HBT Financial, Inc.
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
HBT$37.00-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001628280-24-044316
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000775215-25-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 201 previous paragraphs and 157 current paragraphs.
97 unchanged; 38 reworded; 21 added; 61 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 35 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
(2)On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
Current report
• A $0.9 million increase in salaries and benefits expense, primarily driven by annual merit increases and higher medical benefits expense;
Current report
•A $1.2 million increase in income tax expense, primarily due to an increase in pre-tax income as a result of the items noted above.
Current report
*Annualized measure.
Current report
(2)On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
Current report
In early 2024, our net interest margin was relatively stable, with increases in our loans and debt security yields being mostly offset by increases in funding costs. In September 2024, the Federal Open Market Committee ("FOMC") began lowering interest rates, with the target range for the federal funds rate decreasing by 100 basis points to a range of 4.25% to 4.50% by the end of 2024. These changes contributed to a decrease in funding costs while maturing fixed rate loans and securities continued to reprice at higher rates, driving our net interest margin higher in the first quarter of 2025.
Current report
•A $0.3 million negative MSR fair value adjustment included in the first quarter 2025 results compared to a $0.1 million positive MSR fair value adjustment included in the first quarter 2024 results; and
Current report
•A $0.5 million increase in employee benefits expense, primarily driven by increased medical benefits cost;
Current report
•Deposits increased $66.3 million, primarily as a result of higher balances maintained in existing retail accounts;
Current report
•The vast majority of repurchase agreement account balances were transitioned to reciprocal interest-bearing demand deposit accounts during the first quarter of 2025; and
Current report
•Loans were nearly unchanged with payoffs mostly offset by higher line of credit utilization.
Current report
•A $23.2 million increase in grain elevator lines of credit in the commercial and industrial segment, primarily due to seasonally higher line utilization;
Current report
•A $12.0 million reduction on two lines of credit that funded shortly before and paid off after December 31, 2024; and
Current report
•Larger payoffs in the one-to-four family residential, multi-family, and commercial real estate – non-owner occupied segments, which were partially offset by draws on existing loans in the construction and development segment and new originations in the municipal, consumer, and other segment.
Current report
Construction and land development loans totaled $376.0 million as of March 31, 2025. The majority of these loans consist of multi-family and one-to-four family residential construction projects to either be sold upon completion or held for long-term investment, but also include other property types to be owner occupied upon completion. Construction and land development loans are primarily based on projected cash flows from the rental or sale of the underlying collateral, or based on the identified cash flows of the borrower.
Current report
Loans rated pass-watch or worse were relatively stable as of March 31, 2025, increasing $3.6 million, or 1.8%, from December 31, 2024.
Current report
*Annualized measure.
Current report
Average deposit balances were relatively stable in 2025 compared to 2024, with growth in time deposits mostly offset by the planned repayment of brokered time deposits at scheduled maturities. Additionally, the vast majority of repurchase agreement account balances were transitioned to reciprocal interest-bearing demand accounts during the first quarter of 2025.
Current report
Pre-Provision Net Revenue, Pre-Provision Net Revenue Less Charge-offs (Recoveries),
Current report
Adjusted Pre-Provision Net Revenue, and
Current report
Adjusted Pre-Provision Net Revenue Less Charge-offs (Recoveries)
Removed paragraphs (61)
Previous report
Town and Country Acquisition
Previous report
On February 1, 2023, HBT Financial completed its acquisition of Town and Country, the holding company for Town and Country Bank. The acquisition of Town and Country further enhanced HBT Financial’s footprint in central Illinois and expanded our footprint into metro-east St. Louis. At the time of acquisition, Town and Country Bank operated 10 full-service branch locations which began operating as branches of Heartland Bank. The core system conversion was successfully completed in April 2023. After considering business combination accounting adjustments, Town and Country added total assets of $937 million, total loans held for investment of $635 million, and total deposits of $720 million.
Previous report
Total consideration consisted of 3.4 million shares of HBT Financial’s common stock and $38.0 million in cash. Based upon the closing price of HBT Financial common stock of $21.12 on February 1, 2023, the aggregate consideration was approximately $109.4 million. Goodwill of $30.5 million was recorded in the acquisition.
Previous report
There were no acquisition-related expenses during 2024 or during the third and fourth quarter of 2023. Acquisition-related expenses totaled $13.7 million during the nine months ended September 30, 2023, including the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million through provision for credit losses.
