HBT Financial, Inc. Announces Third Quarter 2020 Financial Results

HBT Financial, Inc.
·23 min read

Third Quarter Highlights

  • Net income of $10.6 million, or $0.38 per diluted share; return on average assets (ROAA) of 1.20%; return on average stockholders' equity (ROAE) of 11.83%; and return on average tangible common equity (ROATCE) (1) of 12.80%

  • A djusted net income (1) of $10.8 million; or $0.39 per diluted share, adjusted ROAA (1) of 1.22%; adjusted ROAE (1) of 12.04%; and adjusted ROATCE (1) of 13.03%

 

 

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

BLOOMINGTON, Ill., Oct. 26, 2020 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the Company or HBT Financial), the holding company for Heartland Bank and Trust Company and State Bank of Lincoln, today reported net income of $10.6 million, or $0.38 diluted earnings per share, for the third quarter of 2020. This compares to net income of $7.4 million, or $0.27 diluted earnings per share, for the second quarter of 2020, and net income of $17.4 million, or $0.97 diluted earnings per share, for the third quarter of 2019.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, We delivered solid results in the third quarter despite the challenges presented by the low interest rate environment and economic uncertainty. Our banks have long prioritized safety and soundness, disciplined growth, and consistent through-the-cycle profitability, and I am pleased to see this focus maintained as we completed our first year as a public company earlier this month. While we remain conservative in building our loan loss reserves to address possible credit deterioration as the pandemic continues, we are encouraged by the stability we are seeing in asset quality, which reflects the strength of our borrowers and our conservative approach to credit. Our nonperforming loans are down from a year ago and our annualized net charge-offs through the first nine months of 2020 amounted to just 0.04% of average loans. In addition, our COVID-19 loan modifications declined by 82% to $36 million, or just 1.6% of our total loans, at the end of the third quarter. With ample liquidity and capital levels, strong asset quality, and a stable deposit base, we are well positioned to continue supporting our customers and communities through this crisis while generating solid results for our shareholders.

C Corp Equivalent Net Income

Prior to October 11, 2019, the Company operated as an S Corporation for U.S. federal and state income tax purposes. Effective October 11, 2019, the Company voluntarily revoked its S Corporation status and became a taxable entity (C Corporation). As such, any periods prior to October 11, 2019 only reflect state replacement taxes. To facilitate comparison, the Company reports its C Corp equivalent financial results, which do not reflect the additional shares issued in the initial public offering (the IPO) for periods prior to the IPO.

The Company reported C Corp equivalent net income of $13.1 million, or $0.73 diluted earnings per share, for the third quarter of 2019.

Adjusted Net Income

In addition to reporting C Corp equivalent results, the Company believes adjusted net income and adjusted earnings per share, which adjust for the additional C Corp equivalent tax expense for periods prior to October 11, 2019, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights (MSR) fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $10.8 million, or $0.39 adjusted diluted earnings per share, for the third quarter of 2020. This compares to adjusted net income of $8.2 million, or $0.30 adjusted diluted earnings per share, for the second quarter of 2020, and adjusted net income of $14.3 million, or $0.80 adjusted diluted earnings per share, for the third quarter of 2019 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2020 was $28.9 million, nearly unchanged from the second quarter of 2020 as growth in average interest-earning assets was largely offset by lower yields on loans and securities.

Relative to the third quarter of 2019, net interest income decreased $4.3 million, or 12.9%. The decline was primarily attributable to lower yields on average interest-earning assets.

Net interest margin for the third quarter of 2020 was 3.39% compared to 3.51% for the second quarter of 2020. The decrease was primarily attributable to the decline in the average yield on earning assets, partially due to the addition of lower yielding Paycheck Protection Program (PPP) loans. The contribution of acquired loan discount accretion to net interest margin remained low at 2 basis points during the third quarter of 2020 compared to less than 1 basis point during the second quarter of 2020.

Relative to the third quarter of 2019, net interest margin decreased from 4.27%. The decrease was due primarily to the decline in the average yield on earning assets. The contribution of acquired loan discount accretion to net interest margin was 4 basis points during the third quarter of 2019.

Noninterest Income

Noninterest income for the third quarter of 2020 was $10.1 million, an increase of 24.7% from $8.1 million for the second quarter of 2020. The increase was primarily attributable to a $1.0 million increase in gains on sale of mortgage loans attributable to a strong mortgage refinancing environment and a $0.4 million increase in service charges on deposit accounts. Third quarter 2020 results included a negative $0.3 million mortgage servicing rights (MSR) fair value adjustment compared to a negative $0.5 million fair value adjustment in the second quarter of 2020.

Relative to the third quarter of 2019, noninterest income increased 32.6% from $7.6 million. The increase was primarily attributable to higher gains on sale of mortgage loans and a less negative MSR fair value adjustment. Partially offsetting these increases was a $0.6 million decline in service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $22.5 million, a decrease of 4.3% from $23.5 million for the second quarter of 2020. The decrease was primarily attributable to lower employee benefits expense as second quarter of 2020 results included a $0.6 million charge related to the termination of the supplemental executive retirement plan (SERP) that was paid out in June 2020.

