the loan. No loss of principal or interest is expected, and the borrower does not pose sufficient risk to warrant a special mention, substandard, or doubtful classification.
Special Mention – a special mention loan has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the assets or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.
Substandard – a substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized as probable that the borrower will not pay principal and interest in accordance with the contractual terms.
Doubtful – a doubtful loan has all the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. There were no
25
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables present loans by category based on their assigned risk ratings determined by management:
| September 30, 2025 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Pass | Pass-Watch | Special Mention | Substandard | Total | |||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Pass | Pass-Watch | Special Mention | Substandard | Total | |||||||||||||||||||||||||||
| Commercial and industrial | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
26
Table of Contents
HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Risk ratings of loans, further sorted by origination year, are as follows as of September 30, 2025:
| (dollars in thousands) | Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
| (dollars in thousands) | Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Total by risk rating | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Risk ratings of loans, further sorted by origination year, are as follows as of December 31, 2024:
| (dollars in thousands) | Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2021 | 2020 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction and land development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Multi-family | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| One-to-four family residential | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and farmland | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
| (dollars in thousands) | Term Loans by Origination Year | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | 2021 | 2020 | Prior | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Municipal, consumer, and other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Total by risk rating | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass-Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Modifications
There were no 0.5 million and $0.5 million, respectively, and were current and performing in accordance with the modified terms.
Pledged Loans
As of September 30, 2025 and December 31, 2024, the Company pledged loans totaling $1.89 billion and $1.91 billion, respectively, to the Federal Home Loan Bank of Chicago (“FHLB”) to secure available FHLB advance borrowing capacity.
NOTE 5 – LOAN SERVICING
Mortgage loans serviced for others, which are not included in the accompanying consolidated balance sheets, amounted to $1.45 billion and $1.55 billion as of September 30, 2025 and December 31, 2024, respectively. Activity in mortgage servicing rights was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||||||||
| Capitalized servicing rights | |||||||||||||||||||||||||||||
| Fair value adjustments attributable to payments and principal reductions | ( | ( | ( | ( | |||||||||||||||||||||||||
| Fair value adjustments attributable to changes in valuation inputs and assumptions | ( | ( | ( | ( | |||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 6 – FORECLOSED ASSETS
Foreclosed assets activity was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||||||||
| Transfers from loans | |||||||||||||||||||||||||||||
| Proceeds from sales | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net gain on sales | |||||||||||||||||||||||||||||
| Direct write-downs | ( | ( | ( | ( | |||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||||||||
Gains (losses) on foreclosed assets included the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Direct write-downs | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Net gain on sales | |||||||||||||||||||||||||||||
| Gains (losses) on foreclosed assets | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
As of September 30, 2025 and December 31, 2024, the carrying value of foreclosed one-to-four family residential real estate properties held was $0.7 million and $0.3 million, respectively. As of September 30, 2025, there were 3 one-to-four family residential real estate loans in the process of foreclosure totaling $0.4 million. As of December 31, 2024, there were 19 one-to-four family residential real estate loans in the process of foreclosure totaling $1.8 million.
NOTE 7 – DEPOSITS
The Company’s deposits are summarized below:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Noninterest-bearing deposits | $ | $ | |||||||||
| Interest-bearing deposits: | |||||||||||
| Interest-bearing demand | |||||||||||
| Money market | |||||||||||
| Savings | |||||||||||
| Time | |||||||||||
| Total interest-bearing deposits | |||||||||||
| Total deposits | $ | $ | |||||||||
Reciprocal deposits included in interest-bearing demand deposits, money market deposits, and time deposits totaled $315.4 million and $229.4 million as of September 30, 2025 and December 31, 2024, respectively. There were no
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The aggregate amounts of time deposits in denominations of $250 thousand or more amounted to $200.1 million and $202.2 million as of September 30, 2025 and December 31, 2024, respectively. The aggregate amounts of time deposits in denominations of $100 thousand or more amounted to $443.9 million and $455.2 million as of September 30, 2025 and December 31, 2024, respectively.
The components of interest expense on deposits were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Interest-bearing demand | $ | $ | $ | $ | |||||||||||||||||||||||||
| Money market | |||||||||||||||||||||||||||||
| Savings | |||||||||||||||||||||||||||||
| Time | |||||||||||||||||||||||||||||
| Brokered | |||||||||||||||||||||||||||||
| Total interest expense on deposits | $ | $ | $ | $ | |||||||||||||||||||||||||
NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are negotiated contracts entered into by two issuing counterparties containing specific agreement terms, including the underlying instrument, amount, exercise price, and maturities. The derivatives accounting guidance requires that the Company recognize all derivative financial instruments as either assets or liabilities at fair value in the consolidated balance sheets. The Company may utilize interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position.
Interest Rate Swaps Designated as Cash Flow Hedges
For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on interest rate swaps designated as cash flow hedging instruments, net of tax, is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings.
The interest rate swap agreement designated as a cash flow hedge was as follows:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (dollars in thousands) | Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||||||||
| Fair value recorded in other assets | $ | $ | $ | $ | |||||||||||||||||||
The interest rate swap agreement matured in April 2025. The effect of interest rate swap agreements designated as cash flow hedges on the consolidated statements of income was as follows:
| Location of gross gain (loss) reclassified from accumulated other comprehensive income (loss) to income | Amounts of gross gain (loss) reclassified from accumulated other comprehensive income (loss) | Amounts of gross gain (loss) reclassified from accumulated other comprehensive income (loss) | ||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||
| Designated as cash flow hedges: | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Interest Rate Swaps Not Designated as Hedging Instruments
The Company may offer interest rate swap agreements to its commercial borrowers in connection with their risk management needs. The Company manages the interest rate risk associated with these contracts by entering into an equal and offsetting derivative with a third-party financial institution. While these interest rate swap agreements generally work together as an economic interest rate hedge, the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.
The interest rate swap agreements not designated as hedging instruments were as follows:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (dollars in thousands) | Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||||||||
| Fair value recorded in other assets: | |||||||||||||||||||||||
| Interest rate swaps with a commercial borrower counterparty | $ | $ | $ | $ | |||||||||||||||||||
| Interest rate swaps with a financial institution counterparty | |||||||||||||||||||||||
| Total fair value recorded in other assets | $ | $ | $ | $ | |||||||||||||||||||
| Fair value recorded in other liabilities: | |||||||||||||||||||||||
| Interest rate swaps with a commercial borrower counterparty | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Interest rate swaps with a financial institution counterparty | ( | ||||||||||||||||||||||
| Total fair value recorded in other liabilities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
As of September 30, 2025, the interest rate swap agreements not designated as hedging instruments had contractual maturities between 2027 and 2040.
The effect of interest rate contracts not designated as hedging instruments recognized in other noninterest income on the consolidated statements of income was as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Not designated as hedging instruments: | |||||||||||||||||||||||||||||
| Gross gains | $ | $ | $ | $ | |||||||||||||||||||||||||
| Gross losses | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net gains (losses) | $ | $ | $ | $ | |||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Risk Participation Agreements
We have entered into a risk participation agreement to share credit exposure with a counterparty in an interest rate swap agreement associated with a loan participation. Under the risk participation agreement, the Company sold a portion of its credit exposure, receiving an up-front fee, and will be required to make a payment to the counterparty if the loan customer defaults on its obligations. The risk participation agreement matures in 2035 and is summarized as follows:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | ||||||||||||
| Risk participation agreements sold | ||||||||||||||
| Number of risk participation agreements | ||||||||||||||
| Notional amount | $ | $ | ||||||||||||
| Fair value | ( | ( | ||||||||||||
NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the activity and accumulated balances for components of other comprehensive income (loss):
| Unrealized Gains (Losses) on Debt Securities | ||||||||||||||||||||||||||
| (dollars in thousands) | Available-for-Sale | Held-to-Maturity | Derivatives | Total | ||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
| Other comprehensive income before reclassifications | ||||||||||||||||||||||||||
| Reclassifications | ||||||||||||||||||||||||||
| Other comprehensive income, before tax | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Other comprehensive income, after tax | ||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
| Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||||||||
| Reclassifications | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), before tax | ( | |||||||||||||||||||||||||
| Income tax expense (benefit) | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), after tax | ( | |||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
| Unrealized Gains (Losses) on Debt Securities | ||||||||||||||||||||||||||
| (dollars in thousands) | Available-for-Sale | Held-to-Maturity | Derivatives | Total | ||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Other comprehensive income before reclassifications | ||||||||||||||||||||||||||
| Reclassifications | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), before tax | ( | |||||||||||||||||||||||||
| Income tax expense (benefit) | ( | |||||||||||||||||||||||||
| Other comprehensive income, after tax | ||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
| Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Other comprehensive income before reclassifications | ||||||||||||||||||||||||||
| Reclassifications | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), before tax | ( | |||||||||||||||||||||||||
| Income tax expense (benefit) | ( | |||||||||||||||||||||||||
| Other comprehensive income (loss), after tax | ( | |||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Reclassifications from accumulated other comprehensive income (loss) for unrealized gains (losses) on debt securities available-for-sale are included in either gains (losses) on sales of securities or provision for credit losses in the accompanying consolidated statements of income.
Reclassifications from accumulated other comprehensive income (loss) for unrealized gains on debt securities held-to-maturity are included in securities interest income in the accompanying consolidated statements of income.
Reclassifications from accumulated other comprehensive income (loss) for the fair value of derivative financial instruments represent net interest payments received or made on derivatives designated as cash flow hedges. See Note 8 for additional information.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 10 – EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed using the treasury stock method and reflects the potential dilution from the Company’s outstanding restricted stock units and performance restricted stock units.
The following table sets forth the computation of basic and diluted earnings per share:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||||||||
| Dilutive effect of outstanding restricted stock units | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding, including all dilutive potential shares | |||||||||||||||||||||||||||||
| Earnings per share - basic | $ | $ | $ | $ | |||||||||||||||||||||||||
| Earnings per share - diluted | $ | $ | $ | $ | |||||||||||||||||||||||||
NOTE 11 – STOCK-BASED COMPENSATION PLANS
The Company has adopted the HBT Financial, Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards and (vii) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. The maximum number of shares of common stock available for issuance under the Omnibus Incentive Plan is 1,820,000 shares.
The following is a summary of stock-based compensation expense (benefit):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Restricted stock units | $ | $ | $ | $ | |||||||||||||||||||||||||
| Performance restricted stock units | |||||||||||||||||||||||||||||
| Total awards classified as equity | |||||||||||||||||||||||||||||
| Stock appreciation rights | ( | ||||||||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Restricted Stock Units
A restricted stock unit grants a participant the right to receive one share of the Company’s common stock, following the completion of the requisite service period. Restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and is recognized on a straight-line basis over the service period for the entire award. Dividend equivalents on restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings.
During the nine months ended September 30, 2025 and 2024, the total grant date fair value of the restricted stock units granted was $1.1 million and $1.0 million, respectively, based on the grant date closing prices. The total intrinsic value of restricted stock units that vested during the nine months ended September 30, 2025 and 2024 was $1.4 million and $1.4 million, respectively.
The following is a summary of restricted stock unit activity:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Restricted Stock Units | Weighted Average Grant Date Fair Value | Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Vested | |||||||||||||||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Restricted Stock Units | Weighted Average Grant Date Fair Value | Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Vested | ( | ( | |||||||||||||||||||||||||||||||||
| Forfeited | ( | ( | |||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
As of September 30, 2025, unrecognized compensation cost related to the non-vested restricted stock units was $1.1 million. This cost is expected to be recognized over the weighted average remaining service period of 1.5 years.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Performance Restricted Stock Units
A performance restricted stock unit is similar to a restricted stock unit, except that the number of shares of the Company’s common stock awarded is based on a performance condition and the completion of the requisite service period. The number of shares of the Company’s common stock that may be earned ranges from 0 % to 150 % of the number of performance restricted stock units granted. Performance restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and an assessment of the probable outcome of the performance condition. Compensation cost is recognized on a straight-line basis over the service period of the entire award. Changes in the performance condition probability assessment result in cumulative catch-up adjustments to the compensation cost recognized. Dividend equivalents on performance restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings.
During the nine months ended September 30, 2025 and 2024, the total fair value of the performance restricted stock units granted was $0.4 million and $0.4 million, respectively, based on the grant date closing prices and an assessment of the probable outcome of the performance condition on the grant date. The total intrinsic value of performance restricted stock units that vested during the nine months ended September 30, 2025 and 2024 was $1.1 million and $0.8 million, respectively.
The following is a summary of performance restricted stock unit activity:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Adjustment for performance condition | |||||||||||||||||||||||||||||||||||
| Vested | |||||||||||||||||||||||||||||||||||
| Forfeited | |||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Adjustment for performance condition | |||||||||||||||||||||||||||||||||||
| Vested | ( | ( | |||||||||||||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
As of September 30, 2025, unrecognized compensation cost related to non-vested performance restricted stock units was $0.4 million, based on the current assessment of the probable outcome of the performance conditions. This cost is expected to be recognized over the weighted average remaining service period of 1.0 year.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Stock Appreciation Rights
A stock appreciation right grants a participant the right to receive an amount of cash, the value of which equals the appreciation in the Company’s stock price between the grant date and the exercise date. Stock appreciation rights are classified as liabilities. The liability is based on an option-pricing model used to estimate the fair value of the stock appreciation rights. Compensation cost for non-vested stock appreciation rights is recognized on a straight line basis over the service period of the entire award.
The following is a summary of stock appreciation rights activity:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Stock Appreciation Rights Outstanding | Weighted Average Grant Date Assigned Value | Stock Appreciation Rights Outstanding | Weighted Average Grant Date Assigned Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Exercised | |||||||||||||||||||||||||||||||||||
| Expired | |||||||||||||||||||||||||||||||||||
| Forfeited | |||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Stock Appreciation Rights | Weighted Average Grant Date Assigned Value | Stock Appreciation Rights | Weighted Average Grant Date Assigned Value | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | |||||||||||||||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||||||||||||||
| Expired | |||||||||||||||||||||||||||||||||||
| Forfeited | |||||||||||||||||||||||||||||||||||
| Ending balance | $ | $ | |||||||||||||||||||||||||||||||||
As of September 30, 2025, all stock appreciation rights were exercisable and had a weighted average remaining term of 3.9 years. There was no unrecognized compensation cost for stock appreciation rights as of September 30, 2025.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
As of September 30, 2025 and December 31, 2024, the liability recorded for outstanding stock appreciation rights was $0.6 million and $0.5 million, respectively. The Company uses an option pricing model to value the stock appreciation rights, using the assumptions in the following table. Expected volatility is derived from the historical volatility of the Company’s stock price.
| September 30, 2025 | December 31, 2024 | ||||||||||
| Risk-free interest rate | % | % | |||||||||
| Expected volatility | % | % | |||||||||
| Expected life (in years) | |||||||||||
| Expected dividend yield | % | % | |||||||||
NOTE 12 – REGULATORY CAPITAL
The Company (on a consolidated basis) and the Bank are each subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by the regulators that, if undertaken, could have a direct material effect on the consolidated financial statements of the Company and the Bank. Additionally, the ability of the Company to pay dividends to its stockholders is dependent upon the ability of the Bank to pay dividends to the Company.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors. As allowed under the regulations, the Company and the Bank elected to exclude accumulated other comprehensive income, including unrealized gains and losses on debt securities, in the computation of regulatory capital. Prompt corrective action provisions are not applicable to bank holding companies.