Previous report
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Previous report
Below are selected factors that could affect the Company’s operating results. For a fuller discussion of the factors that could have a material impact on the operations and future prospects of the Company, see the "Risk Factors" section included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 6, 2024.
Previous report
Economic Conditions
Previous report
The Company's business and financial performance are affected by economic conditions generally in the U.S. and more directly in the Illinois and Iowa markets where we primarily operate. The significant economic factors relevant to our business and our financial performance include the general economic conditions in the U.S. and in the Company's markets (including the effect of inflationary pressures), unemployment rates, real estate markets, and interest rates.
Previous report
Interest Rates
Previous report
Net interest income is our primary source of revenue. Net interest income is equal to the excess of interest income earned on interest earning assets (including discount accretion on purchased loans plus certain loan fees) over interest expense incurred on interest-bearing liabilities. The level of interest rates as well as the volume of interest-earning assets and interest-bearing liabilities both impact net interest income. Net interest income is also influenced by both the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the Federal Reserve Board (“FRB”), and market interest rates.
Previous report
The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, which are primarily driven by the FRB’s actions. The yields generated by our loans and securities are typically driven by short-term and long-term interest rates, which are set by the market and, to some degree, by the FRB’s actions. Our net interest income is therefore influenced by movements in such interest rates and the pace at which such movements occur. Generally, we expect increases in market interest rates will increase our net interest income and net interest margin in future periods, while decreases in market interest rates may decrease our net interest income and net interest margin in future periods; however, this depends upon the timing and extent of interest rate fluctuations and may not always be the case.
Previous report
Credit Trends
Previous report
We focus on originating loans with appropriate risk/reward profiles. We have a detailed loan policy that guides our overall loan origination philosophy and a well-established loan approval process that requires experienced credit officers to approve larger loan relationships. Although we believe our loan approval and credit review processes are strengths that allow us to maintain a high-quality loan portfolio, we recognize that credit trends in the markets in which we operate and in our loan portfolio can materially impact our financial condition and performance and that these trends are primarily driven by the economic conditions in our markets.
Previous report
Competition
Previous report
Our profitability and growth are affected by the highly competitive nature of the financial services industry. We compete with community banks in all our markets and, to a lesser extent, with regional and national banks, primarily in the Chicago MSA. Additionally, we compete with non-bank financial services companies, FinTechs and other financial institutions operating within the areas we serve. We compete by emphasizing personalized service and efficient decision-making tailored to individual needs. We do not rely on any individual, group, or entity for a material portion of our loans or our deposits. We continue to see significant competitive pressure on loan rates and terms, as well as deposit pricing, which may affect our financial results in the future.
Previous report
Digital Banking
Previous report
Throughout the banking industry, in-person branch traffic is expected to continue to decline as more customers turn to digital banking for routine banking transactions. Additionally, widespread adoption of faster payment and instant payment technologies could require us to substantially increase our expenditures on technology and cybersecurity infrastructure, increase our regulatory compliance costs, and adversely impact the stability of our deposit base. We plan to continue investing in our digital banking platforms while maintaining an appropriately sized branch network. An inability to meet evolving customer expectations for both digital and in-person banking may adversely affect our financial results in the future.
Previous report
Regulatory Environment and Trends
Previous report
We are subject to federal and state regulation and supervision, which continue to evolve as the legal and regulatory framework governing our operations continues to change. The current operating environment includes extensive regulation and supervision in areas such as consumer compliance, the Bank Secrecy Act and anti-money laundering compliance, risk management, and internal audit. We anticipate that this environment of extensive regulation and supervision will continue for the industry. As a result, changes in the regulatory environment may result in additional costs for additional compliance, risk management, and audit personnel or professional fees associated with advisors and consultants.
Previous report
FACTORS AFFECTING COMPARABILITY OF FINANCIAL RESULTS
Previous report
JOBS Act Accounting Election
Previous report
We qualify as an “emerging growth company” under the JOBS Act. The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. The Company may remain an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, which is December 31, 2024, (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues, (3) the date on which the Company is deemed to be a “large accelerated filer” under the Exchange Act, or (4) the date on which the Company has, during the previous three year period, issued, publicly or privately, more than $1.0 billion in non-convertible debt securities. We have elected to use the extended transition period until we are no longer an emerging growth company or until we choose to affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies. The Company expects to exit its status as an emerging growth company as of December 31, 2024.
Previous report
The following table presents selected financial results and measures:
Previous report
•A $1.5 million negative mortgage servicing rights fair value adjustment included in the third quarter of 2024 results;
Previous report
•A $0.5 million decrease in net interest income, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets; and
Previous report
•A $0.6 million decrease in income tax expense, primarily reflecting lower pre-tax income resulting from the above items.
