HBT Financial, Inc. Announces First Quarter 2023 Financial Results

Source: Nasdaq GlobeNewswire / 26 Apr 2023 07:05:01 America/New_York

First Quarter Highlights

Net income of $9.2 million, or $0.30 per diluted share; return on average assets (ROAA) of 0.78%; return on average stockholders' equity (ROAE) of 8.84%; and return on average tangible common equity (ROATCE)⁽¹⁾ of 10.45%
Adjusted net income⁽¹⁾ of $19.9 million; or $0.64 per diluted share; adjusted ROAA⁽¹⁾ of 1.69%; adjusted ROAE⁽¹⁾ of 19.08%; and adjusted ROATCE⁽¹⁾ of 22.55%
Completed merger with Town and Country Financial Corporation (“Town and Country”) on February 1, 2023
Asset quality remained strong with nonperforming assets to total assets of 0.20%
Net interest margin expanded 10 basis points to 4.20% from the fourth quarter of 2022

_______________________
^{(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.}

BLOOMINGTON, Ill., April 26, 2023 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial” or “HBT”), the holding company for Heartland Bank and Trust Company, today reported net income of $9.2 million, or $0.30 diluted earnings per share, for the first quarter of 2023. This compares to net income of $13.1 million, or $0.46 diluted earnings per share, for the fourth quarter of 2022, and net income of $13.6 million, or $0.47 diluted earnings per share, for the first quarter of 2022.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “It was a strong start to 2023 for HBT. We posted excellent financial results which were underpinned by two strengths that we have been focused on for many years. Asset quality remains strong with low levels of problem loans and net recoveries recorded during the quarter. In addition, our deposit base which is very granular and nearly 70% retail as of March 31, 2023 has remained stable in balances since December 31, 2022, and the increase in the cost of these deposits was in line with our expectations as our overall cost of funds increased only 19 basis points for the quarter. These strengths contributed to strong net income after adjusting for acquisition related expenses. In addition to our strong financial results, we completed a successful close of the Town and Country acquisition which is expected to provide profitable growth, scale and enhance the long-term value of our company. Finally, I am excited by the leadership changes we have recently announced, as I will transition to an Executive Chairman role and Lance Carter, who has been with the bank since 2001, will take over as Chief Executive Officer effective on May 24, 2023.”

Adjusted Net Income

In addition to reporting GAAP results, the Company believes adjusted net income and adjusted earnings per share, which adjust for acquisition expenses, branch closure expenses, gains (losses) on sale of closed branch premises, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $19.9 million, or $0.64 adjusted diluted earnings per share, for the first quarter of 2023. This compares to adjusted net income of $13.9 million, or $0.48 adjusted diluted earnings per share, for the fourth quarter of 2022, and adjusted net income of $12.2 million, or $0.42 adjusted diluted earnings per share, for the first quarter of 2022 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Acquisition of Town and Country

On February 1, 2023, HBT Financial completed its previously announced acquisition of Town and Country, the holding company for Town and Country Bank. The acquisition further enhances HBT Financial’s footprint in Central Illinois and expands our footprint into metro-east St. Louis. After considering business combination accounting adjustments, Town and Country added total assets of $906 million, total loans held for investment of $635 million, and total deposits of $720 million.

Cash consideration of $38.0 million and stock consideration of approximately 3.4 million shares of HBT Financial common stock resulted in aggregate consideration of $109.4 million. The fair value of the shares of HBT Financial common stock issued as part of the consideration paid to the holders of Town and Country common stock was determined on the basis of the closing price of $21.12 per share on February 1, 2023. Goodwill of $30.6 million was recorded in the acquisition.

Acquisition-related expenses consisted of the following during the first quarter of 2023 and fourth quarter of 2022:

	Three Months Ended
	March 31, 2023		December 31, 2022
	(dollars in thousands)
Provision for credit losses	$	5,924	$	—
Salaries		3,518		—
Data processing		1,855		304
Marketing and customer relations		14		—
Legal fees and other noninterest expense		1,753		326
Total acquisition-related expenses	$	13,064	$	630

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2023 was $46.8 million, an increase of 11.0% from $42.2 million for the fourth quarter of 2022. The increase was primarily attributable to the increase in earning assets following the Town and Country merger and higher yields on interest-earning assets. Partially offsetting these improvements were an increase in funding costs and a decrease in nonaccrual interest recoveries to $0.2 million during the first quarter of 2023 from $1.3 million during the fourth quarter of 2022.

