tm2124507-8_424b3 - none - 33.6408372s
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 Filed Pursuant to Rule 424(b)(3)
 Registration No. 333-258701
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NXT Bancorporation, Inc.
August 23, 2021
Dear Shareholders of NXT Bancorporation, Inc.:
On June 7, 2021, NXT Bancorporation, Inc. (“NXT”), HBT Financial, Inc. (“HBT”), and HB-NXT Merger, Inc., a wholly-owned subsidiary of HBT (“MergerCo”), entered into an Agreement and Plan of Merger (“merger agreement”) that provides for the acquisition of NXT by HBT. NXT will hold a special meeting of its shareholders at which the shareholders of NXT common stock will be asked to vote to approve the merger agreement and the transactions contemplated thereby, as described in the accompanying proxy statement/prospectus.
Under the merger agreement, MergerCo, a newly organized company and wholly owned by HBT, will merge with and into NXT, with NXT as the surviving entity, and as a result, NXT will become a wholly-owned subsidiary of HBT (the “merger”). Immediately following the merger, NXT will then merge with and into HBT, thereby ending the separate corporate existence of NXT. In addition, at such time as the parties may determine following the merger, NXT Bank, an Iowa state-chartered bank and a wholly-owned subsidiary of NXT (“NXT Bank”), will merge with and into Heartland Bank and Trust Company, an Illinois state-chartered bank and a wholly-owned subsidiary of HBT (“Heartland Bank”), with Heartland Bank continuing as the surviving bank (the “bank merger”).
Upon completion of the merger, holders of NXT common stock will receive in exchange for each share of NXT common stock held immediately prior to the completion of the merger (i) a fixed amount of cash equal to $400.00 (the “cash consideration”) and (ii) 67.6783 shares (the “exchange ratio”) of HBT common stock (the “stock consideration,” and together with the cash consideration, as each may be adjusted as described below, the “merger consideration”). In lieu of fractional shares, holders of NXT common stock will receive cash. The merger consideration is subject to adjustment if the anticipated costs to remediate any environmental conditions with respect to NXT’s real property are expected to exceed $200,000; however, based on the information to date, the parties do not anticipate any adjustments to the merger consideration will be necessary.
All NXT restricted stock that is unvested and outstanding will, immediately prior to the merger, automatically become vested as of such time, and the holders thereof will be entitled to receive the same merger consideration for the shares of NXT common stock that were received under the restricted stock awards as all other holders of NXT common stock.
While the cash consideration of $400.00 per share of NXT common stock is fixed, the value of the HBT common stock to be received by holders of NXT common stock in the merger will fluctuate based on the trading price of HBT common stock. HBT common stock trades on the Nasdaq Global Select Market under the symbol “HBT.” The following table shows the implied value of the merger consideration that would be received by NXT shareholders in exchange for each share of NXT common stock if the per share price of HBT common stock was $17.86, which was the closing per share price of HBT common stock on the Nasdaq Global Select Market on June 4, 2021, the last completed trading day before the announcement of the merger, and if such price was $16.15, which was the closing per share price of HBT common stock on the Nasdaq Global Select Market on August 18, 2021.
Closing Price
of HBT
Common Stock
on Nasdaq
Exchange
Ratio
Cash
Consideration
Per NXT
Common Share*
Total
Consideration Per
Share of NXT
Common Stock*
June 4, 2021
$ 17.86 67.6783 $ 400.00 $ 1,608.73
August 18, 2021
$ 16.15 67.6783 $ 400.00 $ 1,493.00

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*
The information presented does not reflect the actual value of the merger consideration that will be received by holders of NXT common stock in the merger. The value of the merger consideration at the closing of the merger will be based partially on the price of HBT common stock on the date the merger is completed plus the cash consideration. The merger consideration is subject to certain adjustments as described in the accompanying proxy statement/prospectus in the event certain environmental remediation costs exceeds specified amounts, and the amounts shown assume no adjustments to the cash consideration of $400.00 per share of NXT common stock and the exchange ratio.
Based on the number of shares of NXT common stock (including unvested restricted common stock) outstanding on August 18, 2021, we expect that the payment of the merger consideration will require HBT to issue approximately 1,799,040 shares of HBT common stock in connection with the merger. In addition, based on the number of issued and outstanding shares of HBT common stock and NXT common stock as of August 18, 2021 and based on the exchange ratio of 67.6783, holders of shares of NXT common stock as of immediately prior to the closing of the merger will hold, in the aggregate, approximately 6.2% of the issued and outstanding shares of HBT common stock immediately following the effectiveness of the merger.
Approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the outstanding shares of NXT common stock.
All of the directors and certain significant shareholders of NXT, collectively holding as of the record date for the special meeting an aggregate 22,172 shares of NXT common stock, have signed voting and support agreements with HBT agreeing to vote in favor of the merger agreement and the transactions contemplated thereby. Accordingly, the holders of approximately 83.4% of the outstanding NXT common shares entitled to vote on the merger proposal have agreed with HBT to vote in favor of the merger proposal.
The special meeting of holders of NXT common stock will be held at Cedar Rapids Country Club, located at 550 27th Street Drive SE, Cedar Rapids, Iowa 52403 on September 21, 2021, at 4:00 p.m. Central Time.
NXT’s board of directors unanimously recommends that holders of NXT common stock vote “FOR” the approval and adoption of the merger agreement and the transactions contemplated thereby and “FOR” one or more adjournments of the NXT special meeting, including adjournments to permit the further solicitation of proxies in favor of the foregoing proposals.
We cannot complete the merger without the approval of the merger agreement and the transactions contemplated thereby by holders of NXT common stock. It is important that your shares be represented and voted regardless of the size of your holdings. Whether or not you plan to attend the special meeting of NXT shareholders, we urge you to submit a proxy to have your shares voted in advance of the special meeting by using one of the methods described in the accompanying proxy statement/prospectus.
The accompanying proxy statement/prospectus provides important information regarding the special meeting and a detailed description of the merger agreement, the merger, certain related transactions and agreements and the matters to be presented at the special meeting. We encourage you to read the entire accompanying proxy statement/prospectus carefully (including any documents incorporated therein by reference). Please pay particular attention to the section entitled “Risk Factors” in the accompanying proxy statement/prospectus for a discussion of the risks relating to the proposed merger.
We hope to see you at the special meeting and look forward to the successful completion of the merger.
Sincerely,
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Roger Baker
President and Chairman
NXT Bancorporation, Inc.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the securities to be issued in the merger or determined if this document is accurate or adequate. Any representation to the contrary is a criminal offense. The securities to be issued in the merger are not savings or deposit accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
The date of the accompanying proxy statement/prospectus is August 23, 2021, and it is first being mailed or otherwise delivered to NXT shareholders on or about August 23, 2021.

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NXT BANCORPORATION, INC.
59 Fourth Street North
Central City, Iowa 52241
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 21, 2021
To the Shareholders of NXT Bancorporation, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting of the holders of common stock, no value per share (“NXT common stock”), of NXT Bancorporation, Inc., an Iowa corporation (“NXT”), will be held at Cedar Rapids Country Club, located at 550 27th Street Drive SE, Cedar Rapids, Iowa 52403 on September 21, 2021, at 4:00 p.m. Central Time (the “NXT special meeting”), for the purpose of considering and voting upon the following matters:
1.
Merger Proposal.   Approval by the holders of NXT common stock, no par value per share (“NXT common stock”), of the Agreement and Plan of Merger, dated as of June 7, 2021, a copy of which is attached as Appendix A to the accompanying proxy statement/prospectus (the “merger agreement”), by and among HBT Financial, Inc. (“HBT”), HB-NXT Merger, Inc. (“MergerCo”) and NXT, and the transactions contemplated thereby (the “merger proposal”), including the merger of NXT with and into MergerCo, with NXT as the surviving corporation and wholly-owned subsidiary of HBT (the “merger”);
2.
Adjournment Proposal.   Approval by the holders of NXT common stock of one or more adjournments of the NXT special meeting, if determined necessary and advisable, including adjournments to permit the further solicitation of proxies in favor of the merger proposal (the “NXT adjournment proposal”); and
3.
Such other business as may properly come before the NXT special meeting and any adjournments or postponements thereof.
We have fixed the close of business on August 18, 2021, as the record date for determining those shareholders entitled to notice of and to vote at the NXT special meeting and any adjournments of the NXT special meeting. Only holders of record of NXT common stock at the close of business on the record date are entitled to notice of and to vote on the proposals at the NXT special meeting and any adjournments of the NXT special meeting.
Approval of the merger proposal requires the affirmative vote of a majority of the outstanding shares of NXT common stock. As a result, abstentions and broker non-votes will have the same effect as votes against approval of the merger proposal. Approval of the NXT adjournment proposal requires the affirmative vote of a majority of the shares of NXT common stock present in person or represented by proxy at the special meeting. Abstentions will have the same effect as votes against approval of the NXT adjournment proposal, and broker non-votes will have no effect on the approval of the NXT adjournment proposal assuming a quorum has been established.
All of the directors of NXT, along with certain other NXT shareholders, have signed voting and support agreements with HBT agreeing to vote for approval of the merger agreement and the transactions contemplated thereby. Accordingly, the holders of approximately 83.4% of the outstanding shares entitled to vote on the merger are expected to vote in favor of the merger proposal.
Under Iowa law, NXT shareholders who do not vote in favor of the merger proposal will have the right, under certain circumstances, to seek appraisal of the “fair value” of their shares of NXT common stock as determined by an Iowa court if the merger is completed, but only if they submit a written demand for such an appraisal prior to the vote on the adoption of the merger proposal and comply with the other Iowa law procedures explained in the accompanying proxy statement/prospectus. NXT shareholders who do not vote in favor of the merger proposal and who submit a written demand for such an appraisal prior to the vote on the adoption of the merger proposal and comply with the other Iowa law procedures will not receive the merger consideration, but the “fair value” as determined by an Iowa court.
 

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Your vote is very important. Whether or not you plan to attend the NXT special meeting in person, please complete, date, sign and return the enclosed proxy card in the enclosed envelope to ensure that your shares of NXT common stock will be represented and voted at the NXT special meeting if you are unable to attend.
The board of directors of NXT has unanimously approved the merger agreement and the merger, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of NXT and its shareholders and has unanimously recommended that holders of NXT common stock vote “FOR” the merger proposal and vote “FOR” the NXT adjournment proposal.
We encourage you to read the entire accompanying proxy statement/prospectus carefully (including any documents incorporated therein by reference). Please pay particular attention to the section entitled “Risk Factors” in the accompanying proxy statement/prospectus for a discussion of the risks relating to the proposed merger.
By Order of the Board of Directors,
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Roger Baker
President and Chairman
Cedar Rapids, Iowa
August 23, 2021
 

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ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates by reference important business and financial information about HBT Financial, Inc. (“HBT”) from documents filed with the Securities and Exchange Commission (“SEC”) that are not included in or delivered with this proxy statement/prospectus. You can obtain any of the documents filed with or furnished to the SEC by HBT at no cost from the SEC’s website maintained at http://www.sec.report. You may also request copies of these documents, including documents incorporated by reference into this proxy statement/prospectus, at no cost by contacting HBT in writing at the address or by telephone as specified below:
HBT Financial, Inc.
Attention: Corporate Secretary
401 North Hershey Road
Bloomington, Illinois 61704
(888) 897-2276
You will not be charged for any of these documents that you request. In order for you to receive timely delivery of the documents before the NXT Bancorporation, Inc. (“NXT”) special meeting, you must request them no later than September 17, 2021.
See the section entitled “Where You Can Find More Information.”
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus, which forms part of a registration statement on Form S-4, filed with the SEC, constitutes a prospectus of HBT under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of HBT common stock to be issued to stockholders of NXT as consideration in the merger of NXT with and into HBT, as more fully described herein. This proxy statement/prospectus also constitutes a proxy statement for HBT. In addition, it constitutes a notice of meeting with respect to the special meeting of NXT stockholders.
You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated August 23, 2021, and you should assume that the information in this proxy statement/prospectus is accurate only as of such date. You should assume that the information incorporated by reference into this proxy statement/prospectus is accurate only as of the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to NXT stockholders nor the issuance by HBT of shares of HBT common stock in connection with the merger will create any implication to the contrary.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
 

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A-1
B-1
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SUMMARY
This summary highlights selected information from this proxy statement/prospectus and may not contain all the information that is important to you. We urge you to carefully read this entire document and the documents referenced herein for a more complete understanding of the merger between HBT and NXT. In addition, we incorporate by reference into this document important business and financial information about HBT. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information.” Each item in this summary includes a page reference directing you to a more complete description of that item.
Unless the context otherwise requires, references in this proxy statement/prospectus to “HBT” refer to HBT Financial, Inc., a Delaware corporation; references to “Heartland Bank” refer to Heartland Bank and Trust Company, an Illinois state-chartered bank and a wholly-owned subsidiary of HBT; references to “MergerCo” refer to HB-NXT Merger, Inc., a wholly-owned subsidiary of HBT; references to “NXT” refer to NXT Bancorporation, Inc., an Iowa corporation; references to “NXT Bank” refer to NXT Bank, an Iowa state-chartered bank and a wholly-owned subsidiary of NXT; and references to “we,” “our” or “us” refer to HBT and NXT.
Proposed merger of HBT and NXT (Page 21)
Pursuant to and subject to the conditions set forth in the merger agreement entered into among NXT, HBT and MergerCo, MergerCo will merge with and into NXT, with NXT as the surviving entity, and as a result, NXT will become a wholly-owned subsidiary of HBT (the “merger”). Immediately following the merger, NXT will then merge with and into HBT. As a result of the merger, the separate existence of NXT will terminate. In addition, at such time as the parties may determine following the merger, NXT Bank will merge with and into HBT’s wholly owned subsidiary, Heartland Bank, with Heartland Bank continuing as the surviving bank (the “bank merger”). Following the bank merger, Heartland Bank will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois, but now with banking locations in Illinois and Iowa.
Subject to the satisfaction of the conditions precedent to the merger, we expect to complete the merger and the bank merger in the fourth quarter of 2021, although delays may occur.
Special meeting of NXT Shareholders (Page 18)
NXT plans to hold its special meeting of shareholders at Cedar Rapids Country Club, located at 550 27th Street Drive SE, Cedar Rapids, lowa 52403 on September 21, 2021, at 4:00 p.m. Central Time (the “NXT special meeting”). At the NXT special meeting, holders of common stock, no par value per share, of NXT (“NXT common stock”) will be asked to approve the merger agreement and the transactions contemplated thereby, including the merger (the “merger proposal”).
You can vote at the NXT special meeting to approve the merger proposal if you owned NXT common stock at the close of business on August 18, 2021 (the “NXT record date”). As of that date, there were 26,582.23 shares of NXT common stock outstanding and entitled to vote, including 50 shares of unvested restricted stock granted by NXT pursuant to a stock bonus plan (the “NXT Stock Plan”). A holder of NXT common stock can cast one vote for each share of NXT common stock owned on that date.
NXT’s board of directors unanimously recommends that holders of NXT common stock vote “FOR” the merger proposal (Page 26)
NXT’s board of directors (i) believes that the agreement and plan of merger, dated as of June 7, 2021, among NXT, HBT and MergerCo (the “merger agreement”), and the transactions contemplated thereby are advisable, fair to and in the best interests of NXT and its shareholders, (ii) has unanimously approved and adopted the merger agreement and the transactions contemplated thereby, and (iii) unanimously recommends that holders of NXT common stock vote “FOR” the merger proposal.
All of the directors of NXT and certain significant shareholders, collectively holding as of the record date for the special meeting an aggregate of 22,172 shares of NXT common stock, have signed voting and support agreements with HBT agreeing to vote in favor of the merger agreement and the transactions
 