Additionally, the Company and the Bank must maintain a “capital conservation buffer” to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The capital conservation buffer is 2.5
As of September 30, 2025 and December 31, 2024, the Company and the Bank each met all capital adequacy requirements to which they were subject.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The actual and required capital amounts and ratios of the Company (on a consolidated basis) and the Bank were as follows:
| September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
| Consolidated HBT Financial, Inc. | ||||||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Heartland Bank and Trust Company | ||||||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | ||||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | ||||||||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | ||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Actual | For Capital Adequacy Purposes | To Be Well Capitalized Under Prompt Corrective Action Provisions | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
| Consolidated HBT Financial, Inc. | ||||||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | $ | % | $ | % | N/A | N/A | ||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | N/A | N/A | ||||||||||||||||||||||||||||||||||||
| Heartland Bank and Trust Company | ||||||||||||||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | ||||||||||||||||||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | ||||||||||||||||||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | ||||||||||||||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 13 – SEGMENT INFORMATION
The Company’s operations consist of one
NOTE 14 – FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.
Level 2 - Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 - Significant unobservable inputs that reflect a Company’s own assumptions about the assumptions that market participants would use in pricing as asset or liability.
The Company uses fair value to measure certain assets and liabilities on a recurring basis, such as investment securities, mortgage servicing rights, and derivatives. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period, and such measurements are therefore considered "nonrecurring" for purposes of disclosing the Company's fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for loans held for sale, collateral-dependent loans, bank premises held for sale, and foreclosed assets.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
Recurring Basis
The following is a description of the methods and significant assumptions used to measure the fair value of assets and liabilities on a recurring basis.
Investment Securities
When available, the Company uses quoted market prices to determine the fair value of securities; such items are classified in Level 1 of the fair value hierarchy. For the Company’s securities where quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2; however, when prices from independent sources vary, cannot be obtained or cannot be corroborated, a security is generally classified as Level 3. The change in fair value of debt securities available-for-sale is recorded through an adjustment to the consolidated statement of comprehensive income. The change in fair value of equity securities with readily determinable fair values is recorded through an adjustment to the consolidated statement of income.
Mortgage Servicing Rights
The Company has elected to record its mortgage servicing rights at fair value. Mortgage servicing rights do not trade in an active market with readily observable prices. Accordingly, the Company determines the fair value of mortgage servicing rights by estimating the fair value of the future cash flows associated with the mortgage loans being serviced as calculated by an independent third party. Key economic assumptions used in measuring the fair value of mortgage servicing rights include, but are not limited to, prepayment speeds and discount rates. Due to the nature of the valuation inputs, mortgage servicing rights are classified as Level 3. The change in fair value is recorded through an adjustment to the consolidated statement of income.
Derivative Financial Instruments
Derivative financial instruments are carried at fair value as determined by dealer valuation models. Based on the inputs used, the derivative financial instruments subjected to recurring fair value adjustments are classified as Level 2. For derivative financial instruments designated as hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of comprehensive income. For derivative financial instruments not designated as hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of income.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables summarize assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 by level within the fair value hierarchy:
| September 30, 2025 | ||||||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||||||||||||
| Debt securities available-for-sale: | ||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||||||||||||
| U.S. government agency | ||||||||||||||||||||||||||
| Municipal | ||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||
| Agency residential | ||||||||||||||||||||||||||
| Agency commercial | ||||||||||||||||||||||||||
| Corporate | ||||||||||||||||||||||||||
| Equity securities with readily determinable fair values | ||||||||||||||||||||||||||
| Mortgage servicing rights | ||||||||||||||||||||||||||
| Derivative financial assets | ||||||||||||||||||||||||||
| Derivative financial liabilities | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||||||||||||
| Debt securities available-for-sale: | ||||||||||||||||||||||||||
| U.S. Treasury | $ | $ | $ | $ | ||||||||||||||||||||||
| U.S. government agency | ||||||||||||||||||||||||||
| Municipal | ||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||
| Agency residential | ||||||||||||||||||||||||||
| Agency commercial | ||||||||||||||||||||||||||
| Corporate | ||||||||||||||||||||||||||
| Equity securities with readily determinable fair values | ||||||||||||||||||||||||||
| Mortgage servicing rights | ||||||||||||||||||||||||||
| Derivative financial assets | ||||||||||||||||||||||||||
| Derivative financial liabilities | ||||||||||||||||||||||||||
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables present additional information about the unobservable inputs used in the fair value measurement of the mortgage servicing rights (dollars in thousands):
| September 30, 2025 | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||||
| Mortgage servicing rights | $ | Discounted cash flows | Constant pre-payment rates (CPR) | |||||||||||||||||||||||
| Discount rate | ||||||||||||||||||||||||||
| December 31, 2024 | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||||
| Mortgage servicing rights | $ | Discounted cash flows | Constant pre-payment rates (CPR) | |||||||||||||||||||||||
| Discount rate | ||||||||||||||||||||||||||
Nonrecurring Basis
The following is a description of the methods and significant assumptions used to measure the fair value of assets and liabilities on a nonrecurring basis.
Loans Held for Sale
Mortgage loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically, these quotes include a premium on the sale and thus these quotes generally indicate fair value of the held for sale loans is greater than cost. Loans held for sale have been classified as Level 2.
Collateral-Dependent Loans
Periodically, a collateral-dependent loan is evaluated individually and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. If the collateral value is not sufficient, a specific reserve is recorded. Collateral values are estimated using recent appraisals and customized discounting criteria. Due to the significance of unobservable inputs, fair values of collateral-dependent loans have been classified as Level 3.
Bank Premises Held for Sale
Bank premises held for sale are recorded at the lower of cost or fair value, less estimated selling costs, at the date classified as held for sale. Values are estimated using recent appraisals and customized discounting criteria. Due to the significance of unobservable inputs, fair values of bank premises held for sale have been classified as Level 3.
Foreclosed Assets
Foreclosed assets are recorded at fair value based on property appraisals, less estimated selling costs, at the date of the transfer. Subsequent to the transfer, foreclosed assets are carried at the lower of cost or fair value, less estimated selling costs. Values are estimated using recent appraisals and customized discounting criteria. Due to the significance of unobservable inputs, fair values of foreclosed assets have been classified as Level 3.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following tables summarize assets measured at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024 by level within the fair value hierarchy:
| September 30, 2025 | ||||||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateral-dependent loans | ||||||||||||||||||||||||||
| Foreclosed assets | ||||||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | ||||||||||||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
| Collateral-dependent loans | ||||||||||||||||||||||||||
| Bank premises held for sale | ||||||||||||||||||||||||||
| Foreclosed assets | ||||||||||||||||||||||||||
The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands):
| September 30, 2025 | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||||
| Collateral-dependent loans | $ | Appraisal of collateral | Appraisal adjustments | Not meaningful | ||||||||||||||||||||||
| Foreclosed assets | Appraisal | Appraisal adjustments | ||||||||||||||||||||||||
| December 31, 2024 | Fair Value | Valuation Technique | Unobservable Inputs | Range (Weighted Average) | ||||||||||||||||||||||
| Collateral-dependent loans | $ | Appraisal of collateral | Appraisal adjustments | Not meaningful | ||||||||||||||||||||||
| Bank premises held for sale | Appraisal | Appraisal adjustments | ||||||||||||||||||||||||
| Foreclosed assets | Appraisal | Appraisal adjustments | ||||||||||||||||||||||||
Other Fair Value Methods
The following methods and assumptions were used by the Company in estimating fair value disclosures of its other financial instruments.
Cash and Cash Equivalents
The carrying amounts of these financial instruments approximate their fair values.
Restricted Stock
The carrying amount of FHLB stock approximates fair value based on the redemption provisions of the FHLB.
Loans
The fair value estimation process for the loan portfolio uses an exit price concept and reflects discounts the Company believes are consistent with discounts in the marketplace. Fair values are estimated for portfolios of
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
loans with similar characteristics. Loans are segregated by type such as commercial and industrial, agricultural and farmland, commercial real estate – owner occupied, commercial real estate – non-owner occupied, multi-family, construction and land development, one-to-four family residential, and municipal, consumer, and other. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar maturities. The fair value analysis also includes other assumptions to estimate fair value, intended to approximate those a market participant would use in an orderly transaction, with adjustments for discount rates, interest rates, liquidity, and credit spreads, as appropriate.
Investments in Unconsolidated Subsidiaries
The fair values of the Company’s investments in unconsolidated subsidiaries are presumed to approximate carrying amounts.
Time Deposits
Fair values of certificates of deposit with stated maturities have been estimated using the present value of estimated future cash flows discounted at rates currently offered for similar instruments. Time deposits also include public funds time deposits.
Securities Sold Under Agreements to Repurchase
The fair values of repurchase agreements with variable interest rates are presumed to approximate their recorded carrying amounts.
FHLB Advances
The fair values of FHLB advances are estimated using discounted cash flow analyses based on current rates offered for borrowings with similar remaining maturities and characteristics.
Subordinated Notes
The fair values of subordinated notes are estimated using discounted cash flow analyses based on rates observed on recent debt issuances by other financial institutions.
Junior Subordinated Debentures
The fair values of subordinated debentures are estimated using discounted cash flow analyses based on rates observed on recent debt issuances by other financial institutions.
Accrued Interest
The carrying amounts of accrued interest approximate fair value.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
The following table provides summary information on the carrying amounts and estimated fair values of the Company’s other financial instruments:
| (dollars in thousands) | Fair Value Hierarchy Level | September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||
| Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | Level 1 | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Debt securities held-to-maturity | Level 2 | |||||||||||||||||||||||||||||||
| Restricted stock | Level 3 | |||||||||||||||||||||||||||||||
| Loans, net | Level 3 | |||||||||||||||||||||||||||||||
| Investments in unconsolidated subsidiaries | Level 3 | |||||||||||||||||||||||||||||||
| Accrued interest receivable | Level 2 | |||||||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||||||||
| Time deposits | Level 3 | |||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | Level 2 | |||||||||||||||||||||||||||||||
| FHLB advances | Level 3 | |||||||||||||||||||||||||||||||
| Subordinated notes | Level 3 | |||||||||||||||||||||||||||||||
| Junior subordinated debentures | Level 3 | |||||||||||||||||||||||||||||||
| Accrued interest payable | Level 2 | |||||||||||||||||||||||||||||||
The Company estimated the fair value of lending related commitments as described in Note 15 to be immaterial based on limited interest rate exposure due to their variable nature, short-term commitment periods, and termination clauses provided in the agreements.
Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Fair values have been estimated using data which management considered the best available and estimation methodologies deemed suitable for the pertinent category of financial instrument.
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HBT FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Unaudited)
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Financial Instruments
The Bank is party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.
The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.
Such commitments and conditional obligations were as follows:
| Contractual Amount | |||||||||||
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Commitments to extend credit | $ | $ | |||||||||
| Standby letters of credit | |||||||||||
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, by the Bank upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies, but may include real estate, accounts receivable, inventory, equipment, and income-producing properties.
Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those standby letters of credit are primarily issued to support extensions of credit. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. The Bank secures the standby letters of credit with the same collateral used to secure the related loan.
Allowance for Credit Losses on Unfunded Lending-related Commitments
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on unfunded commitments is included in other liabilities on the consolidated balance sheets and is adjusted through a charge to provision for credit loss expense on the consolidated statements of income. The allowance for credit losses on unfunded commitments estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The allowance for credit losses on unfunded commitments was $3.3 million and $3.1 million as of September 30, 2025 and December 31, 2024, respectively.
Legal Contingencies
Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Company's consolidated financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context requires otherwise, references in this report to the “Company,” “we,” “us” and “our” refer to HBT Financial, Inc. and its subsidiaries.
The following is management’s discussion and analysis of the financial condition as of September 30, 2025 (unaudited), as compared with December 31, 2024, and the results of operations for the three and nine months ended September 30, 2025 and 2024 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025. Results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of results to be attained for the year ended December 31, 2025, or for any other period.
OVERVIEW
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. We provide a comprehensive suite of financial products and services to consumers, businesses, and municipal entities throughout Illinois and eastern Iowa. As of September 30, 2025, the Company had total assets of $5.0 billion, loans held for investment of $3.4 billion, and total deposits of $4.3 billion.
Market Area
As of September 30, 2025, our branch network included 66 full-service branch locations throughout Illinois and eastern Iowa. We hold a leading deposit share in many of our central Illinois markets, which we define as a top three deposit share rank, providing the foundation for our strong deposit base. The stability provided by this low-cost funding is a key driver of our strong track record of financial performance. Below is a summary of our loan and deposit balances by geographic region:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (dollars in thousands) | Loans | Deposits | Loans | Deposits | |||||||||||||||||||
| Central | $ | 1,567,112 | $ | 2,974,679 | $ | 1,676,842 | $ | 2,984,820 | |||||||||||||||
| Chicago MSA | 1,482,861 | 1,263,226 | 1,443,777 | 1,218,098 | |||||||||||||||||||
| Illinois | 3,049,973 | 4,237,905 | 3,120,619 | 4,202,918 | |||||||||||||||||||
| Iowa | 350,056 | 109,282 | 345,527 | 115,336 | |||||||||||||||||||
| Total | $ | 3,400,029 | $ | 4,347,187 | $ | 3,466,146 | $ | 4,318,254 | |||||||||||||||
Pending CNB Bank Shares, Inc. Acquisition
On October 20, 2025, HBT Financial and CNB Bank Shares, Inc. ("CNBN"), the holding company for CNB Bank & Trust, N.A. ("CNB Bank"), jointly announced the signing of a merger agreement pursuant to which HBT Financial will acquire CNBN and CNB Bank. As of September 30, 2025, CNBN had totals assets of $1.8 billion, total loans of $1.3 billion, and total deposits of $1.5 billion. The combined company will have increased density in the central Illinois, Chicago MSA, and St. Louis MSA markets. The acquisition is expected to close in the first quarter of 2026, subject to CNBN shareholder approval, regulatory approvals, and other customary closing conditions.