Relative to the first quarter of 2022, net interest income increased 46.7% from $31.9 million. The increase was primarily attributable to higher yields on interest-earning assets and the increase in average interest-earning assets following the Town and Country merger.

Net interest margin for the first quarter of 2023 was 4.20%, compared to 4.10% for the fourth quarter of 2022. The increase was primarily attributable to higher yields on interest-earning assets and a more favorable mix of interest-earning assets, driven by the Town and Country merger and subsequent sale of the vast majority of the Town and Country securities portfolio, which was partially offset by higher funding costs. The contribution of nonaccrual interest recoveries to net interest margin was 2 basis points during the first quarter of 2023 and 13 basis points during the fourth quarter of 2022. Additionally, acquired loan discount accretion contributed 7 basis points to net interest margin during the first quarter of 2023 and 2 basis points during the fourth quarter of 2022.

Relative to the first quarter of 2022, net interest margin increased from 3.08%. This increase was primarily attributable to higher yields on interest-earning assets. Nonaccrual interest recoveries contributed 7 basis points to net interest margin, and acquired loan discount accretion contributed 1 basis point to net interest margin, during the first quarter of 2022.

Noninterest Income

Noninterest income for the first quarter of 2023 was $7.4 million, a decrease of 5.7% from $7.9 million for the fourth quarter of 2022. The decrease was primarily attributable to realized losses on sales of securities of $1.0 million as the vast majority of the securities portfolio acquired from Town and Country was sold with the sale proceeds used to reduce Federal Home Loan Bank borrowings. Partially offsetting these losses was a $0.5 million increase in mortgage servicing revenue, primarily due to the addition of Town and Country servicing portfolio which nearly doubled the size of our existing mortgage servicing portfolio.

Relative to the first quarter of 2022, noninterest income decreased 25.9% from $10.0 million. The decline was primarily due to a negative $0.6 million mortgage servicing rights fair value adjustment during the first quarter of 2023 compared to a positive $1.7 million MSR fair value adjustment during the first quarter of 2022. Additionally, the realized losses on sales of securities of $1.0 million were partially offset by increases in mortgage servicing revenue and credit and debit card income.

Noninterest Expense

Noninterest expense for the first quarter of 2023 was $35.9 million, an 8.5% increase from $33.1 million for the fourth quarter of 2022. The increase was primarily due to acquisition-related expenses of $7.1 million and higher base costs following the Town and Country merger. These increases were mostly offset by the absence of accruals for pending legal matters totaling $8.2 million that were included in the fourth quarter of 2022 results.

Relative to the first quarter of 2022, noninterest expense increased 48.7% from $24.2 million, also primarily attributable to acquisition-related expenses.

Loan Portfolio

Total loans outstanding, before allowance for credit losses, were $3.20 billion at March 31, 2023, compared with $2.62 billion at December 31, 2022 and $2.49 billion at March 31, 2022. The $575.3 million increase in total loans from December 31, 2022 included $635.4 million of loans acquired in the Town and Country merger. Excluding the impact of the Town and Country merger, the $60.1 million decrease in total loans was primarily driven by a variety of balance reductions across the portfolio, including $21.9 million of multi-family loans refinanced to the secondary market and $14.9 million of payoffs on loans exited due to the current credit environment. Additionally, significantly lower seasonal usage on grain elevator lines of credit presented a headwind to loan growth during the first quarter of 2023.

Deposits

Total deposits were $4.31 billion at March 31, 2023, compared with $3.59 billion at December 31, 2022 and $3.82 billion at March 31, 2022. The $723.5 million increase from December 31, 2022 included $720.4 million of deposits assumed in the Town and Country merger. Excluding the impact of the Town and Country merger, total deposits remained nearly unchanged, with a $30.5 million increase in noninterest-bearing deposits and a $13.8 million increase in time deposits mostly offset by a $28.6 million decrease in money market accounts and a $16.3 million decrease in savings accounts.

Adoption of CECL Methodology

On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), Measurement of Credit Losses on Financial Instruments, commonly referred to as the Current Expected Credit Loss (“CECL”) standard. Upon adoption of the CECL standard, a cumulative effect adjustment was recognized resulting in an after-tax decrease to retained earnings of $6.9 million as of January 1, 2023. This transition adjustment includes a $7.0 million impact due to the increase in the allowance for credit losses on loans, a $2.9 million impact due to the establishment of an allowance for credit losses on unfunded commitments, and a $2.7 million impact due to the tax effect of the transition adjustment.