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contemplated thereby. Accordingly, the holders of approximately 83.4% of the outstanding NXT common stock entitled to vote on the merger proposal have agreed with HBT to vote in favor of the merger proposal.
NXT shareholders will receive cash and shares of HBT common stock in the merger (Page 21)
Upon completion of the merger, each holder of shares of NXT common stock will receive in exchange for each share of NXT common stock held immediately prior to the completion of the merger (i) a fixed amount of cash equal to $400.00 (the “cash consideration”) and (ii) 67.6783 shares (the “exchange ratio”) of HBT common stock (the “stock consideration,” and together with the cash consideration, as each may be adjusted as described below, the “merger consideration”).
While the cash consideration of $400.00 per share of NXT common stock is fixed, the value of the HBT common stock to be received by holders of NXT common stock in the merger will fluctuate based on the trading price of HBT common stock. In addition, the merger consideration is subject to adjustment if certain environmental conditions exist with respect to NXT’s real property and the total cost to further investigate and remediate such conditions (the “environmental remediation costs”) is reasonably expected to exceed $200,000; however, based on the information to date, the parties do not anticipate any such adjustments to the merger consideration will be necessary.
In lieu of any fractional shares of HBT common stock that would otherwise be issued as part of the stock consideration, NXT shareholders will receive cash for any such fractional shares based on the per share volume weighted average price of the daily closing sales prices of a share of HBT common stock as reported on the Nasdaq Global Select Market for the ten (10) consecutive trading days immediately preceding the closing date of the merger.
The following table shows the implied value of the merger consideration that would be received by NXT shareholders in exchange for each share of NXT common stock if the per share price of HBT common stock was $17.86, which was the closing per share price of HBT common stock on the Nasdaq Global Select Market on June 4, 2021, the last completed trading day before the announcement of the merger, and if such price was $16.15, which was the closing per share price of HBT common stock on the Nasdaq Global Select Market on August 18, 2021.
Closing Price
of HBT
Common Stock
on Nasdaq
Exchange
Ratio
Cash
Consideration
Per NXT
Common Share*
Total
Consideration Per
Share of NXT
Common Stock*
June 4, 2021
$ 17.86 67.6783 $ 400.00 $ 1,608.73
August 18, 2021
$ 16.15 67.6783 $ 400.00 $ 1,493.00
*
The information presented does not reflect the actual value of the merger consideration that will be received by holders of NXT common stock in the merger. The value of the merger consideration at the closing of the merger will be based partially on the price of HBT common stock on the date the merger is completed plus the cash consideration. The merger consideration is subject to certain adjustments as described in this proxy statement/prospectus in the event certain environmental remediation costs exceed specified amounts, and the amounts shown assume no adjustments to the cash consideration of $400.00 per share of NXT common stock and the exchange ratio.
All NXT restricted stock awards that are unvested and outstanding will, immediately prior to the merger, automatically become fully vested as of such time, and the holders thereof will be entitled to receive the same merger consideration for the shares of NXT common stock subject to such awards as all other holders of NXT common stock.
Certain federal income tax consequences of the merger (Page 43)
Subject to certain circumstances described below, and based on certain representations, covenants and assumptions, all of which must continue to be true and accurate in all material respects as of the effective time of the merger, the parties to the merger intend that, for United States federal income tax purposes, the
 
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merger will be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
Provided that the merger qualifies as a reorganization for United States federal income tax purposes, you may recognize gain, but you will not recognize loss, upon the exchange of your shares of NXT common stock for shares of HBT common stock and cash. If the sum of the fair market value of the HBT common stock and the amount of cash you receive in exchange for your shares of NXT common stock (excluding any cash received in lieu of a fractional share of HBT common stock) exceeds the adjusted basis of your shares of NXT common stock, you will recognize taxable gain equal to the lesser of the amount of such excess or the amount of cash you receive in the exchange (excluding any cash received in lieu of a fractional share of HBT common stock). Generally, any gain recognized upon the exchange will be capital gain, and any such capital gain will be long-term capital gain if you have established a holding period of more than one year for your shares of NXT common stock. Depending on certain facts specific to you, any gain could instead be characterized as ordinary dividend income. In addition, you generally will recognize gain or loss with respect to cash received in lieu of a fractional share of HBT common stock.
For a complete description of the material United States federal income tax consequences of the transaction, see “The Merger — Material Federal Income Tax Consequences of the Merger.” You should consult your own tax advisor for a full understanding of the tax consequences to you of the merger.
Prohibition on NXT dividends; HBT’s dividend policy will continue after the merger (Pages 60 and 65)
Pursuant to the terms of the merger agreement, NXT is generally prohibited from paying cash dividends to holders of its common stock prior to completion of the merger. On January 3, 2020, NXT paid a dividend to shareholders of $60.14 per share. On January 4, 2019, NXT paid a dividend to shareholders of $37.22 per share.
HBT expects to continue its policy of paying quarterly cash dividends, although all future dividends are subject to the discretion of HBT’s board. During the first three quarters of 2021 and each quarter of 2020, HBT paid quarterly cash dividends to stockholders of $0.15 per share.
The merger will be accounted for as a business combination (Page 46)
The merger will be treated as a business combination by HBT of NXT under generally accepted accounting principles (“GAAP”).
HBT’s reasons for the merger (Page 25)
For a discussion of the factors considered by HBT’s board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger, see “The Merger — HBT’s Reasons for the Merger.”
NXT’s reasons for the merger (Page 26)
For a discussion of the factors considered by NXT’s board of directors in reaching its decision to approve the merger agreement and the transactions contemplated thereby, including the merger, see “The Merger — NXT’s Reasons for the Merger and Recommendation of the Board of Directors of NXT.”
Opinion of NXT’s financial advisor (Page 28)
On June 4, 2021, D.A. Davidson (“D.A. Davidson”) rendered its oral and written opinion, respectively, to the board of directors of NXT that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in such opinion, the merger consideration in the proposed merger was fair, from a financial point of view, to the holders of NXT common stock.
The full text of the written opinion of D.A. Davidson, dated June 4, 2021, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached as Appendix B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of D.A. Davidson set forth in this proxy
 
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statement/prospectus is qualified in its entirety by reference to the full text of such opinion. NXT shareholders are urged to read the opinion in its entirety. D.A. Davidson’s written opinion was addressed to the board of directors of NXT (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger and was directed only to the merger consideration in the proposed merger and did not address any other aspect of the merger. D.A. Davidson expressed no opinion as to the fairness of the consideration to the holders of any other class of securities, creditors or other constituencies of NXT or as to the underlying decision by NXT to engage in the merger. The issuance of D.A. Davidson’s opinion was approved by a fairness opinion committee of D.A. Davidson. The opinion does not constitute a recommendation to any NXT shareholders as to how such shareholder should vote with respect to the proposed merger or any other matter.
Certain directors and executive officers may have interests in the merger that differ from your interests ( Pages 46 to 48)
Certain directors and executive officers of NXT and/or NXT Bank have interests in the merger other than their interests as shareholders, including:

All NXT restricted stock awards that remain unvested and outstanding will, immediately prior to the completion of the merger, automatically become fully vested per the terms of the NXT Stock Plan and the award agreements issued thereunder, and will be converted into the merger consideration is the same manner as all other outstanding shares of NXT common stock at the effective time of the merger. As of the date of the merger agreement, 100 shares of unvested restricted stock award were outstanding, all of which were held by Nathan Koch, NXT Bank’s President and Chief Executive Officer. On June 30, 2021, 50 shares of the above-mentioned restricted stock vested on its regularly scheduled vesting date.

NXT is party to a change-in-control agreement with Mr. Koch pursuant to which Mr. Koch is entitled to receive a payment in the event of a change-in-control (as defined in the change-in-control agreement) of NXT or NXT Bank in an amount equal to his annual compensation multiplied by a benefit multiple. The benefit is based on the total consideration paid to NXT or its shareholders in the change-of-control transaction relative to NXT’s tangible book value of the property or securities conveyed in the change-in-control transaction. The consummation of the merger with HBT will constitute a change-in-control and will result in a payment to Mr. Koch of approximately $486,047.

Concurrently with the execution of the merger agreement, and in consideration of HBT’s desire to ensure NXT’s customers are provided with operational and customer service continuity following the merger, Mr. Koch entered into an employment agreement with HBT, pursuant to which he will serve as Market President of the Iowa Region of Heartland Bank following the merger. Mr. Koch’s base salary will be equal to his current salary of $252,000, and he will be eligible to receive performance-based annual incentive bonuses and employee benefits as may be offered by HBT from time to time for similarly situated and performing senior executives of HBT. In the event Mr. Koch’s employment is terminated by HBT without cause or by Mr. Koch for good reason, Mr. Koch will be entitled to certain severance and change in control payments. In addition, concurrently with the execution of the merger agreement, Mr. Koch entered into a supplement agreement with HBT pursuant to which HBT agreed to grant to Mr. Koch, within 30-days after the effective time of the merger, $150,000 of performance based restricted stock units (“PSUs”) and $150,000 of time-based restricted stock units (“RSUs”). The PSUs will be subject to an agreed upon performance-based vesting schedule and the RSUs will vest on the following schedule: (i) 33% on February 28, 2023, (ii) 33% on February 29, 2024 and (iii) 34% on February 28, 2025. The employment agreement also provides for various non-compete and non-solicitation restrictions on Mr. Koch in the event of Mr. Koch’s termination under various termination and separation scenarios.

Pursuant to the terms of the merger agreement, the current directors and officers of NXT will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies following the merger.
NXT’s board of directors was aware of these additional interests and considered them when they adopted the merger agreement and approved the merger. These additional interests of directors and officers are discussed further below in “The Merger — Interests of Certain Persons in the Merger.”
 
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Holders of NXT common stock have dissenters’ rights of appraisal (Page 60)
If you are a holder of NXT common stock, you may elect to dissent from the merger and exercise appraisal rights by following the procedures set forth in Section 490.1302 of the Iowa Business Corporation Act (the “IBCA”). For more information regarding your right to dissent from the merger and exercise appraisal rights, please see “The Merger Agreement — Dissenters’ Rights of Appraisal of Holders of NXT Common Stock” on page 60. We have also attached a copy of the relevant provisions of Section 490.1302 of the IBCA as Appendix C to this proxy statement/prospectus.
We have agreed when and how NXT can consider third-party acquisition proposals (Page 58)
We have agreed that NXT will not, and will cause its subsidiaries and its subsidiaries’ representatives, agents, advisors and affiliates not to, solicit or encourage proposals from other parties regarding acquiring NXT. In addition, we have agreed that NXT will not engage in negotiations with or provide confidential information to a third party regarding acquiring NXT. However, if NXT receives an unsolicited acquisition proposal from a third party, NXT can participate in negotiations with and provide confidential information to the third party if, among other steps, NXT’s board of directors concludes in good faith that the proposal is superior to HBT’s merger proposal.
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of NXT common stock, and certain NXT shareholders holding approximately 83.4% of the outstanding NXT common stock have agreed to vote their shares “FOR” the merger proposal (Page 63 and Exhibit A-2 to Appendix A)
In order to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger, the holders of a majority of the outstanding shares of NXT common stock as of the NXT record date of August 18, 2021 must vote in favor of that matter.
As an inducement to and condition of HBT’s willingness to enter into the merger agreement, all of the directors and certain significant shareholders of NXT, collectively holding an aggregate 22,172 shares of NXT common stock, representing or approximately 83.4% of the outstanding NXT common stock, entered into voting and support agreements, pursuant to which, among other things, they agreed to vote all of their shares of NXT common stock in favor of approval and adoption of the merger agreement and the transactions contemplated thereby and the other matters required to be approved or adopted to effect the merger and any other transactions contemplated by the merger agreement. Accordingly, we expect that at least 83.4% of the outstanding shares entitled to vote on the merger proposal that have entered into voting and support agreements with HBT to vote in favor of the merger proposal.
Under the terms of the NXT stock plan and award agreements thereunder, recipients of restricted stock awards are entitled to vote on behalf of the underlying shares of NXT common stock, even while subject to vesting requirements.
For a list of the number of shares of NXT common stock held by (i) each director and executive officer of NXT, (ii) all directors and executive officers of NXT as a group, and (iii) significant shareholders of NXT, see “Security Ownership of Certain NXT Beneficial Owners and Management.”
We must meet the conditions set forth in the merger agreement in order to complete the merger (Page 56)
Our obligations to complete the merger depend on a number of conditions being met. These include:

the continued accuracy of various representations and warranties and the performance or compliance in all material respects of various covenants and obligations made by each party in the merger agreement;

the adoption and approval of the merger agreement by holders of a majority of the outstanding shares of NXT common stock;

the receipt of required approvals of federal and state regulatory authorities;
 
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the effectiveness of the registration statement on Form S-4, of which this proxy statement/prospectus forms a part, for the registration of the shares of HBT common stock to be issued in the merger, and the absence of any stop orders with respect to such registration statement;

the absence of any government action or other legal restraint or prohibition that would delay, prevent or prohibit the merger, the bank merger or any transaction contemplated by the merger agreement or make it illegal;

with respect to NXT’s obligation (but not HBT’s), the filing with the Nasdaq Global Select Market of a notification form for the listing of HBT shares to be issued in the merger and the absence of any objection by Nasdaq to the listing of such shares;

with respect to HBT’s obligation (but not NXT’s), the continued effectiveness of the voting and support agreements;

with respect to HBT’s obligation (but not NXT’s), the termination of the NXT shareholder agreement and consulting agreement in a manner acceptable to HBT;

with respect to HBT’s obligation (but not NXT’s), the wind-up and dissolution of all of NXT’s subsidiaries other than NXT Bank;

with respect to HBT’s obligation (but not NXT’s), the number of dissenting shares of NXT common stock must not exceed 7.5% of the outstanding shares of NXT common stock;

with regard to HBT’s obligation (but not NXT’s), the receipt by HBT of the resignations, effective as of the effective time of the merger, of each director and officer of NXT and of NXT Bank;

with regard to HBT’s obligation (but not NXT’s), no action, suit, claim or proceeding will be pending against or affecting NXT or HBT that is seeking to prohibit or make illegal the consummation of the merger; and

as to each party, there has been no change in the financial condition, assets or business of the other party or any of its subsidiaries that has had or would reasonably be expected to have a material adverse effect (as defined in the merger agreement) on such other party or any of its subsidiaries.
Where the law permits, either of HBT or NXT could choose to waive a condition to its obligation to complete the merger even when that condition has not been satisfied. We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
Regulatory approvals must be obtained in order to complete the merger (Page 59)
The merger and the related transactions require approval from the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The bank merger must also be approved by the Illinois Department of Financial and Professional Regulation (the “IDFPR”), the Federal Deposit Insurance Corporation (the “FDIC”), and the Iowa Division of Banking (“IDB”).
The merger agreement may be terminated by either party under certain circumstances (Page 57)
We can mutually agree at any time to terminate the merger agreement without completing the merger, even if NXT shareholders have voted to approve the merger agreement and the merger.
In addition, either of us can decide, without the consent of the other, to terminate the merger agreement in certain circumstances, including:

if there is a breach of or failure to perform under the merger agreement by a party that, individually or together with other breaches or failures to perform by such party, if occurring and continuing on the date on which the closing of the merger would otherwise occur, would result in the failure of any of the conditions precedent to the transactions contemplated by the merger agreement and the breaching party has not cured or cannot cure the breach or failure to perform on or before two (2) business days prior to the merger agreement termination date and thirty (30) days after delivery of written notice to such breaching party;
 