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RESULTS OF OPERATIONS
Overview of Recent Financial Results
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Total interest and dividend income | $ | 64,336 | $ | 64,117 | $ | 191,393 | $ | 188,902 | |||||||||||||||||||||
| Total interest expense | 14,350 | 16,384 | 43,041 | 47,453 | |||||||||||||||||||||||||
| Net interest income | 49,986 | 47,733 | 148,352 | 141,449 | |||||||||||||||||||||||||
| Provision for credit losses | 596 | 603 | 1,698 | 2,306 | |||||||||||||||||||||||||
| Net interest income after provision for credit losses | 49,390 | 47,130 | 146,654 | 139,143 | |||||||||||||||||||||||||
| Total noninterest income | 9,849 | 8,705 | 28,295 | 23,941 | |||||||||||||||||||||||||
| Total noninterest expense | 32,508 | 31,322 | 96,357 | 93,099 | |||||||||||||||||||||||||
| Income before income tax expense | 26,731 | 24,513 | 78,592 | 69,985 | |||||||||||||||||||||||||
| Income tax expense | 6,966 | 6,333 | 20,522 | 18,477 | |||||||||||||||||||||||||
| Net income | $ | 19,765 | $ | 18,180 | $ | 58,070 | $ | 51,508 | |||||||||||||||||||||
Adjusted net income (1) | $ | 20,452 | $ | 19,244 | $ | 59,508 | $ | 55,456 | |||||||||||||||||||||
Pre-provision net revenue (1) | $ | 27,327 | $ | 25,116 | $ | 80,290 | $ | 72,291 | |||||||||||||||||||||
Pre-provision net revenue less net charge-offs (1) | 27,193 | 24,530 | 78,680 | 71,226 | |||||||||||||||||||||||||
Adjusted pre-provision net revenue (1) | 28,288 | 26,604 | 82,301 | 77,813 | |||||||||||||||||||||||||
Adjusted pre-provision net revenue less net charge-offs (1) | 28,154 | 26,018 | 80,691 | 76,748 | |||||||||||||||||||||||||
| Share and Per Share Information | |||||||||||||||||||||||||||||
| Earnings per share - diluted | $ | 0.63 | $ | 0.57 | $ | 1.84 | $ | 1.62 | |||||||||||||||||||||
Adjusted earnings per share - diluted (1) | 0.65 | 0.61 | 1.88 | 1.75 | |||||||||||||||||||||||||
| Weighted average shares of common stock outstanding | 31,481,135 | 31,559,366 | 31,525,247 | 31,600,442 | |||||||||||||||||||||||||
| Summary Ratios | |||||||||||||||||||||||||||||
| Net interest margin * | 4.13 | % | 3.98 | % | 4.13 | % | 3.96 | % | |||||||||||||||||||||
Net interest margin (tax-equivalent basis) * (1) (2) | 4.18 | 4.03 | 4.18 | 4.01 | |||||||||||||||||||||||||
| Yield on loans * | 6.35 | 6.45 | 6.37 | 6.38 | |||||||||||||||||||||||||
| Yield on interest-earning assets * | 5.32 | 5.35 | 5.33 | 5.29 | |||||||||||||||||||||||||
| Cost of total deposits * | 1.19 | 1.35 | 1.20 | 1.31 | |||||||||||||||||||||||||
| Cost of funds * | 1.29 | 1.47 | 1.30 | 1.42 | |||||||||||||||||||||||||
| Efficiency ratio | 53.17 | % | 54.24 | % | 53.37 | % | 55.00 | % | |||||||||||||||||||||
Efficiency ratio (tax-equivalent basis) (1) (2) | 52.68 | 53.71 | 52.88 | 54.45 | |||||||||||||||||||||||||
Adjusted efficiency ratio (tax-equivalent basis) (1) (2) | 51.55 | 52.35 | 52.18 | 52.71 | |||||||||||||||||||||||||
| Return on average assets * | 1.56 | % | 1.44 | % | 1.54 | % | 1.37 | % | |||||||||||||||||||||
| Return on average stockholders' equity * | 13.31 | 13.81 | 13.57 | 13.58 | |||||||||||||||||||||||||
Return on average tangible common equity * (1) | 15.28 | 16.25 | 15.66 | 16.11 | |||||||||||||||||||||||||
Adjusted return on average assets * (1) | 1.61 | % | 1.53 | % | 1.58 | % | 1.48 | % | |||||||||||||||||||||
Adjusted return on average stockholders' equity * (1) | 13.77 | 14.62 | 13.90 | 14.62 | |||||||||||||||||||||||||
Adjusted return on average tangible common equity * (1) | 15.81 | 17.20 | 16.05 | 17.34 | |||||||||||||||||||||||||
_________________________________________________
* Annualized measure.
(1)See "Non-GAAP Financial Information" for reconciliation of non-GAAP measures to their most closely comparable GAAP measures.
(2)On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
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Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
For the three months ended September 30, 2025, net income was $19.8 million, increasing by $1.6 million, or 8.7%, when compared to net income for the three months ended September 30, 2024. Notable changes include the following:
•A $2.3 million increase in net interest income, primarily attributable to lower funding costs and improved yields on debt securities which were partially offset by a decrease in loan yields;
•A $0.5 million negative mortgage servicing rights fair value adjustment included in the third quarter of 2025 results compared to a $1.5 million negative mortgage servicing rights fair value adjustment included in the third quarter 2024 results;
•A $0.4 million loss on the extinguishment of debt, associated with the early payoff of $40.0 million of subordinated notes in September 2025;
•A $0.6 million increase in income tax expense, primarily due to an increase in pre-tax income as a result of the items noted above.
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
For the nine months ended September 30, 2025, net income was $58.1 million, increasing by $6.6 million, or 12.7%, when compared to net income for the nine months ended September 30, 2024. Notable changes include the following:
•A $6.9 million increase in net interest income, primarily attributable to lower funding costs, higher yields on debt securities, and higher average loan balances;
•A $49 thousand loss on sales of securities during the nine months ended September 30, 2025 compared to a $3.4 million of loss on sales of securities during the same period in 2024;
•A $2.0 million increase in salaries and benefits expense, primarily driven by higher medical benefits expenses and annual merit increases;
•A $0.9 million increase in wealth management fees, primarily driven by higher values of assets under management;
•The absence of $0.6 million of impairment losses on bank premises related to the closure of two branch premises recognized in the nine months ended September 30, 2024;
•A $0.4 million loss on the extinguishment of debt, associated with the early payoff of $40.0 million of subordinated notes in September 2025; and
•A $2.0 million increase in income tax expense, primarily due to an increase in pre-tax income as a result of the items noted above.
Net Interest Income
Net interest income equals the excess of interest income on interest earning assets (including discount accretion on acquired loans plus certain loan fees) over interest expense incurred on interest-bearing liabilities. Net interest margin, which is expressed as the percentage of net interest income to average interest-earning assets, is utilized to measure and explain changes in net interest income.
The following tables set forth average balances, average yields and costs, and certain other information. Average balances are daily average balances. Nonaccrual loans are included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees and costs as well as purchase accounting adjustments that are accreted or amortized to interest income or expense.
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| Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest | Yield/Cost * | Average Balance | Interest | Yield/Cost * | |||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
| Loans | $ | 3,379,637 | $ | 54,063 | 6.35 | % | $ | 3,379,299 | $ | 54,783 | 6.45 | % | |||||||||||||||||||||||
| Debt securities | 1,265,683 | 8,779 | 2.75 | 1,191,642 | 6,955 | 2.32 | |||||||||||||||||||||||||||||
| Deposits with banks | 142,659 | 1,350 | 3.75 | 185,870 | 2,230 | 4.77 | |||||||||||||||||||||||||||||
| Other | 12,540 | 144 | 4.51 | 12,660 | 149 | 4.68 | |||||||||||||||||||||||||||||
| Total interest-earning assets | 4,800,519 | $ | 64,336 | 5.32 | % | 4,769,471 | $ | 64,117 | 5.35 | % | |||||||||||||||||||||||||
| Allowance for credit losses | (41,711) | (40,780) | |||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 268,353 | 278,030 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 5,027,161 | $ | 5,006,721 | |||||||||||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 1,113,391 | $ | 1,676 | 0.60 | % | $ | 1,085,609 | $ | 1,408 | 0.52 | % | |||||||||||||||||||||||
| Money market | 833,812 | 4,638 | 2.21 | 800,651 | 4,726 | 2.35 | |||||||||||||||||||||||||||||
| Savings | 568,001 | 399 | 0.28 | 573,077 | 396 | 0.27 | |||||||||||||||||||||||||||||
| Time | 771,360 | 6,282 | 3.23 | 804,379 | 7,702 | 3.81 | |||||||||||||||||||||||||||||
| Brokered | — | — | — | 29,996 | 417 | 5.54 | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,286,564 | 12,995 | 1.57 | 3,293,712 | 14,649 | 1.77 | |||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 6 | — | — | 29,426 | 134 | 1.80 | |||||||||||||||||||||||||||||
| Borrowings | 7,256 | 31 | 1.68 | 13,691 | 119 | 3.47 | |||||||||||||||||||||||||||||
| Subordinated notes | 32,714 | 387 | 4.69 | 39,524 | 470 | 4.73 | |||||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | 52,887 | 937 | 7.04 | 52,827 | 1,012 | 7.63 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,379,427 | $ | 14,350 | 1.68 | % | 3,429,180 | $ | 16,384 | 1.90 | % | |||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,028,608 | 1,013,893 | |||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 30,050 | 39,903 | |||||||||||||||||||||||||||||||||
| Total liabilities | 4,438,085 | 4,482,976 | |||||||||||||||||||||||||||||||||
| Stockholders' Equity | 589,076 | 523,745 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,027,161 | $ | 5,006,721 | |||||||||||||||||||||||||||||||
Net interest income/Net interest margin (1) | $ | 49,986 | 4.13 | % | $ | 47,733 | 3.98 | % | |||||||||||||||||||||||||||
Tax-equivalent adjustment (2) | 552 | 0.05 | 552 | 0.05 | |||||||||||||||||||||||||||||||
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3) | $ | 50,538 | 4.18 | % | $ | 48,285 | 4.03 | % | |||||||||||||||||||||||||||
Net interest rate spread (4) | 3.64 | % | 3.45 | % | |||||||||||||||||||||||||||||||
Net interest-earning assets (5) | $ | 1,421,092 | $ | 1,340,291 | |||||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.42 | 1.39 | |||||||||||||||||||||||||||||||||
| Cost of total deposits | 1.19 | % | 1.35 | % | |||||||||||||||||||||||||||||||
| Cost of funds | 1.29 | 1.47 | |||||||||||||||||||||||||||||||||
_________________________________________________
*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 "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most closely comparable GAAP 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.
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| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Interest | Yield/Cost * | Average Balance | Interest | Yield/Cost * | |||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||
| Loans | $ | 3,419,077 | $ | 162,971 | 6.37 | % | $ | 3,374,875 | $ | 161,077 | 6.38 | % | |||||||||||||||||||||||
| Debt securities | 1,229,388 | 24,075 | 2.62 | 1,197,772 | 20,592 | 2.30 | |||||||||||||||||||||||||||||
| Deposits with banks | 141,216 | 3,959 | 3.75 | 188,087 | 6,752 | 4.80 | |||||||||||||||||||||||||||||
| Other | 12,579 | 388 | 4.12 | 12,744 | 481 | 5.04 | |||||||||||||||||||||||||||||
| Total interest-earning assets | 4,802,260 | $ | 191,393 | 5.33 | % | 4,773,478 | $ | 188,902 | 5.29 | % | |||||||||||||||||||||||||
| Allowance for credit losses | (41,962) | (40,611) | |||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 271,193 | 279,789 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 5,031,491 | $ | 5,012,656 | |||||||||||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 1,119,902 | $ | 4,698 | 0.56 | % | $ | 1,112,198 | $ | 4,148 | 0.50 | % | |||||||||||||||||||||||
| Money market | 818,453 | 13,498 | 2.20 | 800,693 | 14,193 | 2.37 | |||||||||||||||||||||||||||||
| Savings | 568,891 | 1,143 | 0.27 | 592,134 | 1,232 | 0.28 | |||||||||||||||||||||||||||||
| Time | 778,618 | 19,430 | 3.34 | 744,349 | 20,744 | 3.72 | |||||||||||||||||||||||||||||
| Brokered | — | — | — | 50,046 | 2,058 | 5.49 | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,285,864 | 38,769 | 1.58 | 3,299,420 | 42,375 | 1.72 | |||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | 3,361 | 22 | 0.89 | 30,769 | 415 | 1.80 | |||||||||||||||||||||||||||||
| Borrowings | 9,103 | 170 | 2.49 | 13,387 | 365 | 3.64 | |||||||||||||||||||||||||||||
| Subordinated notes | 37,261 | 1,326 | 4.76 | 39,504 | 1,409 | 4.76 | |||||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | 52,871 | 2,754 | 6.97 | 52,812 | 2,889 | 7.31 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,388,460 | $ | 43,041 | 1.70 | % | 3,435,892 | $ | 47,453 | 1.84 | % | |||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,039,564 | 1,031,239 | |||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities | 31,242 | 38,943 | |||||||||||||||||||||||||||||||||
| Total liabilities | 4,459,266 | 4,506,074 | |||||||||||||||||||||||||||||||||
| Stockholders' Equity | 572,225 | 506,582 | |||||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,031,491 | $ | 5,012,656 | |||||||||||||||||||||||||||||||
Net interest income/Net interest margin (1) | $ | 148,352 | 4.13 | % | $ | 141,449 | 3.96 | % | |||||||||||||||||||||||||||
Tax-equivalent adjustment (2) | 1,645 | 0.05 | 1,680 | 0.05 | |||||||||||||||||||||||||||||||
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (2) (3) | $ | 149,997 | 4.18 | % | $ | 143,129 | 4.01 | % | |||||||||||||||||||||||||||
Net interest rate spread (4) | 3.63 | % | 3.45 | % | |||||||||||||||||||||||||||||||
Net interest-earning assets (5) | $ | 1,413,800 | $ | 1,337,586 | |||||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities | 1.42 | 1.39 | |||||||||||||||||||||||||||||||||
| Cost of total deposits | 1.20 | % | 1.31 | % | |||||||||||||||||||||||||||||||
| Cost of funds | 1.30 | 1.42 | |||||||||||||||||||||||||||||||||
_________________________________________________
*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 "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most closely comparable GAAP 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.
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The following table sets forth the components of loan interest income and their contributions to the total loan yield.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Interest | Yield Contribution * | Interest | Yield Contribution * | Interest | Yield Contribution * | Interest | Yield Contribution * | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Contractual interest | $ | 51,576 | 6.06 | % | $ | 52,160 | 6.14 | % | $ | 154,538 | 6.04 | % | $ | 153,668 | 6.08 | % | |||||||||||||||||||||||||||||||||||||||||||
| Loan fees | 1,491 | 0.18 | 1,051 | 0.12 | 4,445 | 0.17 | 3,202 | 0.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Accretion of acquired loan discounts | 892 | 0.10 | 1,232 | 0.15 | 3,000 | 0.12 | 3,409 | 0.14 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonaccrual interest recoveries | 104 | 0.01 | 340 | 0.04 | 988 | 0.04 | 798 | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total loan interest income | $ | 54,063 | 6.35 | % | $ | 54,783 | 6.45 | % | $ | 162,971 | 6.37 | % | $ | 161,077 | 6.38 | % | |||||||||||||||||||||||||||||||||||||||||||
* Annualized measure.
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The following table sets forth the components of net interest income and their contributions to the net interest margin.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Interest | Net Interest Margin Contribution * | Interest | Net Interest Margin Contribution * | Interest | Net Interest Margin Contribution * | Interest | Net Interest Margin Contribution * | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contractual interest on loans | $ | 51,576 | 4.26 | % | $ | 52,160 | 4.35 | % | $ | 154,538 | 4.30 | % | $ | 153,668 | 4.30 | % | |||||||||||||||||||||||||||||||||||||||||||
| Loan fees | 1,491 | 0.12 | 1,051 | 0.09 | 4,445 | 0.13 | 3,202 | 0.09 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Accretion of acquired loan discounts | 892 | 0.07 | 1,232 | 0.10 | 3,000 | 0.08 | 3,409 | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonaccrual interest recoveries | 104 | 0.01 | 340 | 0.03 | 988 | 0.03 | 798 | 0.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt securities | 8,779 | 0.73 | 6,955 | 0.58 | 24,075 | 0.67 | 20,592 | 0.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits in bank | 1,350 | 0.12 | 2,230 | 0.19 | 3,959 | 0.11 | 6,752 | 0.19 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 144 | 0.01 | 149 | 0.01 | 388 | 0.01 | 481 | 0.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest income | 64,336 | 5.32 | 64,117 | 5.35 | 191,393 | 5.33 | 188,902 | 5.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits | 12,995 | 1.08 | 14,649 | 1.22 | 38,769 | 1.08 | 42,375 | 1.19 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other interest-bearing liabilities | 1,355 | 0.11 | 1,735 | 0.15 | 4,272 | 0.12 | 5,078 | 0.14 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest expense | 14,350 | 1.19 | 16,384 | 1.37 | 43,041 | 1.20 | 47,453 | 1.33 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | 49,986 | 4.13 | 47,733 | 3.98 | 148,352 | 4.13 | 141,449 | 3.96 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tax-equivalent adjustment (1) | 552 | 0.05 | 552 | 0.05 | 1,645 | 0.05 | 1,680 | 0.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (tax-equivalent) (1) (2) | $ | 50,538 | 4.18 | % | $ | 48,285 | 4.03 | % | $ | 149,997 | 4.18 | % | $ | 143,129 | 4.01 | % | |||||||||||||||||||||||||||||||||||||||||||
_________________________________________________
* Annualized measure.