Additionally, we also adopted the CECL standard using the prospective transition approach for purchased credit deteriorated (“PCD”) financial assets that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30. In accordance with the CECL standard, we did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $0.2 million to the allowance for credit losses. The remaining noncredit discount will be accreted into interest income at the effective interest rate as of January 1, 2023.

Asset Quality

Nonperforming loans totaled $6.5 million, or 0.20% of total loans, at March 31, 2023, compared with $2.2 million, or 0.08% of total loans, at December 31, 2022, and $2.5 million, or 0.10% of total loans, at March 31, 2022. The $4.4 million increase in nonperforming loans from December 31, 2022 was primarily attributable to the Town and Country merger, which added $3.8 million in nonaccrual loans as of March 31, 2023, consisting primarily of one-to-four family residential real estate loans.

The Company recorded a provision for credit losses of $6.2 million for the first quarter of 2023 including the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger. The remaining provision for credit losses primarily reflects the establishment of an allowance for credit losses of $0.6 million on debt securities available-for-sale, related to one bank subordinated debt security, a $0.2 million decrease in specific reserves, and net recoveries of $0.1 million.

The Company had net recoveries of $0.1 million, or (0.02)% of average loans on an annualized basis, for the first quarter of 2023, compared to net recoveries of $0.9 million, or (0.14)% of average loans on an annualized basis, for the fourth quarter of 2022, and net recoveries of $1.2 million, or (0.19)% of average loans on an annualized basis, for the first quarter of 2022.

The Company’s allowance for credit losses was 1.21% of total loans and 595% of nonperforming loans at March 31, 2023, compared with 0.97% of total loans and 1,175% of nonperforming loans at December 31, 2022.

Stock Repurchase Program

During the first quarter of 2023, the Company repurchased 79,463 shares of its common stock at a weighted average price of $19.92 under its stock repurchase program. The Company’s Board of Directors have authorized the repurchase of up to $15 million of HBT Financial common stock under its stock repurchase program in effect until January 1, 2024. As of March 31, 2023, the Company had $13.4 million remaining under the current stock repurchase authorization.

About HBT Financial, Inc.

HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. HBT provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Illinois and Eastern Iowa through 68 full-service branches. As of March 31, 2023, HBT had total assets of $5.0 billion, total loans of $3.2 billion, and total deposits of $4.3 billion.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, return on average tangible common equity, adjusted net income, adjusted earnings per share, adjusted return on average assets, adjusted return on average stockholders' equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the "Reconciliation of Non-GAAP Financial Measures" tables.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release contains, and future oral and written statements of the Company and its management may contain, "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or “should,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: (i) the strength of the local, state, national and international economies (including effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof (including the Russian invasion of Ukraine), or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iii) changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the FASB or the PCAOB (including the Company’s adoption of CECL methodology); (iv) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business and any changes in response to the recent failures of other banks; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of LIBOR phase-out); (vi) increased competition in the financial services sector, including from non-bank competitors such as credit unions and “fintech” companies, and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (ix) the loss of key executives or employees; (x) changes in consumer spending; (xi) unexpected outcomes of existing or new litigation involving the Company; (xii) the economic impact of exceptional weather occurrences such as tornadoes, floods and blizzards; (xiii) fluctuations in the value of securities held in our securities portfolio; (xiv) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xvi) the level of non-performing assets on our balance sheets; (xvii) interruptions involving our information technology and communications systems or third-party servicers; (xviii) breaches or failures of our information security controls or cybersecurity-related incidents, and (xix) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

CONTACT:
Peter Chapman
HBTIR@hbtbank.com
(888) 897-2276

HBT Financial, Inc. Unaudited Consolidated Financial Summary
	As of or for the Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands, except per share data)
Interest and dividend income	$	51,779		$	44,948		$	33,335
Interest expense		4,942			2,765			1,407
Net interest income		46,837			42,183			31,928
Provision for credit losses		6,210			(653	)		(584	)
Net interest income after provision for credit losses		40,627			42,836			32,512
Noninterest income		7,437			7,889			10,043
Noninterest expense		35,933			33,110			24,157
Income before income tax expense		12,131			17,615			18,398
Income tax expense		2,923			4,475			4,794
Net income	$	9,208		$	13,140		$	13,604