Relative to the third quarter of 2019, noninterest expense increased 0.8% from $22.3 million. Lower employee benefits expense, due to the termination and liquidation of the SERP, was more than offset by increases in salaries, FDIC insurance, and other noninterest expenses. Higher salaries expense was driven by increases in mortgage lender commissions and overtime for mortgage support personnel, as a result of increased residential mortgage origination volume.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.28 billion at September 30, 2020, compared with $2.28 billion at June 30, 2020 and $2.17 billion at September 30, 2019. The $3.8 million increase in loans from June 30, 2020 was primarily attributable to an $18.1 million increase in construction and land development loans and a $13.0 million increase in multi-family loans being largely offset by a $19.0 million reduction in commercial and industrial loans, a $3.5 million decline in agricultural and farmland loans and a $3.2 million reduction in commercial real estate - owner occupied loans. The $71.1 million decrease in total loans outstanding, net of PPP loans from September 30, 2019 was primarily due to a $65.7 million reduction in participation loan balances.

Deposits

Total deposits were $3.02 billion at September 30, 2020 and at June 30, 2020, compared with $2.70 billion at September 30, 2019. Increases in interest-bearing demand and savings balances were substantially offset by declines in noninterest-bearing, money market and time deposit balances in the third quarter.

Asset Quality

Nonperforming loans totaled $15.2 million, or 0.67% of total loans, at September 30, 2020, compared with $14.0 million, or 0.61% of total loans, at June 30, 2020, and $19.1 million, or 0.88% of total loans, at September 30, 2019. The increase in nonperforming loans from the end of the prior quarter was primarily attributable to the movement of one $4.1 million loan to nonaccrual partially offset by reductions from the pay-off or pay-down on three relationships combined with a charge-down of one relationship.

The Company recorded a provision for loan losses of $2.2 million for the third quarter of 2020, which was primarily due to adjustments to qualitative factors to reflect changes in the economic environment.

Net charge-offs for the third quarter of 2020 were $0.2 million, or 0.04% of average loans on an annualized basis compared to net recoveries of $63 thousand, or 0.01% of average loans on an annualized basis, for the second quarter of 2020, and net charge-offs of $0.5 million, or 0.08% of average loans on an annualized basis, for the third quarter of 2019.

The Companys allowance for loan losses was 1.39% of total loans and 208.14% of nonperforming loans at September 30, 2020, compared with 1.31% of total loans and 213.04% of nonperforming loans at June 30, 2020.

Capital

At September 30, 2020, the Company exceeded all regulatory capital requirements under Basel III and was considered to be well-capitalized, as summarized in the following table:

 

 

 

 

 

 

 

Well Capitalized

 

September 30, 

Regulatory

 

2020

Requirements

Total capital to risk-weighted assets

 16.81

%  

 10.00

%

Tier 1 capital to risk-weighted assets

 13.98

%  

 8.00

%

Common equity tier 1 capital ratio

 12.52

%  

 6.50

%

Tier 1 leverage ratio

 10.04

%  

 5.00

%

Total stockholders' equity to total assets

 10.05

%

N/A

 

Tangible common equity to tangible assets (1)

 9.36

%  

N/A

 


 

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

Subordinated Note Issuance

To further enhance the Companys strong capital and liquidity positions, HBT Financial successfully completed a private placement of $40.0 million 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 during the quarter. This issuance of subordinated notes, which qualify as Tier 2 regulatory capital, contributed to an increase in HBT Financials total risk based capital ratio, which was 16.81% at September 30, 2020, compared to 15.13% at June 30, 2020, while also significantly bolstering the cash reserves held at the holding company.

Annualization Factor

The method used to calculate annualization factors for interim period ratios has changed from financial information previously presented. The annualization factor is now calculated using the number of days in the year divided by the number of days in the interim period. Previously, annualization factors were calculated as 4 divided by the number of quarters in the interim period, or an annualization factor of 4 for a quarterly period. The change was applied retrospectively to all periods presented and did not have a material impact on the annualized interim ratios.

About HBT Financial, Inc.

HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company and State Bank of Lincoln. The banks provide a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 63 branches. As of September 30, 2020, HBT had total assets of $3.5 billion, total loans of $2.3 billion, and total deposits of $3.0 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back 100 years.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Companys plans, objectives, future performance, goals, future earnings levels, and future loan growth. These statements are subject to many risks and 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 these forward-looking statements include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; changes in interest rates and general economic, business and political conditions in the United States generally or in Illinois in particular, including in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACT:
Matthew Keating
HBTIR@hbtbank.com
(310) 622-8230


HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 

 

June 30, 

 

September 30, 

 

September 30, 

 

    

2020

 

    

2020

 

    

2019

 

    

2020

 

    

2019

 

 

 

 

INTEREST AND DIVIDEND INCOME

 

(dollars in thousands, except per share amounts)

Loans, including fees:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

 25,118

 

 

$

 25,337

 

 

$

 29,308

 

 

$

 77,396

 

 

$

 89,257

 

Federally tax exempt

 

 

 542

 

 

 

 532

 

 

 

 684

 

 

 

 1,748

 

 

 

 2,130

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

 3,266

 

 

 