(1)On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(2)See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most closely comparable GAAP measures.
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Rate/Volume Analysis
The following table sets forth the dollar amount of changes in interest income and interest expense for the major categories of our interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to changes attributable to volume (i.e., changes in average balances multiplied by the prior-period average rate), and changes attributable to rate (i.e., changes in average rate multiplied by prior-period average balances). For purposes of this table, changes attributable to both volume and rate that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.
Three Months Ended September 30, 2025 vs. Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2025 vs. Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Increase (Decrease) Due to | Total | Increase (Decrease) Due to | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Volume | Rate | Volume | Rate | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans | $ | 5 | $ | (725) | $ | (720) | $ | 2,107 | $ | (213) | $ | 1,894 | |||||||||||||||||||||||||||||||||||||||||
| Debt securities | 452 | 1,372 | 1,824 | 556 | 2,927 | 3,483 | |||||||||||||||||||||||||||||||||||||||||||||||
| Deposits with banks | (461) | (419) | (880) | (1,486) | (1,307) | (2,793) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | (1) | (4) | (5) | (6) | (87) | (93) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | (5) | 224 | 219 | 1,171 | 1,320 | 2,491 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand | 37 | 231 | 268 | 29 | 521 | 550 | |||||||||||||||||||||||||||||||||||||||||||||||
| Money market | 191 | (279) | (88) | 310 | (1,005) | (695) | |||||||||||||||||||||||||||||||||||||||||||||||
| Savings | (4) | 7 | 3 | (48) | (41) | (89) | |||||||||||||||||||||||||||||||||||||||||||||||
| Time | (306) | (1,114) | (1,420) | 925 | (2,239) | (1,314) | |||||||||||||||||||||||||||||||||||||||||||||||
| Brokered | (417) | — | (417) | (2,058) | — | (2,058) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | (499) | (1,155) | (1,654) | (842) | (2,764) | (3,606) | |||||||||||||||||||||||||||||||||||||||||||||||
| Securities sold under agreements to repurchase | (67) | (67) | (134) | (251) | (142) | (393) | |||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | (42) | (46) | (88) | (98) | (97) | (195) | |||||||||||||||||||||||||||||||||||||||||||||||
| Subordinated notes | (80) | (3) | (83) | (80) | (3) | (83) | |||||||||||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures issued to capital trusts | 1 | (76) | (75) | 3 | (138) | (135) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | (687) | (1,347) | (2,034) | (1,268) | (3,144) | (4,412) | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in net interest income | $ | 682 | $ | 1,571 | $ | 2,253 | $ | 2,439 | $ | 4,464 | $ | 6,903 | |||||||||||||||||||||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
Net interest income for the three months ended September 30, 2025 was $50.0 million, increasing $2.3 million, or 4.7%, when compared to the three months ended September 30, 2024. The increase is primarily attributable to lower funding costs and improved yields on debt securities which were partially offset by a decrease in loan yields. Additionally, a $0.4 million increase in loan fees was mostly offset by a $0.3 million decrease in acquired loan discount accretion.
Net interest margin increased to 4.13% for the three months ended September 30, 2025, compared to 3.98% for the three months ended September 30, 2024. The increase was primarily attributable to lower funding costs and higher yields on debt securities. Additionally, a 3 basis point increase in the contribution of loan fees to net interest margin was offset by a 3 basis point decrease in the contribution of acquired loan discount accretion to net interest margin when comparing each of the three months ended September 30, 2025 and 2024.
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Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Net interest income for the nine months ended September 30, 2025 was $148.4 million, increasing $6.9 million, or 4.9%, when compared to the nine months ended September 30, 2024. The increase is primarily attributable to lower funding costs, higher yields on debt securities, and higher average loan balances. Additionally, a $1.4 million increase in loan fees and nonaccrual interest recoveries was partially offset by a $0.4 million decrease in acquired loan discount accretion.
Net interest margin increased to 4.13% for the nine months ended September 30, 2025, compared to 3.96% for the nine months ended September 30, 2024. The increase was primarily attributable to a decrease in funding costs, higher yields on debt securities, and a favorable shift in the mix of interest-earning assets. Additionally, the increase in the contribution of loan fees and nonaccrual interest recoveries accounted for 5 basis points of the increase in net interest margin and were partially offset by a 2 basis point decrease in the contribution from acquired loan discount accretion.
The quarterly net interest margins were as follows:
| 2025 | 2024 | ||||||||||||||||
| Three months ended: | |||||||||||||||||
| March 31 | 4.12 | % | 3.94 | % | |||||||||||||
| June 30 | 4.14 | 3.95 | |||||||||||||||
| September 30 | 4.13 | 3.98 | |||||||||||||||
| December 31 | — | 3.96 | |||||||||||||||
In early 2024, our net interest margin was relatively stable, with increases in our loans and debt securities yields being mostly offset by increases in funding costs. In September 2024, the Federal Open Market Committee ("FOMC") began lowering interest rates, with the target range for the federal funds rate decreasing by 100 basis points to a range of 4.25% to 4.50% by the end of 2024. In September 2025, the FOMC further reduced the target range for the federal funds rate by 25 basis points to a range of 4.00% to 4.25%. These changes have contributed to a decrease in funding costs and yields on variable rate loans while maturing fixed rate loans and securities continued to reprice at higher rates, driving our net interest margin higher during the first three quarters of 2025, relative to 2024.
Decreases in market interest rates, and potential future decreases, may put downward pressure on our net interest margin, as the negative impact on floating rate loans may not be fully offset by the positive impacts of maturing fixed rate loans and securities repricing at higher rates or potential decreases in deposit costs. Generally, we expect increases in market interest rates will increase our net interest income and net interest margin in future periods, while decreases in market interest rates may decrease our net interest income and net interest margin in future periods; however, this depends upon the timing and extent of both short-term and long-term interest rate fluctuations and may not always be the case.
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Provision for Credit Losses
The following table sets forth the components of provision for credit losses for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | |||||||||||||||||||||||||||||
| Loans | $ | 375 | $ | 746 | $ | 1,466 | $ | 1,983 | |||||||||||||||||||||
| Unfunded lending-related commitments | 221 | (143) | 232 | 323 | |||||||||||||||||||||||||
| Total provision for credit losses | $ | 596 | $ | 603 | $ | 1,698 | $ | 2,306 | |||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
The Company recorded a provision for credit losses of $0.6 million during the three months ended September 30, 2025, compared to a $0.6 million provision during the three months ended September 30, 2024. The third quarter of 2025 provision for credit losses primarily reflects a $1.2 million increase in required reserves driven by increased loan balances and changes within the portfolio; a $0.3 million increase in specific reserves; a $0.6 million decrease in required reserves resulting from changes in qualitative factors; and a $0.3 million decrease in required reserves driven by changes in the economic forecast.
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
The Company recorded a provision for credit losses of $1.7 million for the nine months ended September 30, 2025, compared to a $2.3 million provision during the nine months ended September 30, 2024. The 2025 provision for credit losses primarily reflects a $1.1 million increase in required reserves resulting from changes in qualitative factors; a $0.7 million increase in required reserves resulting from changes in economic forecasts; a $0.1 million increase in required reserves driven by changes within the portfolio; and a $0.1 million decrease in specific reserves.
The provision for credit losses is highly dependent on current and forecast economic conditions. Potential deterioration of economic conditions may lead to higher credit losses and adversely impact our financial condition and results of operations. The economic forecasts utilized in estimating the allowance for credit losses on loans and unfunded lending-related commitments include the unemployment rate and changes in GDP as macroeconomic variables, although other economic metrics are considered on a qualitative basis.
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Noninterest Income
The following table sets forth the major categories of noninterest income for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Card income | $ | 2,732 | $ | 2,753 | $ | (21) | (0.8) | % | $ | 8,077 | $ | 8,254 | $ | (177) | (2.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth management fees | 3,122 | 2,670 | 452 | 16.9 | 8,789 | 7,840 | 949 | 12.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 2,093 | 2,081 | 12 | 0.6 | 5,952 | 5,852 | 100 | 1.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage servicing | 1,019 | 1,113 | (94) | (8.4) | 3,051 | 3,279 | (228) | (7.0) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage servicing rights fair value adjustment | (514) | (1,488) | 974 | NM | (1,573) | (1,505) | (68) | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains on sale of mortgage loans | 390 | 461 | (71) | (15.4) | 1,101 | 1,202 | (101) | (8.4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realized gains (losses) on sales of securities | (49) | — | (49) | NM | (49) | (3,382) | 3,333 | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unrealized gains (losses) on equity securities | (67) | 136 | (203) | NM | (36) | 24 | (60) | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on foreclosed assets | 148 | (44) | 192 | NM | 175 | 15 | 160 | 1066.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on other assets | (14) | (2) | (12) | NM | (88) | (637) | 549 | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income on bank owned life insurance | 169 | 170 | (1) | (0.6) | 500 | 500 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest income | 820 | 855 | (35) | (4.1) | 2,396 | 2,499 | (103) | (4.1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 9,849 | $ | 8,705 | $ | 1,144 | 13.1 | % | $ | 28,295 | $ | 23,941 | $ | 4,354 | 18.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
_________________________________________________
NM Not meaningful.
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
Total noninterest income for the three months ended September 30, 2025, was $9.8 million, an increase of $1.1 million, or 13.1%, from the three months ended September 30, 2024. Notable changes in noninterest income include the following:
•A $0.5 million negative mortgage servicing rights fair value adjustment included the third quarter of 2025 results, primarily reflecting the net decrease in the servicing portfolio due to payments and principal reductions, compared to a $1.5 million negative mortgage servicing rights fair value adjustment included in the third quarter 2024 results;
•A $0.5 million increase in wealth management fees, driven by higher values of assets under management and an increase in agricultural real estate brokerage commissions; and
•A $0.1 million unrealized loss on equity securities included in the third quarter of 2025 results compared to a $0.1 million unrealized gain on equity securities included in the third quarter of 2024 results.
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Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Total noninterest income for the nine months ended September 30, 2025, was $28.3 million, an increase of $4.4 million, or 18.2%, from the nine months ended September 30, 2024. Notable changes in noninterest income include the following:
•A $49 thousand loss on sales of securities during the nine months ended September 30, 2025 compared to a $3.4 million of loss on sales of securities during the same period in 2024;
•A $0.9 million increase in wealth management fees, primarily driven by higher values of assets under management; and
•The absence of $0.6 million of impairment losses on bank premises related to the closure of two branch premises recognized in the 2024 results.
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Noninterest Expense
The following table sets forth the major categories of noninterest expense for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salaries | $ | 16,351 | $ | 16,325 | $ | 26 | 0.2 | % | $ | 49,856 | $ | 49,346 | $ | 510 | 1.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employee benefits | 3,314 | 2,997 | 317 | 10.6 | 10,179 | 8,662 | 1,517 | 17.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy of bank premises | 2,826 | 2,695 | 131 | 4.9 | 7,922 | 7,520 | 402 | 5.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Furniture and equipment | 737 | 446 | 291 | 65.2 | 1,757 | 1,544 | 213 | 13.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Data processing | 2,791 | 2,640 | 151 | 5.7 | 8,195 | 8,171 | 24 | 0.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Marketing and customer relations | 1,035 | 1,380 | (345) | (25.0) | 3,199 | 3,372 | (173) | (5.1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 694 | 710 | (16) | (2.3) | 2,083 | 2,130 | (47) | (2.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 391 | — | 391 | NM | 391 | — | 391 | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FDIC insurance | 561 | 572 | (11) | (1.9) | 1,674 | 1,697 | (23) | (1.4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loan collection and servicing | 264 | 476 | (212) | (44.5) | 1,007 | 1,403 | (396) | (28.2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreclosed assets | 62 | 19 | 43 | 226.3 | 134 | 78 | 56 | 71.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest expense | 3,482 | 3,062 | 420 | 13.7 | 9,960 | 9,176 | 784 | 8.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 32,508 | $ | 31,322 | $ | 1,186 | 3.8 | % | $ | 96,357 | $ | 93,099 | $ | 3,258 | 3.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comparison of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024
Total noninterest expense for the three months ended September 30, 2025, was $32.5 million, an increase of $1.2 million, or 3.8%, from the three months ended September 30, 2024. Notable changes in noninterest expense include the following:
•A $0.4 million loss on the extinguishment of debt associated with the early payoff of $40.0 million of subordinated notes in September 2025;
•A $0.3 million increase in benefits expense, primarily driven by higher medical benefits costs;
•A $0.3 million increase in furniture and equipment expense, primarily due to planned maintenance and upgrades; and
•A $0.2 million increase in data processing expense.
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Total noninterest expense for the nine months ended September 30, 2025, was $96.4 million, an increase of $3.3 million, or 3.5%, from the nine months ended September 30, 2024. Notable changes in noninterest expense include the following:
•A $1.5 million increase in employee benefits expense, primarily driven by higher medical benefits cost;
•A $0.5 million increase in salaries expense, primarily driven by annual merit increases;
•A $0.4 million increase in bank occupancy expense, primarily due to planned building maintenance and upgrades; and
•A $0.4 million loss on the extinguishment of debt associated with the early payoff of $40.0 million of subordinated notes in September 2025.
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Income Taxes
During the three months ended September 30, 2025 and 2024, we recorded income tax expense of $7.0 million, or an effective tax rate of 26.1%, and $6.3 million, or an effective tax rate of 25.8%, respectively. During the nine months ended September 30, 2025 and 2024, we recorded income tax expense of $20.5 million, or an effective tax rate of 26.1%, and $18.5 million, or an effective tax rate of 26.4%, respectively.
The higher effective tax rate during the third quarter of 2025 was primarily attributable to a lower proportion of tax-exempt interest income to pre-tax income during 2025 relative to 2024. The higher effective tax rate during the nine months ended September 30, 2024 was primarily attributable to an additional $0.5 million of tax expense for a deferred tax asset write-down, recognized during the second quarter of 2024, as a result of an Illinois tax change. Additionally, $0.3 million of additional tax expense was recognized during the second quarter of 2025, related to the nonrecurring reversal of a stranded tax effect included in accumulated other comprehensive income, in connection with the maturity of a derivative designated as a cash flow hedge.