Earnings per share - Basic	$	0.30		$	0.46		$	0.47
Earnings per share - Diluted		0.30			0.46			0.47

Adjusted net income ⁽¹⁾	$	19,859		$	13,886		$	12,227
Adjusted earnings per share - Basic ⁽¹⁾		0.64			0.48			0.42
Adjusted earnings per share - Diluted ⁽¹⁾		0.64			0.48			0.42

Book value per share	$	14.02		$	12.99		$	13.23
Tangible book value per share ⁽¹⁾		11.45			11.94			12.16

Shares of common stock outstanding		32,095,370			28,752,626			28,967,943
Weighted average shares of common stock outstanding		30,977,204			28,752,626			28,986,593

SUMMARY RATIOS
Net interest margin *		4.20	%		4.10	%		3.08	%
Net interest margin (tax equivalent basis) * ^{(1) (2)}		4.26			4.17			3.13

Efficiency ratio		65.27	%		65.85	%		56.97	%
Efficiency ratio (tax equivalent basis) ^{(1) (2)}		64.43			64.94			56.26

Loan to deposit ratio		74.13	%		73.05	%		65.19	%

Return on average assets *		0.78	%		1.23	%		1.27	%
Return on average stockholders' equity *		8.84			14.17			13.58
Return on average tangible common equity * ⁽¹⁾		10.45			15.45			14.71

Adjusted return on average assets * ⁽¹⁾		1.69	%		1.30	%		1.14	%
Adjusted return on average stockholders' equity * ⁽¹⁾		19.08			14.98			12.20
Adjusted return on average tangible common equity * ⁽¹⁾		22.55			16.33			13.22

CAPITAL
Total capital to risk-weighted assets		15.11	%		16.27	%		16.86	%
Tier 1 capital to risk-weighted assets		13.16			14.23			14.66
Common equity tier 1 capital ratio		11.79			13.07			13.40
Tier 1 leverage ratio		10.29			10.48			9.83
Total stockholders' equity to total assets		8.98			8.72			8.81
Tangible common equity to tangible assets ⁽¹⁾		7.45			8.06			8.16

ASSET QUALITY
Net charge-offs (recoveries) to average loans, before allowance for credit losses		(0.02	)%		(0.14	)%		(0.19	)%
Allowance for credit losses to loans, before allowance for credit losses		1.21			0.97			0.99
Nonperforming loans to loans, before allowance for credit losses		0.20			0.08			0.10
Nonperforming assets to total assets		0.20			0.12			0.13
^{* Annualized measure.} ^{(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.} ^{(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.}

HBT Financial, Inc. Unaudited Consolidated Financial Summary Consolidated Statements of Income
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
INTEREST AND DIVIDEND INCOME	(dollars in thousands, except per share data)
Loans, including fees:
Taxable	$	42,159		$	35,839		$	26,806
Federally tax exempt		952			952			662
Securities:
Taxable		6,616			6,421			4,649
Federally tax exempt		1,197			1,184			1,040
Interest-bearing deposits in bank		739			504			159
Other interest and dividend income		116			48			19
Total interest and dividend income		51,779			44,948			33,335

INTEREST EXPENSE
Deposits		2,374			849			569
Securities sold under agreements to repurchase		38			10			9
Borrowings		1,297			880			1
Subordinated notes		470			470			470
Junior subordinated debentures issued to capital trusts		763			556			358
Total interest expense		4,942			2,765			1,407
Net interest income		46,837			42,183			31,928
PROVISION FOR CREDIT LOSSES		6,210			(653	)		(584	)
Net interest income after provision for credit losses		40,627			42,836			32,512

NONINTEREST INCOME
Card income		2,658			2,642			2,404
Wealth management fees		2,338			2,485			2,289
Service charges on deposit accounts		1,871			1,701			1,652
Mortgage servicing		1,099			593			658
Mortgage servicing rights fair value adjustment		(624	)		(293	)		1,729
Gains on sale of mortgage loans		276			194			587
Realized gains (losses) on sales of securities		(1,007	)		—			—
Unrealized gains (losses) on equity securities		(22	)		33			(187	)
Gains (losses) on foreclosed assets		(10	)		(122	)		40
Gains (losses) on other assets		—			17			193
Income on bank owned life insurance		115			42			40
Other noninterest income		743			597			638
Total noninterest income		7,437			7,889			10,043