 3,172

 

 

 

 3,572

 

 

 

 9,772

 

 

 

 11,295

 

Federally tax exempt

 

 

 1,233

 

 

 

 1,227

 

 

 

 1,395

 

 

 

 3,488

 

 

 

 4,459

 

Interest-bearing deposits in bank

 

 

 65

 

 

 

 79

 

 

 

 662

 

 

 

 873

 

 

 

 1,948

 

Other interest and dividend income

 

 

 14

 

 

 

 14

 

 

 

 15

 

 

 

 42

 

 

 

 46

 

Total interest and dividend income

 

 

 30,238

 

 

 

 30,361

 

 

 

 35,636

 

 

 

 93,319

 

 

 

 109,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 843

 

 

 

 1,042

 

 

 

 2,000

 

 

 

 3,480

 

 

 

 6,094

 

Securities sold under agreements to repurchase

 

 

 9

 

 

 

 11

 

 

 

 17

 

 

 

 40

 

 

 

 48

 

Borrowings

 

 

 1

 

 

 

 1

 

 

 

 

 

 

 

 2

 

 

 

 7

 

Subordinated notes

 

 

 147

 

 

 

 

 

 

 

 

 

 

 

 147

 

 

 

 

 

Junior subordinated debentures issued to capital trusts

 

 

 367

 

 

 

 399

 

 

 

 478

 

 

 

 1,209

 

 

 

 1,462

 

Total interest expense

 

 

 1,367

 

 

 

 1,453

 

 

 

 2,495

 

 

 

 4,878

 

 

 

 7,611

 

Net interest income

 

 

 28,871

 

 

 

 28,908

 

 

 

 33,141

 

 

 

 88,441

 

 

 

 101,524

 

PROVISION FOR LOAN LOSSES

 

 

 2,174

 

 

 

 3,573

 

 

 

 684

 

 

 

 10,102

 

 

 

 3,266

 

Net interest income after provision for loan losses

 

 

 26,697

 

 

 

 25,335

 

 

 

 32,457

 

 

 

 78,339

 

 

 

 98,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Card income

 

 

 2,146

 

 

 

 1,998

 

 

 

 1,985

 

 

 

 5,936

 

 

 

 5,813

 

Service charges on deposit accounts

 

 

 1,493

 

 

 

 1,133

 

 

 

 2,111

 

 

 

 4,460

 

 

 

 5,805

 

Wealth management fees

 

 

 1,646

 

 

 

 1,507

 

 

 

 1,676

 

 

 

 4,967

 

 

 

 4,916

 

Mortgage servicing

 

 

 724

 

 

 

 727

 

 

 

 795

 

 

 

 2,175

 

 

 

 2,342

 

Mortgage servicing rights fair value adjustment

 

 

 (268

)

 

 

 (508

)

 

 

 (860

)

 

 

 (2,947

)

 

 

 (2,982

)

Gains on sale of mortgage loans

 

 

 3,184

 

 

 

 2,135

 

 

 

 992

 

 

 

 5,855

 

 

 

 2,177

 

Gains (losses) on securities

 

 

 (2

)

 

 

 57

 

 

 

 (73

)

 

 

 3

 

 

 

 42

 

Gains (losses) on foreclosed assets

 

 

 27

 

 

 

 58

 

 

 

 (20

)

 

 

 120

 

 

 

 132

 

Gains (losses) on other assets

 

 

 1

 

 

 

 (69

)

 

 

 (29

)

 

 

 (71

)

 

 

 1,244

 

Title insurance activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 167

 

Other noninterest income

 

 

 1,101

 

 

 

 1,022

 

 

 

 1,005

 

 

 

 2,866

 

 

 

 2,759

 

Total noninterest income

 

 

 10,052

 

 

 

 8,060

 

 

 

 7,582

 

 

 

 23,364

 

 

 

 22,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries

 

 

 12,595

 

 

 

 12,674

 

 

 

 12,303

 

 

 

 38,023

 

 

 

 36,422

 

Employee benefits

 

 

 1,666

 

 

 

 2,455

 

 

 

 2,253

 

 

 

 6,555

 

 

 

 8,220

 

Occupancy of bank premises

 

 

 1,609

 

 

 

 1,642

 

 

 

 1,785

 

 

 

 5,079

 

 

 

 5,260

 

Furniture and equipment

 

 

 679

 

 

 

 609

 

 

 

 545

 

 

 

 1,891

 

 

 

 2,050

 

Data processing

 

 

 1,583

 

 

 

 1,672

 

 

 

 1,471

 

 

 

 4,841

 

 

 

 4,023

 

Marketing and customer relations

 

 

 690

 

 

 

 817

 

 

 

 801

 

 

 

 2,551

 

 

 

 2,837

 

Amortization of intangible assets

 

 

 305

 

 

 

 305

 

 

 

 335

 

 

 

 927

 

 

 

 1,087

 

FDIC insurance

 

 

 222

 

 

 

 218

 

 

 

 8

 

 

 

 476

 

 

 

 435

 

Loan collection and servicing

 

 

 450

 

 

 

 494

 

 

 

 547

 

 

 

 1,292

 

 

 