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FINANCIAL CONDITION
| (dollars in thousands, except per share data) | September 30, 2025 | December 31, 2024 | $ Change | % Change | |||||||||||||||||||
| Cash and cash equivalents | $ | 155,133 | $ | 137,692 | $ | 17,441 | 12.7 | % | |||||||||||||||
| Debt securities available-for-sale, at fair value | 793,730 | 698,049 | 95,681 | 13.7 | |||||||||||||||||||
| Debt securities held-to-maturity | 466,565 | 499,858 | (33,293) | (6.7) | |||||||||||||||||||
| Loans held for sale | 1,432 | 1,586 | (154) | (9.7) | |||||||||||||||||||
| Loans, before allowance for credit losses | 3,400,029 | 3,466,146 | (66,117) | (1.9) | |||||||||||||||||||
| Less: allowance for credit losses | 41,900 | 42,044 | (144) | (0.3) | |||||||||||||||||||
| Loans, net of allowance for credit losses | 3,358,129 | 3,424,102 | (65,973) | (1.9) | |||||||||||||||||||
| Goodwill | 59,820 | 59,820 | — | — | |||||||||||||||||||
| Intangible assets, net | 15,760 | 17,843 | (2,083) | (11.7) | |||||||||||||||||||
| Other assets | 184,458 | 193,952 | (9,494) | (4.9) | |||||||||||||||||||
| Total assets | $ | 5,035,027 | $ | 5,032,902 | $ | 2,125 | — | % | |||||||||||||||
| Total deposits | $ | 4,347,187 | $ | 4,318,254 | $ | 28,933 | 0.7 | % | |||||||||||||||
| Securities sold under agreements to repurchase | — | 28,969 | (28,969) | (100.0) | |||||||||||||||||||
| Borrowings | 7,271 | 13,231 | (5,960) | (45.0) | |||||||||||||||||||
| Subordinated notes | — | 39,553 | (39,553) | (100.0) | |||||||||||||||||||
| Junior subordinated debentures | 52,894 | 52,849 | 45 | 0.1 | |||||||||||||||||||
| Other liabilities | 28,546 | 35,441 | (6,895) | (19.5) | |||||||||||||||||||
| Total liabilities | 4,435,898 | 4,488,297 | (52,399) | (1.2) | |||||||||||||||||||
| Total stockholders' equity | 599,129 | 544,605 | 54,524 | 10.0 | |||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 5,035,027 | $ | 5,032,902 | $ | 2,125 | — | % | |||||||||||||||
Tangible assets (1) | $ | 4,959,447 | $ | 4,955,239 | $ | 4,208 | 0.1 | % | |||||||||||||||
Tangible common equity (1) | 523,549 | 466,942 | 56,607 | 12.1 | |||||||||||||||||||
Core deposits (1) | $ | 4,147,096 | $ | 4,116,058 | $ | 31,038 | 0.8 | % | |||||||||||||||
| Share and Per Share Information | |||||||||||||||||||||||
| Book value per share | $ | 19.05 | $ | 17.26 | $ | 1.79 | 10.4 | % | |||||||||||||||
Tangible book value per share (1) | 16.64 | 14.80 | 1.84 | 12.4 | |||||||||||||||||||
| Shares of common stock outstanding | 31,455,803 | 31,559,366 | |||||||||||||||||||||
| Balance Sheet Ratios | |||||||||||||||||||||||
| Loan to deposit ratio | 78.21 | % | 80.27 | % | |||||||||||||||||||
Core deposits to total deposits (1) | 95.40 | 95.32 | |||||||||||||||||||||
| Stockholders' equity to total assets | 11.90 | 10.82 | |||||||||||||||||||||
Tangible common equity to tangible assets (1) | 10.56 | 9.42 | |||||||||||||||||||||
_________________________________________________
(1)See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most closely comparable GAAP measures.
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Notable changes in our consolidated balance sheet include the following:
•A $66.1 million decrease in loans, primarily attributable to early payoffs from property sales and refinancings;
•A $62.4 million increase in debt securities, primarily attributable to a reinvestment of cash flows from loan paydowns into debt securities and a $25.4 million increase in the fair value of debt securities available-for-sale;
•The $40.0 million of subordinated notes outstanding at December 31, 2024 were paid off in September 2025;
•A $28.9 million increase in deposits, primarily attributable to $45.0 million of wealth management customer reciprocal money market deposits being brought on balance sheet which was partially offset by a $20.7 million decrease in time deposits; and
•A vast majority of repurchase agreement account balances were transitioned to reciprocal interest-bearing demand deposit accounts.
Loan Portfolio
The following table sets forth the composition of the loan portfolio, excluding loans held-for-sale, by type of loan.
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (dollars in thousands) | Balance | Percent | Balance | Percent | |||||||||||||||||||
| Commercial and industrial | $ | 395,859 | 11.7 | % | $ | 428,389 | 12.4 | % | |||||||||||||||
| Commercial real estate - owner occupied | 312,192 | 9.2 | 322,316 | 9.3 | |||||||||||||||||||
| Commercial real estate - non-owner occupied | 931,723 | 27.4 | 899,565 | 25.9 | |||||||||||||||||||
| Construction and land development | 269,924 | 7.9 | 374,657 | 10.8 | |||||||||||||||||||
| Multi-family | 514,801 | 15.1 | 431,524 | 12.4 | |||||||||||||||||||
| One-to-four family residential | 443,215 | 13.0 | 463,968 | 13.4 | |||||||||||||||||||
| Agricultural and farmland | 280,309 | 8.3 | 293,375 | 8.5 | |||||||||||||||||||
| Municipal, consumer, and other | 252,006 | 7.4 | 252,352 | 7.3 | |||||||||||||||||||
| Loans, before allowance for credit losses | 3,400,029 | 100.0 | % | 3,466,146 | 100.0 | % | |||||||||||||||||
| Allowance for credit losses | (41,900) | (42,044) | |||||||||||||||||||||
| Loans, net of allowance for credit losses | $ | 3,358,129 | $ | 3,424,102 | |||||||||||||||||||
Loans, before allowance for credit losses were $3.40 billion at September 30, 2025, a decrease of $66.1 million, or 1.9%, from December 31, 2024. Notable changes include the following:
•A $104.7 million decrease in construction and land development loans, primarily attributable to transfers of completed projects into other categories, as well as payoffs from property sales and refinancings;
•A $12.0 million reduction on two lines of credit that funded shortly before and paid off after December 31, 2024; and
•An $83.3 million increase in multi-family loans and a $32.2 million increase in commercial real estate – non-owner occupied loans, primarily attributable to new originations as well as completed construction projects transferred from the construction and land development category, partially offset by early payoffs.
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Commercial Real Estate Portfolios
Commercial real estate – owner occupied loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The commercial real estate – owner occupied portfolio composition, segmented by the owner’s business classification, as of September 30, 2025 was as follows:
| September 30, 2025 | |||||||||||
| (dollars in thousands) | Balance | Substandard Risk Rating | |||||||||
| Manufacturing | $ | 49,442 | $ | 429 | |||||||
| Auto repair and dealers | 34,345 | 244 | |||||||||
| Health care and social assistance | 32,346 | 1,376 | |||||||||
| Real estate, rental, and leasing | 29,315 | 388 | |||||||||
| Retail trade | 28,536 | — | |||||||||
| Accommodation and food services | 25,304 | 328 | |||||||||
| Grain elevators | 17,537 | 1,423 | |||||||||
| Construction | 15,893 | 1,558 | |||||||||
| Other services (except public administration) | 13,836 | 248 | |||||||||
| Wholesale trade | 13,579 | — | |||||||||
| Administrative and support services | 10,611 | — | |||||||||
| Arts, entertainment, and recreation | 9,414 | 68 | |||||||||
| Agriculture, forestry, fishing, and hunting | 6,411 | — | |||||||||
| Education services | 6,210 | 1,146 | |||||||||
| Professional, scientific, and technical services | 6,131 | 51 | |||||||||
| Finance and insurance | 3,181 | — | |||||||||
| Other | 10,101 | — | |||||||||
| Total | $ | 312,192 | $ | 7,259 | |||||||
Commercial real estate – non-owner occupied loans are primarily made based on projected cash flows from the rental or sale of the underlying collateral. The commercial real estate – non-owner occupied portfolio composition, segmented by the property type, as of September 30, 2025 was as follows:
| September 30, 2025 | |||||||||||||||||
| (dollars in thousands) | Balance | Substandard Risk Rating | Weighted Average LTV(1) | ||||||||||||||
| Retail | $ | 198,732 | $ | 7,417 | 55 | % | |||||||||||
| Warehouse and manufacturing | 186,780 | — | 54 | ||||||||||||||
| Office | 167,899 | 32 | 57 | ||||||||||||||
| Senior Living | 122,922 | 12,672 | 63 | ||||||||||||||
| Hotel | 82,506 | 7,401 | 54 | ||||||||||||||
| Mixed use (commercial and residential) | 66,614 | — | 62 | ||||||||||||||
| Medical office | 32,176 | — | 57 | ||||||||||||||
| Gas station | 24,477 | — | 61 | ||||||||||||||
| Auto repair and dealers | 19,171 | — | 54 | ||||||||||||||
| Restaurant and bar | 12,509 | — | 58 | ||||||||||||||
| Other | 17,937 | — | 55 | ||||||||||||||
| Total | $ | 931,723 | $ | 27,522 | 57 | % | |||||||||||
(1) Weighted average LTV is based on the most recent appraisals available, which are generally obtained at the time of origination.
Multi-family loans totaled $514.8 million as of September 30, 2025, and are primarily made based on projected cash flows from the rental of the underlying collateral. As of September 30, 2025, multi-family loans had a weighted average LTV of 56%, based on the most recent appraisals available, which are generally obtained at the time of origination.
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Construction and land development loans totaled $269.9 million as of September 30, 2025. The majority of these loans consist of multi-family and one-to-four family residential construction projects either to be sold upon completion or held for long-term investment, but also include other property types that may be rented, sold, or owner occupied upon completion. Construction and land development loans are primarily based on projected cash flows from the rental or sale of the underlying collateral, or based on the identified cash flows of the borrower.
Management’s disciplined approach to credit risk management is exercised through portfolio diversification, robust underwriting policies, and routine loan monitoring practices in order to identify and mitigate any credit weakness as early as possible. Management continually monitors and evaluates commercial real estate concentrations by property class, industry, and relative to the Bank’s regulatory capital to remain in line with board-established limits and adapt to changing industry conditions. A centralized credit underwriting group, independent of the originating lender, evaluates a vast majority of the commercial exposures over $750 thousand annually, if not more frequently, through a standardized credit review process to ensure uniform application of policies and procedures as well as analyze credit performance. All loans require appropriate internal approval, with a centralized credit approval group reviewing the vast majority of exposures over $500 thousand. Additionally, more than 45% of loan commitments are reviewed on a rolling 24 month basis between a robust internal review process and an annual third-party review of a sample of the portfolio.
For commercial real estate – non-owner occupied and multi-family loans over $1 million, we evaluate, on a quarterly basis, the impact of current interest rates on the underlying cash flows of the properties securing these loans, based on the most recent cash flow data available. Individual credits with a maturity scheduled within the next five quarters that are presenting stress under current renewal terms are identified, so that ample time is available to develop solutions to manage credit risk. This testing is completed in addition to the various sensitivity testing completed at the initial extension of credit.
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Loan Portfolio Maturities
The following table summarizes the scheduled maturities of the loan portfolio as of September 30, 2025. Demand loans (loans having no stated repayment schedule or maturity) and overdraft loans are reported as being due in one year or less.
| (dollars in thousands) | 1 Year or Less | After 1 Year Through 5 Years | After 5 Years Through 15 Years | After 15 Years | Total | |||||||||||||||||||||||||||
| Commercial and industrial | $ | 183,042 | $ | 156,932 | $ | 55,885 | $ | — | $ | 395,859 | ||||||||||||||||||||||
| Commercial real estate - owner occupied | 45,461 | 173,051 | 76,760 | 16,920 | 312,192 | |||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | 209,766 | 603,507 | 104,831 | 13,619 | 931,723 | |||||||||||||||||||||||||||
| Construction and land development | 160,644 | 101,445 | 7,123 | 712 | 269,924 | |||||||||||||||||||||||||||
| Multi-family | 93,369 | 371,727 | 48,435 | 1,270 | 514,801 | |||||||||||||||||||||||||||
| One-to-four family residential | 84,937 | 157,976 | 71,120 | 129,182 | 443,215 | |||||||||||||||||||||||||||
| Agricultural and farmland | 116,596 | 126,764 | 31,861 | 5,088 | 280,309 | |||||||||||||||||||||||||||
| Municipal, consumer, and other | 105,124 | 45,371 | 67,593 | 33,918 | 252,006 | |||||||||||||||||||||||||||
| Total | $ | 998,939 | $ | 1,736,773 | $ | 463,608 | $ | 200,709 | $ | 3,400,029 | ||||||||||||||||||||||
The following table summarizes loans maturing after one year, segregated into variable and fixed interest rates.
| Variable Interest Rates | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | Repricing 1 Year or Less | Repricing After 1 Year | Total Variable Interest Rates | Predetermined (Fixed) Interest Rates | Total | |||||||||||||||||||||||||||
| Commercial and industrial | $ | 65,346 | $ | 3,630 | $ | 68,976 | $ | 143,841 | $ | 212,817 | ||||||||||||||||||||||
| Commercial real estate - owner occupied | 50,733 | 42,885 | 93,618 | 173,113 | 266,731 | |||||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | 140,349 | 32,276 | 172,625 | 549,332 | 721,957 | |||||||||||||||||||||||||||
| Construction and land development | 29,402 | 1,668 | 31,070 | 78,210 | 109,280 | |||||||||||||||||||||||||||
| Multi-family | 91,975 | 12,173 | 104,148 | 317,284 | 421,432 | |||||||||||||||||||||||||||
| One-to-four family residential | 72,230 | 62,795 | 135,025 | 223,253 | 358,278 | |||||||||||||||||||||||||||
| Agricultural and farmland | 7,696 | 10,920 | 18,616 | 145,097 | 163,713 | |||||||||||||||||||||||||||
| Municipal, consumer, and other | 14,724 | 23,218 | 37,942 | 108,940 | 146,882 | |||||||||||||||||||||||||||
| Total | $ | 472,455 | $ | 189,565 | $ | 662,020 | $ | 1,739,070 | $ | 2,401,090 | ||||||||||||||||||||||
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Nonperforming Assets
Our nonperforming loans and nonperforming assets were as follows:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| NONPERFORMING ASSETS | |||||||||||
| Nonaccrual | $ | 7,637 | $ | 7,652 | |||||||
| Past due 90 days or more, still accruing | 5 | 4 | |||||||||
| Total nonperforming loans | 7,642 | 7,656 | |||||||||
| Foreclosed assets | 1,007 | 367 | |||||||||
| Total nonperforming assets | $ | 8,649 | $ | 8,023 | |||||||
| Nonperforming loans that are wholly or partially guaranteed by the U.S. Government | $ | 1,760 | $ | 1,573 | |||||||
| Allowance for credit losses | $ | 41,900 | $ | 42,044 | |||||||
| Loans, before allowance for credit losses | 3,400,029 | 3,466,146 | |||||||||
| CREDIT QUALITY RATIOS | |||||||||||
| Allowance for credit losses to loans, before allowance for credit losses | 1.23 | % | 1.21 | % | |||||||
| Allowance for credit losses to nonaccrual loans | 548.64 | 549.45 | |||||||||
| Allowance for credit losses to nonperforming loans | 548.29 | 549.16 | |||||||||
| Nonaccrual loans to loans, before allowance for credit losses | 0.22 | 0.22 | |||||||||
| Nonperforming loans to loans, before allowance for credit losses | 0.22 | 0.22 | |||||||||
| Nonperforming assets to total assets | 0.17 | 0.16 | |||||||||
| Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets | 0.25 | 0.23 | |||||||||
Total nonperforming assets were $8.6 million at September 30, 2025, an increase of 7.8%, when compared to $8.0 million at December 31, 2024. Additionally, of the $7.6 million of nonperforming loans held as of September 30, 2025, $1.8 million are either wholly or partially guaranteed by the U.S. Government. The $0.6 million increase in nonperforming assets from December 31, 2024 was primarily attributable to an increase in foreclosed assets.
Risk Classification of Loans
Our risk classifications of loans were as follows:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Pass | $ | 3,215,114 | $ | 3,264,396 | |||||||
| Pass-watch | 89,732 | 83,947 | |||||||||
| Special mention | 15,090 | 46,590 | |||||||||
| Substandard | 80,093 | 71,213 | |||||||||
| Total | $ | 3,400,029 | $ | 3,466,146 | |||||||
Loans rated pass-watch or worse decreased $16.8 million, or 8.3%, from December 31, 2024 to September 30, 2025, primarily attributable to the pay-offs across the multi-family and construction and land development segments.