NONINTEREST EXPENSE
Salaries		19,411			13,278			12,801
Employee benefits		2,335			2,126			2,444
Occupancy of bank premises		2,102			1,893			2,060
Furniture and equipment		659			633			552
Data processing		4,323			2,167			1,653
Marketing and customer relations		836			867			851
Amortization of intangible assets		510			140			245
FDIC insurance		563			276			288
Loan collection and servicing		278			278			157
Foreclosed assets		61			33			132
Other noninterest expense		4,855			11,419			2,974
Total noninterest expense		35,933			33,110			24,157
INCOME BEFORE INCOME TAX EXPENSE		12,131			17,615			18,398
INCOME TAX EXPENSE		2,923			4,475			4,794
NET INCOME	$	9,208		$	13,140		$	13,604

EARNINGS PER SHARE - BASIC	$	0.30		$	0.46		$	0.47
EARNINGS PER SHARE - DILUTED	$	0.30		$	0.46		$	0.47
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING		30,977,204			28,752,626			28,986,593

HBT Financial, Inc. Unaudited Consolidated Financial Summary Consolidated Balance Sheets
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
ASSETS
Cash and due from banks	$	35,244		$	18,970		$	30,761
Interest-bearing deposits with banks		141,868			95,189			328,218
Cash and cash equivalents		177,112			114,159			358,979

Interest-bearing time deposits with banks		249			—			487
Debt securities available-for-sale, at fair value		854,622			843,524			933,922
Debt securities held-to-maturity		536,429			541,600			438,054
Equity securities with readily determinable fair value		3,145			3,029			3,256
Equity securities with no readily determinable fair value		1,980			1,977			1,927
Restricted stock, at cost		4,991			7,965			2,739
Loans held for sale		5,130			615			1,777

Loans, before allowance for credit losses		3,195,540			2,620,253			2,487,785
Allowance for credit losses		(38,776	)		(25,333	)		(24,508	)
Loans, net of allowance for credit losses		3,156,764			2,594,920			2,463,277

Bank owned life insurance		23,447			7,557			7,433
Bank premises and equipment, net		65,119			50,469			52,005
Bank premises held for sale		235			235			1,081
Foreclosed assets		3,356			3,030			3,043
Goodwill		59,876			29,322			29,322
Intangible assets, net		22,842			1,070			1,698
Mortgage servicing rights, at fair value		19,992			10,147			9,723
Investments in unconsolidated subsidiaries		1,614			1,165			1,165
Accrued interest receivable		20,301			19,506			13,527
Other assets		56,617			56,444			25,550
Total assets	$	5,013,821		$	4,286,734		$	4,348,965

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	1,218,888		$	994,954		$	1,069,231
Interest-bearing		3,091,633			2,592,070			2,746,838
Total deposits		4,310,521			3,587,024			3,816,069

Securities sold under agreements to repurchase		34,919			43,081			50,834
Federal Home Loan Bank advances		75,183			160,000			—
Subordinated notes		39,415			39,395			39,336
Junior subordinated debentures issued to capital trusts		52,746			37,780			37,731
Other liabilities		50,939			45,822			21,840
Total liabilities		4,563,723			3,913,102			3,965,810

Stockholders' Equity
Common stock		327			293			293
Surplus		294,441			222,783			221,735
Retained earnings		228,782			232,004			203,076
Accumulated other comprehensive income (loss)		(62,175	)		(71,759	)		(36,100	)
Treasury stock at cost		(11,277	)		(9,689	)		(5,849	)
Total stockholders’ equity		450,098			373,632			383,155
Total liabilities and stockholders’ equity	$	5,013,821		$	4,286,734		$	4,348,965

SHARE INFORMATION
Shares of common stock outstanding		32,095,370			28,752,626			28,967,943

HBT Financial, Inc. Unaudited Consolidated Financial Summary
	March 31,		December 31,		March 31,
	2023		2022		2022
	(dollars in thousands)
LOANS
Commercial and industrial	$	333,013	$	266,757	$	291,909
Commercial real estate - owner occupied		317,103		218,503		237,000
Commercial real estate - non-owner occupied		854,024		713,202		687,617
Construction and land development		389,142		360,824		320,030
Multi-family		362,672		287,865		243,447
One-to-four family residential		482,732		338,253		327,791
Agricultural and farmland		243,357		237,746		232,528
Municipal, consumer, and other		213,497		197,103		147,463
Loans, before allowance for credit losses	$	3,195,540	$	2,620,253	$	2,487,785