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if there is a final and non-appealable denial of a required regulatory approval, or an application for a required regulatory approval has been withdrawn upon the request or recommendation of the applicable governmental authority;

if holders of a majority of the outstanding shares of NXT common stock fail to approve the merger proposal at the special meeting;

if a court or regulatory authority has issued a final, non-appealable judgement, injunction or other action enjoining or prohibiting the merger, the bank merger or any other transaction contemplated by the merger agreement; or

if the merger is not completed on or before December 31, 2021 or, in the event all necessary regulatory approvals have not been obtained by December 31, 2021, if the merger is not completed on or before March 31, 2022.
In addition, HBT may terminate the merger agreement:

if NXT or the board of directors of NXT withholds, withdraws, qualifies or adversely modifies (or publicly proposes or resolves to withhold, withdraw, qualify or adversely modify) the recommendation of NXT’s board of directors that NXT’s shareholders vote in favor of the adoption and approval of the merger agreement and the merger (a “NXT Adverse Recommendation”); or

if the environmental remediation costs exceed or are reasonably expected to exceed $1,000,000.
In addition, NXT may terminate the merger agreement:

if NXT receives an unsolicited proposal to acquire NXT that the NXT board of directors concludes constitutes or would reasonably be likely to result in a Superior Proposal (as defined in the merger agreement), subject to applicable notice and negotiation periods with HBT;

if the aggregate merger consideration payable to NXT shareholders, as determined on the date that is ten (10) business days prior to the merger closing date (the “Determination Date”) based on the volume weighted average of the daily closing sales prices of a share of HBT common stock as reported on the Nasdaq Global Select Market for the ten (10) consecutive trading days immediately preceding the Determination Date (the “Final HBT Market Value”), is less than $34,000,000; provided, that if HBT delivers timely written notice to NXT that it intends to proceed with the merger by paying additional consideration so that the aggregate merger consideration payable to NXT shareholders is more than $34,000,000, then no termination event will have occurred and the merger agreement will remain in full force and effect;

if on the Determination Date, with such termination to be effective on the tenth (10th) day following the Determination Date, (i) the Final HBT Market Value is less than $14.29, and (ii) the number obtained by dividing the Final HBT Market Value by $17.86 (subject to adjustment as provided for in the merger agreement) is less than the number obtained by subtracting 0.20 from the “Index Ratio” as defined in the merger agreement. If, however, following notice of NXT’s election to exercise its termination right, HBT, within five (5) business days of receipt of NXT’s notice, elects to increase the stock consideration to be paid to NXT shareholders such that it equals an amount as calculated pursuant to the merger agreement, no termination will be deemed to have occurred and the merger agreement will remain in full force and effect; or

if the environmental remediation costs exceed or are reasonably expected to exceed $1,000,000 and HBT elects, pursuant to the merger agreement, to reduce the merger consideration by an amount equal to or greater than $2,500,000.
With respect to certain events and circumstances above, the right to terminate the merger agreement will not be available to a party whose failure to fulfill its obligations under the merger agreement caused or resulted in the occurrence of the event or circumstance giving rise to such party’s termination right.
Whether or not the merger is completed, we will each pay our own fees and expenses, except that HBT will pay the costs and expenses incurred in connection with filing, printing and distributing this proxy statement/prospectus and all filing and other fees payable to the Securities and Exchange Commission
 
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(“SEC”), including fees paid for filing the registration statement of which this proxy statement/prospectus forms a part, except for fees paid to counsel and accountants.
If the merger agreement is terminated by a party due to the breach of or failure to perform under the merger agreement by the other party that, individually or together with other breaches or failures to perform by such party would result in the failure of any of the conditions precedent to the transactions contemplated by the merger agreement, then such breaching party is required to pay the non-breaching party $750,000 within ten (10) business days of the merger agreement’s termination.
If the merger agreement is terminated by HBT due to a NXT Adverse Recommendation or the NXT’s board of directors’ acceptance of a Superior Proposal (as defined in the merger agreement), then NXT will be obligated under the merger agreement to pay HBT a termination fee of $1.5 million within two (2) business days after such termination.
If an acquisition proposal with respect to NXT that seeks to acquire more than 50% of the voting power, business or assets of NXT becomes known to senior management of NXT or has been made directly to NXT shareholders, or any such acquisition proposal has been publicly announced (and not withdrawn), and (i) thereafter the merger agreement is terminated by HBT due to NXT’s material breach of the merger agreement or by NXT due to the Final HBT Market Value being less than $34,000,000 and (ii) within twelve (12) months after such termination NXT enters into discussions that result in a definitive written agreement with any person other than HBT with respect to such acquisition proposal, then NXT will be obligated to pay to HBT, within ten (10) business days after the execution of such definitive agreement, a termination fee of $1.5 million (less the amount of funds, if any, previously paid by NXT to HBT under the termination provisions of the merger agreement).
We may amend or waive merger agreement provisions (Page 58)
At any time before completion of the merger, the parties may amend the merger agreement; however, once holders of NXT common stock have approved the merger proposal, no amendment may be made that would require further approval by NXT shareholders unless that approval is obtained.
At any time before completion of the merger, either HBT or NXT may, to the extent legally allowed, waive in writing compliance by the other with any provision contained in the merger agreement or extend the time for performance of any obligation of the other party.
The parties also may change the structure of the merger or the method of effecting the merger before the effective time of the merger so long as any change does not: (a) affect the U.S. federal income tax consequences of the merger to holders of NXT common stock; and (b) no such change will (i) reduce the amount or kind of the consideration to be issued to NXT shareholders as consideration in the merger, (ii) materially impede or delay consummation of the merger or (iii) require submission to or approval of the NXT shareholders after the merger has been approved by NXT shareholders.
The rights of NXT shareholders following the merger will be different (Page 70)
The rights of HBT stockholders are governed by Delaware law and by HBT’s restated certificate of incorporation and its amended and restated bylaws. The rights of NXT shareholders are governed by Iowa law and by NXT’s articles of incorporation, as amended, and bylaws. Upon completion of the merger, the rights of both shareholder groups will be governed by Delaware law and HBT’s restated certificate of incorporation and amended and restated by-laws.
Information about the companies (Page 67)
HBT Financial, Inc.
401 N. Hershey Road
Bloomington, Illinois 61704
(888) 897-2276
HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company. The bank provides a comprehensive suite of business, commercial,
 
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wealth management, and retail banking products and services to individuals, businesses, and municipal entities throughout Central and Northeastern Illinois through 62 branches. As of June 30, 2021, HBT had total assets of $4.0 billion, total loans of $2.2 billion, and total deposits of $3.4 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back to 1920. HBT common stock is traded on the Nasdaq Stock Market under the symbol “HBT”
NXT Bancorporation, Inc.
325 Oakbrook Drive
Marion, Iowa 52302
(319) 373-4100
NXT is a financial services and registered bank holding company headquartered in Central City, Iowa. NXT’s primary business is operating its wholly-owned subsidiary, NXT Bank, an Iowa state-chartered bank. NXT Bank provides a full range of commercial and retail banking products and services in its Eastern Iowa market. NXT Bank is anticipated to have 4 locations at the time of transaction closing, with locations in Central City, Marion, Waterloo, and Coralville. Established in 1946 as City State Bank, the Bank changed its name to NXT Bank in connection with the Bank’s acquisition of five Eastern Iowa branches in 2013 from another Iowa financial institution.
On June 30, 2021, NXT had approximately $238 million in total assets, $184 million in deposits and $199 million in total loans.
See “Information About the Companies” on page 68 of this proxy statement/prospectus.
 
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SELECTED CONSOLIDATED FINANCIAL DATA OF HBT
The following table summarizes selected historical consolidated financial data of HBT for the periods and as of the dates indicated. HBT’s historical results may not be indicative of HBT’s future performance. In addition, results for the six month periods ended June 30, 2021 and 2020 may not be indicative of the results that may be expected for the full fiscal year or future periods.
This information has been derived from HBT’s consolidated financial statements filed with the SEC. You should read this information in conjunction with HBT’s consolidated financial statements and related notes thereto included in HBT’s Annual Report on Form 10-K as of and for the year ended December 31, 2020, and HBT’s Quarterly Report on Form 10-Q as of and for the six months ended June 30, 2021, each of which is incorporated by reference into this joint proxy statement/prospectus. See “Where You Can Find More Information.”
(Unaudited)
As of or for
the six months
ended June 30,
As of or for the years ended December 31,
2021
2020
2020
2019
2018
2017
2016
(dollars in thousands, except per share information)
Operating Results
Net income
$ 28,962 $ 13,640 $ 36,845 $ 66,865 $ 63,799 $ 56,103 $ 58,546
C Corp equivalent net income(1)
N/A N/A N/A 53,372 48,297 37,294 39,249
Share and Per Share Data
Earnings per share – Diluted
$ 1.05 $ 0.50 $ 1.34 $ 3.33 $ 3.54 $ 3.10 $ 3.24
C Corp equivalent earnings per share – Diluted(1)
N/A N/A N/A 2.66 2.68 2.06 2.17
Book value at period end
13.64 12.67 13.25 12.12 18.88 17.92 18.05
Closing stock price at period
end
17.41 13.33 15.15 18.99 N/A N/A N/A
Ending number shares of common stock outstanding
27,355,053 27,457,306 27,457,306 27,457,306 18,027,512 18,070,692 18,070,692
Weighted average shares of common stock outstanding
27,396,557 27,457,306 27,457,306 20,090,270 18,047,332 18,070,692 18,053,600
Performance Ratios
Net interest margin(2)
3.19% 3.76% 3.54% 4.31% 4.16% 3.83% 3.87%
Efficiency ratio
56.31% 63.37% 59.66% 53.80% 55.24% 59.77% 57.49%
Return on average assets(2)
1.52% 0.83% 1.07% 2.07% 1.96% 1.69% 1.76%
Return on average stockholders’ equity(2)
16.03% 7.97% 10.51% 19.58% 19.32% 16.58% 16.93%
C Corp equivalent return on average assets(1)(2)
N/A N/A N/A 1.65% 1.49% 1.12% 1.18%
C Corp equivalent return on
average stockholders’ equity(1)(2)
N/A N/A N/A 15.63% 14.63% 11.02% 11.35%
Balance Sheet Highlights
Total assets
$ 3,953,677 $ 3,501,412 $ 3,666,567 $ 3,245,103 $ 3,249,569 $ 3,312,875 $ 3,317,124
Total loans, before allowance for loan losses
2,152,119 2,275,795 2,247,006 2,163,826 2,144,257 2,115,946 2,106,515
Total deposits
3,424,634 3,015,113 3,130,534 2,776,855 2,795,970 2,855,685 2,877,181
Subordinated notes
39,277 39,238
Junior subordinated debentures
37,681 37,616 37,648 37,583 37,517 37,451 37,386
Total stockholders’ equity
373,194 347,840 363,917 332,918 340,396 323,916 326,246
 
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(Unaudited)
As of or for
the six months
ended June 30,
As of or for the years ended December 31,
2021
2020
2020
2019
2018
2017
2016
(dollars in thousands, except per share information)
Credit Quality Ratios
Allowance for loan losses to loans, before allowance for loan losses
1.23% 1.31% 1.42% 1.03% 0.96% 0.93% 0.94%
Nonperforming loans to loans, before allowance for loan losses
0.34% 0.61% 0.44% 0.88% 0.74% 1.04% 1.06%
Nonperforming assets to loans,
before allowance for loan losses
and foreclosed assets
0.70% 0.81% 0.63% 1.11% 1.18% 1.81% 1.81%
Net loan charge-offs to average
loans, before allowance for loan
losses(2)
(0.02)% 0.05% 0.04% 0.07% 0.23% 0.15% 0.23%
Regulatory Capital Ratios
Total capital to risk-weighted assets
18.55% 15.13% 17.40% 14.54% 14.99% 14.40% 14.54%
Tier 1 capital to risk-weighted assets
15.79% 13.92% 14.55% 13.64% 14.17% 13.58% 13.72%
Common equity Tier 1 (“CETI”)
to risk-weighted assets
14.25% 12.43% 13.06% 12.15% 12.71% 12.09% 12.21%
Tier 1 capital to average
assets
9.67% 10.00% 9.94% 10.38% 10.80% 9.94% 9.93%
(1)
Reflects adjustment to HBT’s historical net income for each period to give effect to the C Corp equivalent provision for income tax for such period.
(2)
Annualized based on the actual number of days for the six months ended June 30, 2021 and 2020.
N/A
Not applicable.
 
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus, as well as HBT’s other filings with the SEC and NXT’s other communications with its stockholders, may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any results, levels of activity, performance, or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below.
In some cases, forward-looking statements can be identified by the use of words such as “may,” “might,” “will,” “would,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “outlook,” “predict,” “project,” “probable,” “potential,” “possible,” “target,” “continue,” “look forward,” or “assume” and words of similar import. Forward-looking statements are not historical facts or guarantees of future performance or outcomes, but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements. We caution you not to place undue reliance on these statements. Forward-looking statements are made only as of the date of this proxy statement/prospectus, and HBT and NXT undertake no obligation to update any forward-looking statements to reflect new information or events or conditions after the date hereof.
In connection with the safe harbor provisions of the PSLRA, we are hereby identifying important factors that could affect our financial performance and could cause our actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any forward-looking statements.
Among the factors that could impact our ability to achieve operating results, growth plan goals, and the beliefs expressed or implied in forward-looking statements are:

the risk that the business of HBT and NXT will not be integrated successfully, or such integration may be more difficult, time consuming or costly than expected;

expected revenue synergies, cost savings and other financial or other benefits of the proposed transaction between HBT and NXT might not be realized within the expected time frames or might be less than projected;

revenues following the merger may be lower than expected;

deposit attrition, operating costs, customer loss and business disruption following the merger, including, without limitation, difficulties in maintaining relationships with employees, may be greater than expected;

the ability to obtain governmental approvals of the merger, or the ability to obtain such regulatory approvals in a timely manner;

the potential impact of announcement or completion of the merger on relationships with third parties, including customers, employees, and competitors;

business disruption following the merger, including diversion of management’s attention from ongoing business operations and opportunities;

the failure of holders of NXT voting common stock to approve the merger proposal;

changes in the level of non-performing assets and charge-offs;

HBT’s potential exposure to unknown contingent liabilities of NXT;

any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems;

changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements;
 
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changes in HBT’s stock price before closing, including as a result of the financial performance of NXT prior to closing;

inflation, interest rate, securities market and monetary fluctuations;

credit and interest rate risks associated with HBT’s and NXT’s respective businesses, customer borrowing, repayment, investment and deposit practices;

general economic conditions, either internationally, nationally or in the market areas in which HBT and NXT operate or anticipate doing business, may be less favorable than expected;

changes in the economic environment, competition or other factors that may influence the anticipated growth of loans and deposits, the quality of the loan portfolio and loan and deposit pricing;

changes in the competitive environment among bank holding companies and banks;

new regulatory or legal requirements or obligations with which HBT and NXT must comply; and

other economic, competitive, governmental, regulatory and technological factors affecting HBT’s and NXT’s operations, products, services and prices.
The foregoing list of important factors may not be all inclusive, and we specifically decline to undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events. For a further discussion of these and other risks, uncertainties and other factors applicable to HBT and NXT, see “Risk Factors” in this proxy statement/prospectus and HBT’s other filings with the SEC incorporated by reference into this proxy statement/prospectus.
 