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Net Charge-offs (Recoveries)
The following table summarizes net charge-offs (recoveries) to average loans by loan category.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Net charge-offs (recoveries) | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | (61) | $ | 707 | $ | 878 | $ | 1,165 | |||||||||||||||||||||
| Commercial real estate - owner occupied | 111 | (4) | 79 | (8) | |||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | — | (329) | — | (586) | |||||||||||||||||||||||||
| Construction and land development | — | — | 4 | (2) | |||||||||||||||||||||||||
| Multi-family | — | — | 43 | 188 | |||||||||||||||||||||||||
| One-to-four family residential | (26) | 81 | 404 | 4 | |||||||||||||||||||||||||
| Agricultural and farmland | 4 | (2) | (43) | (10) | |||||||||||||||||||||||||
| Municipal, consumer, and other | 106 | 133 | 245 | 314 | |||||||||||||||||||||||||
| Total | $ | 134 | $ | 586 | $ | 1,610 | $ | 1,065 | |||||||||||||||||||||
| Average loans | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | 412,004 | $ | 395,431 | $ | 425,942 | $ | 402,807 | |||||||||||||||||||||
| Commercial real estate - owner occupied | 315,285 | 282,143 | 320,283 | 291,371 | |||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | 915,168 | 885,529 | 902,389 | 885,021 | |||||||||||||||||||||||||
| Construction and land development | 295,144 | 373,218 | 343,970 | 364,598 | |||||||||||||||||||||||||
| Multi-family | 485,452 | 424,879 | 446,911 | 422,968 | |||||||||||||||||||||||||
| One-to-four family residential | 444,420 | 484,247 | 453,116 | 487,949 | |||||||||||||||||||||||||
| Agricultural and farmland | 275,064 | 290,426 | 278,044 | 284,465 | |||||||||||||||||||||||||
| Municipal, consumer, and other | 237,100 | 243,426 | 248,422 | 235,696 | |||||||||||||||||||||||||
| Total | $ | 3,379,637 | $ | 3,379,299 | $ | 3,419,077 | $ | 3,374,875 | |||||||||||||||||||||
| Charge-offs (recoveries) to average loans * | |||||||||||||||||||||||||||||
| Commercial and industrial | (0.06) | % | 0.71 | % | 0.28 | % | 0.39 | % | |||||||||||||||||||||
| Commercial real estate - owner occupied | 0.14 | (0.01) | 0.03 | — | |||||||||||||||||||||||||
| Commercial real estate - non-owner occupied | — | (0.15) | — | (0.09) | |||||||||||||||||||||||||
| Construction and land development | — | — | — | — | |||||||||||||||||||||||||
| Multi-family | — | — | 0.01 | 0.06 | |||||||||||||||||||||||||
| One-to-four family residential | (0.02) | 0.07 | 0.12 | — | |||||||||||||||||||||||||
| Agricultural and farmland | 0.01 | — | (0.02) | — | |||||||||||||||||||||||||
| Municipal, consumer, and other | 0.18 | 0.22 | 0.13 | 0.18 | |||||||||||||||||||||||||
| Total | 0.02 | % | 0.07 | % | 0.06 | % | 0.04 | % | |||||||||||||||||||||
* Annualized measure.
The net charge-offs (recoveries) to average total loans ratio has remained low for several years. While we believe our continuous credit monitoring and collection efforts have resulted in lower levels of credit losses, we also recognize that substantial federal economic stimulus during the COVID-19 pandemic and the relatively stable economic conditions after the pandemic have also contributed to reduced credit losses.
Additionally, equipment finance loans which were purchased as part of a pool of loans during 2023 contributed to heightened net charge-offs within the commercial and industrial segment.
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Securities
The Company’s investment policy emphasizes safety of the principal, liquidity needs, expected returns, cash flow targets, and consistency with our interest rate risk management strategy. The composition and maturities of the debt securities portfolio as of September 30, 2025, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur. Security yields have not been adjusted to a tax-equivalent basis.
| September 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Available-for-Sale | Held-to-Maturity | Total | ||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | ||||||||||||||||||||||||||||||||
| Due in 1 year or less | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 19,987 | 0.95 | % | $ | — | — | % | $ | 19,987 | 0.95 | % | ||||||||||||||||||||||||||
| U.S. government agency | 9,498 | 2.53 | 5,000 | 1.10 | 14,498 | 2.04 | ||||||||||||||||||||||||||||||||
| Municipal | 4,600 | 1.56 | 2,998 | 3.06 | 7,598 | 2.15 | ||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | 217 | 2.92 | — | — | 217 | 2.92 | ||||||||||||||||||||||||||||||||
| Agency commercial | 7,445 | 1.85 | 2,847 | 2.21 | 10,292 | 1.95 | ||||||||||||||||||||||||||||||||
| Corporate | 1,998 | 6.00 | — | — | 1,998 | 6.00 | ||||||||||||||||||||||||||||||||
| Total | $ | 43,745 | 1.75 | % | $ | 10,845 | 1.93 | % | $ | 54,590 | 1.79 | % | ||||||||||||||||||||||||||
| Due after 1 year through 5 years | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 70,047 | 1.35 | % | $ | — | — | % | $ | 70,047 | 1.35 | % | ||||||||||||||||||||||||||
| U.S. government agency | 23,806 | 2.33 | 37,351 | 2.44 | 61,157 | 2.40 | ||||||||||||||||||||||||||||||||
| Municipal | 64,544 | 1.65 | 17,005 | 3.18 | 81,549 | 1.97 | ||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | 9,256 | 2.74 | 10,788 | 2.10 | 20,044 | 2.40 | ||||||||||||||||||||||||||||||||
| Agency commercial | 70,777 | 1.65 | 100,910 | 2.29 | 171,687 | 2.03 | ||||||||||||||||||||||||||||||||
| Corporate | 23,307 | 6.72 | — | — | 23,307 | 6.72 | ||||||||||||||||||||||||||||||||
| Total | $ | 261,737 | 2.12 | % | $ | 166,054 | 2.40 | % | $ | 427,791 | 2.23 | % | ||||||||||||||||||||||||||
| Due after 5 years through 10 years | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 9,725 | 1.66 | % | $ | — | — | % | $ | 9,725 | 1.66 | % | ||||||||||||||||||||||||||
| U.S. government agency | 18,626 | 3.62 | 46,138 | 2.66 | 64,764 | 2.94 | ||||||||||||||||||||||||||||||||
| Municipal | 63,469 | 1.87 | 8,659 | 3.64 | 72,128 | 2.08 | ||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | 58,737 | 2.40 | — | — | 58,737 | 2.40 | ||||||||||||||||||||||||||||||||
| Agency commercial | 6,264 | 2.31 | 127,375 | 1.83 | 133,639 | 1.85 | ||||||||||||||||||||||||||||||||
| Corporate | 35,500 | 5.95 | — | — | 35,500 | 5.95 | ||||||||||||||||||||||||||||||||
| Total | $ | 192,321 | 2.96 | % | $ | 182,172 | 2.13 | % | $ | 374,493 | 2.55 | % | ||||||||||||||||||||||||||
| Due after 10 years | ||||||||||||||||||||||||||||||||||||||
| Municipal | $ | 17,110 | 2.21 | % | $ | 1,937 | 3.47 | % | $ | 19,047 | 2.34 | % | ||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | 256,747 | 4.50 | 67,445 | 3.62 | 324,192 | 4.32 | ||||||||||||||||||||||||||||||||
| Agency commercial | 49,311 | 3.45 | 38,112 | 1.91 | 87,423 | 2.78 | ||||||||||||||||||||||||||||||||
| Corporate | 6,760 | 6.41 | — | — | 6,760 | 6.41 | ||||||||||||||||||||||||||||||||
| Total | $ | 329,928 | 4.26 | % | $ | 107,494 | 3.01 | % | $ | 437,422 | 3.96 | % | ||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 99,759 | 1.30 | % | $ | — | — | % | $ | 99,759 | 1.30 | % | ||||||||||||||||||||||||||
| U.S. government agency | 51,930 | 2.83 | 88,489 | 2.48 | 140,419 | 2.61 | ||||||||||||||||||||||||||||||||
| Municipal | 149,723 | 1.80 | 30,599 | 3.32 | 180,322 | 2.06 | ||||||||||||||||||||||||||||||||
| Mortgage-backed: | ||||||||||||||||||||||||||||||||||||||
| Agency residential | 324,957 | 4.07 | 78,233 | 3.41 | 403,190 | 3.94 | ||||||||||||||||||||||||||||||||
| Agency commercial | 133,797 | 2.36 | 269,244 | 2.02 | 403,041 | 2.13 | ||||||||||||||||||||||||||||||||
| Corporate | 67,565 | 6.26 | — | — | 67,565 | 6.26 | ||||||||||||||||||||||||||||||||
| Total | $ | 827,731 | 3.15 | % | $ | 466,565 | 2.42 | % | $ | 1,294,296 | 2.89 | % | ||||||||||||||||||||||||||
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SOURCES OF FUNDS
Deposits
Management continues to focus on growing deposits through the Company’s relationship-driven banking philosophy and community-focused marketing programs.
The following table sets forth the distribution of average deposits, by account type:
| Three Months Ended September 30, | Percent Change in Average Balance | ||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Percent of Total Deposits | Weighted Average Cost * | Average Balance | Percent of Total Deposits | Weighted Average Cost * | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 1,028,608 | 23.8 | % | — | % | $ | 1,013,893 | 23.5 | % | — | % | 1.5 | % | |||||||||||||||||||||||||||
| Interest-bearing demand | 1,113,391 | 25.8 | 0.60 | 1,085,609 | 25.2 | 0.52 | 2.6 | ||||||||||||||||||||||||||||||||||
| Money market | 833,812 | 19.3 | 2.21 | 800,651 | 18.6 | 2.35 | 4.1 | ||||||||||||||||||||||||||||||||||
| Savings | 568,001 | 13.2 | 0.28 | 573,077 | 13.3 | 0.27 | (0.9) | ||||||||||||||||||||||||||||||||||
| Time | 771,360 | 17.9 | 3.23 | 804,379 | 18.7 | 3.81 | (4.1) | ||||||||||||||||||||||||||||||||||
| Brokered | — | — | — | 29,996 | 0.7 | 5.54 | (100.0) | ||||||||||||||||||||||||||||||||||
| Total deposits | $ | 4,315,172 | 100.0 | % | 1.19 | % | $ | 4,307,605 | 100.0 | % | 1.35 | % | 0.2 | % | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | Percent Change in Average Balance | ||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Percent of Total Deposits | Weighted Average Cost * | Average Balance | Percent of Total Deposits | Weighted Average Cost * | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 1,039,564 | 24.0 | % | — | % | $ | 1,031,239 | 23.8 | % | — | % | 0.8 | % | |||||||||||||||||||||||||||
| Interest-bearing demand | 1,119,902 | 25.9 | 0.56 | 1,112,198 | 25.7 | 0.50 | 0.7 | ||||||||||||||||||||||||||||||||||
| Money market | 818,453 | 18.9 | 2.20 | 800,693 | 18.5 | 2.37 | 2.2 | ||||||||||||||||||||||||||||||||||
| Savings | 568,891 | 13.2 | 0.27 | 592,134 | 13.7 | 0.28 | (3.9) | ||||||||||||||||||||||||||||||||||
| Time | 778,618 | 18.0 | 3.34 | 744,349 | 17.2 | 3.72 | 4.6 | ||||||||||||||||||||||||||||||||||
| Brokered | — | — | — | 50,046 | 1.1 | 5.49 | (100.0) | ||||||||||||||||||||||||||||||||||
| Total deposits | $ | 4,325,428 | 100.0 | % | 1.20 | % | $ | 4,330,659 | 100.0 | % | 1.31 | % | (0.1) | % | |||||||||||||||||||||||||||
_________________________________________________
*Annualized measure.
Average deposit balances have been relatively stable in 2025 compared to 2024, with growth in money market and time deposits being offset by decreases in savings and the planned repayment of brokered time deposits at scheduled maturities. Additionally, the vast majority of repurchase agreement account balances were transitioned to reciprocal interest-bearing demand accounts during the first half of 2025 and $45.0 million of wealth management customer reciprocal money market deposits were brought on balance sheet at the end of the third quarter of 2025.
The following table sets forth time deposits by remaining maturity as of September 30, 2025:
| (dollars in thousands) | 3 Months or Less | Over 3 through 6 Months | Over 6 through 12 Months | Over 12 Months | Total | ||||||||||||||||||||||||
| Time deposits: | |||||||||||||||||||||||||||||
| Amounts less than $100,000 | $ | 105,540 | $ | 106,623 | $ | 73,867 | $ | 34,806 | $ | 320,836 | |||||||||||||||||||
| Amounts of $100,000 or more but less than $250,000 | 88,011 | 82,876 | 55,262 | 17,639 | 243,788 | ||||||||||||||||||||||||
| Amounts of $250,000 or more | 43,592 | 82,364 | 69,593 | 4,542 | 200,091 | ||||||||||||||||||||||||
| Total time deposits | $ | 237,143 | $ | 271,863 | $ | 198,722 | $ | 56,987 | $ | 764,715 | |||||||||||||||||||
As of September 30, 2025 and December 31, 2024, the Bank’s uninsured deposits were estimated to be $964.5 million and $949.4 million, respectively.
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LIQUIDITY
Bank Liquidity
The overall objective of bank liquidity management is to ensure the availability of sufficient cash funds to meet all financial commitments and to take advantage of investment opportunities. The Bank manages liquidity in order to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings as they mature, and to fund new loans and investments as opportunities arise.
The Bank continuously monitors its liquidity positions to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. The Bank manages its liquidity position to meet our daily cash flow needs, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives. The Bank also monitors liquidity requirements in light of interest rate trends, changes in the economy, the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits, and regulatory capital requirements.
As part of the Bank’s liquidity management strategy, the Bank is also focused on minimizing costs of liquidity and attempts to decrease these costs by promoting noninterest-bearing and low-cost deposits. While the Bank does not control the types of deposit instruments our clients choose, those choices can be influenced with the rates and the deposit specials offered.
Our on-balance sheet sources of liquidity included cash and cash equivalents as well as unpledged securities which may be sold or pledged as collateral to meet liquidity needs. As of September 30, 2025 and December 31, 2024, our on-balance sheet sources of liquidity included the following:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Cash and cash equivalents | $ | 155,133 | $ | 137,692 | |||||||
| Fair value of unpledged securities | 728,368 | 705,106 | |||||||||
| Total cash and unpledged securities | $ | 883,501 | $ | 842,798 | |||||||
Additional sources of liquidity include borrowings from the FHLB, the Federal Reserve discount window, and federal fund lines of credit. Interest is charged on outstanding borrowings at the prevailing market rate. As of September 30, 2025, our current borrowings and additional available borrowing capacity were as follows:
| September 30, 2025 | |||||||||||
| (dollars in thousands) | Current Balance | Additional Available Capacity | |||||||||
| FHLB | $ | 7,271 | $ | 1,004,044 | |||||||
| Federal Reserve | — | 108,038 | |||||||||
| Federal funds lines of credit | — | 80,000 | |||||||||
| Total | $ | 7,271 | $ | 1,192,082 | |||||||
Furthermore, the Bank could utilize brokered deposits as an additional source of liquidity, as needed.
As of September 30, 2025, management believed the current liquidity and available sources of liquidity are adequate to meet all of the reasonably foreseeable short-term and intermediate-term demands of the Bank. As of September 30, 2025, the Bank had no material commitments for capital expenditures.
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Holding Company Liquidity
The Holding Company, or HBT Financial, Inc. on an unconsolidated basis, is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. As of September 30, 2025, the Holding Company had cash and cash equivalents of $10.7 million.
The Holding Company’s main source of funding is dividends declared and paid to it by the Bank. Dividends paid by the Bank to the Holding Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Management believes that such limitations will not impact the Holding Company’s ability to meet its ongoing short-term or intermediate-term cash obligations. During the three months ended September 30, 2025 and 2024, the Bank paid $25.0 million and $8.0 million in dividends to the Holding Company, respectively. During the nine months ended September 30, 2025 and 2024, the Bank paid $62.5 million and $26.0 million in dividends to the Holding Company, respectively.