 1,901

 

Foreclosed assets

 

 

 226

 

 

 

 88

 

 

 

 196

 

 

 

 403

 

 

 

 525

 

Other noninterest expense

 

 

 2,460

 

 

 

 2,525

 

 

 

 2,059

 

 

 

 7,253

 

 

 

 6,316

 

Total noninterest expense

 

 

 22,485

 

 

 

 23,499

 

 

 

 22,303

 

 

 

 69,291

 

 

 

 69,076

 

INCOME BEFORE INCOME TAX EXPENSE

 

 

 14,264

 

 

 

 9,896

 

 

 

 17,736

 

 

 

 32,412

 

 

 

 51,597

 

INCOME TAX EXPENSE

 

 

 3,701

 

 

 

 2,477

 

 

 

 299

 

 

 

 8,209

 

 

 

 819

 

NET INCOME

 

$

 10,563

 

 

$

 7,419

 

 

$

 17,437

 

 

$

 24,203

 

 

$

 50,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE - BASIC

 

$

 0.38

 

 

$

 0.27

 

 

$

 0.97

 

 

$

 0.88

 

 

$

 2.82

 

EARNINGS PER SHARE - DILUTED

 

$

 0.38

 

 

$

 0.27

 

 

$

 0.97

 

 

$

 0.88

 

 

$

 2.82

 

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING

 

 

 27,457,306

 

 

 

 27,457,306

 

 

 

 18,027,512

 

 

 

 27,457,306

 

 

 

 18,027,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRO FORMA C CORP EQUIVALENT INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical income before income tax expense

 

 

 

 

 

 

 

$

 17,736

 

 

 

 

 

$

 51,597

 

Pro forma C Corp equivalent income tax expense

 

 

 

 

 

 

 

 

 4,614

 

 

 

 

 

 

 13,313

 

Pro forma C Corp equivalent net income

 

 

 

 

 

 

 

$

 13,122

 

 

 

 

 

$

 38,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC

 

 

 

 

 

 

 

$

 0.73

 

 

 

 

 

$

 2.12

 

PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED

 

 

 

 

 

 

 

$

 0.73

 

 

 

 

 

$

 2.12

 

 

 

HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

    

September 30, 

 

June 30, 

   

September 30, 

 

    

2020  

    

2020  

     

2019  

 

 

 

 

 

(dollars in thousands)

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

 22,347

 

 

$

 21,789

 

 

$

 19,969

 

Interest-bearing deposits with banks

 

 

 214,377

 

 

 

 292,576

 

 

 

 134,972

 

Cash and cash equivalents

 

 

 236,724

 

 

 

 314,365

 

 

 

 154,941

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing time deposits with banks

 

 

 

 

 

 

 

 

 

 

 248

 

Debt securities available-for-sale, at fair value

 

 

 814,798

 

 

 

 701,353

 

 

 

 618,120

 

Debt securities held-to-maturity

 

 

 74,510

 

 

 

 73,823

 

 

 

 99,861

 

Equity securities

 

 

 4,814

 

 

 

 4,815

 

 

 

 4,436

 

Restricted stock, at cost

 

 

 2,498

 

 

 

 2,498

 

 

 

 2,425

 

Loans held for sale

 

 

 23,723

 

 

 

 25,934

 

 

 

 7,608

 

 

 

 

 

 

 

 

 

 

 

Loans, before allowance for loan losses

 

 

 2,279,639

 

 

 

 2,275,795

 

 

 

 2,171,014

 

Allowance for loan losses

 

 

 (31,654

)

 

 

 (29,723

)

 

 

 (22,761

)

Loans, net of allowance for loan losses

 

 

 2,247,985

 

 

 

 2,246,072

 

 

 

 2,148,253

 

 

 

 

 

 

 

 

 

 

 

Bank premises and equipment, net

 

 

 53,271

 

 

 

 53,883

 

 

 

 54,105

 

Bank premises held for sale

 

 

 121

 

 

 

 121

 

 

 

 121

 

Foreclosed assets

 

 

 3,857

 

 

 

 4,450

 

 

 

 6,574

 

Goodwill

 

 

 23,620

 

 

 

 23,620

 

 

 

 23,620

 

Core deposit intangible assets, net

 

 

 3,103

 

 

 

 3,408

 

 

 

 4,366

 

Mortgage servicing rights, at fair value

 

 

 5,571

 

 

 

 5,839

 

 

 

 7,936

 

Investments in unconsolidated subsidiaries

 

 

 1,165

 

 

 

 1,165

 

 

 

 1,165

 

Accrued interest receivable

 

 

 13,820

 

 

 

 12,661

 

 

 

 14,816

 

Other assets

 

 

 25,643

 

 

 

 27,405

 

 

 

 18,018

 

Total assets

 

$

 3,535,223

 

 

$

 3,501,412

 

 

$

 3,166,613

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

 850,306

 

 

$

 856,030

 

 

$

 649,316

 

Interest-bearing

 

 

 2,166,355

 

 

 

 2,159,083

 

 

 

 2,054,742

 

Total deposits

 

 

 3,016,661

 

 

 

 3,015,113

 

 

 

 2,704,058

 