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RISK FACTORS
In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus, including the matters addressed under the heading “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus. You should also consider the other information in, and the other documents incorporated by reference into, this proxy statement/prospectus, including in particular the risk factors associated with HBT’s business contained under the heading “Risk Factors” in HBT’s Annual Report on Form 10-K for the year ended December 31, 2020. See “Where You Can Find More Information.”
Because the market price of HBT common stock will fluctuate, NXT stockholders cannot be certain of the market value of the merger consideration they will receive.
Upon effectiveness of the merger, each holder of shares of NXT common stock, will receive, in addition to cash, a number of shares of HBT common stock in exchange for each share of NXT common stock held immediately prior to the effectiveness of the merger calculated based on the exchange ratio, plus the cash consideration. Any change to the market price of HBT common stock prior to completion of the merger will affect the value of any shares of HBT common stock NXT stockholders receive as consideration in the merger. The market price of HBT common stock may fluctuate as a result of a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors are outside of our control. Accordingly, at the time of the NXT special meeting, NXT stockholders will not know or be able to calculate the market price of HBT common stock that they will receive upon completion of the merger.
The cash consideration will not be determined until the effective time of the merger and NXT stockholders may not be certain of the amount of the cash consideration they will receive for their NXT shares in connection with the merger.
In connection with the merger, holders of NXT common stock will receive $400.00 per share subject to certain adjustments that will be determined prior to completion of the merger. Because the merger will not be completed until certain conditions have been satisfied or waived, a significant amount of time may pass between the time of the NXT special meeting and the time that the merger is complete. Therefore, at the time you vote your shares of NXT voting common stock, you may not know the exact amount of the cash consideration that will be paid if the merger is completed. Based on information available as of the date of this proxy statement/prospectus, no adjustment to the cash consideration is reasonably expected. For a description of the potential adjustments to the cash consideration, see “The Merger Agreement — Merger Consideration.”
NXT will be subject to business uncertainties and contractual restrictions while the merger is pending.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on NXT and consequently on HBT. These uncertainties may impair NXT’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that do business with NXT to seek to change existing business relationships with NXT. Employee retention may be challenging during the pendency of the merger, as employees may experience uncertainty about their future roles with HBT, and certain NXT employees have already chosen not to remain with NXT following the merger. If key employees depart in significant numbers because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with HBT, HBT’s business following the merger could be harmed. In addition, the merger agreement restricts NXT from making certain acquisitions and taking other specified actions without HBT’s consent, and generally requires NXT to continue its operations in the ordinary course until the merger occurs. These restrictions may prevent NXT from pursuing attractive business opportunities that may arise prior to the completion of the merger. For a description of the restrictive covenants to which NXT is subject, see “The Merger Agreement — Conduct of Business Pending the Merger.”
Combining our two companies may be more difficult, costly or time-consuming than we currently expect, and we may fail to realize the anticipated benefits and cost savings of the merger.
HBT and NXT have operated and, until the completion of the merger, will continue to operate independently. The success of the merger, including the realization of anticipated benefits and cost savings,
 
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will depend, in part, on HBT’s ability to successfully combine and integrate NXT’s business into its own in a manner that permits growth opportunities and does not materially disrupt existing customer relationships or result in decreased revenues due to loss of customers. It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers and employees. As with any merger of banking institutions, there also may be business disruptions that cause us to lose customers or cause customers to take their deposits or loans out of our banks. The success of the combined company following the merger and the bank merger may depend, in part, on the ability of HBT to integrate the two businesses, business models and cultures. If HBT experiences difficulties in the integration process, including those listed above, HBT may fail to realize the anticipated benefits of the merger in a timely manner or at all. HBT’s business or results of operations or the value of its common stock may be materially and adversely affected as a result.
The market price of HBT common stock after the merger may be affected by factors different from those currently affecting HBT common stock.
The businesses of HBT and NXT differ in some respects and, accordingly, the results of operations of the combined company and the market price of HBT common stock after the merger may be affected by factors different from those currently affecting the independent results of operations of each of HBT or NXT. For a discussion of the business of HBT and of certain factors to consider in connection with the business of HBT, see the documents incorporated by reference into this proxy statement/prospectus and referred to under “Where You Can Find More Information,” including, in particular, the section entitled “Risk Factors” in HBT’s Annual Report on Form 10-K for the year ended December 31, 2020.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.
Before the merger and the bank merger may be completed, HBT and NXT must obtain approvals from the Federal Reserve, the FDIC, the IDFPR and the IDB, to which applications have been submitted. Other approvals, waivers or consents from regulators may also be required. In determining whether to grant these approvals the regulators consider a variety of factors, including the regulatory standing of each party and the factors described under “The Merger Agreement — Regulatory Approvals Required for the Merger.” An adverse development in either party’s regulatory standing or these factors could result in a delay of or an inability to obtain regulatory approval. The regulators may impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger. Such conditions or changes could have the effect of delaying or preventing completion of the merger or the bank merger or imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, any of which might have an adverse effect on the combined company following the merger. See “The Merger Agreement — Regulatory Approvals Required for the Merger.” Regulatory approvals could also be adversely impacted based on the status of any ongoing investigation of either party or its customers, including subpoenas to provide information or investigations by a federal, state or local governmental agency. Further, delays to the regulatory approval process may occur as a result of government shutdowns, including another federal government shutdown such as the one that concluded in January 2019, which resulted in curtailed operations by the Federal Reserve, the SEC and other agencies. We cannot guarantee that we will be able to obtain all required regulatory approvals, the timing of those approvals or whether any conditions will be imposed.
Some NXT directors and officers may have interests and arrangements that may have influenced their decisions to support or recommend that you approve the merger.
NXT’s stockholders should be aware that some of NXT’s directors and executive officers have interests in the merger and have arrangements that are different from, or in addition to, those of NXT’s stockholders generally. These interests and arrangements may create potential conflicts of interest. NXT’s board of directors was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that holders of NXT voting common stock vote in favor of the merger proposal.
 
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For a more complete description of these interests, see “The Merger — Interests of Certain Persons in the Merger.”
The merger agreement limits NXT’s ability to pursue alternatives to the merger.
The merger agreement contains provisions that limit NXT’s ability to solicit, encourage or discuss competing third-party proposals to acquire all or a significant part of NXT. These provisions, which include a $1,500,000 termination fee, might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of NXT from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share market price than that proposed in the merger, or might result in a potential competing acquiror proposing to pay a lower per share price to acquire NXT than it might otherwise have proposed to pay.
Termination of the merger agreement could negatively impact HBT or NXT.
In the event the merger agreement is terminated, HBT’s or NXT’s business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger. The market price of HBT common stock might decline to the extent that the current market price reflects a market assumption that the merger will be completed. If the merger agreement is terminated and NXT’s board of directors seeks another merger or business combination, NXT stockholders cannot be certain that NXT will be able to find a party willing to offer equivalent or more attractive consideration than the merger consideration provided in the merger. If the merger agreement is terminated under certain circumstances, NXT may be required to pay HBT a termination fee of $1,500,000. If the merger agreement is terminated, HBT or NXT may experience negative reactions from its customers, vendors and employees. See “The Merger Agreement — Termination of the Merger Agreement.”
If the merger is not completed, HBT and NXT will have incurred substantial expenses without realizing the expected benefits of the merger.
Each of HBT and NXT has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this proxy statement/prospectus and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, HBT and NXT would have to recognize these expenses without realizing the expected benefits of the merger.
Holders of NXT common stock will have a reduced ownership and voting interest after the merger and will exercise less influence over management.
Holders of NXT common stock currently have the right to vote on matters affecting NXT. Upon the completion of the merger, each NXT stockholder who receives shares of HBT common stock will become a stockholder of HBT with a percentage ownership of HBT with respect to such shares that is smaller than the stockholder’s current percentage ownership of NXT. Since the exchange ratio is 67.6783 shares of HBT common stock per each issued and outstanding share of NXT common stock, following the effective time of the merger, the former stockholders of NXT as a group would receive shares in the merger constituting approximately 6.2% of the outstanding shares of HBT common stock immediately after the merger based on the number of shares of HBT common stock and NXT common stock outstanding as of June 30, 2021. Because of this, NXT stockholders will have less influence on the management and policies of HBT than they now have on the management and policies of NXT.
The opinion of NXT’s financial advisor will not reflect changes in circumstances between the signing of the merger agreement and the completion of the merger.
NXT has not obtained an updated opinion from D.A. Davidson, its financial advisor, as of the date of this proxy statement/prospectus. D.A. Davidson’s opinion was based on certain facts and assumptions regarding the operations and prospects of HBT and NXT, general market and economic conditions and other factors. Changes in the operations and prospects of HBT or NXT, general market and economic conditions and other factors that may be beyond the control of HBT or NXT may significantly alter the value of HBT or NXT, the price of shares of HBT common stock by the time the merger is completed or the future
 
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price at which HBT common stock trades. D.A. Davidson’s opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. The opinion will not address the fairness of the merger consideration from a financial point of view at the time a NXT stockholder votes or at the time the merger is completed. However, NXT’s board of directors’ recommendation that NXT stockholders vote “FOR” adoption and approval of the merger agreement is made as of the date of this proxy statement/prospectus. For a description of the opinion that NXT received from D.A. Davidson, please refer to “The Merger — Opinion of NXT’s Financial Advisor”.
The shares of HBT common stock that NXT stockholders will receive as a result of the merger will have different rights from shares of NXT common stock.
The rights associated with NXT common stock are different from the rights associated with HBT common stock. For a discussion of the different rights associated with HBT common stock, see “Comparison of Stockholder Rights.”
Under certain circumstances, the merger consideration could be reduced if certain environmental conditions exist with respect to NXT’s real property.
The merger consideration may be subject to adjustment if certain environmental conditions exist with respect to NXT’s real property and the estimated costs to remediate these conditions is greater than $200,000, as more fully described in “The Merger Agreement — Merger Consideration”. Due to the fact that these costs, if any, may not be determinable prior to the date of the NXT special meeting, at the time of the vote on the merger proposal at the NXT special meeting, holders of NXT common stock may not know with certainty whether the amount of cash consideration they will receive as part of the merger consideration will be subject to reduction. Based on information available as of the date of this proxy statement, however, no adjustment to the cash consideration of $400 per share of NXT common stock is reasonably expected by the parties.
Completion of the merger is subject to certain conditions, and if these conditions are not satisfied or waived, the merger will not be completed.
The obligations of HBT and NXT to complete the merger are subject to the satisfaction or waiver (if permitted) of a number of conditions. The satisfaction of all of the required conditions could delay the completion of the merger for a significant period of time or prevent it from occurring. Any delay in completing the merger could cause the combined company not to realize some or all of the benefits that the combined company expects to achieve if the merger is successfully completed within its expected time frame. Further, there can be no assurance that the conditions to the closing of the merger will be satisfied or waived or that the merger will be completed. See “The Merger Agreement — Conditions to Completion of the Merger.”
In addition, if the merger is not completed on or before December 31, 2021, either HBT or NXT may choose not to proceed with the merger. HBT and/or NXT may also terminate the merger agreement under certain circumstances. See “The Merger Agreement — Termination of the Merger Agreement.”
 
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NXT SPECIAL MEETING
This section contains information from NXT for NXT shareholders about the special meeting NXT has called to consider and approve the merger agreement and the transactions contemplated thereby by the holders of NXT common stock. On or about August 23, 2021, NXT commenced mailing of this proxy statement/prospectus to holders of NXT common stock. Together with this proxy statement/prospectus, we are also sending to shareholders of NXT’s common stock a notice of the NXT special meeting and a form of proxy card that NXT’s board of directors is soliciting for use at the NXT special meeting and at any adjournments of the meeting.
This proxy statement/prospectus is also being furnished by HBT to NXT shareholders as a prospectus in connection with the issuance of shares of HBT common stock upon completion of the merger.
Date, Time and Place
The NXT special meeting will be held at Cedar Rapids Country Club, located at 550 27th Street Drive SE, Cedar Rapids, Iowa 52403 on September 21, 2021, at 4:00 p.m. Central Time.
Matters to Be Considered
At the NXT special meeting, holders of NXT common stock as of the NXT record date will be asked to consider and vote on the following matters:

To approve the merger agreement and the transactions contemplated thereby (the “merger proposal”),

To approve one or more adjournments of the NXT special meeting, if determined necessary and advisable, including adjournments to permit the further solicitation of proxies in favor of the merger proposal (the “NXT adjournment proposal”); and

To approve the transaction of such other business as may properly come before the NXT special meeting and any adjournments or postponements thereof.
Recommendation of NXT’s Board of Directors
After careful consideration, the NXT board of directors unanimously approved the merger agreement and the transactions contemplated thereby, and unanimously determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of NXT and its shareholders.
The board of directors of NXT unanimously recommends that holders of NXT common stock vote “FOR” the merger proposal and “FOR” the NXT adjournment proposal. Please see the section entitled “The Merger — NXT’s Reasons for the Merger and Recommendation of the Board of NXT.”
All of the directors and certain significant shareholders of NXT, collectively holding as of the NXT record date an aggregate 22,172 shares of NXT common stock, have signed voting and support agreements with HBT agreeing to vote in favor of the merger agreement and the transactions contemplated thereby. Accordingly, the holders of approximately 83.4% of the outstanding NXT common stock entitled to vote on the merger proposal have entered into voting and support agreements with HBT to vote in favor of the merger proposal.
NXT Record Date and Quorum
Record Date
NXT’s board of directors has fixed the close of business on August 18, 2021, as the NXT record date for determining the NXT shareholders entitled to receive notice of and to vote at the NXT special meeting.
As of the close of business on the NXT record date, 26,582.23 shares of NXT common stock (which includes 50 shares of outstanding unvested restricted NXT common stock) were issued and outstanding and held by approximately 50 record holders. Each share of NXT common stock held of record at the close
 
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of business on the NXT record date entitles the holder thereof to one vote on each matter considered and voted on by holders of NXT common stock at the NXT special meeting.
Quorum Requirements
A quorum is required to transact business and consider each proposal at the NXT special meeting. The presence at the special meeting, in person or by proxy, of holders of a majority of the outstanding shares of NXT common stock entitled to vote at the special meeting will constitute a quorum for the transaction of business. All shares of NXT common stock present in person or represented by proxy, including abstentions, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the NXT special meeting.
Vote Required; Treatment of Abstentions and Failure to Vote
Merger Proposal
Approval of the merger proposal requires the affirmative vote of NXT shareholders representing a majority of the outstanding shares of NXT common stock as of the close of business on the NXT record date. If you fail to submit a proxy card or vote in person at the NXT special meeting, mark “ABSTAIN” on your proxy card or fail to instruct your bank or broker for shares held in street name with respect to the proposal to approve the merger proposal, it will have the same effect as a vote “AGAINST” approval of the merger proposal.
The merger proposal will not require the approval of the holders of HBT common stock under the Delaware General Corporation Law or applicable rules of the Nasdaq Global Select Market.
NXT Adjournment Proposal
Approval of the NXT adjournment proposal requires the affirmative vote of a majority of the shares of NXT common stock present in person or represented by proxy at the NXT special meeting. If you mark “ABSTAIN” with respect to the NXT adjournment proposal, it will have the same effect as a vote “AGAINST” the NXT adjournment proposal, and broker non-votes will have no effect on the approval of the NXT adjournment proposal assuming a quorum has been established.
Shares Held by Directors and Significant Shareholders
Each of the directors of NXT, in his or her capacity as a beneficial owner of shares of NXT common stock, has entered into a voting and support agreement with HBT, the form of which is attached to this proxy statement/prospectus as Exhibit A-2 to Appendix A, in which each such director has agreed to vote all shares of NXT common stock that he or she beneficially owns and has the power to vote in favor of the merger proposal and any other matter that is required to be approved by the shareholders of NXT to facilitate the transactions contemplated by the merger agreement. The directors also agreed to vote against any proposal made in opposition to the approval of the merger or in competition with the merger agreement and against any other acquisition proposal. See “The Merger — Interests of Certain Persons in the Merger.”
As of the close of business on the NXT record date, NXT’s directors and certain significant shareholders party to voting and support agreements held, in the aggregate, approximately 22,172 shares of NXT common stock, or approximately 83.4% of the outstanding shares of NXT common stock entitled to vote at the NXT special meeting.
As of the NXT record date, HBT and its subsidiaries held no shares of NXT common stock, and none of its directors and executive officers and their affiliates held shares of NXT common stock.
Participants in the NXT Stock Plan
Recipients of restricted stock awards are entitled to vote the underlying shares of NXT common stock, even while subject to vesting requirements. Accordingly, the holder of NXT restricted stock will vote in the same manner as holders of NXT common stock.
 
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Solicitation of Proxies; Payment of Solicitation Expenses
Proxies are being solicited by NXT’s board of directors from shareholders of NXT common stock. Shares of NXT common stock represented by properly executed proxies, and that have not been revoked, will be voted in accordance with the instructions indicated on the proxies. If no instructions are indicated, such proxies representing shares of NXT common stock will be voted “FOR” the merger proposal and “FOR” the NXT adjournment proposal, and in the discretion of the individuals named as proxies as to any other matter that may come before the NXT special meeting.
HBT has agreed to pay for the costs and expenses (excluding the fees and disbursements of counsel and accountants) of filing, printing and distributing this proxy statement/prospectus and all filing and registration fees, including fees paid for filing the registration statement of which this proxy statement/prospectus forms a part with the SEC. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, officers or employees of NXT or its affiliates telephonically, electronically or by other means of communication. Directors, officers and employees will receive no additional compensation for such solicitation. NXT does not anticipate using a paid proxy solicitor in connection with the special meeting.
Voting Your Shares
Holders of NXT common stock may vote in person or by proxy at the NXT special meeting on the proposals upon which they are entitled to vote. Holders of NXT common stock may also vote by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. To be valid, your vote by mail must be received by the deadline specified on the proxy card.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF NXT COMMON STOCK YOU OWN. ACCORDINGLY, YOU SHOULD SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE NXT SPECIAL MEETING IN PERSON.
Revocability of Proxies and Changes to a NXT Shareholder’s Vote
A holder of NXT common stock who has submitted a proxy may revoke it or change the shareholder’s vote at any time before its proxy is voted at the NXT special meeting. A holder of NXT common stock may revoke its proxy by (i) giving a written notice of revocation to Roger Baker, President and Chairman of NXT, (ii) attending the NXT special meeting in person and voting by ballot at the NXT special meeting, or (iii) by properly submitting to NXT a duly executed proxy bearing a later date. All written notices of revocation and other communications with respect to revocation of proxies should be addressed to NXT as follows: 325 Oakbrook Drive, Marion, Iowa 52302, Attention: Roger Baker, President and Chairman of NXT.
Attending the NXT Special Meeting
The NXT special meeting will be held at Cedar Rapids Country Club, located at 550 27th Street Drive SE, Cedar Rapids, Iowa 52403 on September 21, 2021, at 4:00 p.m. Central Time. All holders of NXT common stock as of the record date, including shareholders who hold their shares through brokers, trusts, banks, nominees or any other holder of record, are invited to attend the NXT special meeting.
All shareholders must bring an acceptable form of identification, such as a valid driver’s license, in order to attend the NXT special meeting in person.
Any representative of a shareholder who wishes to attend the special meeting must present acceptable documentation evidencing his or her authority, acceptable evidence of ownership by the holder of shares of NXT common stock and an acceptable form of identification.
Questions and Additional Information
If you have any questions or need assistance in voting your shares, please call Nathan Koch, Vice President of NXT, at (319) 688-6208.
 