The liquidity needs of the Holding Company on an unconsolidated basis consist primarily of operating expenses, interest payments on debt, and shareholder distributions in the form of dividends and stock repurchases. During the three months ended September 30, 2025 and 2024, holding company operating expenses consisted of interest expense of $1.3 million and $1.5 million, respectively, and other operating expenses of $1.5 million and $1.0 million, respectively. During the nine months ended September 30, 2025 and 2024, holding company operating expenses consisted of interest expense of $4.1 million and $4.3 million, respectively, and other operating expenses of $3.7 million and $3.1 million, respectively. Additionally, the Holding Company paid $6.7 million and $6.0 million of dividends to stockholders during the three months ended September 30, 2025 and 2024, respectively, and paid $20.0 million and $18.1 million of dividends to stockholders during the nine months ended September 30, 2025 and 2024, respectively.
As of September 30, 2025, management was not aware of any known trends, events or uncertainties that had or were reasonably likely to have a material impact on the Holding Company’s liquidity.
As of September 30, 2025, management believed the current liquidity and available sources of liquidity are adequate to meet all of the reasonably foreseeable short-term and intermediate-term demands of the Holding Company. As of September 30, 2025, the Holding Company had no material commitments for capital expenditures.
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CAPITAL RESOURCES
The overall objectives of capital management are to ensure the availability of sufficient capital to support loan, deposit and other asset and liability growth opportunities and to maintain capital to absorb unforeseen losses or write-downs that are inherent in the business risks associated with the banking industry. The Company seeks to balance the need for higher capital levels to address such unforeseen risks and the goal to achieve an adequate return on the capital invested by our stockholders.
Regulatory Capital Requirements
The Company and Bank are each subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Company and the Bank.
In addition to meeting minimum capital requirements, the Company and the Bank must also maintain a “capital conservation buffer” to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The capital conservation buffer requirement is 2.5% of risk-weighted assets.
As of September 30, 2025 and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they were subject. As of those dates, the Bank was “well capitalized” under the regulatory prompt corrective action provisions.
The following table sets forth actual capital ratios of the Company and the Bank as of the dates indicated, as well as the minimum ratios for capital adequacy purposes with the capital conservation buffer, and the minimum ratios to be well capitalized under regulatory prompt corrective action provisions.
| September 30, 2025 | December 31, 2024 | For Capital Adequacy Purposes With Capital Conservation Buffer (1) | To Be Well Capitalized Under Prompt Corrective Action Provisions (2) | |||||||||||||||||||||||
| Consolidated HBT Financial, Inc. | ||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | 16.77 | % | 16.51 | % | 10.50 | % | N/A | |||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | 15.67 | 14.50 | 8.50 | N/A | ||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | 14.35 | 13.21 | 7.00 | N/A | ||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | 12.16 | 11.51 | 4.00 | N/A | ||||||||||||||||||||||
| Heartland Bank and Trust Company | ||||||||||||||||||||||||||
| Total Capital (to Risk Weighted Assets) | 16.49 | % | 16.11 | % | 10.50 | % | 10.00 | % | ||||||||||||||||||
| Tier 1 Capital (to Risk Weighted Assets) | 15.40 | 15.10 | 8.50 | 8.00 | ||||||||||||||||||||||
| Common Equity Tier 1 Capital (to Risk Weighted Assets) | 15.40 | 15.10 | 7.00 | 6.50 | ||||||||||||||||||||||
| Tier 1 Capital (to Average Assets) | 11.95 | 11.98 | 4.00 | 5.00 | ||||||||||||||||||||||
_________________________________________________
(1)The Tier 1 capital to average assets ratio (known as the “leverage ratio”) is not impacted by the capital conservation buffer.
(2)The prompt corrective action provisions are not applicable to bank holding companies.
N/A Not applicable.
As of September 30, 2025, management was not aware of any known trends, events or uncertainties that had or were reasonably likely to have a material impact on the Company’s capital resources.
Cash Dividends
During 2024, the Company paid quarterly cash dividends of $0.19 per share. In January 2025, the Company announced an increase of $0.02 and paid quarterly cash dividends of $0.21 during the first three quarters of 2025.
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Stock Repurchase Program
Under the Company's stock repurchase program, the Company repurchased 39,631 shares of its common stock at a weighted average price of $25.36 during the three months ended September 30, 2025. The Company’s Board of Directors have authorized the repurchase of up to $15.0 million of its common stock under its stock repurchase program in effect until January 1, 2026. As of September 30, 2025, the Company had $11.1 million remaining under the current stock repurchase authorization.
OFF-BALANCE SHEET ARRANGEMENTS
As a financial services provider, the Bank routinely is a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit, standby letters of credit, unused lines of credit, commitments to sell loans, and interest rate swaps. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process afforded to loans originated by the Bank. For additional information, see “Note 15 – Commitments and Contingencies” to the consolidated financial statements.
CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those that are critical to the portrayal and understanding of the Company’s financial condition and results of operations and require management to make assumptions that are difficult, subjective, or complex. These estimates involve judgments, assumptions, and uncertainties that are susceptible to change. In the event that different assumptions or conditions were to prevail, and depending on the severity of such changes, the possibility of a materially different financial condition or materially different results of operations is a reasonable likelihood. Further, changes in accounting standards could impact the Company’s critical accounting estimates. The following accounting estimate could be deemed critical:
Allowance for Credit Losses
The allowance for credit losses reflects an estimate of lifetime expected credit losses. Measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is established through a provision for credit losses which is charged to expense. Additions to the allowance for credit losses are expected to maintain the adequacy of the total allowance for credit losses. Loan losses are charged off against the allowance for credit losses when the Company determines the loan balance to be uncollectible. Cash received on previously charged off amounts is recorded as a recovery to the allowance for credit losses.
Management uses the discounted cash flow method to estimate expected credit losses for all loan categories, except for consumer loans where the weighted average remaining maturity method is utilized. The Company uses regression analysis of historical internal and peer data to determine which macroeconomic variables are most closely correlated with credit losses, such as the unemployment rate and changes in GDP. Management leverages economic projections from a reputable third party to form its economic forecasts with a reversion to historical averages for periods beyond a reasonable and supportable forecast period.
Nonaccrual loans and loans which do not share risk characteristics with other loans in the pool are individually evaluated to determine expected credit losses.
The allowance for credit losses on unfunded commitments is estimated in the same manner as the associated loans, adjusted for anticipated funding rate.
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NON-GAAP FINANCIAL INFORMATION
This Quarterly Report on Form 10-Q contains certain financial information determined by methods other than those in accordance with GAAP. 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 closely comparable GAAP financial measures below.
| Non-GAAP Financial Measure | Definition | How the Measure Provides Useful Information to Investors | ||||||
| Adjusted Net Income | •Net income, with the following adjustments: -excludes acquisition expenses, including the day 2 provision for credit losses on non-PCD loans and unfunded commitments, -excludes branch closure expenses, -losses on extinguishment of debt, -excludes gains (losses) on closed branch premises, -excludes realized gains (losses) on sales of securities, -excludes mortgage servicing rights fair value adjustment, and -the income tax effect of these pre-tax adjustments. | •Enhances comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. •We also sometimes refer to ratios that include Adjusted Net Income, such as: -Adjusted Return on Average Assets, which is Adjusted Net Income divided by average assets. -Adjusted Return on Average Equity, which is Adjusted Net Income divided by average equity. -Adjusted Earnings Per Share – Basic, which is Adjusted Net Income allocated to common shares divided by weighted average common shares outstanding. -Adjusted Earnings Per Share – Diluted, which is Adjusted Net Income allocated to common shares divided by weighted average common shares outstanding, including all dilutive potential shares. •Adjusted Return on Average Assets is a performance measure utilized in determining executive compensation. | ||||||
| Pre-Provision Net Revenue | •Net interest income, plus noninterest income, less noninterest expense. | •Provides investors with information regarding profitability excluding provision for credit losses and income tax expense, which may fluctuate from period to period. •We also sometimes refer to measures that include Pre-Provision Net Revenue, such as: -Adjusted Pre-Provision Net Revenue which reflects the adjustments considered in Adjusted Net Income, as necessary. -Pre-Provision Net Revenue Less Charge-offs (Recoveries). -Adjusted Pre-Provision Net Revenue Less Charge-offs (Recoveries) which reflects the adjustments considered in Adjusted Net Income, as necessary. •Adjusted Pre-Provision Net Revenue Less Net Charge-Offs (Recoveries) is a performance measure utilized in determining executive compensation. | ||||||
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| Non-GAAP Financial Measure | Definition | How the Measure Provides Useful Information to Investors | ||||||
| Net Interest Income (Tax-Equivalent Basis) | •Net interest income adjusted for the tax-favored status of tax-exempt loans and securities. (1) | •We believe the tax-equivalent basis is the preferred industry measurement of net interest income. •Enhances comparability of net interest income arising from taxable and tax-exempt sources. •We also sometimes refer to Net Interest Margin (Tax-Equivalent Basis), which is Net Interest Income (Tax-Equivalent Basis) divided by average interest-earning assets. | ||||||
| Efficiency Ratio (Tax-Equivalent Basis) | •Noninterest expense less amortization of intangible assets divided by the sum of net interest income (tax-equivalent basis) and noninterest income. (1) | •Provides a measure of productivity in the banking industry. •Calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. •We also sometimes refer to Adjusted Efficiency Ratio (Tax-Equivalent Basis) which reflects the adjustments considered in Adjusted Net Income, as necessary. •Adjusted Efficiency Ratio (Tax-Equivalent Basis) is a performance measure utilized in determining executive compensation. | ||||||
| Ratio of Tangible Common Equity to Tangible Assets | •Tangible Common Equity is total stockholders’ equity less goodwill and other intangible assets. •Tangible Assets is total assets less goodwill and other intangible assets. | •Generally used by investors, our management, and banking regulators to evaluate capital adequacy. •Facilitates comparison of our earnings with the earnings of other banking organization with varying amounts of goodwill or intangible assets. •We also sometimes refer to ratios that include Tangible Common Equity, such as: -Tangible Book Value Per Share, which is Tangible Common Equity divided by shares of common stock outstanding. -Return on Average Tangible Common Equity, which is net income divided by average Tangible Common Equity. -Adjusted Return on Average Tangible Common Equity, which is Adjusted Net Income divided by average Tangible Common Equity. | ||||||
| Core Deposits | •Total deposits, excluding: -Time deposits of $250,000 or more, and -Brokered deposits | •Provides investors with information regarding the stability of the Company’s sources of funds. •We also sometimes refer to the ratio of Core Deposits to total deposits. | ||||||
_________________________________________________
(1)Tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.
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Reconciliation of Non-GAAP Financial Measure —
Adjusted Net Income and Adjusted Return on Average Assets
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Net income | $ | 19,765 | $ | 18,180 | $ | 58,070 | $ | 51,508 | |||||||||||||||||||||
| Less: adjustments | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | (391) | — | (391) | — | |||||||||||||||||||||||||
| Gains (losses) on closed branch premises | (7) | — | 2 | (635) | |||||||||||||||||||||||||
| Realized gains (losses) on sales of securities | (49) | — | (49) | (3,382) | |||||||||||||||||||||||||
| Mortgage servicing rights fair value adjustment | (514) | (1,488) | (1,573) | (1,505) | |||||||||||||||||||||||||
| Total adjustments | (961) | (1,488) | (2,011) | (5,522) | |||||||||||||||||||||||||
Tax effect of adjustments (1) | 274 | 424 | 573 | 1,574 | |||||||||||||||||||||||||
| Total adjustments after tax effect | (687) | (1,064) | (1,438) | (3,948) | |||||||||||||||||||||||||
| Adjusted net income | $ | 20,452 | $ | 19,244 | $ | 59,508 | $ | 55,456 | |||||||||||||||||||||
| Average assets | $ | 5,027,161 | $ | 5,006,721 | $ | 5,031,491 | $ | 5,012,656 | |||||||||||||||||||||
| Return on average assets * | 1.56 | % | 1.44 | % | 1.54 | % | 1.37 | % | |||||||||||||||||||||
| Adjusted return on average assets * | 1.61 | 1.53 | 1.58 | 1.48 | |||||||||||||||||||||||||
_________________________________________________
* Annualized measure.
(1)Assumes a federal income tax rate of 21% and a state tax rate of 9.5%.