Previous report
For the nine months ended September 30, 2024, net income was $51.5 million, increasing by $4.1 million, or 8.7%, when compared to net income for the nine months ended September 30, 2023. Notable changes include the following:
Previous report
•There were no Town and Country acquisition-related expenses during the nine months ended September 30, 2024, compared to $13.7 million of acquisition-related expenses incurred during the nine months ended September 30, 2023;
Previous report
•Net losses of $3.4 million were realized on the sale of debt securities during the nine months ended September 30, 2024, compared to net losses of $1.8 million realized during the nine months ended September 30, 2023;
Previous report
•A $2.1 million increase in income tax expense, primarily reflecting higher pre-tax income resulting from the above items as well as an additional $0.5 million for a deferred tax expense write-down, primarily as a result of an Illinois tax change. This increased our effective tax rate to 26.4% during the nine months ended September 30, 2024, compared to 25.7% during the nine months ended September 30, 2023. We expect this write-down to be earned back over several years through reduced tax expense.
Previous report
Net interest income for the three months ended September 30, 2024 was $47.7 million, decreasing $0.5 million, or 1.1%, when compared to the three months ended September 30, 2023. The decrease is primarily attributable to an increase in funding costs which were mostly offset by higher yields on interest-earning assets and an increase in interest-earning assets.
Previous report
Net interest margin decreased to 3.98% for the three months ended September 30, 2024, compared to 4.07% for the three months ended September 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. The contribution of acquired loan discount accretion to net interest margin was flat for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, remaining at 10 basis points.
Previous report
Net interest income for the nine months ended September 30, 2024 was $141.4 million, decreasing $2.5 million, or 1.8%, when compared to the nine months ended September 30, 2023. The decrease is primarily attributable to an increase in funding costs which were partially offset by higher yields on interest-earning assets and higher interest-earning asset balances following the Town and Country merger.
Previous report
Our net interest margin decreased modestly beginning in the second quarter of 2023 as increased competition for deposits drove an increase in our funding costs. This continued during the remainder of 2023 with increases in funding costs outpacing increases in interest-earning asset yields. Our deposit balances and funding costs began to stabilize during the first quarter of 2024.
Previous report
Additionally, the 2023 results included the reversal of an allowance for credit losses of $0.8 million on debt securities available-for-sale related to one bank subordinated debt security after a merger announcement by the issuer.
Previous report
The 2023 results included the recognition of an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million through provision for credit losses which were related to the Town and Country acquisition.
Previous report
Additionally, the 2023 results included the establishment of an allowance for credit losses of $0.8 million on debt securities available-for-sale during the first half of 2023, related to one bank subordinated debt security, which was later reversed during the third quarter of 2023 after a merger announcement by the issuer of the bank subordinated debt security.
Previous report
•A $1.5 million negative mortgage servicing rights fair value adjustment included the third quarter of 2024 results, primarily due to changes in the prepayment and future interest rate assumptions utilized in the valuations, compared to a $23 thousand positive mortgage servicing rights fair value adjustment included in the third quarter 2023 results;
Previous report
•A $44 thousand loss on foreclosed assets was recognized during the third quarter of 2024, compared to a $0.6 million gain on foreclosed assets during the third quarter of 2023, primarily related to the sale of one property; and
Previous report
Total noninterest income for the nine months ended September 30, 2024, was $23.9 million, a decrease of $2.9 million, or 10.8%, from the nine months ended September 30, 2023. Notable changes in noninterest income include the following:
Showing the first 40 of 61 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
The following is management’s discussion and analysis of the financial condition as of September 30, 2024 (unaudited), as compared with December 31, 2023, and the results of operations for the three and nine months ended September 30, 2024 and 2023 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 6, 2024. Results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of results to be attained for the year ended December 31, 2024, or for any other period.
Current wording
The following is management’s discussion and analysis of the financial condition as of March 31, 2025 (unaudited), as compared with December 31, 2024, and the results of operations for the three months ended March 31, 2025 and 2024 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025. Results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of results to be attained for the year ended December 31, 2025, or for any other period.
Previous wording
HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. We provide a comprehensive suite of financial products and services to consumers, businesses, and municipal entities throughout Illinois and eastern Iowa. As of September 30, 2024, the Company had total assets of $5.0 billion, loans held for investment of $3.4 billion, and total deposits of $4.3 billion.