PPP LOANS (included above)
Commercial and industrial	$	25	$	28	$	16,184
Agricultural and farmland		—		—		392
Total PPP Loans	$	25	$	28	$	16,576

	March 31,		December 31,		March 31,
	2023		2022		2022
	(dollars in thousands)
DEPOSITS
Noninterest-bearing	$	1,218,888	$	994,954	$	1,069,231
Interest-bearing demand		1,270,454		1,139,150		1,167,058
Money market		662,088		555,425		597,464
Savings		738,719		634,527		687,147
Time		420,372		262,968		295,169
Total deposits	$	4,310,521	$	3,587,024	$	3,816,069

HBT Financial, Inc. Unaudited Consolidated Financial Summary
	Three Months Ended
	March 31, 2023							December 31, 2022							March 31, 2022
	Average					Yield/		Average					Yield/		Average					Yield/
	Balance			Interest		Cost *		Balance			Interest		Cost *		Balance			Interest		Cost *
	(dollars in thousands)
ASSETS
Loans	$	3,012,320		$	43,111	5.80	%	$	2,600,746		$	36,791	5.61	%	$	2,507,006		$	27,468	4.44	%
Securities		1,411,613			7,813	2.24			1,396,401			7,605	2.16			1,321,918			5,689	1.75
Deposits with banks		92,363			739	3.24			76,507			504	2.61			370,130			159	0.17
Other		7,425			116	6.33			5,607			48	3.37			2,739			19	2.80
Total interest-earning assets		4,523,721		$	51,779	4.64	%		4,079,261		$	44,948	4.37	%		4,201,793		$	33,335	3.22	%
Allowance for credit losses		(33,301	)						(25,404	)						(24,099	)
Noninterest-earning assets		274,870							188,942							165,752
Total assets	$	4,765,290						$	4,242,799						$	4,343,446

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand	$	1,230,644		$	458	0.15	%	$	1,125,877		$	177	0.06	%	$	1,143,829		$	142	0.05	%
Money market		634,608			935	0.60			572,718			379	0.26			598,271			121	0.08
Savings		709,862			178	0.10			640,668			53	0.03			649,563			50	0.03
Time		356,779			803	0.91			266,117			240	0.36			310,675			256	0.33
Total interest-bearing deposits		2,931,893			2,374	0.33			2,605,380			849	0.13			2,702,338			569	0.09
Securities sold under agreements to repurchase		39,619			38	0.38			51,703			10	0.08			53,054			9	0.07
Borrowings		113,896			1,297	4.62			92,120			880	3.79			500			1	0.71
Subordinated notes		39,403			470	4.83			39,384			470	4.73			39,325			470	4.84
Junior subordinated debentures issued to capital trusts		47,586			763	6.50			37,770			556	5.84			37,721			358	3.85
Total interest-bearing liabilities		3,172,397		$	4,942	0.63	%		2,826,357		$	2,765	0.39	%		2,832,938		$	1,407	0.20	%
Noninterest-bearing deposits		1,121,365							1,023,355							1,077,917
Noninterest-bearing liabilities		49,316							25,220							26,302
Total liabilities		4,343,078							3,874,932							3,937,157
Stockholders' Equity		422,212							367,867							406,289
Total liabilities and stockholders’ equity	$	4,765,290						$	4,242,799						$	4,343,446

Net interest income/Net interest margin ⁽¹⁾				$	46,837	4.20	%				$	42,183	4.10	%				$	31,928	3.08	%
Tax-equivalent adjustment ⁽²⁾					702	0.06						698	0.07						529	0.05
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) ^{(2) (3)}				$	47,539	4.26	%				$	42,881	4.17	%				$	32,457	3.13	%
Net interest rate spread ⁽⁴⁾						4.01	%						3.98	%						3.02	%
Net interest-earning assets ⁽⁵⁾	$	1,351,324						$	1,252,904						$	1,368,855
Ratio of interest-earning assets to interest-bearing liabilities		1.43							1.44							1.48
Cost of total deposits						0.24	%						0.09	%						0.06	%
Cost of funds						0.47							0.28							0.15
^{* Annualized measure.} ^{(1) Net interest margin represents net interest income divided by average total interest-earning assets.} ^{(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.} ^{(3) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.} ^{(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.} ^{(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.}