 

 

 

 

 

 

 

 

 

 

Securities sold under agreements to repurchase

 

 

 45,438

 

 

 

 51,354

 

 

 

 32,267

 

Subordinated notes

 

 

 39,218

 

 

 

 

 

 

 

 

 

Junior subordinated debentures issued to capital trusts

 

 

 37,632

 

 

 

 37,616

 

 

 

 37,566

 

Other liabilities

 

 

 40,980

 

 

 

 49,489

 

 

 

 43,786

 

Total liabilities

 

 

 3,179,929

 

 

 

 3,153,572

 

 

 

 2,817,677

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

Common stock

 

 

 275

 

 

 

 275

 

 

 

 181

 

Surplus

 

 

 190,787

 

 

 

 190,687

 

 

 

 32,288

 

Retained earnings

 

 

 146,101

 

 

 

 139,667

 

 

 

 311,055

 

Accumulated other comprehensive income

 

 

 18,131

 

 

 

 17,211

 

 

 

 8,431

 

Less cost of treasury stock held

 

 

 

 

 

 

 

 

 

 

 (3,019

)

Total stockholders equity

 

 

 355,294

 

 

 

 347,840

 

 

 

 348,936

 

Total liabilities and stockholders equity

 

$

 3,535,223

 

 

$

 3,501,412

 

 

$

 3,166,613

 

 

 

 

 

 

 

 

 

 

 

SHARE INFORMATION

 

 

 

 

 

 

 

 

 

Ending number shares of common stock outstanding

 

 

 27,457,306

 

 

 

 27,457,306

 

 

 

 18,027,512

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HBT Financial, Inc.
Consolidated Financial Summary

 

 

 

 

 

 

 

 

 

 

 

    

September 30, 

 

June 30, 

   

September 30, 

 

    

2020

    

2020

    

2019

 

 

 

 

 

(dollars in thousands)

LOANS

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

 389,231

 

$

 408,230

 

$

 340,650

Agricultural and farmland

 

 

 235,597

 

 

 239,101

 

 

 205,041

Commercial real estate - owner occupied

 

 

 225,345

 

 

 228,506

 

 

 239,805

Commercial real estate - non-owner occupied

 

 

 532,454

 

 

 535,339

 

 

 552,262

Multi-family

 

 

 199,441

 

 

 186,440

 

 

 191,646

Construction and land development

 

 

 265,758

 

 

 247,640

 

 

 210,939

One-to-four family residential

 

 

 308,365

 

 

 308,133

 

 

 321,947

Municipal, consumer, and other

 

 

 123,448

 

 

 122,406

 

 

 108,724

Loans, before allowance for loan losses

 

$

 2,279,639

 

$

 2,275,795

 

$

 2,171,014

 

 

 

 

 

 

 

 

 

 

PPP LOANS (included above)

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

 168,466

 

$

 166,868

 

$

 

Agricultural and farmland

 

 

 4,179

 

 

 4,027

 

 

 

Municipal, consumer, and other

 

 

 7,095

 

 

 7,063

 

 

 

Total PPP Loans

 

$

 179,740

 

$

 177,958

 

$

 


 

 

 

 

 

 

 

 

 

 

 

 

September 30, 

 

June 30, 

   

September 30, 

 

    

2020

    

2020

    

2019

 

 

 

 

 

(dollars in thousands)

DEPOSITS

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

 850,306

 

$

 856,030

 

$

 649,316

Interest-bearing demand

 

 

 885,719

 

 

 880,007

 

 

 800,471

Money market

 

 

 475,047

 

 

 480,497

 

 

 463,444

Savings

 

 

 497,682

 

 

 487,761

 

 

 426,707

Time

 

 

 307,907

 

 

 310,818

 

 

 364,120

Total deposits

 

$

 3,016,661

 

$

 3,015,113

 

$

 2,704,058

 

 

HBT Financial, Inc.
Consolidated Financial Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

 

 

    

Average

    

 

 

    

 

    

Average

    

 

 

    

 

    

Average

    

 

 

    

 

 

 

 

Balance

 

Interest

 

Yield/Cost *

 

Balance

 

Interest

 

Yield/Cost *

 

Balance

 

Interest

 

Yield/Cost *

 

 

 

 

 

 

 

(dollars in thousands)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

 2,277,826

 

 

$

 25,660

 

 4.48

%  

$

 2,265,032

 

 

$

 25,869

 

 4.59

%  

$

 2,191,230

 

 

$

 29,992

 

 5.43

%

Securities

 

 

 831,120

 

 

 

 4,499

 

 2.15

 

 

 721,817

 

 

 

 4,399

 

 2.45

 

 

 745,532

 

 

 

 4,967

 

 2.64

 

Deposits with banks

 

 

 274,022

 

 

 

 65

 

 0.09

 

 

 326,216

 

 

 

 79

 

 0.10

 

 

 136,635

 

 

 

 662

 

 1.93

 

Other

 

 

 2,498

 

 

 

 14

 

 2.29

 

 

 2,496

 

 

 

 14

 

 2.21

 

 

 2,425

 

 

 

 15

 

 2.35

 

Total interest-earning assets

 

 