Current wording
HBT Financial, Inc., headquartered in Bloomington, Illinois, is the holding company for Heartland Bank and Trust Company, and has banking roots that can be traced back to 1920. We provide a comprehensive suite of financial products and services to consumers, businesses, and municipal entities throughout Illinois and eastern Iowa. As of March 31, 2025, the Company had total assets of $5.1 billion, loans held for investment of $3.5 billion, and total deposits of $4.4 billion.
Previous wording
For the three months ended September 30, 2024, net income was $18.2 million, decreasing by $1.5 million, or 7.8%, when compared to net income for the three months ended September 30, 2023. Notable changes include the following:
Current wording
For the three months ended March 31, 2025, net income was $19.1 million, increasing by $3.8 million, or 25.0%, when compared to net income for the three months ended March 31, 2024. Notable changes include the following:
Previous wording
•Net losses of $0.8 million realized on the sale of debt securities included in the third quarter of 2023 results not present in the third quarter of 2024 results;
Current wording
•Realized losses of $3.4 million on the sale of debt securities included in the first quarter 2024 results were not present in the first quarter 2025 results;
Previous wording
•A $2.5 million decrease in net interest income, primarily attributable to higher funding costs which were partially offset by higher asset yields and an increase in interest-earning assets;
Current wording
•A $2.0 million increase in net interest income, primarily attributable to higher average loan balances, a decrease in deposit costs, and higher yields on debt securities;
Previous wording
•Impairment losses on bank premises of $0.6 million related to the closure of two branch premises, now held for sale, were recognized during 2024 which were not present in the 2023 results; and
Current wording
•The absence of $0.6 million of impairment losses on bank premises related to the closure of two branch premises recognized in the first quarter of 2024;
Previous wording
•A $1.5 million negative mortgage servicing rights fair value adjustment included in the 2024 results, compared to a $0.5 million negative mortgage servicing rights fair value adjustment included in the 2023 results; and
Current wording
•A $0.3 million negative mortgage servicing rights ("MSR") fair value adjustment included in the first quarter 2025 results, compared to a $0.1 million positive MSR fair value adjustment included in the first quarter 2024 results; and
Previous wording
Net interest income equals the excess of interest income on interest earning assets (including discount accretion on acquired loans plus certain loan fees) over interest expense incurred on interest-bearing liabilities. Interest rate spread and net interest margin are utilized to measure and explain changes in net interest income. Interest rate spread is the difference between the yield on interest-earning assets and the rate paid for interest-bearing liabilities that fund those assets. The net interest margin is expressed as the percentage of net interest income to average interest-earning assets. The net interest margin exceeds the interest rate spread because noninterest-bearing sources of funds, principally noninterest-bearing demand deposits and stockholders’ equity, also support interest-earning assets.
Current wording
Net interest income equals the excess of interest income on interest earning assets (including discount accretion on acquired loans plus certain loan fees) over interest expense incurred on interest-bearing liabilities. Net interest margin, which is expressed as the percentage of net interest income to average interest-earning assets, is utilized to measure and explain changes in net interest income.
Previous wording
The following tables set forth average balances, average yields and costs, and certain other information. Average balances are daily average balances. Nonaccrual loans are included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees and costs, discounts and premiums, as well as purchase accounting adjustments that are accreted or amortized to interest income or expense.
Current wording
The following table sets forth average balances, average yields and costs, and certain other information. Average balances are daily average balances. Nonaccrual loans are included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees and costs, discounts and premiums, as well as purchase accounting adjustments that are accreted or amortized to interest income or expense.
Previous wording
•A $0.7 million increase in salaries expense, primarily driven by annual merit increases;
Current wording
Net interest income for the three months ended March 31, 2025 was $48.7 million, increasing $2.0 million, or 4.3%, when compared to the three months ended March 31, 2024. The increase is primarily attributable to higher average loan balances, a decrease in deposit costs, and higher yields on debt securities. Also contributing was a $0.7 million increase in nonaccrual interest recoveries and loan fees.
Previous wording
Net interest margin decreased to 3.96% for the nine months ended September 30, 2024, compared to 4.14% for the nine months ended September 30, 2023. The decrease was primarily attributable to increases in funding costs outpacing increases in interest-earning asset yields. Additionally, the contribution of acquired loan discount accretion to net interest margin increased to 10 basis points during the nine months ended September 30, 2024, compared to 9 basis points during the nine months ended September 30, 2023.
