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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39085

HBT Financial, Inc.

(Exact name of registrant as specified in its charter)


Delaware	37-1117216
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

401 North Hershey Rd Bloomington, Illinois 61704	(888) 897-2276
(Address of principal executive offices, including zip code)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HBT	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 2, 2022, there were 28,752,626 shares outstanding of the registrant’s common stock, $0.01 par value.

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TABLE OF CONTENTS
HBT Financial, Inc.

		Page

PART I. FINANCIAL INFORMATION		3
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statement of Changes in Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	86
Item 4.	Controls and Procedures	87
PART II. OTHER INFORMATION		88
Item 1.	Legal Proceedings	88
Item 1A.	Risk Factors	88
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88
Item 3.	Defaults Upon Senior Securities	88
Item 4.	Mine Safety Disclosures	89
Item 5.	Other Information	89
Item 6.	Exhibits	89

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this quarterly report are forward-looking statements. Forward-looking statements may include statements relating to our plans, strategies and expectations, the economic impact of the COVID-19 pandemic and our future financial results, near-term loan growth, net interest margin, mortgage banking profits, wealth management fees, expenses, asset quality, capital levels, continued earnings, and liquidity. Forward-looking statements are generally identifiable by use of the words "believe," "may," "will," "should," "could," "expect," "estimate," "intend," "anticipate," "project," "plan" or similar expressions. Forward-looking statements are frequently based on assumptions that may or may not materialize and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or prospects include, but are not limited to:

●

the strength of the local, state, national and international economies (including effects of inflationary pressures and supply chain constraints);

●

the economic impact of any future terrorist threats and attacks, widespread disease or pandemics (including the COVID-19 pandemic in the United States), acts of war or other threats thereof, or other adverse external events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events;

●

our asset quality and any loan charge-offs;

●

the composition of our loan portfolio;

●

environmental liability associated with our lending activities;

●

the effects of changes in interest rates on our net interest income, net interest margin, our investments, our loan originations, and our modeling estimates relating to interest rate changes;

●

changes in and uncertainty related to benchmark interest rates used to price our loans, including the elimination of the London Interbank Offered Rate (“LIBOR”);

●

our access to sources of liquidity and capital to address our liquidity needs;

●

our inability to receive dividends from the Bank, pay dividends to our common stockholders or satisfy obligations as they become due;

●

the effects of problems encountered by other financial institutions;

●

our ability to achieve organic loan and deposit growth and the composition of such growth;

●

our ability to attract and retain skilled employees or changes in our management personnel;

●

any failure or interruption of our information and communications systems;

●

our ability to identify and address cybersecurity risks;

●

the effects of the failure of any component of our business infrastructure provided by a third party;

●

our ability to keep pace with technological changes;

●

our ability to successfully develop and commercialize new or enhanced products and services;

●

current and future business, economic and market conditions in the United States (“U.S.”) generally or in the States of Illinois and Iowa in particular;

●

the geographic concentration of our operations in the States of Illinois and Iowa;

●

our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business;

●

our ability to attract and retain customer deposits;

●

our ability to maintain the Bank’s reputation;

●

possible impairment of our goodwill and other intangible assets;

●

the impact of, and changes in applicable laws, regulations and accounting standards and policies;

●

our prior status as an S corporation;

●

possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations;

●

the effectiveness of our risk management and internal disclosure controls and procedures;

●

market perceptions associated with certain aspects of our business;

●

our ability to meet our obligations as a public company, including our obligations under Section 404 of the Sarbanes-Oxley Act of 2002;

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●

damage to our reputation from any of the factors described above;

●

our success at managing the risks involved in the foregoing items; and

●

the factors discussed in “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations" or elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange (“SEC”) Commission on March 11, 2022.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made.