 3,385,466

 

 

$

 30,238

 

 3.55

%  

 

 3,315,561

 

 

$

 30,361

 

 3.68

%  

 

 3,075,822

 

 

$

 35,636

 

 4.60

%

Allowance for loan losses

 

 

 (30,221

)

 

 

 

 

 

 

 

 (26,125

)

 

 

 

 

 

 

 

 (22,326

)

 

 

 

 

 

 

Noninterest-earning assets

 

 

 157,446

 

 

 

 

 

 

 

 

 163,713

 

 

 

 

 

 

 

 

 149,146

 

 

 

 

 

 

 

Total assets

 

$

 3,512,691

 

 

 

 

 

 

 

$

 3,453,149

 

 

 

 

 

 

 

$

 3,202,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand

 

$

 888,941

 

 

$

 123

 

 0.05

%  

$

 860,131

 

 

$

 162

 

 0.08

%  

$

 812,526

 

 

$

 347

 

 0.17

%

Money market

 

 

 479,314

 

 

 

 96

 

 0.08

 

 

 477,441

 

 

 

 118

 

 0.10

 

 

 468,139

 

 

 

 497

 

 0.42

 

Savings

 

 

 493,278

 

 

 

 37

 

 0.03

 

 

 474,609

 

 

 

 50

 

 0.04

 

 

 428,447

 

 

 

 70

 

 0.06

 

Time

 

 

 306,154

 

 

 

 587

 

 0.76

 

 

 317,965

 

 

 

 712

 

 0.90

 

 

 383,070

 

 

 

 1,086

 

 1.12

 

Total interest-bearing deposits

 

 

 2,167,687

 

 

 

 843

 

 0.15

 

 

 2,130,146

 

 

 

 1,042

 

 0.20

 

 

 2,092,182

 

 

 

 2,000

 

 0.38

 

Securities sold under agreements to repurchase

 

 

 51,686

 

 

 

 9

 

 0.06

 

 

 53,867

 

 

 

 11

 

 0.08

 

 

 35,757

 

 

 

 17

 

 0.18

 

Borrowings

 

 

 1,196

 

 

 

 1

 

 0.47

 

 

 2,582

 

 

 

 1

 

 0.03

 

 

 33

 

 

 

 

 

 2.40

 

Subordinated notes

 

 

 11,976

 

 

 

 147

 

 4.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Junior subordinated debentures issued to capital trusts

 

 

 37,621

 

 

 

 367

 

 3.89

 

 

 37,605

 

 

 

 399

 

 4.26

 

 

 37,561

 

 

 

 478

 

 5.05

 

Total interest-bearing liabilities

 

 

 2,270,166

 

 

$

 1,367

 

 0.24

%  

 

 2,224,200

 

 

$

 1,453

 

 0.26

%  

 

 2,165,533

 

 

$

 2,495

 

 0.46

%

Noninterest-bearing deposits

 

 

 846,808

 

 

 

 

 

  

 

 

 824,232

 

 

 

  

 

  

 

 

 651,085

 

 

 

  

 

  

 

Noninterest-bearing liabilities

 

 

 40,421

 

 

 

 

 

  

 

 

 58,177

 

 

 

  

 

  

 

 

 37,274

 

 

 

  

 

  

 

Total liabilities

 

 

 3,157,395

 

 

 

 

 

  

 

 

 3,106,609

 

 

 

  

 

  

 

 

 2,853,892

 

 

 

  

 

  

 

Stockholders' Equity

 

 

 355,296

 

 

 

 

 

  

 

 

 346,540

 

 

 

  

 

  

 

 

 348,750

 

 

 

  

 

  

 

Total liabilities and stockholders equity

 

$

 3,512,691

 

 

 

 

 

  

 

$

 3,453,149

 

 

 

  

 

  

 

$

 3,202,642

 

 

 

  

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income/Net interest margin (3)

 

 

 

 

$

 28,871

 

 3.39

%  

 

 

 

$

 28,908

 

 3.51

%  

 

 

 

$

 33,141

 

 4.27

%  

Tax-equivalent adjustment (2)

 

 

 

 

 

 495

 

 0.06

 

 

 

 

 

 483

 

 0.06

 

 

 

 

 

 559

 

 0.08

 

Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2)

 

 

 

 

$

 29,366

 

 3.45

%  

 

 

 

$

 29,391

 

 3.57

%  

 

 

 

$

 33,700

 

 4.35

%  

Net interest rate spread (4)

 

 

 

 

 

 

 

 3.31

%  

 

  

 

 

  

 

 3.42

%  

 

  

 

 

  

 

 4.14

%  

Net interest-earning assets (5)

 

$

 1,115,300

 

 

 

 

 

  

 

$

 1,091,361

 

 

 

  

 

  

 

$

 910,289

 

 

 

  

 

  

 

Ratio of interest-earning assets to interest-bearing liabilities

 

 

 1.49

 

 

 

 

 

  

 

 

 1.49

 

 

 

  

 

  

 

 

 1.42

 

 

 

  

 

  

 

Cost of total deposits

 

 

 

 

 

 

 

 0.11

%  

 

  

 

 

  

 

 0.14

%  

 

  

 

 

  

 

 0.29

%  


 

*  Annualized measure.
(1)  See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
(2)  On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3)  Net interest margin represents net interest income divided by average total interest-earning assets.
(4)  Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5)  Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.