Reconciliation of Non-GAAP Financial Measure —
Adjusted Earnings Per Share
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||
| Net income | $ | 19,765 | $ | 18,180 | $ | 58,070 | $ | 51,508 | |||||||||||||||||||||
| Adjusted net income | $ | 20,452 | $ | 19,244 | $ | 59,508 | $ | 55,456 | |||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding | 31,481,135 | 31,559,366 | 31,525,247 | 31,600,442 | |||||||||||||||||||||||||
| Dilutive effect of outstanding restricted stock units | 106,800 | 118,180 | 103,682 | 115,266 | |||||||||||||||||||||||||
| Weighted average common shares outstanding, including all dilutive potential shares | 31,587,935 | 31,677,546 | 31,628,929 | 31,715,708 | |||||||||||||||||||||||||
| Earnings per share - basic | $ | 0.63 | $ | 0.58 | $ | 1.84 | $ | 1.63 | |||||||||||||||||||||
| Earnings per share - diluted | $ | 0.63 | $ | 0.57 | $ | 1.84 | $ | 1.62 | |||||||||||||||||||||
| Adjusted earnings per share - basic | $ | 0.65 | $ | 0.61 | $ | 1.89 | $ | 1.75 | |||||||||||||||||||||
| Adjusted earnings per share - diluted | $ | 0.65 | $ | 0.61 | $ | 1.88 | $ | 1.75 | |||||||||||||||||||||
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Reconciliation of Non-GAAP Financial Measure —
Pre-Provision Net Revenue, Pre-Provision Net Revenue Less Charge-offs (Recoveries),
Adjusted Pre-Provision Net Revenue, and
Adjusted Pre-Provision Net Revenue Less Charge-offs (Recoveries)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Net interest income | $ | 49,986 | $ | 47,733 | $ | 148,352 | $ | 141,449 | |||||||||||||||||||||
| Noninterest income | 9,849 | 8,705 | 28,295 | 23,941 | |||||||||||||||||||||||||
| Noninterest expense | (32,508) | (31,322) | (96,357) | (93,099) | |||||||||||||||||||||||||
| Pre-provision net revenue | 27,327 | 25,116 | 80,290 | 72,291 | |||||||||||||||||||||||||
| Less: adjustments | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | (391) | — | (391) | — | |||||||||||||||||||||||||
| Gains (losses) on closed branch premises | (7) | — | 2 | (635) | |||||||||||||||||||||||||
| Realized gains (losses) on sales of securities | (49) | — | (49) | (3,382) | |||||||||||||||||||||||||
| Mortgage servicing rights fair value adjustment | (514) | (1,488) | (1,573) | (1,505) | |||||||||||||||||||||||||
| Total adjustments | (961) | (1,488) | (2,011) | (5,522) | |||||||||||||||||||||||||
| Adjusted pre-provision net revenue | $ | 28,288 | $ | 26,604 | $ | 82,301 | $ | 77,813 | |||||||||||||||||||||
| Pre-provision net revenue | $ | 27,327 | $ | 25,116 | $ | 80,290 | $ | 72,291 | |||||||||||||||||||||
| Less: net charge-offs | 134 | 586 | 1,610 | 1,065 | |||||||||||||||||||||||||
| Pre-provision net revenue less net charge-offs | $ | 27,193 | $ | 24,530 | $ | 78,680 | $ | 71,226 | |||||||||||||||||||||
| Adjusted pre-provision net revenue | $ | 28,288 | $ | 26,604 | $ | 82,301 | $ | 77,813 | |||||||||||||||||||||
| Less: net charge-offs | 134 | 586 | 1,610 | 1,065 | |||||||||||||||||||||||||
| Adjusted pre-provision net revenue less net charge-offs | $ | 28,154 | $ | 26,018 | $ | 80,691 | $ | 76,748 | |||||||||||||||||||||
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Reconciliation of Non-GAAP Financial Measure —
Net Interest Income and Net Interest Margin (Tax-Equivalent Basis)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | |||||||||||||||||||||||||||||
| Net interest income | $ | 49,986 | $ | 47,733 | $ | 148,352 | $ | 141,449 | |||||||||||||||||||||
Tax-equivalent adjustment (1) | 552 | 552 | 1,645 | 1,680 | |||||||||||||||||||||||||
Net interest income (tax-equivalent basis) (1) | $ | 50,538 | $ | 48,285 | $ | 149,997 | $ | 143,129 | |||||||||||||||||||||
| Net interest margin (tax-equivalent basis) | |||||||||||||||||||||||||||||
| Net interest margin * | 4.13 | % | 3.98 | % | 4.13 | % | 3.96 | % | |||||||||||||||||||||
Tax-equivalent adjustment * (1) | 0.05 | 0.05 | 0.05 | 0.05 | |||||||||||||||||||||||||
Net interest margin (tax-equivalent basis) * (1) | 4.18 | % | 4.03 | % | 4.18 | % | 4.01 | % | |||||||||||||||||||||
| Average interest-earning assets | $ | 4,800,519 | $ | 4,769,471 | $ | 4,802,260 | $ | 4,773,478 | |||||||||||||||||||||
_________________________________________________
* 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 Measure —
Efficiency Ratio (Tax-Equivalent Basis) and Adjusted Efficiency Ratio (Tax-Equivalent Basis)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Total noninterest expense | $ | 32,508 | $ | 31,322 | $ | 96,357 | $ | 93,099 | |||||||||||||||||||||
| Less: amortization of intangible assets | 694 | 710 | 2,083 | 2,130 | |||||||||||||||||||||||||
| Noninterest expense excluding amortization of intangible assets | $ | 31,814 | $ | 30,612 | $ | 94,274 | $ | 90,969 | |||||||||||||||||||||
| Less: adjustments to noninterest expense | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 391 | — | 391 | — | |||||||||||||||||||||||||
| Total adjustments to noninterest expense | 391 | — | 391 | — | |||||||||||||||||||||||||
| Adjusted noninterest expense | $ | 31,423 | $ | 30,612 | $ | 93,883 | $ | 90,969 | |||||||||||||||||||||
| Net interest income | $ | 49,986 | $ | 47,733 | $ | 148,352 | $ | 141,449 | |||||||||||||||||||||
| Total noninterest income | 9,849 | 8,705 | 28,295 | 23,941 | |||||||||||||||||||||||||
| Operating revenue | 59,835 | 56,438 | 176,647 | 165,390 | |||||||||||||||||||||||||
Tax-equivalent adjustment (1) | 552 | 552 | 1,645 | 1,680 | |||||||||||||||||||||||||
Operating revenue (tax-equivalent basis) (1) | 60,387 | 56,990 | 178,292 | 167,070 | |||||||||||||||||||||||||
| Less: adjustments to noninterest income | |||||||||||||||||||||||||||||
| Gains (losses) on closed branch premises | (7) | — | 2 | (635) | |||||||||||||||||||||||||
| Realized gains (losses) on sales of securities | (49) | — | (49) | (3,382) | |||||||||||||||||||||||||
| Mortgage servicing rights fair value adjustment | (514) | (1,488) | (1,573) | (1,505) | |||||||||||||||||||||||||
| Total adjustments to noninterest income | (570) | (1,488) | (1,620) | (5,522) | |||||||||||||||||||||||||
Adjusted operating revenue (tax-equivalent basis) (1) | 60,957 | 58,478 | $ | 179,912 | $ | 172,592 | |||||||||||||||||||||||
| Efficiency ratio | 53.17 | % | 54.24 | % | 53.37 | % | 55.00 | % | |||||||||||||||||||||
Efficiency ratio (tax-equivalent basis) (1) | 52.68 | 53.71 | 52.88 | 54.45 | |||||||||||||||||||||||||
Adjusted efficiency ratio (tax-equivalent basis) (1) | 51.55 | 52.35 | 52.18 | 52.71 | |||||||||||||||||||||||||
_________________________________________________
(1)On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.
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Reconciliation of Non-GAAP Financial Measure —
Ratio of Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share
| (dollars in thousands, except per share data) | September 30, 2025 | December 31, 2024 | |||||||||
| Tangible Common Equity | |||||||||||
| Total stockholders' equity | $ | 599,129 | $ | 544,605 | |||||||
| Less: Goodwill | 59,820 | 59,820 | |||||||||
| Less: Intangible assets, net | 15,760 | 17,843 | |||||||||
| Tangible common equity | $ | 523,549 | $ | 466,942 | |||||||
| Tangible Assets | |||||||||||
| Total assets | $ | 5,035,027 | $ | 5,032,902 | |||||||
| Less: Goodwill | 59,820 | 59,820 | |||||||||
| Less: Intangible assets, net | 15,760 | 17,843 | |||||||||
| Tangible assets | $ | 4,959,447 | $ | 4,955,239 | |||||||
| Total stockholders' equity to total assets | 11.90 | % | 10.82 | % | |||||||
| Tangible common equity to tangible assets | 10.56 | 9.42 | |||||||||
| Shares of common stock outstanding | 31,455,803 | 31,559,366 | |||||||||
| Book value per share | $ | 19.05 | $ | 17.26 | |||||||
| Tangible book value per share | 16.64 | 14.80 | |||||||||
Reconciliation of Non-GAAP Financial Measure —
Return on Average Tangible Common Equity, Adjusted Return on Average Stockholders’ Equity, and Adjusted Return on Average Tangible Common Equity
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Average Tangible Common Equity | |||||||||||||||||||||||||||||
| Total stockholders' equity | $ | 589,076 | $ | 523,745 | $ | 572,225 | $ | 506,582 | |||||||||||||||||||||
| Less: Goodwill | 59,820 | 59,820 | 59,820 | 59,820 | |||||||||||||||||||||||||
| Less: Intangible assets, net | 16,095 | 18,892 | 16,781 | 19,607 | |||||||||||||||||||||||||
| Average tangible common equity | $ | 513,161 | $ | 445,033 | $ | 495,624 | $ | 427,155 | |||||||||||||||||||||
| Net income | $ | 19,765 | $ | 18,180 | $ | 58,070 | $ | 51,508 | |||||||||||||||||||||
| Adjusted net income | 20,452 | 19,244 | 59,508 | 55,456 | |||||||||||||||||||||||||
| Return on average stockholders' equity * | 13.31 | % | 13.81 | % | 13.57 | % | 13.58 | % | |||||||||||||||||||||
| Return on average tangible common equity * | 15.28 | 16.25 | 15.66 | 16.11 | |||||||||||||||||||||||||
| Adjusted return on average stockholders' equity * | 13.77 | % | 14.62 | % | 13.90 | % | 14.62 | % | |||||||||||||||||||||
| Adjusted return on average tangible common equity * | 15.81 | 17.20 | 16.05 | 17.34 | |||||||||||||||||||||||||
_________________________________________________
* Annualized measure.
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Reconciliation of Non-GAAP Financial Measure —
Core Deposits
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Core Deposits | |||||||||||
| Total deposits | $ | 4,347,187 | $ | 4,318,254 | |||||||
| Less: time deposits of $250,000 or more | 200,091 | 202,196 | |||||||||
| Less: brokered deposits | — | — | |||||||||
| Core deposits | $ | 4,147,096 | $ | 4,116,058 | |||||||
| Core deposits to total deposits | 95.40 | % | 95.32 | % | |||||||
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are interest rate risk and credit risk.
Interest Rate Risk
Our most significant form of market risk is interest rate risk inherent in the normal course of lending and deposit-taking activities. Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates. Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results. To that end, management actively monitors and manages our interest rate exposure.
The Company’s Asset/Liability Management Committee (“ALCO”), which is authorized by the Company’s board of directors, monitors our interest rate sensitivity and makes decisions relating to that process. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.
We monitor the impact of changes in interest rates on our net interest income and economic value of equity (“EVE”) using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time. A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet.
The base and shock scenarios in the rate shock analysis assume a static balance sheet, static interest rates, no changes to product mix shift, and cash flow reinvestment at current market interest rates. We also make assumptions for our deposit betas and asset prepayments, based on historical experience.
Deposit Betas
Deposit pricing changes are primarily driven by changes in the federal funds rate, with the relationship between deposit rates and federal funds rate defined as deposit beta. We define cumulative deposit beta as the change in our quarterly cost of deposits divided by the change in the upper level of the stated federal funds rate range over a specified period. During the most recent rising rate cycle, which was from the fourth quarter of 2021 through the second quarter of 2024, our cumulative deposit beta was 23.6%. Since the start of the current falling rate cycle, which began with the third quarter of 2024, our cumulative deposit beta has been 16.5%.
Asset Prepayments
We include prepayment assumptions for both our loan and securities portfolios, based on historical experience. Generally, mortgage portfolio prepayments increase in lower rate environments, while commercial and consumer portfolios have historically remained more consistent throughout rate cycles.
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The following table sets forth the estimated impact on our EVE and net interest income of immediate and parallel changes in interest rates at the specified levels.
| Change in Interest Rates (basis points) | Estimated Increase (Decrease) in EVE | Increase (Decrease) in Estimated Net Interest Income | ||||||||||||||||||
| Year 1 | Year 2 | |||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||
| +400 | 30.1 | % | 6.0 | % | 15.4 | % | ||||||||||||||
| +300 | 24.5 | 5.1 | 12.4 | |||||||||||||||||
| +200 | 17.5 | 4.0 | 9.1 | |||||||||||||||||
| +100 | 9.4 | 2.5 | 5.2 | |||||||||||||||||
| -100 | (10.7) | (4.1) | (6.9) | |||||||||||||||||
| -200 | (19.1) | (4.8) | (10.9) | |||||||||||||||||
| -300 | (12.9) | (5.0) | (13.8) | |||||||||||||||||
| -400 | (4.7) | (4.8) | (14.2) | |||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||
| +400 | 22.0 | % | 4.9 | % | 11.3 | % | ||||||||||||||
| +300 | 18.3 | 3.9 | 9.0 | |||||||||||||||||
| +200 | 13.4 | 3.2 | 6.7 | |||||||||||||||||
| +100 | 7.3 | 2.0 | 3.8 | |||||||||||||||||
| -100 | (9.1) | (4.2) | (6.2) | |||||||||||||||||
| -200 | (20.3) | (5.5) | (10.2) | |||||||||||||||||
| -300 | (22.1) | (5.7) | (14.0) | |||||||||||||||||
| -400 | (14.1) | (5.8) | (15.9) | |||||||||||||||||
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE and net interest income requires that we make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The EVE and net interest income table presented above assumes that the composition of our interest-rate-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors, which could change the actual impact on EVE and net interest income. The table also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the repricing characteristics of specific assets and liabilities. Accordingly, although the EVE and net interest income table provides an indication of our sensitivity to interest rate changes at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.
Credit Risk
Credit risk is the risk that borrowers or counterparties will be unable or unwilling to repay their obligations in accordance with the underlying contractual terms. We manage credit risk in the loan portfolio by adhering to well-defined underwriting criteria and account administration standards established by management. Our loan policy documents underwriting standards, approval levels, exposure limits and other limits or standards deemed necessary and prudent. Portfolio diversification at the borrower, industry, and product levels is actively managed to mitigate concentration risk. In addition, credit risk management also includes an independent loan review process that assesses compliance with loan policy, compliance with loan documentation standards, accuracy of the risk rating and overall credit quality of the loan portfolio.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this report was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, the end of the period covered by this report, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is: (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are sometimes party to legal actions that are routine and incidental to our business. Management, in consultation with legal counsel, does not expect the ultimate disposition of any or a combination of these matters to have a material adverse effect on our assets, business, cash flow, financial condition, liquidity, prospects and results of operations; however, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business, including laws and regulations governing consumer protection, fair lending, fair labor, privacy, information security, and anti-money laundering and anti-terrorism laws, we, like all banking organizations, are subject to heightened legal and regulatory compliance and litigation risk.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Unregistered Sales of Equity Securities
None.
Issuer Purchases of Equity Securities
On December 17, 2024, the Company’s board of directors approved a stock repurchase program that authorizes the Company to repurchase up to $15.0 million of its common stock. The stock repurchase program will be in effect until January 1, 2026, with the timing of purchases and number of shares repurchased dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements, and market conditions. The Company is not obligated to purchase any shares under the stock repurchase program, and the stock repurchase program may be suspended or discontinued at any time without notice.
The following table sets forth information about the Company’s purchases of its common stock during the third quarter of 2025:
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (in thousands) | ||||||||||||||||||||||
| July 1 - 31, 2025 | — | $ | — | — | $ | 12,103 | ||||||||||||||||||||
| August 1 - 31, 2025 | 21,813 | 25.02 | 21,813 | 11,557 | ||||||||||||||||||||||
| September 1 - 30, 2025 | 17,818 | 25.78 | 17,818 | 11,098 | ||||||||||||||||||||||
| Total | 39,631 | $ | 25.36 | 39,631 | $ | 11,098 | ||||||||||||||||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
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ITEM 5. OTHER INFORMATION
During the fiscal quarter ended September 30, 2025, none of the Company’s directors or executive officers adopted terminated
ITEM 6. EXHIBITS
| Exhibit No. | Description | |||||||
| 2.1 * | Agreement and Plan of Merger among HBT Financial, Inc., HB-CNB Merger, Inc. and CNB Bank Shares, Inc., dated October 20, 2025 (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed with the Commission on October 20, 2025). | |||||||
| 31.1 | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a). | |||||||
| 31.2 | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a). | |||||||
| 32.1 ** | Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350. | |||||||
| 32.2 ** | Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350. | |||||||
| 101.INS | Inline XBRL Instance Document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101). | |||||||
_________________________________________________
*The Company has omitted schedules and similar attachments to the subject agreement pursuant to Item 601(b) of Regulation S-K. The Company will furnish a copy of any omitted schedule or similar attachment to the SEC upon request.
**This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HBT FINANCIAL, INC. | ||||||||
| October 31, 2025 | By: | /s/ Peter R. Chapman | ||||||
| Peter R. Chapman | ||||||||
| Chief Financial Officer | ||||||||
| (on behalf of the registrant and as principal financial officer) | ||||||||
89
FAQ
How did HBT (HBT) perform in Q3 2025?
Q3 2025 net income was $19.8 million with diluted EPS of $0.63, up from $18.2 million and $0.57 in Q3 2024.
What drove changes in HBT’s net interest income?
Net interest income rose to $50.0 million, aided by lower deposit interest expense year over year.
What is HBT’s credit cost trend and reserve level?
Provision for credit losses was $0.6 million in Q3 2025; the allowance stood at $41.9 million at September 30, 2025.
How did securities marks affect equity?
Accumulated other comprehensive loss improved to $27.1 million from $46.8 million at December 31, 2024.
What are HBT’s current loans and deposits?
Loans were $3.40 billion and total deposits were $4.35 billion as of September 30, 2025.
What are the terms of HBT’s CNB Bank Shares deal?
Consideration is about 5.5 million HBT shares plus $33.8M cash; CNBN holders are expected to own about 15% post-close.
Did HBT return capital to shareholders in Q3 2025?
Yes. It paid a $0.21 per-share dividend and repurchased 39,631 shares during the quarter.
Hbt Financial, Inc.
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Banks - Regional
State Commercial Banks
United States
BLOOMINGTON