Current wording
Net interest margin increased to 4.12% for the three months ended March 31, 2025, compared to 3.94% for the three months ended March 31, 2024. The increase was primarily attributable to higher yields on interest-earning assets, a decrease in funding costs, and an increase in nonaccrual interest recoveries and loan fees. The contribution of acquired loan discount accretion to net interest margin was 9 basis points for the three months ended March 31, 2025 compared to 10 basis points for the three months ended March 31, 2024. Additionally, the contribution of nonaccrual interest recoveries and loan fees to net interest margin increased to 17 basis points during the three months ended March 31, 2025, compared to 11 basis points for the three months ended March 31, 2024.
Previous wording
In September 2024, the Federal Open Markets Committee ("FOMC") lowered the target range for the federal funds rate by 50 basis points to a range of 4.75% to 5.00%. This decrease, and potential future decreases, may put downward pressure on our net interest margin, as the negative impact on floating rate loans may not be fully offset by the positive impacts of maturing fixed rate loans and securities repricing at higher rates or potential decreases in deposit costs. Generally, we expect increases in market interest rates will increase our net interest income and net interest margin in future periods, while decreases in market interest rates may decrease our net interest income and net interest margin in future periods; however, this depends upon the timing and extent of interest rate fluctuations and may not always be the case.
Current wording
Decreases in market interest rates, and potential future decreases, may put downward pressure on our net interest margin, as the negative impact on floating rate loans may not be fully offset by the positive impacts of maturing fixed rate loans and securities repricing at higher rates or potential decreases in deposit costs. Generally, we expect increases in market interest rates will increase our net interest income and net interest margin in future periods, while decreases in market interest rates may decrease our net interest income and net interest margin in future periods; however, this depends upon the timing and extent of interest rate fluctuations and may not always be the case.
Previous wording
The Company recorded a provision for credit losses of $2.3 million for the nine months ended September 30, 2024. The 2024 provision for credit losses primarily reflects a $3.9 million increase in required reserves resulting from changes in qualitative factors; a $0.1 million increase in required reserves resulting from changes in economic forecasts; a $1.0 million decrease in specific reserves on individually evaluated loans; and a $0.7 million decrease in required reserves driven by changes within the loan portfolio.
Current wording
The Company recorded a provision for credit losses of $0.6 million for the three months ended March 31, 2025. The 2025 provision for credit losses primarily reflects a $0.8 million increase in required reserves resulting from changes in qualitative factors; a $0.1 million increase in required reserves driven by changes within the portfolio; and a $0.3 million decrease in specific reserves.
Previous wording
Credit losses are highly dependent on current and forecast economic conditions. Potential deterioration of economic conditions may lead to higher credit losses and adversely impact our financial condition and results of operations. The economic forecasts utilized in estimating the allowance for credit losses on loans and lending-related unfunded commitments include the unemployment rate and changes in GDP as macroeconomic variables, although other economic metrics are considered on a qualitative basis.
Current wording
Credit losses are highly dependent on current and forecast economic conditions. Potential deterioration of economic conditions may lead to higher credit losses and adversely impact our financial condition and results of operations. The economic forecasts utilized in estimating the allowance for credit losses on loans and unfunded lending-related commitments include the unemployment rate and changes in GDP as macroeconomic variables, although other economic metrics are considered on a qualitative basis.
Previous wording
Total noninterest income for the three months ended September 30, 2024, was $8.7 million, a decrease of $0.8 million, or 8.3%, from the three months ended September 30, 2023. Notable changes in noninterest income include the following:
Current wording
Total noninterest income for the three months ended March 31, 2025, was $9.3 million, an increase of $3.7 million, or 65.4%, from the three months ended March 31, 2024. Notable changes in noninterest income include the following:
Previous wording
•Realized losses of $0.8 million on the sale of securities recognized during the third quarter of 2023, which were not present in the third quarter 2024 results;
Current wording
•Realized losses of $3.4 million on the sale of debt securities included in the first quarter 2024 results were not present in the first quarter 2025 results;
Previous wording
•A $0.3 million increase in wealth management fees, driven by higher values of assets under management.
Current wording
•A $0.3 million increase in wealth management fees, driven primarily by higher assets under management and an increase in farm management income.