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THE MERGER
The following discussion describes certain material information about the merger. We urge you to read carefully this entire document, including the merger agreement and the financial advisor opinion of D.A. Davidson delivered to the board of directors of NXT, attached as Appendices A and B, respectively, to this proxy statement/prospectus, for a more complete understanding of the merger.
Terms of the Merger
HBT’s board of directors and NXT’s board of directors have each unanimously approved and adopted the merger agreement and the transactions contemplated thereby, including the merger. Pursuant to and subject to the conditions set forth in the merger agreement, MergerCo will merge with and into NXT, with NXT as the surviving entity, and as a result, NXT will become a wholly-owned subsidiary of HBT. Immediately following the merger, NXT will then merge with and into HBT and, as a result, the separate existence of NXT will terminate. Following the merger at such time as HBT may determine, NXT Bank will merge with and into Heartland Bank, HBT’s wholly owned bank subsidiary, with Heartland Bank being the surviving bank. Following the bank merger, Heartland Bank will continue its corporate existence as a commercial bank organized under the laws of the State of Illinois. We expect to complete the merger late in the third quarter or early in the fourth quarter of 2021, although delays may occur.
Upon completion of the merger, each holder of shares of NXT common stock will receive the merger consideration, consisting of $400 in cash and a number of shares of HBT common stock based on the exchange ratio, in exchange for each share of NXT common stock held immediately prior to the completion of the merger, subject to adjustment as provided in the merger agreement and described in this proxy statement/prospectus.
The merger consideration is subject to adjustment if certain environmental conditions exist with respect to NXT’s real property and the total cost to further investigate and remediate such conditions is reasonably expected to exceed $200,000. Based on information available as of the date of this proxy statement/prospectus, there is not expected to be any adjustment to the merger consideration due to environmental remediation costs.
The exchange ratio of 67.6783 is not subject to adjustment but the value of the HBT common stock to be received by holders of NXT common stock in the merger will fluctuate based on the trading price of HBT common stock.
In lieu of any fractional shares of HBT common stock that would otherwise be issued as part of the stock consideration, NXT shareholders will receive cash for any fractional shares based on the per share volume weighted average price of the daily closing sales prices of a share of HBT common stock as reported on the Nasdaq Global Select Market for the ten (10) consecutive trading days immediately preceding the closing date of the merger.
All NXT restricted stock that is unvested and outstanding will, immediately prior to the merger, automatically become vested as of such time, and the holders thereof will be entitled to receive the same merger consideration for the shares of NXT common stock that were received under the restricted stock awards as all other holders of NXT common stock.
For additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the merger and the provisions for terminating or amending the merger agreement, see “The Merger Agreement.”
Background of the Merger
As part of its ongoing consideration and evaluation of NXT’s long-term business strategy and prospects, the NXT Board and senior management of NXT have engaged in periodic strategic reviews during which the NXT Board discussed NXT’s strategic direction, performance and prospects in the context of trends and developments in the markets that NXT serves, the banking industry and the regulatory environment. Among other topics, these discussions have focused on both the possible acquisition of other banks and the potential sale of NXT to another institution. Over the past several years NXT has pursued a
 
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number of potential acquisitions that could assist NXT in executing its strategic plans. Most of these potential acquisition discussions did not materialize because the targets demanded more consideration than the NXT Board deemed appropriate. During this same time period, NXT’s Board and management also believed that shareholders would benefit by being a part of a larger organization that could take advantage of the loan demand NXT generates and the economies of scale inherit in a bank merger or acquisition. Periodically, NXT has received overtures from financial institutions and engaged in discussions about strategic transactions, including the potential acquisition of NXT or a merger-of-equal transaction, with most conversations not proceeding past preliminary discussions. Several of these discussions stalled primarily over valuation, with potential acquirers not placing sufficient value on NXT.
In December 2020, while senior management of NXT remained open to the acquisition by NXT of a smaller bank, greater emphasis was being placed on exploring a potential sale of NXT. A primary factor for more actively seeking a potential sale of NXT at this time was the pending expiration of the Bank’s 10-year data processing contract on April 30, 2022. An acquisition of NXT during the end of the contract’s term would potentially bring more value to NXT and its shareholders because the contract’s termination fees, which are significant, would be much less in the contract’s final months versus a contract termination with years remaining under a new or renewed data processing contract. Around this time, NXT began working with D.A. Davidson & Co. (“D.A. Davidson”), who was acting as a financial advisor to NXT, regarding plans to engage in a more active solicitation of potential buyers that would be interested in exploring an acquisition of NXT.
In January, 2021, an investment banker with Piper Sandler & Co. (“Piper Sandler”), in its role as financial advisor to HBT, contacted Roger Baker, Chairman of NXT, who referred the call to Nathan Koch, President and Chief Executive Officer of NXT Bank. After some preliminary discussions with the investment banker, on February 9, 2021, Mr. Koch first spoke with Lance Carter, President and Chief Operating Officer of HBT, about the possibility of exploring a business combination.
On February 19, 2021, Mr. Koch and Mr. Baker participated in a video conference call with Fred Drake, Chairman and Chief Executive Officer of HBT and Mr. Carter. During the call, the four individuals discussed their personal background, each financial institution’s history, and the strategic focus and culture of both firms.
On February 24, 2021, D.A. Davidson provided Mr. Koch with a list of financial institutions that D.A. Davidson believed might be likely candidates to explore an acquisition of NXT if approached. D.A. Davidson also requested information from NXT in order to develop an information packet that could be used by D.A. Davidson in discussions with potential buyers.
Beginning late February into March, non-confidential information was shared between NXT and HBT, including non-confidential information of NXT provided to Piper Sandler in order to assist HBT with assessing NXT’s business and operations. As discussions with HBT continued, NXT management began to place more emphasis on pursing a potential transaction with HBT, given that discussions had continued to advance, and less focus on its plans to more actively seek out other potential buyers.
On March 22, 2021, following several weeks of review by HBT and Piper Sandler of certain financial and operational information NXT had provided, NXT and D.A. Davidson received preliminary merger modeling from Piper Sandler regarding a potential transaction between the companies. This initial model included a number of transaction assumptions, including a consideration mix of approximately 75% in HBT common stock and 25% cash and an indicative merger consideration of 64.1926 shares of HBT common stock and $391.58 in cash for each share of NXT common stock.
On April 5, 2021, NXT and D.A. Davidson provided a response to the preliminary modeling assumptions HBT and Piper Sandler had provided. Its response reflected enhanced economic terms for NXT’s shareholders, consisting of a merger consideration of 70 shares of HBT common stock and $425.00 in cash for each share of NXT common stock, while the consideration mix remained in the 75% stock and 25% cash range.
On April 19, 2021, Lance Carter forwarded a draft letter of intent to Nathan Koch, who shared the draft with outside counsel. On that same day, the Executive Committee of the NXT Board, consisting of Mr. Baker, Mr. Koch, John Maurice, Mike Wilkins, met to receive an update from management on the
 
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discussions and developments with HBT. Prior to the meeting, Mr. Koch provided a draft copy of a letter of intent from HBT, together with several changes recommended by outside counsel, financial and historical performance data of HBT, and materials prepared by D.A. Davidson regarding the economics of a proposed transaction with HBT. Following that meeting, NXT and D.A. Davidson entered into a formal engagement letter dated April 19, 2021, pursuant to which D.A. Davidson would continue to provide NXT with advice concerning its strategic alternatives.
On April 23, 2021, HBT submitted a non-binding, indication of interest (the “HBT LOI”) proposing an acquisition of NXT and NXT Bank at an implied value of $1,593 per NXT common share (based in part on then recent HBT share trading price), consisting of cash consideration of $400.00 and 68.4464 shares of HBT common stock for each outstanding NXT share. HBT’s offer, as outlined in the HBT LOI, was not conditioned on any financing contingency and expected that Mr. Koch would continue as a key employee in the combined company.
On April 26, 2021, the NXT Board met to consider the HBT LOI and management’s and D.A. Davidson’s analysis of the HBT offer. In attendance at the meeting were representatives from Vedder Price P.C. (“Vedder Price”), counsel to NXT, and representatives from D.A. Davidson, financial advisor to NXT. Following discussions, the NXT Board approved the entering into the HBT LOI as well as mutual confidentiality agreement with HBT to facilitate the exchange of confidential and non-public information. Both the HBT LOI and confidentiality agreement were executed and delivered by NXT on April 27th.
On April 30, 2021, an initial draft of the merger agreement prepared by NXT with the assistance of its counsel, Vedder Price, was provided by Mr. Koch to Mr. Carter.
On May 18, 2021, the Executive Committee met and received an update from NXT management regarding the negotiations with HBT. Discussions at the meeting included outstanding issues being negotiated, a timeline for on-site due diligence by HBT, and the determination that other members of the NXT Bank management team would need to be made aware of the proposed transaction.
On May 19, 2021, Mr. Koch received a draft employment agreement from HBT. HBT had previously advised and consistently maintained that it would not enter into a merger agreement unless it had assurances that Mr. Koch would become an employee of HBT following the merger and be subject to a multi-year contract.
On May 21, 2021, NXT received HBT’s comments to the draft merger agreement that had been circulated to HBT on April 30. That same day, the NXT Board met to discuss the status of the negotiations.
In late May, executives and lending staff of HBT travelled to NXT Bank’s offices in Coralville, Iowa and performed on-site due diligence on NXT Bank’s loan portfolio.
Throughout the end of May through early June, the parties continued to negotiate the material terms of the proposed transaction and otherwise exchanging various drafts of the merger agreement and ancillary documents. The parties negotiated, among other items, the representations and warranties that would be made by HBT and NXT, whether NXT could declare a special dividend in an amount equal to any excess amount in its allowance for loan and lease losses, the performance of environmental investigations and the effect of bonus payments to employees. During this time, the parties agreed that the per share merger consideration would be subject to downward adjustments at closing in the event the costs of any environmental remediation at NXT properties were to exceed certain amounts, with the ability for HBT to terminate the transaction if the remediation costs were expected to exceed certain amounts and for NXT to terminate the transaction if the per share merger consideration would be reduced in excess of certain amounts as a result of any remediation costs. HBT also sought to reduce the proposed per-share stock consideration from 68.4464 HBT shares to 67.6783 HBT shares to reflect the after-tax effect of the change-in-control payment the merger would trigger under Mr. Koch’s change-in-control agreement.
On June 3, 2021, executives from NXT along with representatives of D.A. Davidson performed reverse due diligence on HBT in light of the stock consideration to be received by NXT shareholders under the terms of the merger. The diligence also included interviews with Mr. Carter.
On June 4, 2021, the NXT Board held a special meeting to consider the terms of the proposed merger with HBT, including the merger agreement. As an initial matter, Vedder Price advised the Board of its
 
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fiduciary duties in connection with its consideration of the transaction and the terms of the proposed merger with HBT. In addition to discussing the terms of the proposed merger, Mr. Koch disclosed and discussed the terms of the employment arrangements with HBT. HBT continued to make clear it would not execute the merger agreement unless Mr. Koch also entered into a multi-year employment agreement.
After further discussion among members of NXT’s Board, Vedder Price led a comprehensive review of the definitive transaction documents, including the merger agreement. During the meeting, NXT’s management and a representative from D.A. Davidson also reported on, and the NXT Board discussed, the reverse due diligence process undertaken by NXT and its advisors with respect to HBT, including Vedder Price’s and management’s assessment of areas of risk identified as part of the diligence process and its conclusions with respect to its review. Vedder Price also led a discussion regarding the voting and support agreement each director was being asked to sign.
Following this discussion, representatives of D.A. Davidson reviewed the financial aspects of the proposed merger and discussed in detail their financial analyses as of the date of the meeting, including those described under “— Opinion of NXT’s Financial Advisor.” In particular, it was noted that the implied aggregate transaction value, on a fully diluted basis and based on the contemporaneous trading price of HBT’s common stock, was approximately $42.8 million, with approximately 75% of the merger consideration payable in shares of HBT common stock and approximately 25% in cash. The implied value to NXT on a per share basis was $1,611 per share (based on closing price of HBT common stock on June 3, 2021). At this meeting, D.A. Davison delivered its written opinion to the NXT Board to the effect that, based upon and subject to various assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken as described in its opinion, the per share merger consideration was fair, from a financial point of view, to the holders of NXT common stock, as described under “— Opinion of NXT’s Financial Advisor.”
Following extensive discussion and after considering the foregoing and the proposed terms of the transaction documents, and taking into account the strategic rationale, financial terms, consideration to be received by NXT shareholders, integration risk and business rationale of consummating a merger with HBT, including the factors described in the section titled “— NXT’s Reasons for the Merger and Recommendation of the Board of Directors of NXT,” the NXT Board, having determined that the terms of the merger agreement and the transactions contemplated thereby, including the merger, were fair to and in the best interests of NXT and its shareholders, unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the merger and the per share merger consideration, at the meeting. The board directed that the merger agreement be submitted to holders of NXT’s common stock for approval, and recommended that holders of NXT common stock vote in favor of the approval of the merger agreement and the transactions contemplated thereby.
On June 4, 2021, the HBT Board held a special meeting to consider the proposed merger with NXT, including the financial terms of the proposed transaction and the transaction documents. Prior to discussing the above, Kirkland & Ellis reviewed the fiduciary duties of the HBT Board. The chairman of the HBT Board then discussed the strategic benefits of the proposed transaction with NXT. Following a comprehensive presentation by Piper Sandler, that included Piper Sandler’s financial analysis regarding the terms and impact of the proposed acquisition, Kirkland and senior management then lead a detailed discussion regarding the terms of the proposed transaction documents with specific emphasis on the pricing arrangements (including the possible adjustments to the transaction pricing), the protections included in the voting and support agreements to be executed by the directors, senior officers and certain significant shareholders of NXT and provided background regarding the negotiations with NXT. After management and outside counsel answered numerous questions and following discussion, the HBT Board determined that the terms of the merger agreement and the transactions were fair and in the best interests of HBT and its stockholders, unanimously adopted and approved, and declared advisable the merger agreement and the transactions contemplated thereby and directed senior management to finalize the transaction documents and, when appropriate to execute the documents, including the merger agreement.
Between June 4, 2021 and June 7, 2021, the parties continued to finalize remaining open items regarding the terms of the merger and the draft merger agreement.
 