HBT Financial, Inc. Unaudited Consolidated Financial Summary
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
NONPERFORMING ASSETS
Nonaccrual	$	6,508		$	2,155		$	2,461
Past due 90 days or more, still accruing ⁽¹⁾		10			1			8
Total nonperforming loans		6,518			2,156			2,469
Foreclosed assets		3,356			3,030			3,043
Total nonperforming assets	$	9,874		$	5,186		$	5,512

Allowance for credit losses	$	38,776		$	25,333		$	24,508
Loans, before allowance for credit losses		3,195,540			2,620,253			2,487,785

CREDIT QUALITY RATIOS
Allowance for credit losses to loans, before allowance for credit losses		1.21	%		0.97	%		0.99	%
Allowance for credit losses to nonaccrual loans		595.82			1,175.55			995.86
Allowance for credit losses to nonperforming loans		594.91			1,175.00			992.63
Nonaccrual loans to loans, before allowance for credit losses		0.20			0.08			0.10
Nonperforming loans to loans, before allowance for credit losses		0.20			0.08			0.10
Nonperforming assets to total assets		0.20			0.12			0.13
Nonperforming assets to loans, before allowance for credit losses, and foreclosed assets		0.31			0.20			0.22
^{(1) Prior to 2023, excludes loans acquired with deteriorated credit quality that are past due 90 or more days and accruing. Such loans totaled $145 thousand as of December 31, 2022 and $25 thousand as of March 31, 2022.}

	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
ALLOWANCE FOR CREDIT LOSSES ON LOANS	(dollars in thousands)
Beginning balance	$	25,333		$	25,060		$	23,936
Adoption of ASC 326		6,983			—			—
PCD allowance established in acquisition		1,247			—			—
Provision for credit losses		5,101			(653	)		(584	)
Charge-offs		(142	)		(169	)		(134	)
Recoveries		254			1,095			1,290
Ending balance	$	38,776		$	25,333		$	24,508

Net charge-offs (recoveries)	$	(112	)	$	(926	)	$	(1,156	)
Average loans, before allowance for credit losses		3,012,320			2,600,746			2,507,006

Net charge-offs (recoveries) to average loans, before allowance for credit losses *		(0.02	)%		(0.14	)%		(0.19	)%
^{* Annualized measure.}

	Three Months Ended
	March 31,		December 31,			March 31,
	2023		2022			2022
PROVISION FOR CREDIT LOSSES	(dollars in thousands)
Loans ⁽¹⁾	$	5,101	$	(653	)	$	(584	)
Unfunded lending-related commitments ⁽¹⁾		509		—			—
Debt securities		600		—			—
Total provision for credit losses	$	6,210	$	(653	)	$	(584	)
^{(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger.}

Reconciliation of Non-GAAP Financial Measures – Adjusted Net Income and Adjusted Return on Average Assets
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
Net income	$	9,208		$	13,140		$	13,604
Adjustments:
Acquisition expenses ⁽¹⁾		(13,064	)		(630	)		—
Gains (losses) on sales of closed branch premises		—			—			197
Realized gains (losses) on sales of securities		(1,007	)		—			—
Mortgage servicing rights fair value adjustment		(624	)		(293	)		1,729
Total adjustments		(14,695	)		(923	)		1,926
Tax effect of adjustments		4,044			177			(549	)
Less adjustments, after tax effect		(10,651	)		(746	)		1,377
Adjusted net income	$	19,859		$	13,886		$	12,227

Average assets	$	4,765,290		$	4,242,799		$	4,343,446

Return on average assets *		0.78	%		1.23	%		1.27	%
Adjusted return on average assets *		1.69			1.30			1.14
^{* Annualized measure.} ^{(1) Includes recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million in connection with the Town and Country merger.}

Reconciliation of Non-GAAP Financial Measures – Adjusted Earnings Per Share
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands, except per share data)
Numerator:
Net income	$	9,208		$	13,140		$	13,604
Earnings allocated to participating securities ⁽¹⁾		(5	)		(15	)		(17	)
Numerator for earnings per share - basic and diluted	$	9,203		$	13,125		$	13,587

Adjusted net income	$	19,859		$	13,886		$	12,227
Earnings allocated to participating securities ⁽¹⁾		(13	)		(16	)		(15	)
Numerator for adjusted earnings per share - basic and diluted	$	19,846		$	13,870		$	12,212