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PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)


	(Unaudited)
	September 30,		December 31,
	2022		2021
ASSETS
Cash and due from banks	$	22,169	$	23,387
Interest-bearing deposits with banks		56,046		385,881
Cash and cash equivalents		78,215		409,268

Interest-bearing time deposits with banks		—		490
Debt securities available-for-sale, at fair value		853,740		942,168
Debt securities held-to-maturity (fair value of $481,692 in 2022 and $336,027 in 2021)		546,694		336,185
Equity securities with readily determinable fair value		2,996		3,443
Equity securities with no readily determinable fair value		1,977		1,927
Restricted stock, at cost		4,050		2,739
Loans held for sale		2,297		4,942

Loans, before allowance for loan losses		2,579,928		2,499,689
Allowance for loan losses		(25,060)		(23,936)
Loans, net of allowance for loan losses		2,554,868		2,475,753

Bank owned life insurance		7,515		7,393
Bank premises and equipment, net		50,854		52,483
Bank premises held for sale		281		1,452
Foreclosed assets		2,637		3,278
Goodwill		29,322		29,322
Core deposit intangible assets, net		1,210		1,943
Mortgage servicing rights, at fair value		10,440		7,994
Investments in unconsolidated subsidiaries		1,165		1,165
Accrued interest receivable		16,881		14,901
Other assets		48,182		17,408
Total assets	$	4,213,324	$	4,314,254

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	1,017,710	$	1,087,659
Interest-bearing		2,625,733		2,650,526
Total deposits		3,643,443		3,738,185

Securities sold under agreements to repurchase		48,130		61,256
Federal Home Loan Bank advances		60,000		—
Subordinated notes		39,376		39,316
Junior subordinated debentures issued to capital trusts		37,763		37,714
Other liabilities		25,539		25,902
Total liabilities		3,854,251		3,902,373

COMMITMENTS AND CONTINGENCIES (Note 14)

Stockholders' Equity
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding		—		—
Common stock, $0.01 par value; 125,000,000 shares authorized; shares issued of 29,308,491 at 2022 and 29,276,547 at 2021; shares outstanding of 28,752,626 at 2022 and 28,986,061 at 2021		293		293
Surplus		222,436		220,891
Retained earnings		223,495		194,132
Accumulated other comprehensive income (loss)		(77,462)		1,471
Treasury stock at cost, 555,865 shares at 2022 and 290,486 at 2021		(9,689)		(4,906)
Total stockholders’ equity		359,073		411,881
Total liabilities and stockholders’ equity	$	4,213,324	$	4,314,254

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

INTEREST AND DIVIDEND INCOME	(dollars in thousands, except per share data)
Loans, including fees:
Taxable	$	29,855	$	25,604	$	84,504	$	76,016
Federally tax exempt		842		572		2,183		1,722
Securities:
Taxable		6,635		4,632		16,947		12,323
Federally tax exempt		1,207		1,103		3,385		3,383
Interest-bearing deposits in bank		458		190		1,037		385
Other interest and dividend income		17		14		50		39
Total interest and dividend income		39,014		32,115		108,106		93,868

INTEREST EXPENSE
Deposits		587		564		1,662		1,821
Securities sold under agreements to repurchase		9		8		26		23
Borrowings		85		1		87		2
Subordinated notes		470		470		1,409		1,409
Junior subordinated debentures issued to capital trusts		473		357		1,231		1,069
Total interest expense		1,624		1,400		4,415		4,324
Net interest income		37,390		30,715		103,691		89,544
PROVISION FOR LOAN LOSSES		386		(1,667)		(53)		(7,234)
Net interest income after provision for loan losses		37,004		32,382		103,744		96,778

NONINTEREST INCOME
Card income		2,569		2,509		7,687		7,216
Wealth management fees		2,059		2,036		6,670		6,013
Service charges on deposit accounts		1,927		1,677		5,371		4,364
Mortgage servicing		697		699		2,016		2,095
Mortgage servicing rights fair value adjustment		351		40		2,446		1,425
Gains on sale of mortgage loans		354		1,257		1,267		4,919
Unrealized gains (losses) on equity securities		(107)		28		(447)		74
Gains (losses) on foreclosed assets		(225)		(14)		(192)		126
Gains (losses) on other assets		(31)		(672)		119		(719)
Income on bank owned life insurance		41		—		122		—
Other noninterest income		599		832		1,769		2,461
Total noninterest income		8,234		8,392		26,828		27,974