HBT Financial, Inc.
Consolidated Financial Summary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2020

 

September 30, 2019

 

 

    

Average

    

 

    

 

    

Average

    

 

    

 

 

 

 

Balance

 

Interest

 

Yield/Cost *

 

Balance

 

Interest

 

Yield/Cost *

 

 

 

 

 

 

(dollars in thousands)

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

 2,228,145

 

 

$

 79,144

 

 4.74

%  

$

 2,184,263

 

 

$

 91,387

 

 5.59

%

Securities

 

 

 740,834

 

 

 

 13,260

 

 2.39

 

 

 779,375

 

 

 

 15,754

 

 2.70

 

Deposits with banks

 

 

 283,730

 

 

 

 873

 

 0.41

 

 

 131,209

 

 

 

 1,948

 

 1.99

 

Other

 

 

 2,473

 

 

 

 42

 

 2.29

 

 

 2,527

 

 

 

 46

 

 2.42

 

Total interest-earning assets

 

 

 3,255,182

 

 

$

 93,319

 

 3.83

%  

 

 3,097,374

 

 

$

 109,135

 

 4.71

%

Allowance for loan losses

 

 

 (26,288

)

 

 

 

 

  

 

 

 (21,346

)

 

 

  

 

  

 

Noninterest-earning assets

 

 

 156,121

 

 

 

 

 

  

 

 

 147,972

 

 

 

  

 

  

 

Total assets

 

$

 3,385,015

 

 

 

 

 

  

 

$

 3,224,000

 

 

 

  

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

Liabilities

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

Interest-bearing deposits:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

Interest-bearing demand

 

$

 853,775

 

 

$

 536

 

 0.08

%  

$

 821,848

 

 

$

 1,175

 

 0.19

%

Money market

473,647 608 0.17 455,469 1,356 0.40 Savings 467,482 157 0.04 428,865 207 0.06 Time 321,905 2,179 0.90 408,972 3,356 1.10 Total interest-bearing deposits 2,116,809 3,480 0.22 2,115,154 6,094 0.39 Securities sold under agreements to repurchase 49,183 40 0.11 39,542 48 0.16 Borrowings 1,333 2 0.19 378 7 2.61 Subordinated notes 4,021 147 4.87 — — — Junior subordinated debentures issued to capital trusts 37,605 1,209 4.30 37,544 1,462 5.21 Total interest-bearing liabilities 2,208,951 $ 4,878 0.29% 2,192,618 $ 7,611 0.46%Noninterest-bearing deposits 780,826 654,818 Noninterest-bearing liabilities 47,426 31,720 Total liabilities 3,037,203 2,879,156 Stockholders' Equity 347,812 344,844 Total liabilities and stockholders’ equity $ 3,385,015 3,224,000 Net interest income/Net interest margin (3) $ 88,441 3.63% $ 101,524 4.38% Tax-equivalent adjustment (2) 1,441 0.06 1,775 0.08 Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2) $ 89,882 3.69% $ 103,299 4.46% Net interest rate spread (4) 3.54% 4.25%Net interest-earning assets (5) $ 1,046,231 $ 904,756 Ratio of interest-earning assets to interest-bearing liabilities 1.47 1.41 Cost of total deposits 0.16% 0.29%


* Annualized measure.
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.


HBT Financial, Inc.
Consolidated Financial Summary

September 30,

June 30,

September 30,

2020

2020

2019

(dollars in thousands)

NONPERFORMING ASSETS

Nonaccrual

$

15,191

$

13,945

$

18,977

Past due 90 days or more, still accruing (1)

17

7

95

Total nonperforming loans

15,208

13,952

19,072

Foreclosed assets

3,857

4,450

6,574

Total nonperforming assets

$

19,065

$

18,402

$

25,646

NONPERFORMING ASSETS (Originated) (2)

Nonaccrual

$

10,179

$

9,059

$

11,268

Past due 90 days or more, still accruing

17

7

95

Total nonperforming loans (originated)

10,196

9,066

11,363

Foreclosed assets

939

1,092

1,048

Total nonperforming (originated)

$

11,135

$

10,158

$

12,411

NONPERFORMING ASSETS (Acquired) (2)

Nonaccrual

$

5,012

$

4,886

$

7,709

Past due 90 days or more, still accruing (1)

Total nonperforming loans (acquired)

5,012

4,886

7,709

Foreclosed assets

2,918

3,358

5,526

Total nonperforming assets (acquired)

$

7,930

$

8,244

$

13,235

Allowance for loan losses

$

31,654

$

29,723

$

22,761

Loans, before allowance for loan losses

$

2,279,639

$

2,275,795

$

2,171,014

Loans, before allowance for loan losses (originated) (2)

2,148,074

2,132,189

1,987,265

Loans, before allowance for loan losses (acquired) (2)