Previous wording
Total noninterest expense for the three months ended September 30, 2024, was $31.3 million, an increase of $0.7 million, or 2.1%, from the three months ended September 30, 2023. Notable changes in noninterest expense include the following:
Current wording
Total noninterest expense for the three months ended March 31, 2025, was $31.9 million, an increase of $0.7 million, or 2.1%, from the three months ended March 31, 2024. Notable changes in noninterest expense include the following:
Previous wording
•A $0.4 million increase in benefits, primarily attributable to higher medical benefits expenses; and
Current wording
•A $0.4 million increase in salaries expense, primarily driven by annual merit increases; and
Previous wording
The Company recorded a provision for credit losses of $0.6 million during the three months ended September 30, 2024, compared to a $0.5 million provision during the three months ended September 30, 2023. The third quarter of 2024 provision for credit losses primarily reflects a $1.2 million increase in required reserves resulting from changes in economic forecasts; a $0.2 million increase in required reserves resulting from qualitative factor changes; a $0.6 million decrease in required reserves driven by decreased loan balances and changes within the loan portfolio; and a $0.2 million decrease in specific reserves.
Current wording
•A $0.2 million decrease in data processing expense.
Previous wording
During the three months ended September 30, 2024 and 2023, we recorded income tax expense of $6.3 million, or an effective tax rate of 25.8%, and $6.9 million, or an effective tax rate of 25.9%, respectively. During the nine months ended September 30, 2024 and 2023, we recorded income tax expense of $18.5 million, or an effective tax rate of 26.4%, and $16.4 million, or an effective tax rate of 25.7%, respectively. The increase in effective tax rate during 2024 was primarily attributable to an additional $0.5 million of tax expense for a deferred tax asset write-down, recognized during the second quarter of 2024, as a result of an Illinois tax change.
Current wording
During the three months ended March 31, 2025 and 2024, we recorded income tax expense of $6.4 million, or an effective tax rate of 25.2%, and $5.3 million, or an effective tax rate of 25.6%, respectively. The lower effective tax rate during the first quarter of 2025 was primarily attributable to a $0.2 million tax benefit from stock-based compensation that vested during the first quarter of 2025, compared to a $0.1 million tax benefit during the first quarter of 2024. Additionally, during the second quarter of 2025, we expect to recognize an additional $0.3 million of tax expense related to the reversal of a stranded tax effect included in accumulated other comprehensive income in connection with the maturity of a derivative designated as a cash flow hedge.
Previous wording
Loans, before allowance for credit losses were $3.37 billion at September 30, 2024, a decrease of $34.6 million, or 1.0%, from December 31, 2023. Notable changes include the following:
Current wording
Loans, before allowance for credit losses were $3.46 billion at March 31, 2025, nearly unchanged from December 31, 2024. Notable changes include the following:
Previous wording
Multi-family loans totaled $432.7 million as of September 30, 2024 and are primarily made based on projected cash flows from the rental or sale of the underlying collateral. As of September 30, 2024, multi-family loans had a weighted average LTV of 58%, based on the most recent appraisals available, which are generally obtained at the time of origination.
Current wording
Multi-family loans totaled $424.1 million as of March 31, 2025, and are primarily made based on projected cash flows from the rental or sale of the underlying collateral. As of March 31, 2025, multi-family loans had a weighted average LTV of 57%, based on the most recent appraisals available, which are generally obtained at the time of origination.
Previous wording
Management’s disciplined approach to credit risk management is exercised through portfolio diversification, robust underwriting policies, and routine loan monitoring practices in order to identify and mitigate any credit weakness as early as possible. Management continually monitors and evaluates commercial real estate concentrations by property class, industry, and relative to the Bank’s regulatory capital to remain in line with board established limits and adapt to changing industry conditions. A centralized credit underwriting group, independent of the originating lender, evaluates all exposures over $750 thousand annually, if not more frequently, through a standardized credit review process to ensure uniform application of policies and procedures as well as analyze credit performance. All loans require appropriate internal approval, with a centralized credit approval group reviewing all exposures over $500 thousand. A sampling of the loan portfolio is also reviewed by the Bank’s internal loan review function annually, in addition to an annual third-party review of the portfolio.
Current wording
Management’s disciplined approach to credit risk management is exercised through portfolio diversification, robust underwriting policies, and routine loan monitoring practices in order to identify and mitigate any credit weakness as early as possible. Management continually monitors and evaluates commercial real estate concentrations by property class, industry, and relative to the Bank’s regulatory capital to remain in line with board-established limits and adapt to changing industry conditions. A centralized credit underwriting group, independent of the originating lender, evaluates a vast majority of the commercial exposures over $750 thousand annually, if not more frequently, through a standardized credit review process to ensure uniform application of policies and procedures as well as analyze credit performance. All loans require appropriate internal approval, with a centralized credit approval group reviewing all exposures over $500 thousand. Additionally, a robust internal review process reviews more than 45% of loan commitments on a rolling 24 month basis that is in addition to an annual third-party review of a sample of the portfolio.