NONINTEREST EXPENSE
Salaries		12,752		11,835		38,489		36,486
Employee benefits		1,771		1,455		6,199		4,549
Occupancy of bank premises		1,979		1,610		5,780		5,011
Furniture and equipment		668		657		1,843		1,883
Data processing		1,631		1,767		5,274		5,176
Marketing and customer relations		880		883		2,936		2,291
Amortization of intangible assets		243		252		733		799
FDIC insurance		302		279		888		763
Loan collection and servicing		336		400		771		1,098
Foreclosed assets		97		242		260		704
Other noninterest expense		3,339		2,787		8,824		8,105
Total noninterest expense		23,998		22,167		71,997		66,865
INCOME BEFORE INCOME TAX EXPENSE		21,240		18,607		58,575		57,887
INCOME TAX EXPENSE		5,613		4,892		15,259		15,210
NET INCOME	$	15,627	$	13,715	$	43,316	$	42,677

EARNINGS PER SHARE - BASIC	$	0.54	$	0.50	$	1.50	$	1.56
EARNINGS PER SHARE - DILUTED	$	0.54	$	0.50	$	1.49	$	1.56
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING		28,787,662		27,340,926		28,887,757		27,377,809

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(dollars in thousands)
NET INCOME	$	15,627	$	13,715	$	43,316	$	42,677

OTHER COMPREHENSIVE LOSS
Unrealized losses on debt securities available-for-sale		(35,358)		(5,676)		(112,931)		(19,950)
Reclassification adjustment for amortization of net unrealized losses on debt securities transferred to held-to-maturity		504		195		1,234		426
Unrealized gains (losses) on derivative instruments		374		(8)		1,117		173
Reclassification adjustment for net settlements on derivative instruments		14		105		177		306
Total other comprehensive loss, before tax		(34,466)		(5,384)		(110,403)		(19,045)
Income tax benefit		(9,824)		(1,535)		(31,470)		(5,429)
Total other comprehensive loss		(24,642)		(3,849)		(78,933)		(13,616)
TOTAL COMPREHENSIVE (LOSS) INCOME	$	(9,015)	$	9,866	$	(35,617)	$	29,061

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)


								Accumulated
	Common Stock							Other				Total
	Shares					Retained		Comprehensive		Treasury		Stockholders’
	Outstanding	Amount		Surplus		Earnings		Income (Loss)		Stock		Equity

	(dollars in thousands, except per share data)
Balance, June 30, 2022	28,831,197	$	293	$	222,087	$	212,506	$	(52,820)	$	(8,257)	$	373,809
Net income	—		—		—		15,627		—		—		15,627
Other comprehensive loss	—		—		—		—		(24,642)		—		(24,642)
Stock-based compensation	—		—		349		—		—		—		349
Repurchase of common stock	(78,571)		—		—		—		—		(1,432)		(1,432)
Cash dividends and dividend equivalents ($0.16 per share)	—		—		—		(4,638)		—		—		(4,638)
Balance, September 30, 2022	28,752,626	$	293	$	222,436	$	223,495	$	(77,462)	$	(9,689)	$	359,073

Balance, June 30, 2021	27,355,053	$	275	$	191,185	$	175,328	$	8,386	$	(1,980)	$	373,194
Net income	—		—		—		13,715		—		—		13,715
Other comprehensive loss	—		—		—		—		(3,849)		—		(3,849)
Stock-based compensation	—		—		228		—		—		—		228
Repurchase of common stock	(20,625)										(343)		(343)
Cash dividends and dividend equivalents ($0.15 per share)	—		—		—		(4,124)		—		—		(4,124)
Balance, September 30, 2021	27,334,428	$	275	$	191,413	$	184,919	$	4,537	$	(2,323)	$	378,821

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

(Unaudited)


								Accumulated
	Common Stock							Other				Total
	Shares					Retained		Comprehensive		Treasury		Stockholders’
	Outstanding	Amount		Surplus		Earnings		Income (Loss)		Stock		Equity

	(dollars in thousands, except per share data)
Balance, December 31, 2021	28,986,061	$	293	$	220,891	$	194,132	$	1,471	$	(4,906)	$	411,881
Net income	—		—		—		43,316		—		—		43,316
Other comprehensive loss	—		—		—		—		(78,933)		—		(78,933)
Stock-based compensation	—		—		1,602		—		—		—		1,602
Issuance of common stock upon vesting of restricted stock units, net of tax withholdings	31,944		—		(57)		—		—		—		(57)
Repurchase of common stock	(265,379)		—		—