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On June 7, 2021, the merger agreement and related documents were signed by the parties and HBT announced the transaction the afternoon of June 7 via a press release.
HBT’s Reasons for the Merger
In reaching its decision to adopt and approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the HBT board of directors evaluated the merger in consultation with HBT management and considered information provided by HBT’s financial and legal advisors, as well as a number of factors, including the following material factors:

management’s view that the acquisition of NXT provides an attractive opportunity to expand HBT’s presence into desirable Iowa markets;

NXT’s community banking orientation and its compatibility with HBT and its subsidiaries;

management’s assessment that NXT presents a strong banking franchise that is consistent with Heartland Bank’s relationship-based banking model while adding talent and depth to Heartland Bank’s operations;

management’s review of the business, operations, earnings and financial condition, including capital levels and asset quality, of NXT Bank;

management’s belief that NXT Bank’s core deposit base was strong and that a substantial portion of these deposits would be retained following completion of the merger;

management’s due diligence review of NXT and NXT Bank;

the projected earnings per share accretion expected to occur as a result of the proposed transactions;

the projected tangible book value earn-back period of less than one year, which is an important investor metric;

the expectation of management that HBT will maintain its strong capital ratios upon completion of the proposed transactions;

the fact that stockholders of NXT will have an opportunity to approve the merger;

projected efficiencies, including reductions in NXT’s total non-interest expense base, to come from integrating certain of NXT’s operations into HBT’s existing operations;

the financial and other terms of the merger agreement, including the exchange ratio for the merger consideration, the expected tax treatment and the deal protection and termination fee provisions, which HBT reviewed with its outside financial and legal advisors;

NXT Bank’s compatibility with Heartland Bank, which HBT management believes should facilitate integration and implementation of the merger and the bank merger, and the complementary nature of the products and customers of NXT Bank and Heartland Bank, which HBT management believes should provide the opportunity to mitigate integration risks and increase potential returns;

the nature and amount of payments and other benefits to be received by NXT and NXT Bank management in connection with the transactions pursuant to existing NXT benefit plans and compensation arrangements and the merger agreement;

the fact that, concurrently with the execution of the merger agreement, all of the directors of NXT who beneficially owned in the aggregate approximately 59.9% of NXT’s outstanding voting common stock, were entering into (i) voting and support agreements with HBT agreeing to vote for approval of the merger agreement and the transactions contemplated thereby and (ii) restrictive covenant agreements with HBT;

the fact that, concurrently with the execution of the merger agreement, certain NXT stockholders who beneficially owned in the aggregate an additional approximately 23.5% of NXT’s outstanding voting common stock, were entering into voting and support agreements with HBT agreeing to vote for approval of the merger agreement and the transactions contemplated thereby; and
 
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the fact that the regulatory and other approvals required to consummate the transactions and expected to be received in a reasonably timely manner and without the imposition of unacceptable conditions.
HBT’s board of directors believes that the merger and the merger agreement are advisable and in the best interests of HBT and its stockholders.
The foregoing discussion of the information and factors considered by HBT’s board of directors is not intended to be exhaustive, but includes a description of all material factors considered by HBT’s board of directors. HBT’s board of directors further considered various risks and uncertainties related to each of these factors and the ability to complete the merger. In view of the wide variety of factors considered by HBT’s board of directors in connection with its evaluation of the merger, HBT’s board of directors did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered. In considering the factors described above, individual directors may have given differing weights to different factors. HBT’s board of directors collectively made its determination with respect to the merger based on the conclusion reached by its members, based on the factors that each of them considered appropriate, that the merger is in the best interests of HBT stockholders and that the benefits expected to be achieved from the merger outweigh the potential risks and vulnerabilities.
It should be noted that this explanation of the HBT board of directors’ reasoning and all other information presented in this section includes information that is forward-looking in nature, and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements.”
NXT’s Reasons for the Merger and Recommendation of the Board of Directors of NXT
After careful consideration, the NXT Board, at a meeting held on June 4, 2021, unanimously determined that the merger agreement and the transactions contemplated by the merger agreement were advisable and in the best interests of NXT and its shareholders and approved the merger agreement and the transactions contemplated by the merger agreement, including the merger. The NXT Board has concluded that the merger offers NXT shareholders an attractive opportunity to achieve the board of directors’ strategic business objectives, including increasing shareholder value and enhancing liquidity for NXT shareholders. In addition, the NXT Board believes that the customers and communities served by NXT Bank will benefit from the merger. Accordingly, the NXT Board recommends that NXT shareholders vote “FOR” approval and adoption of the merger agreement at the NXT special meeting.
In reaching its decision, the NXT Board, with advice from NXT’s management, as well as its legal counsel, Vedder Price, and financial advisor, D.A. Davidson, considered a number of financial, legal and market factors, including the following:

the opportunity to provide liquidity for NXT shareholders upon receipt of the merger consideration in exchange for their NXT common stock, given that, for the entirety of its existence, NXT operated as a privately held company with no active trading market for its shares;

the composition of the per share merger consideration, which provides NXT shareholders with:

a cash component that provides the ability to realize immediate value for a portion of their shares of NXT common stock; and

stock consideration that offers the opportunity to participate in the future growth and opportunities of the combined company;

that the per share merger consideration is subject to possible downward adjustment between signing and closing in the event that certain environmental remediation costs with respect to NXT’s properties were to be required and such costs were to exceed certain amounts;

HBT’s active trading market on the Nasdaq Global Select Market, which will provide NXT shareholders liquidity with respect to the stock consideration received in the merger;

HBT’s history of paying quarterly dividends and its dividend yield;
 
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the market value of HBT common stock prior to the execution of the merger agreement and the prospects for future appreciation in the stock;

HBT’s experience as an acquiror of over a dozen financial institutions and track record of successfully integrating acquired financial institutions;

the NXT Board’s belief that NXT shareholders and customers will benefit from combining with a larger financial institution, including potentially being better equipped to respond to economic and financial services industry developments and better positioned to develop and build on its position in existing markets;

information with respect to the businesses, earnings, operations, financial condition, prospects, capital levels, loan portfolio and asset quality of NXT and HBT, both individually and as a combined company;

the fact that HBT was an out-of-market buyer, which would be much less likely lead to NXT branch closures and less employee overlap;

the NXT Board’s familiarity with, and understanding of, NXT’s business, results of operations, asset quality, operating markets, financial and market position and expectations concerning NXT’s future earnings and prospects;

the compatibility of NXT’s geographical footprint with that of HBT and the potential expansion of product and service availability to the customers of and communities currently served by NXT;

the complementary aspects and cultures of NXT’s and HBT’s businesses, including customer focus, geographic coverage, business orientation and operations, HBT’s strong deposit market share, low cost of funds and HBT’s strengths in relationship-based commercial lending;

the NXT Board’s understanding of the current and prospective environment in which NXT and HBT operate, including national, regional and local economic conditions, the interest rate environment, the competitive and regulatory environments for financial institutions generally, and the perceived risks and uncertainties attendant to NXT’s operation as an independent banking organization;

the financial presentation of NXT’s financial advisor, D.A. Davidson, to the NXT Board on June 4, 2021, and the delivery of the written opinion of D.A. Davidson, dated June 4, 2021, to the board of directors of NXT, to the effect that as of such date and based on and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in its opinion, the merger consideration was fair, from a financial point of view, to holders of NXT common stock, as further described under “— Opinion of NXT’s Financial Advisor”;

potential risks related to the merger, including:

the potential risk of diverting management’s attention and resources from the operation of NXT’s business to the merger, and the possibility of employee attrition or adverse effects on customer and business relationships as a result of the announcement and pendency of the merger;

the risks that certain of the conditions to the consummation of the merger set forth in the merger agreement would not be satisfied in a timely manner, or at all;

the potential risks and costs associated with successfully integrating NXT’s business, operations and employees with those of HBT, including the risk of not realizing all of the anticipated benefits of the merger or not realizing them in the expected time frame;

the risk that the merger may not be consummated or that the closing may be unduly delayed, including as a result of factors outside either party’s control;

that the announcement and/or consummation of the merger would result in key staff departures, potentially adversely impacting the operations of NXT Bank prior to the consummation of the merger and during the post-merger integration period;

the regulatory and other approvals required in connection with the merger, consideration of the relevant factors assessed by the regulators for the approvals and the parties’ evaluation of those factors,
 
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and the expectations that such approvals could be received in a reasonably timely manner and without the imposition of burdensome conditions;

the satisfactory results of NXT’s management’s reverse due diligence of HBT;

the right of the NXT shareholders to exercise dissenters’ rights, as further described under “Dissenters’ Rights of Appraisal of Holders of NXT Common Stock”;

the fact that the NXT directors and certain officers of NXT have interests in the merger that are different from or in addition to those of NXT shareholders; and

the fact that the receipt of the HBT common stock portion of the merger consideration may be tax-free to NXT shareholders based on the expected tax treatment of the merger as a “reorganization” for U.S. federal income tax purposes, as further described under “The Merger — Material Federal Income Tax Consequences of the Merger”.
The foregoing discussion of the information and factors considered by NXT’s board of directors is not intended to be exhaustive, but includes a summary of all material factors considered by NXT’s board of directors. NXT’s board of directors in approving the merger agreement further considered various risks and uncertainties related to each of these factors and the ability to complete the merger. In view of the wide variety of factors considered by the NXT Board in connection with its evaluation of the merger, the NXT Board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered. In considering the factors described above, individual directors may have given differing weights to different factors. The NXT Board collectively made its determination with respect to the merger based on the conclusion reached by its members, in light of factors that each of them considered appropriate, that the merger is in the best interests of NXT and NXT shareholders and that the benefits expected to be achieved from the merger were achievable and outweigh the potential risks and vulnerabilities. The NXT Board realized that there can be no assurance about future results, including results expected or considered in the factors listed above.
After considering the foregoing and other relevant factors and risks, and their overall impact on the shareholders and other constituencies of NXT, the NXT Board concluded that the anticipated benefits of the merger outweighed the anticipated risks of the transaction. Accordingly, the NXT Board unanimously approved and deemed advisable the merger agreement and the merger, and the board of directors unanimously recommends that NXT shareholders vote “FOR” the proposal to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger, and “FOR” the NXT adjournment proposal.
It should be noted that this explanation of the NXT Board reasoning and all other information presented in this section includes information that is forward-looking in nature, and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements.”
Opinion of NXT’s Financial Advisor
As of April 19, 2021, NXT entered into an engagement agreement with D.A. Davidson on an exclusive basis to render financial advisory and investment banking services to NXT in connection with NXT’s review of its financial and strategic alternatives, including through merger, sale or otherwise, by means of a merger, consolidation, reorganization or any other transaction of a like nature, regardless of form, with another person, corporation or business entity. As part of its engagement, Davidson agreed to assist NXT in analyzing, structuring, negotiating and, if appropriate, effecting a transaction between NXT and another person, corporation or business entity. D.A. Davidson also agreed to provide NXT’s board of directors with an opinion as to the fairness, from a financial point of view, to the holders of NXT’s Common Stock of the merger consideration to be paid to such holders in the proposed merger. NXT engaged Davidson because D.A. Davidson is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with NXT and its business. As part of its investment banking business, D.A. Davidson is continually engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.
 
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On June 4, 2021, NXT’s board of directors held a meeting to evaluate the proposed merger. At this meeting, D.A. Davidson reviewed the financial aspects of the proposed merger and rendered an opinion to NXT’s board that, as such date and based upon and subject to assumptions made, procedures followed, matters considered and limitations on the review undertaken, the merger consideration was fair, from a financial point of view, to such holders of NXT’s common stock in the proposed merger.
The full text of D.A. Davidson’s written opinion, dated June 4, 2021, is attached as Appendix B to this proxy statement/prospectus and is incorporated herein by reference. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion. NXT’s common shareholders are urged to read the opinion in its entirety.
D.A. Davidson’s opinion speaks only as of the date of the opinion and D.A. Davidson undertook no obligation to revise or update its opinion. The opinion is directed to NXT’s board of directors and addresses only the fairness, from a financial point of view, to the holders of NXT’s Common Stock of the merger consideration to be paid to such holders in the proposed merger. The opinion does not address, and D.A. Davidson expresses no view or opinion with respect to, (i) the underlying business decision of NXT to engage in the merger, (ii) the relative merits or effect of the merger as compared to any alternative business transactions or strategies that may be or may have been available to or contemplated by NXT or NXT’s board of directors, or (iii) any legal, regulatory, accounting, tax or similar matters relating to NXT, its shareholders or relating to or arising out of the merger. The opinion expresses no view or opinion as to any terms or other aspects of the merger, except for the merger consideration. NXT and HBT determined the merger consideration through a negotiated process. The opinion does not express any view as to the amount or nature of the compensation to any of NXT’s or HBT’s officers, directors or employees, or any class of such persons, relative to the merger consideration, or with respect to the fairness of any such compensation. The opinion has been reviewed and approved by D.A. Davidson’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.
D.A. Davidson has reviewed the registration statement on Form S-4 of which this proxy statement/prospectus is a part and consented to the inclusion of its opinion to NXT’s board of directors as Appendix B to this proxy statement/prospectus and to the references to D.A. Davidson and its opinion contained herein. A copy of the consent of D.A. Davidson is attached as Exhibit 99.1 to the registration statement on Form S-4.
In connection with rendering its opinion, D.A. Davidson reviewed, among other things, the following:

the draft of the merger agreement, dated June 2, 2021;

certain financial statements and other historical financial and business information about NXT and HBT made available to D.A. Davidson from published sources and/or from the internal records of NXT and HBT that D.A. Davidson deemed relevant;

internal projections and other financial and operating data concerning the business, operations, and prospects of NXT and HBT prepared by or at the direction of management of NXT or HBT, as approved for D.A. Davidson’s use by NXT and HBT;

the past and current business, operations, financial condition, and prospects of NXT and HBT, the strategic, financial, tax, and operational benefits expected to result from the merger, and other matters D.A. Davidson deemed relevant, with senior management of NXT and HBT;

certain publicly available analyst earnings estimates for HBT for the years ending December 31, 2021 and December 31, 2022 and for the years ending December 31, 2023, December 31, 2024, December 31, 2025, and December 31, 2026 based on growth rate assumptions provided by management, as discussed with and confirmed by senior management of HBT;

financial projections for NXT for the years ending December 31, 2021 and December 31, 2022 and for the years ending December 31, 2023, December 31, 2024, December 31, 2025, and December 31, 2026 based on growth rate assumptions provided by management, as discussed with and confirmed by senior management of NXT;
 
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the proposed financial terms of the merger with the publicly available financial terms of certain other mergers and acquisitions that D.A. Davidson deemed relevant;

the market and trading characteristics of selected public companies and selected public bank and thrift holding companies in particular that D.A. Davidson deemed relevant;

the current and historical market prices and trading activity of HBT’s Common Stock with that of certain other publicly-traded companies that D.A. Davidson deemed relevant;

the pro forma financial effects of the merger, taking into consideration the amounts and timing of merger costs, earnings estimates, potential cost savings, and other financial and accounting considerations in connection with the merger;

the value of the merger consideration to the valuation derived by discounting future cash flows and a terminal value of NXT’s business based upon NXT’s internal financial forecasts at discount rates that D.A. Davidson deemed appropriate;

the relative contributions of NXT and HBT to the combined company; and

such other financial studies, analyses, investigations, economic and market information regarding the banking industry, NXT and HBT that D.A. Davidson considered relevant including discussions with management and other representatives and advisors of NXT and HBT concerning the business, financial condition, results of operations and prospects of NXT and HBT.
In arriving at its opinion, D.A. Davidson has, with NXT’s consent, assumed and relied upon the accuracy and completeness of all information that was publicly available or supplied or otherwise made available to, discussed with or reviewed by or for D.A. Davidson. D.A. Davidson has not independently verified (nor has it assumed responsibility for independently verifying) such information or its accuracy or completeness. D.A. Davidson has relied on the assurances of management of NXT and HBT that they are not aware of any facts or circumstances that would make any of such information, forecasts or estimates inaccurate or misleading. D.A. Davidson has not undertaken or been provided with any independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of NXT or HBT. In addition, D.A. Davidson has not assumed any obligation to conduct, nor has it conducted, any physical inspection of the properties or facilities of NXT or HBT, and has not been provided with any reports of such physical inspections. D.A. Davidson has assumed that there has been no material change in NXT’s or HBT’s business, assets, financial condition, results of operations, cash flows or prospects since the date of the most recent financial statements provided to D.A. Davidson.
With respect to the financial projections and estimates (including information relating to the amounts and timing of the merger costs, cost savings, and revenue enhancements) provided to or otherwise reviewed by or for or discussed with D.A. Davidson, D.A. Davidson has been advised by management of NXT and management of HBT, and have assumed with NXT’s consent, that such projections and estimates were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of NXT and HBT as to the future financial performance of NXT and the other matters covered thereby, and that the financial results reflected in such projections and estimates will be realized in the amounts and at the times projected. D.A. Davidson assumes no responsibility for and expresses no opinion as to these projections and estimates or the assumptions on which they were based. D.A. Davidson has relied on the assurances of management of NXT and HBT that they are not aware of any facts or circumstances that would make any of such information, projections or estimates inaccurate or misleading.
D.A. Davidson does not specialize in the evaluation of loan and lease portfolios, classified loans or other real estate owned or in assessing the adequacy of the allowance for loan losses with respect thereto, and it did not make an independent evaluation or appraisal thereof, or of any other specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of NXT or HBT or any of their respective subsidiaries. D.A. Davidson has not reviewed any individual loan or credit files relating to NXT or HBT. D.A. Davidson has assumed, with NXT’s consent, that the respective allowances for loan and lease losses for both NXT and HBT are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. D.A. Davidson did not make an independent evaluation of the quality of NXT’s or HBT’s deposit base, nor has it independently evaluated potential deposit concentrations or the deposit composition of NXT or HBT. D.A. Davidson did not make an independent evaluation of the quality of NXT’s or HBT’s
 