Previous wording
In response to the rapid increase in interest rates, we have prepared quarterly cash flow stress tests for our commercial real estate – non-owner occupied and multi-family loans since the fourth quarter of 2022. For commercial real estate – non-owner occupied and multi-family loans over $1 million, we evaluate the impact of current interest rates on the underlying cash flows of the properties securing these loans, based on the most recent cash flow data available. This testing is completed in addition to the various sensitivity testing completed at the initial extension of credit. Individual credits with a maturity scheduled within the next five quarters that are presenting stress under current renewal terms are identified, so that ample time is available to develop solutions to manage credit risk.
Current wording
For commercial real estate – non-owner occupied and multi-family loans over $1 million, we evaluate, on a quarterly basis, the impact of current interest rates on the underlying cash flows of the properties securing these loans, based on the most recent cash flow data available. Individual credits with a maturity scheduled within the next five quarters that are presenting stress under current renewal terms are identified, so that ample time is available to develop solutions to manage credit risk. This testing is completed in addition to the various sensitivity testing completed at the initial extension of credit.
Previous wording
The following table sets forth information concerning nonperforming loans and nonperforming assets as of each of the dates indicated.
Current wording
Our nonperforming loans and nonperforming assets were as follows:
Previous wording
Total nonperforming assets were $8.6 million at September 30, 2024, remaining relatively stable from December 31, 2023. Additionally, of the $8.2 million of nonperforming loans held as of September 30, 2024, $2.0 million are either wholly or partially guaranteed by the U.S. Government.
Current wording
Total nonperforming assets were $5.6 million at March 31, 2025, a decrease of 30.6%, when compared to $8.0 million at December 31, 2024. Additionally, of the $5.1 million of nonperforming loans held as of March 31, 2025, $1.4 million are either wholly or partially guaranteed by the U.S. Government. The $2.5 million decrease in nonperforming assets from December 31, 2024 was primarily attributable to the pay-off of a $1.6 million nonaccrual commercial real estate – non-owner occupied credit.
Previous wording
The net charge-offs (recoveries) to average total loans ratio has remained low for several years. While we believe our continuous credit monitoring and collection efforts have resulted in lower levels of credit losses, we also recognize that substantial federal economic stimulus following the COVID-19 pandemic and the relatively stable economic conditions after the pandemic have also contributed to reduced credit losses.
Current wording
The net charge-offs (recoveries) to average total loans ratio has remained low for several years. While we believe our continuous credit monitoring and collection efforts have resulted in lower levels of credit losses, we also recognize that substantial federal economic stimulus during the COVID-19 pandemic and the relatively stable economic conditions after the pandemic have also contributed to reduced credit losses.
Previous wording
As of September 30, 2024 and December 31, 2023, the Bank’s uninsured deposits were estimated to be $967.5 million and $867.7 million, respectively.
Current wording
As of March 31, 2025 and 2024, the Bank’s uninsured deposits were estimated to be $894.4 million and $949.4 million, respectively.
Previous wording
The Holding Company, or HBT Financial, Inc. on an unconsolidated basis, is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. As of September 30, 2024, the Holding Company had cash and cash equivalents of $17.9 million.
Current wording
The Holding Company, or HBT Financial, Inc. on an unconsolidated basis, is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. As of March 31, 2025, the Holding Company had cash and cash equivalents of $13.9 million.
Previous wording
The Holding Company’s main source of funding is dividends declared and paid to it by the Bank. Dividends paid by the Bank to the Holding Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Management believes that such limitations will not impact the Holding Company’s ability to meet its ongoing short-term or intermediate-term cash obligations. During the three months ended September 30, 2024 and 2023, the Bank paid $8.0 million and $12.0 million in dividends to the Holding Company, respectively. During the nine months ended September 30, 2024 and 2023, the Bank paid $26.0 million and $52.0 million in dividends to the Holding Company, respectively.
Current wording
The Holding Company’s main source of funding is dividends declared and paid to it by the Bank. Dividends paid by the Bank to the Holding Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Management believes that such limitations will not impact the Holding Company’s ability to meet its ongoing short-term or intermediate-term cash obligations. During the three months ended March 31, 2025 and 2024, the Bank paid $7.5 million and $8.0 million in dividends to the Holding Company, respectively.