Denominator:
Weighted average common shares outstanding		30,977,204			28,752,626			28,986,593
Dilutive effect of outstanding restricted stock units		69,947			91,905			43,646
Weighted average common shares outstanding, including all dilutive potential shares		31,047,151			28,844,531			29,030,239

Earnings per share - Basic	$	0.30		$	0.46		$	0.47
Earnings per share - Diluted	$	0.30		$	0.46		$	0.47

Adjusted earnings per share - Basic	$	0.64		$	0.48		$	0.42
Adjusted earnings per share - Diluted	$	0.64		$	0.48		$	0.42
^{(1) The Company has granted certain restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.}

Reconciliation of Non-GAAP Financial Measures – Net Interest Income and Net Interest Margin (Tax Equivalent Basis)
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
Net interest income (tax equivalent basis)
Net interest income	$	46,837		$	42,183		$	31,928
Tax-equivalent adjustment ⁽¹⁾		702			698			529
Net interest income (tax equivalent basis) ⁽¹⁾	$	47,539		$	42,881		$	32,457

Net interest margin (tax equivalent basis)
Net interest margin *		4.20	%		4.10	%		3.08	%
Tax-equivalent adjustment * ⁽¹⁾		0.06			0.07			0.05
Net interest margin (tax equivalent basis) * ⁽¹⁾		4.26	%		4.17	%		3.13	%

Average interest-earning assets	$	4,523,721		$	4,079,261		$	4,201,793
^{* Annualized measure.} ^{(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.}

Reconciliation of Non-GAAP Financial Measures – Efficiency Ratio (Tax Equivalent Basis)
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
Efficiency ratio (tax equivalent basis)
Total noninterest expense	$	35,933		$	33,110		$	24,157
Less: amortization of intangible assets		510			140			245
Adjusted noninterest expense	$	35,423		$	32,970		$	23,912

Net interest income	$	46,837		$	42,183		$	31,928
Total noninterest income		7,437			7,889			10,043
Operating revenue		54,274			50,072			41,971
Tax-equivalent adjustment ⁽¹⁾		702			698			529
Operating revenue (tax equivalent basis) ⁽¹⁾	$	54,976		$	50,770		$	42,500

Efficiency ratio		65.27	%		65.85	%		56.97	%
Efficiency ratio (tax equivalent basis) ⁽¹⁾		64.43			64.94			56.26
^{(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.}

Reconciliation of Non-GAAP Financial Measures – Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands, except per share data)
Tangible common equity
Total stockholders' equity	$	450,098		$	373,632		$	383,155
Less: Goodwill		59,876			29,322			29,322
Less: Intangible assets, net		22,842			1,070			1,698
Tangible common equity	$	367,380		$	343,240		$	352,135

Tangible assets
Total assets	$	5,013,821		$	4,286,734		$	4,348,965
Less: Goodwill		59,876			29,322			29,322
Less: Intangible assets, net		22,842			1,070			1,698
Tangible assets	$	4,931,103		$	4,256,342		$	4,317,945

Total stockholders' equity to total assets		8.98	%		8.72	%		8.81	%
Tangible common equity to tangible assets		7.45			8.06			8.16

Shares of common stock outstanding		32,095,370			28,752,626			28,967,943

Book value per share	$	14.02		$	12.99		$	13.23
Tangible book value per share		11.45			11.94			12.16

Reconciliation of Non-GAAP Financial Measures – Return on Average Tangible Common Equity, Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity
	Three Months Ended
	March 31,			December 31,			March 31,
	2023			2022			2022
	(dollars in thousands)
Average tangible common equity
Total stockholders' equity	$	422,212		$	367,867		$	406,289
Less: Goodwill		49,352			29,322			29,322
Less: Intangible assets, net		15,635			1,134			1,844
Average tangible common equity	$	357,225		$	337,411		$	375,123

Net income	$	9,208		$	13,140		$	13,604
Adjusted net income		19,859			13,886			12,227

Return on average stockholders' equity *		8.84	%		14.17	%		13.58	%
Return on average tangible common equity *		10.45			15.45			14.71

Adjusted return on average stockholders' equity *		19.08	%		14.98	%		12.20	%
Adjusted return on average tangible common equity *		22.55			16.33			13.22
^{* Annualized measure.}

HBT Financial, Inc. Announces First Quarter 2023 Financial Results

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