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investment securities portfolio, nor has it independently evaluated potential concentrations in the investment securities portfolio of NXT or HBT.
D.A. Davidson has assumed that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct in all respects material to its analysis, and that the merger will be consummated in accordance with the terms of the merger agreement, without waiver, modification or amendment of any term, condition or covenant thereof the effect of which would be in any respect material to our analysis. D.A. Davidson has assumed the impact of any pending, potential or threatened litigation at NXT and HBT will not have a material impact on their respective operations. D.A. Davidson also has assumed that all material governmental, regulatory or other consents, approvals, and waivers necessary for the consummation of the merger will be obtained without any material adverse effect on NXT or the contemplated benefits of the merger. Further, D.A. Davidson has assumed that the executed Agreement will not differ in any material respect from the draft Agreement, dated June 2, 2021, reviewed by D.A. Davidson.
D.A. Davidson has assumed in all respects material to its analysis that NXT and HBT will remain as a going concern for all periods relevant to D.A. Davidson’s analysis. D.A. Davidson expresses no opinion regarding the liquidation value of NXT and HBT or any other entity.
D.A. Davidson’s opinion is limited to the fairness, from a financial point of view, of the merger consideration to be paid to the holders of NXT’s Common Stock (other than shares of NXT’s Common Stock held as a result of debts previously contracted, treasury shares and Dissenters’ Shares) in the proposed merger. D.A. Davidson does not express any view on, and our opinion does not address, any other term or aspect of the merger agreement or merger (including, without limitation, the form or structure of the merger) or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into in connection with the merger, or as to the underlying business decision by NXT to engage in the merger. Furthermore, D.A. Davidson expresses no opinion with respect to the amount or nature of any compensation to any officers, directors or employees of NXT or HBT, or any class of such persons, relative to the merger consideration to be paid to the holders of NXT’s Common Stock in the merger, or with respect to the fairness of any such compensation. D.A. Davidson’s opinion does not take into account individual circumstances of specific holders with respect to control, voting or other rights which may distinguish such holders.
D.A. Davidson expresses no view as to, and its opinion does not address, the relative merits of the merger as compared to any alternative business mergers or strategies, or whether such alternative mergers or strategies could be achieved or are available. D.A. Davidson notes that it was not authorized to and did not solicit any expressions of interest from any other parties with respect to the sale of all or any part of NXT or any other alternative merger or strategy. In addition, D.A. Davidson’s opinion does not address any legal, regulatory, tax or accounting matters, as to which D.A. Davidson understands that NXT obtained such advice as it deemed necessary from qualified professionals.
D.A. Davidson has not evaluated the solvency or fair value of NXT or HBT under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. This opinion is not a solvency opinion and does not in any way address the solvency or financial condition of NXT or HBT. D.A. Davidson is not expressing any opinion as to the impact of the merger on the solvency or viability of NXT or HBT or the ability of NXT or HBT to pay their respective obligations when they come due.
Set forth below is a summary of the material financial analyses performed by D.A. Davidson in connection with rendering its opinion. The summary of the analyses D.A. Davidson set forth below is not a complete description of the analysis underlying its opinion, and the order in which these analyses are described below is not indicative of any relative weight or importance given to those analyses by D.A. Davidson. The following summaries of financial analyses include information presented in tabular format. You should read these tables together with the full text of the summary financial analyses, as the tables alone are not a complete description of the analyses.
Unless otherwise indicated, the following quantitative information, to the extent it is based on market data, is based on pricing and market data as of June 3, 2021, and is not necessarily indicative of market conditions after such date.
 
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Implied Valuation Multiples for NXT based on the merger consideration
D.A. Davidson reviewed the financial terms of the proposed transaction. As described in the merger agreement, each share of NXT’s common stock (“NXT Common Stock”) that is issued and outstanding immediately prior to the Effective Time (other than shares of NXT Common Stock held as a result of debts previously contracted, treasury shares and Dissenters’ Shares) shall be converted into the right to receive the following: (i) Per Share Cash Consideration in the amount of $400.00; and (ii) Per Share Stock Consideration equal to 67.6783 duly authorized, validly issued, fully paid and non-assessable shares of HBT common stock (“HBT Common Stock”). Holders of NXT Common Stock shall have the right to receive the Per Share Cash Consideration and Per Share Stock Consideration in accordance with the merger agreement. The merger Consideration shall mean the aggregate sum of (A) the Per Share Cash Consideration and (B) the Per Share Stock Consideration payable to holders of NXT Common Stock pursuant to Section 2.1 of the merger agreement. The number of shares of NXT Common Stock to be converted into the right to receive the Per Share Cash Consideration shall be equal to $10,632,892.00 and the number of shares of NXT Common Stock to be converted into the right to receive the Per Share Stock Consideration shall be equal to 1,799,040 shares of HBT Common Stock. The terms and conditions of the merger are more fully set forth in the merger agreement. Based upon financial information as of or for the twelve month period ended March 31, 2021 and other financial and market information described below, D.A. Davidson calculated the following transaction ratios:
Transaction Ratios
Aggregate
Transaction Price / LTM Net Income
18.0x
Transaction Price / 2021E “Core” Net Income(1)(2)
19.8x
Transaction Price / Book Value (3/31/2021)
128.56%
Transaction Price / Tangible Book Value (3/31/2021)
134.05%
Transaction Price / Core 8% Tangible Book Value (3/31/2021)
156.57%
Tangible Book Premium / Core Deposits (3/31/2021)(3)
6.24%
(1)
Financial projections for Company based on management estimates in 2021
(2)
Excludes one-time items such as impact of PPP fees, security gains / losses, insurance proceeds, and accelerated depreciation due to branch closings
(3)
Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits
Stock Price Performance of HBT
D.A. Davidson reviewed the history of the reported trading prices and volume of HBT Common Stock and certain stock indices, including the S&P 500, the KBW Nasdaq Regional Bank Index and the NASDAQ Bank Index. D.A. Davidson compared the stock price performance of HBT with the performance of the S&P 500, the KBW Nasdaq Regional Banking Index and the NASDAQ Bank Index as follows:
Year-To-Date
Beginning Index
Value on
12/31/2020
Ending Index
Value on
6/3/2021
S&P 500
100.0% 111.6%
KBW Nasdaq Regional Banking Index
100.0% 135.8%
NASDAQ Bank
100.0% 135.8%
HBT
100.0% 118.1%
 
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One Year Stock Performance
Beginning Index
Value on
6/3/2020
Ending Index
Value on
6/3/2021
S&P 500
100.0% 134.3%
KBW Nasdaq Regional Banking Index
100.0% 168.5%
NASDAQ Bank
100.0% 170.0%
HBT
100.0% 133.5%
Post-COVID Stock Performance
Beginning Index
Value on
2/28/2020
Ending Index
Value on
6/3/2021
S&P 500
100.0% 141.9%
KBW Nasdaq Regional Banking Index
100.0% 146.1%
NASDAQ Bank
100.0% 145.6%
HBT
100.0% 115.6%
HBT Stock Performance Since IPO
Beginning Index
Value on
10/9/2019
Ending Index
Value on
6/3/2021
S&P 500
100.0% 143.6%
KBW Nasdaq Regional Banking Index
100.0% 135.4%
NASDAQ Bank
100.0% 137.8%
HBT
100.0% 111.8%
Contribution Analysis
D.A. Davidson analyzed the relative contribution of NXT and HBT to certain financial and operating metrics for the pro forma combined company. Such financial and operating metrics included: (i) NXT’s net income for the twelve months ended March 31, 2021 and NXT’s estimated net income for the twelve months ended December 31, 2021 based on NXT management projections; (ii) HBT’s net income for the twelve months ended March 31, 2021 and HBT’s estimated net income for the twelve months ended December 31, 2021 based on publicly available analyst earnings estimates; (iii) total assets; (iv) total investment securities; (v) gross loans (including loans held for sale); (vi) loan loss reserve; (vii) total deposits; (viii) non-interest bearing demand deposits; (ix) non-maturity deposits; and (x) tangible common equity. The relative contribution analysis did not give effect to the impact of any synergies as a result of the proposed merger. The results of this analysis are summarized in the table below, which also compares the results of this analysis with the implied pro forma ownership percentages of NXT’s or HBT’s shareholders in the combined company based on the merger consideration:
 
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Contribution Analysis
HBT
Stand-alone(1)
HBT
% of Total
NXT
Stand-alone(2)(3)
NXT
% of Total
Income Statement – Historical
LTM Net Income (in thousands)
$ 45,869 95.1% $ 2,373 4.9%
Income Statement – Projections
“Core” Net Income (2021E)
$ 49,043 95.8% $ 2,162 4.2%
Balance Sheet
Total Assets (in thousands)
$ 3,865,614 93.8% $ 254,381 6.2%
Total Investment Securities (in thousands)
$ 1,058,376 97.7% $ 24,888 2.3%
Gross Loans, Incl. Loans HFS (in thousands)
$ 2,283,587 92.0% $ 198,215 8.0%
Loan Loss Reserve (in thousands)
$ 28,759 90.1% $ 3,168 9.9%
Total Deposits (in thousands)
$ 3,355,966 94.8% $ 184,177 5.2%
Non-Interest Bearing Demand Deposits (in thousands)
$ 968,991 95.8% $ 42,556 4.2%
Non-CDs (in thousands)
$ 3,070,505 95.9% $ 132,349 4.1%
Tangible Common Equity (3/31/2021) (in thousands)
$ 331,277 91.2% $ 31,943 8.8%
Pro Forma Ownership
Pro Forma Ownership Split (at 67.6783x Exchange
Ratio)
93.8% 6.2%
Note: Pro forma contribution does not include any purchase accounting or merger adjustments
(1)
Financial projections for HBT based on Consensus estimates in 2021
(2)
Financial projections for NXT based on management estimates in 2021
(3)
NXT “Core” net income in 2021 excludes one-time items such as impact of PPP fees, security gains / losses, insurance proceeds and accelerated depreciation due to branch closings
NXT Comparable Companies Analysis
D.A. Davidson used publicly available information to compare selected financial and market trading information for a group of 20 financial institutions selected by D.A. Davidson which: (i) were headquartered in in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin; (ii) had their common stock listed on the NYSE, NASDAQ or an over-the-counter exchange; (iii) had assets between $100 million and $500 million; (iv) had Non-Performing Assets / Assets less than 0.5%; (v) had Tangible Common Equity / Tangible assets greater than 8.0%; (vi) had a return on average assets greater than 0.0%; and (vii) were not pending merger targets. The 20 financial institutions were as follows:
Benton Financial Corp.
Century Financial Corp.
Citizens Commerce Bcshs Inc
CSB Bancorp
Eastern Michigan Fncl. Corp
FFBW, Inc.
First Bancshares Inc.
First Bank of Ohio
First Niles Financial Inc.
FNB Inc.
Grand River Commerce Inc.
HCB Financial Corp.
Home Bancorp Wisconsin Inc.
Huron Valley Bancorp Inc.
Liberty Bancshares (Ada OH)
Madison County Financial Inc.
Ottawa Bancorp Inc.
The First Citizens National Bank of Upper Sandusky
Third Century Bancorp
WCF Bancorp Inc.
The analysis compared the financial condition and market performance of NXT and the 20 financial institutions identified above based on publicly available financial and market trading information for NXT
 
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and the 20 financial institutions as of and for the twelve-month or three-month period ended March 31, 2021. The analysis did not reflect the impact from pending acquisitions or acquisitions closed after March 31, 2021. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by D.A. Davidson).
Financial Condition and Performance
Comparable Companies
NXT
Median
Average
Low
High
Total Assets (in millions)
$ 254 $ 331 $ 324 $ 110 $ 494
Loan / Deposit Ratio
107.6% 85.9% 80.5% 51.2% 111.2%
Non-Performing Assets / Total Assets(1)
0.01% 0.21% 0.21% 0.00% 0.48%
Tangible Common Equity Ratio
12.62% 10.33% 13.12% 8.10% 31.64%
Net Interest Margin (LTM)
3.23% 3.43% 3.35% 2.09% 5.05%
Cost of Deposits (LTM)
0.60% 0.47% 0.50% 0.08% 1.27%
Non-Interest Income / Assets (LTM)
0.49% 0.52% 0.68% 0.13% 1.73%
Efficiency Ratio (LTM)
59.8% 67.0% 68.2% 36.6% 94.3%
Return on Average Equity (LTM)
7.32% 9.37% 8.19% 0.87% 13.95%
Return on Average Assets (LTM)
0.93% 0.99% 0.98% 0.17% 1.69%
Market Performance Multiples
Comparable Companies
Median
Average
Low
High
Market Capitalization (in millions)
$ 28.9 $ 34.9 $ 12.0 $ 87.8
Price Change (LTM)
18.1% 20.1% -56.7% 81.1%
Price Change (YTD)
8.1% 10.4% -0.6% 43.6%
Price / LTM Earnings
10.1x 10.9x 7.9x 25.3x
Price / Tangible Book Value
87.4% 86.8% 45.9% 117.4%
Price / Core 8% Tangible Book Value
91.3% 87.0% 44.5% 119.9%
Tangible Book Premium / Core Deposits(2)
-1.64% -3.43% -27.00% 2.38%
Dividend Yield (Most Recent Quarter)
2.43% 2.65% 1.62% 4.07%
Average Daily Volume (in thousands)
$ 7 $ 12 $ $ 104
(1)
Non-Performing Assets / Total Assets includes performing troubled debt restructurings (TDRs)
(2)
Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits
HBT Comparable Companies Analysis
D.A. Davidson used publicly available information to compare selected financial and market trading information for HBT and a group of 27 financial institutions selected by D.A. Davidson which: (i) were headquartered in in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin; (ii) had their common stock listed on the NASDAQ or NYSE; (iii) had assets between $2.0 billion and $6.0 billion; (iv) had a return on average assets greater than 0.0%; and (v) were not pending merger targets. These 27 financial institutions were as follows:
 