Previous wording
The liquidity needs of the Holding Company on an unconsolidated basis consist primarily of operating expenses, interest payments on the subordinated notes and junior subordinated debentures, and shareholder distributions in the form of dividends and stock repurchases. During the three months ended September 30, 2024 and 2023, holding company operating expenses consisted of interest expense of $1.5 million and $1.4 million, respectively, and other operating expenses of $1.0 million and $1.2 million, respectively. During the nine months ended September 30, 2024 and 2023, holding company operating expenses consisted of interest expense of $4.3 million and $4.0 million, respectively, and other operating expenses of $3.1 million and $4.6 million, respectively.
Current wording
The liquidity needs of the Holding Company on an unconsolidated basis consist primarily of operating expenses, interest payments on the subordinated notes and junior subordinated debentures, and shareholder distributions in the form of dividends and stock repurchases. During the three months ended March 31, 2025 and 2024, holding company operating expenses consisted of interest expense of $1.4 million and $1.4 million, respectively, and other operating expenses of $1.0 million and $1.1 million, respectively.
Previous wording
Additionally, the Holding Company paid $6.0 million and $5.4 million of dividends to stockholders during the three months ended September 30, 2024 and 2023, respectively, and paid $18.1 million and $16.4 million of dividends to stockholders during the nine months ended September 30, 2024 and 2023, respectively. The Holding Company also paid $38.0 million in cash consideration in the acquisition of Town and Country during the first quarter of 2023.
Current wording
Additionally, the Holding Company paid $6.7 million and $6.1 million of dividends to stockholders during the three months ended March 31, 2025 and 2024, respectively.
Previous wording
During 2023, the Company paid quarterly cash dividends of $0.17 per share. On January 23, 2024, the Company announced an increase of $0.02 and paid a $0.19 per share dividend during the first, second, and third quarters of 2024.
Current wording
During 2024, the Company paid quarterly cash dividends of $0.19 per share. In January 2025, the Company announced an increase of $0.02 and paid a $0.21 per share dividend during the first quarter of 2025.
Previous wording
The Company did not repurchase any shares of its common stock during the three months ended September 30, 2024. The Company’s Board of Directors have authorized the repurchase of up to $15.0 million of its common stock under its stock repurchase program in effect until January 1, 2025. As of September 30, 2024, the Company had $10.6 million remaining under the current stock repurchase authorization.
Current wording
The Company did not repurchase any shares of its common stock during the three months ended March 31, 2025. The Company’s Board of Directors have authorized the repurchase of up to $15.0 million of its common stock under its stock repurchase program in effect until January 1, 2026. As of March 31, 2025, the Company had $15.0 million remaining under the current stock repurchase authorization.
Previous wording
Management uses the discounted cash flow method to estimate expected credit losses for all loan categories, except for consumer loans where the weighted average remaining maturity method is utilized. The Company uses regression analysis of historical internal and peer data to determine which macroeconomic variables are most closely correlated with credit losses, such as the unemployment rate and changes in GDP. Management leverages economic projections from a reputable third party to inform its economic forecasts with a reversion to historical averages for periods beyond a reasonable and supportable forecast period.
Current wording
Management uses the discounted cash flow method to estimate expected credit losses for all loan categories, except for consumer loans where the weighted average remaining maturity method is utilized. The Company uses regression analysis of historical internal and peer data to determine which macroeconomic variables are most closely correlated with credit losses, such as the unemployment rate and changes in GDP. Management leverages economic projections from a reputable third party to form its economic forecasts with a reversion to historical averages for periods beyond a reasonable and supportable forecast period.
Previous wording
(2)Assumes a federal income tax rate of 21% and a state tax rate of 9.5%.
Current wording
(1)Assumes a federal income tax rate of 21% and a state tax rate of 9.5%.
Previous wording
Efficiency Ratio (Tax-Equivalent Basis)
Current wording
Efficiency Ratio (Tax-Equivalent Basis) and Adjusted Efficiency Ratio (Tax-Equivalent Basis)
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•The absence of $0.6 million of impairment losses on bank premises related to the closure of two branch premises recognized in the first quarter of 2024;
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
(1)Net interest margin represents net interest income divided by average total interest-earning assets.
Previous report — wording carried elsewhere
(3)See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most closely comparable GAAP measures.
Previous report — wording carried elsewhere
(4)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
Previous report — wording carried elsewhere
(5)Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
Previous report — wording carried elsewhere
•A $0.7 million increase in salaries expense, primarily driven by annual merit increases;