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Alerus Financial Corporation
Bank First Corporation
Bridgewater Bancshares, Inc.
ChoiceOne Financial Services
Civista Bancshares, Inc.
Community Trust Bancorp, Inc.
CrossFirst Bankshares
Farmers National Banc Corp.
First Business Financial Services
First Financial Corporation
First Internet Bancorp
First Mid Bancshares
German American Bancorp, Inc.
Great Southern Bancorp, Inc.
Independent Bank Corporation
Level One Bancorp
Macatawa Bank Corporation
Mercantile Bank Corporation
MidWestOne Financial Group
Nicolet Bankshares, Inc.
Old Second Bancorp, Inc.
Peoples Bancorp Inc.
QCR Holdings, Inc.
Southern Missouri Bancorp, Inc.
Stock Yards Bancorp, Inc.
Waterstone Financial
West Bancorporation, Inc.
The analysis compared the financial condition and market performance of HBT and the 27 financial institutions identified above based on publicly available financial and market trading information for HBT and the 27 financial institutions as of and for the twelve-month or three-month period ended March 31, 2021. The analysis also compared the 2021 and 2022 earnings per share multiples for HBT and the 27 financial institutions identified above based on publicly available analyst earnings estimates for HBT and the 27 financial institutions. The analysis did not reflect the impact from pending acquisitions or acquisitions closed after March 31, 2021. The table below shows the results of this analysis (excluding the impact of earnings per share multiples considered not meaningful by D.A. Davidson).
Financial Condition and Performance
Comparable Companies
HBT
Median
Average
Low
High
Total Assets (in millions)
$ 3,866 $ 4,189 $ 4,023 $ 2,070 $ 5,998
Loan / Deposit Ratio
67.7% 83.6% 83.0% 56.7% 117.5%
Non-Performing Assets / Total Assets(1)
0.57% 0.49% 0.56% 0.03% 1.62%
Tangible Common Equity Ratio
8.63% 8.86% 9.22% 6.13% 19.57%
Net Interest Margin (LTM)
3.41% 3.26% 3.24% 1.81% 3.81%
Cost of Deposits (LTM)
0.11% 0.37% 0.44% 0.10% 1.43%
Non-Interest Income / Assets (LTM)
1.11% 1.13% 1.65% 0.13% 12.19%
Efficiency Ratio (LTM)
55.9% 55.0% 54.2% 40.2% 66.8%
Return on Average Equity (LTM)
12.88% 11.59% 12.34% 3.36% 24.03%
Return on Average Assets (LTM)
1.28% 1.22% 1.34% 0.37% 4.40%
 
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Market Performance Multiples
Comparable Companies
HBT
Median
Average
Low
High
Market Capitalization (in millions)
$ 489.6 $ 511.9 $ 569.1 $ 201.9 $ 1,223.1
Price Change (LTM)
33.5% 51.1% 48.1% -13.7% 103.5%
Price Change (YTD)
18.1% 25.1% 25.7% -16.0% 50.8%
Price / LTM Earnings
10.8x 10.9x 11.8x 5.1x 18.7x
Price / Tangible Book Value
147.9% 138.9% 157.4% 98.4% 285.2%
Price / Core 8% Tangible Book Value
151.5% 147.7% 164.9% 98.4% 309.9%
Tangible Book Premium / Core Deposits(2)
4.85% 5.24% 6.55% -0.18% 19.72%
Dividend Yield (Most Recent Quarter)
3.35% 2.35% 2.33% 0.29% 4.63%
Average Daily Volume (in thousands)
$ 527 $ 1,494 $ 1,592 $ 493 $ 3,127
(1)
Non-Performing Assets / Total Assets includes performing troubled debt restructurings (TDRs)
(2)
Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits
Precedent Transactions Analysis
D.A. Davidson reviewed three sets of precedent merger and acquisition transactions. The sets of mergers and acquisitions included: (1) “Iowa Transactions,” ​(2) “Overcapitalized Transactions” and “Post-COVID Transactions”.
“Iowa Transactions” included 10 transactions where:

the selling company was a bank or thrift headquartered in Iowa;

the selling company’s total assets were less than $1 billion;

the transaction was announced between January 1, 2012 and June 3, 2021;

the transaction’s pricing information was publicly available;

the buying company was not an investor group; and

the transaction was not a merger of equals.
“Overcapitalized Transaction” included 24 transactions where:

the selling company was a bank headquartered in the United States;

the selling company’s total assets were between $100 million and $500 million;

the selling company’s return on average assets over the last twelve months was greater than 0.00%;

the selling company’s Tangible Common Equity / Tangible Assets was greater than 10%;

the selling company’s Non-Performing Assets / Assets was less than 0.5%;

the transaction was announced between January 1, 2019 and June 3, 2021;

the transaction’s pricing information was publicly available;

the buying company was not an investor group; and,

the transaction was not a merger of equals.
“Post-COVID Transactions” included 29 transactions where:

the selling company was a bank headquartered in the United States;

the selling company’s total assets were less than $500 million;
 
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the transaction was announced between March 1, 2020 and June 3, 2021;

the transaction’s pricing information was publicly available; and,

the transaction was not a merger of equals.
The following tables set forth the transactions included in “Iowa Transactions,” “Overcapitalized Transactions” and “Post-COVID Transactions” and are sorted by announcement date:
Iowa Transactions
Announcement Date
Acquirer
Target
7/29/2019
5/15/2019
4/19/2018
1/12/2018
6/08/2017
5/23/2016
4/05/2016
4/24/2013
2/14/2013
3/13/2012
Ames National Corporation
Midstates Bancshares, Inc.
Ames National Corporation
Chebelle Corporation
QCR Holdings, Inc.
QCR Holdings, Inc.
Community Bancshares Corp.
Triumph Consolidated
QCR Holdings, Inc.
National Australia Bank
Iowa Savings Bank
F&M State Bank Neola
Clarke County State Bank
Victor State Bank
Guaranty B&T Company
Community State Bank
IT&S of Iowa, Inc.
National Bancshares
Community National Bancorp.
North Central Bancshares
Overcapitalized Transactions
Announcement Date
Acquirer
Target
5/04/2021*
4/27/2021*
2/26/2021*
1/28/2021*
1/25/2021
3/25/2020
1/23/2020
1/21/2020
1/08/2020
12/18/2019
9/17/2019
9/17/2019
9/16/2019
8/13/2019
8/13/2019
8/09/2019
7/25/2019
7/24/2019
7/22/2019
5/31/2019
5/28/2019
5/17/2019
5/09/2019
2/05/2019
Farmers & Merchants Bancorp, Inc.
Southern California Bancorp
Fidelity D & D Bancorp, Inc.
CBB Bancorp, Inc.
Investar Holding Corporation
Community Bancorp, Inc.
Seacoast Banking Corp. of FL
Pinnacle Bankshares Corp.
First Illinois Bancorp, Inc.
Cambridge Financial Group
Summit Financial Group, Inc.
FB Financial Corporation
Reliant Bancorp, Inc.
Level One Bancorp, Inc.
Indiana Members Credit Union
Eagle Bancorp Montana, Inc.
South Plains Financial, Inc.
Banner Corporation
First Bancshares, Inc.
Dickinson Financial Corp. II
Santa Cruz County Bank
Capitol Bancorporation, Inc.
Allegheny Bancshares, Inc.
United Community Banks
Perpetual F. S. B.
Bank of Santa Clarita
Landmark Bancorp, Inc.
Ohana Pacific Bank
Cheaha Financial Group
Lincoln Bancshares, Inc.
Fourth Street Banking Co.
Virginia Bank Bankshares
Rockwood Bancshares
Melrose Bancorp, Inc.
Cornerstone Fin. Services
FNB Financial Corp.
TN Comm. Bank Holdings
Ann Arbor Bancorp, Inc.
Commerce Bank
Western HoldCo Wolf Point
West Texas State Bank
AltaPacific Bancorp
First Florida Bancorp, Inc.
KCB Bank
Lighthouse Bank
Advantage Bank
Mount Hope Bankshares
First Madison Bank & Trust
*
Indicates the transaction was pending as of June 3, 2021
 
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Post-COVID Transactions
Announcement Date
Acquirer
Target
5/06/2021
5/04/2021*
4/27/2021*
4/14/2021*
3/16/2021*
3/16/2021*
3/11/2021*
3/09/2021*
3/08/2021*
2/26/2021*
2/18/2021*
1/28/2021*
1/25/2021
12/21/2020
12/16/2020
11/20/2020
11/05/2020
10/09/2020
5/06/2021
9/28/2020
8/19/2020*
7/28/2020
6/18/2020
4/30/2020
3/25/2020*
3/25/2020
3/06/2020
3/03/2020
3/02/2020
Investor Group
Farmers & Merchants Bancorp, Inc.
Southern California Bancorp
SmartFinancial, Inc.
United Bancorp. of Alabama
DLP Real Estate Capital, Inc.
Plumas Bancorp
Social Finance, Inc.
Investor Group
Fidelity D & D Bancorp, Inc.
First National Corporation
CBB Bancorp, Inc.
Investar Holding Corporation
F. & M. Bancorp
PSB Holdings, Inc.
OakStar Bancshares, Inc.
People’s Bank of Commerce
Community First Bancorp.
Investor Group
Summit Financial Group, Inc.
Crane Credit Union
FFBW, Inc.
BV Financial, Inc. (MHC)
Tinker Federal Credit Union
ST Hldgs, Inc.
Community Bancorp, Inc.
Farmers and Merchants Bncs.
PBT Bancshares, Inc.
South Porte Financial Inc.
Delta Bncs. of Louisiana
Perpetual F. S. B.
Bank of Santa Clarita
Sevier County Bncs.
Town-Country Nat. Bank
Sunnyside Bancorp, Inc.
Feather River Bancorp, Inc.
Golden Pacific Bancorp
Northern Calif. Nat. Bank
Landmark Bancorp, Inc.
Bank of Fincastle
Ohana Pacific Bank
Cheaha Financial Group
Ossian Financial Services
Waukesha Bankshares
First Bancshares, Inc.
Willamette Comm. Bank
SFB Bancorp, Inc.
Delta Bncs. of Louisiana
WinFirst Financial Corp.
Our Community Bank
Mitchell Bank
Delmarva Bancshares
Prime Bank
Rochelle State Bank
Lincoln Bancshares, Inc.
Carroll Bancorp, Inc.
Community Bank of MW
SouthernTrust Bancshares
*
Indicates the transaction was pending as of June 3, 2021
For each transaction referred to above, D.A. Davidson compared, among other things, the following implied ratios:

transaction price compared to tangible book value, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

transaction price compared to core 8% tangible book value, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction;

transaction price compared to net income for the last twelve months, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction and;

tangible book premium to core deposits, based on the latest publicly available financial statements of the target company prior to the announcement of the transaction.
As illustrated in the following table, D.A. Davidson compared the proposed merger multiples to the multiples of the comparable transaction groups and other operating financial data where relevant. The table below sets forth the data for the comparable transaction groups as of the last twelve months ended prior to the transaction announcement and NXT data for the last twelve months ended March 31, 2021.
 
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Financial Condition and Performance
Iowa
Overcapitalized
Post-COVID
NXT
Median
Average
Low
High
Median
Average
Low
High
Median
Average
Low
High
Total Assets (in millions)
$ 254.4 $ 237.0 $ 309.3 $ 53.4 $ 950.6 $ 256.5 $ 280.7 $ 100.2 $ 451.0 $ 175.5 $ 191.2 $ 29.4 $ 424.0
Return on Average Assets (LTM)
0.93% 0.75% 0.87% 0.46% 1.99% 1.19% 1.19% 0.38% 2.12% 0.68% 0.76% -0.75% 1.94%
Return on Average Equity (LTM)
7.32% 7.24% 7.54% 5.01% 12.35% 9.69% 9.90% 2.93% 17.99% 6.65% 6.70% -4.16% 18.33%
Tangible Common Equity Ratio
12.62% 9.30% 8.65% 4.06% 11.48% 11.69% 12.37% 10.23% 20.08% 10.85% 11.37% 5.65% 20.08%
Core Deposits / Deposits
94.7% 92.2% 93.3% 88.1% 99.6% 86.1% 85.2% 58.3% 98.5% 87.9% 85.9% 58.3% 100.0%
Loans / Deposits
107.6% 81.2% 79.2% 44.9% 92.4% 87.3% 83.0% 29.7% 109.3% 82.2% 79.5% 35.1% 131.0%
Non-Interest Income / Assets
(LTM)
48.60% 0.76% 0.82% 0.23% 1.69% 0.45% 0.46% 0.00% 1.10% 0.42% 0.52% 0.00% 2.89%
Efficiency Ratio (LTM)
59.8% 71.0% 67.6% 21.2% 84.1% 62.3% 62.2% 41.3% 82.0% 70.1% 72.0% 39.9% 118.3%
Non-Performing Assets / Total
Assets(1)
0.01% 1.27% 1.61% 0.00% 3.61% 0.17% 0.20% 0.00% 0.48% 0.72% 1.04% 0.00% 3.75%
Loan Loss Reserves / Non-Performing
Assets
NM 74.5% 67.3% 31.0% 112.6% 261.8% 331.2% 150.4% 754.0% 95.2% 119.3% 11.2% 267.7%
Transaction Multiples
Iowa
Overcapitalized
Post-COVID
NXT
Median
Average
Low
High
Median
Average
Low
High
Median
Average
Low
High
Transaction Price / Tangible Book
Value
134.1% 123.5% 114.9% 44.9% 157.9% 142.8% 143.1% 96.2% 180.6% 128.2% 131.5% 57.1% 180.1%
Transaction Price / Core 8% Tangible Book Value
156.6% 121.7% 127.7% 92.3% 166.0% 172.1% 169.4% 94.3% 236.6% 140.9% 148.8% 101.4% 242.5%
Transaction Price / LTM Earnings
18.0x 14.2x 14.8x 4.3x 27.4x 15.5x 16.3x 10.8x 28.1x 15.6x 16.0x 8.5x 24.1x
Tangible Book Premium / Core
Deposits(2)
6.24% 2.49% 2.12% -7.62% 9.02% 8.81% 8.55% -0.53% 18.44% 5.17% 5.73% -9.19% 21.76%
(1)
Non-Performing Assets / Total Assets includes performing troubled debt restructurings (TDRs)
(2)
Tangible Book Premium / Core Deposits calculated by dividing the excess or deficit of the aggregate transaction value compared to tangible book value by core deposits
Net Present Value Analysis for Standalone Company
D.A. Davidson performed an analysis that estimated the net present value per share of NXT Common Stock under various circumstances. The analysis assumed: (i) NXT performed in accordance with NXT management’s financial projections for the year ending December 31, 2021; and (ii) NXT performed in accordance with D.A. Davidson Investment Banking assumptions as discussed with and confirmed by NXT senior management for the years ending December 31, 2022, December 31, 2023, December 31, 2024, December 31, 2025 and December 31, 2026. To approximate the terminal value of NXT Common Stock at December 31, 2026, D.A. Davidson applied price to earnings multiples ranging from 10.0x to 20.0x and multiples of tangible book value ranging from 100.0% to 170.0%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 8.86% to 20.86% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of NXT Common Stock. In evaluating the discount rate, D.A. Davidson used industry standard methods of adding the current risk-free rate, which is based on the 10-year Treasury yield, plus the published Duff & Phelps Industry Equity Risk Premium and plus the published Duff & Phelps Size Premium.
At the June 4, 2021 NXT board of directors meeting, D.A. Davidson noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.
 
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As illustrated in the following tables, the analysis indicates an imputed range of values per share of NXT Common Stock of $375.18 to $1,369.88 when applying the price to earnings multiples to the financial forecasts and $589.47 to $1,829.45 when applying the multiples of tangible book value to the financial forecasts.
Earnings Per Share Multiple
Discount Rate
10.0x
11.4x
12.9x
14.3x
15.7x
17.1x
18.6x
20.0x
8.86%
$ 684.94 $ 782.79 $ 880.64 $ 978.49 $ 1,076.33 $ 1,174.18 $ 1,272.03 $ 1,369.88
10.86%
$ 616.80 $ 704.91 $ 793.02 $ 881.14 $ 969.25 $ 1,057.36 $ 1,145.48 $ 1,233.59
12.86%
$ 556.47 $ 635.97 $ 715.46 $ 794.96 $ 874.46 $ 953.95 $ 1,033.45 $ 1,112.94
14.86%
$ 502.96 $ 574.81 $ 646.66 $ 718.51 $ 790.36 $ 862.21 $ 934.06 $ 1,005.91
16.86%
$ 455.38 $ 520.44 $ 585.49 $ 650.55 $ 715.60 $ 780.66 $ 845.71 $ 910.77
18.86%
$ 413.00 $ 472.00 $ 531.01 $ 590.01 $ 649.01 $ 708.01 $ 767.01 $ 826.01
20.86%
$ 375.18 $ 428.78 $ 482.38 $ 535.97 $ 589.57 $ 643.17 $ 696.76 $ 750.36
Tangible Book Value Per Share Multiple
<
Discount Rate
100.0%
110.0%
120.0%
130.0%
140.0%
150.0%
160.0%
170.0%
8.86%
$ 1,076.15 $ 1,183.76 $ 1,291.38 $ 1,398.99 $ 1,506.61 $ 1,614.22 $ 1,721.83 $ 1,829.45
10.86%
$ 969.08 $ 1,065.99