131,565

143,606

183,749

CREDIT QUALITY RATIOS

Allowance for loan losses to loans, before allowance for loan losses

1.39

%

1.31

%

1.05

%

Allowance for loan losses to nonperforming loans

208.14

213.04

119.34

Nonperforming loans to loans, before allowance for loan losses

0.67

0.61

0.88

Nonperforming assets to total assets

0.54

0.53

0.81

Nonperforming assets to loans, before allowance for loan losses and foreclosed assets

0.83

0.81

1.18

CREDIT QUALITY RATIOS (Originated) (2)

Nonperforming loans to loans, before allowance for loan losses

0.47

%

0.43

%

0.57

%

Nonperforming assets to loans, before allowance for loan losses and foreclosed assets

0.52

0.48

0.62

CREDIT QUALITY RATIOS (Acquired) (2)

Nonperforming loans to loans, before allowance for loan losses

3.81

%

3.40

%

4.20

%

Nonperforming assets to loans, before allowance for loan losses and foreclosed assets

5.90

5.61

6.99


(1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $30 thousand, $0.1 million, and $0.7 million as of September 30, 2020, June 30, 2020, and September 30, 2019, respectively.
(2) Originated loans and acquired loans along with the related credit quality ratios such as nonperforming loans to loans, before allowance for loan losses (originated and acquired) and nonperforming assets to loans, before allowance for loan losses and foreclosed assets (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.


HBT Financial, Inc.
Consolidated Financial Summary

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

2020

2020

2019

2020

2019

ALLOWANCE FOR LOAN LOSSES

(dollars in thousands)

Beginning balance

$

29,723

$

26,087

$

22,542

$

22,299

$

20,509

Provision

2,174

3,573

684

10,102

3,266

Charge-offs

(1,078

)

(160

)

(937

)

(2,459

)

(2,436

)

Recoveries

835

223

472

1,712

1,422

Ending balance

$

31,654

$

29,723

$

22,761

$

31,654

$

22,761

Net charge-offs (recoveries)

$

243

$

(63

)

$

465

$

747

$

1,014

Net charge-offs (recoveries) - (originated) (1)

(20

)

3

224

155

182

Net charge-offs (recoveries) - (acquired) (1)

263

(66

)

241

592

832

Average loans, before allowance for loan losses

$

2,277,826

$

2,265,032

$

2,191,230

$

2,228,145

$

2,184,263

Average loans, before allowance for loan losses (originated) (1)

2,140,376

2,117,131

2,001,803

2,080,668

1,979,383

Average loans, before allowance for loan losses (acquired) (1)

137,450

147,901

189,427

147,477

204,880

Net charge-offs to average loans, before allowance for loan losses *

0.04

%

(0.01

)

%

0.08

%

0.04

%

0.06

%

Net charge-offs to average loans, before allowance for loan losses (originated) * (1)

0.04

0.01

0.01

Net charge-offs to average loans, before allowance for loan losses (acquired) * (1)

0.76

(0.18

)

0.50

0.54

0.54


* Annualized measure.
(1) Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs (originated and acquired), average loans, before allowance for loan losses (originated and acquired), and net charge-offs to average loans, before allowance for loan losses (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.


HBT Financial, Inc.
Consolidated Financial Summary

As of or for the Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

2020

2020

2019

2020

2019

(dollars in thousands, except per share amounts)

EARNINGS AND PER SHARE INFORMATION

Net income

$

10,563

$

7,419

$

17,437

$

24,203

$

50,778

Earnings per share - Basic

0.38

0.27

0.97

0.88

2.82

Earnings per share - Diluted

0.38

0.27

0.97

0.88

2.82

C Corp equivalent net income (1)

N/A

N/A

$

13,122

N/A

$

38,284

C Corp equivalent earnings per share - Basic (1)

N/A

N/A

0.73

N/A

2.12

C Corp equivalent earnings per share - Diluted (1)

N/A

N/A

0.73

N/A

2.12

Book value per share

$

12.94

$

12.67

$

19.36

Ending number shares of common stock outstanding

27,457,306

27,457,306

18,027,512

Weighted average shares of common stock outstanding

27,457,306

27,457,306

18,027,512

27,457,306

18,027,512

SUMMARY RATIOS

Net interest margin *

3.39

%

3.51

%

4.27

%

3.63

%

4.38

%

Efficiency ratio

56.98

62.74

53.94

61.15

54.86

Loan to deposit ratio

75.57

75.48

80.29

Return on average assets *

1.20

%

0.86

%

2.16

%

0.96

%

2.11

%

Return on average stockholders' equity *

11.83

8.61

19.84

9.30

19.69

C Corp equivalent return on average assets * (1)

N/A

N/A

1.63

%

N/A

1.59

%

C Corp equivalent return on average stockholders' equity * (1)

N/A

N/A

14.93

N/A

14.84

NON-GAAP FINANCIAL MEASURES

Adjusted net income (2)

$

10,755

$

8,218

$

14,343

$

27,352

$

43,010

Adjusted earnings per share - Basic (2)

0.39

0.30

0.80

0.99

2.39

Adjusted earnings per share - Diluted (2)

0.39

0.30

0.80

0.99

2.39

Tangible book value per share (2)

$

11.97

$

11.68

$

17.80

Net interest margin (tax equivalent basis) * (2)

3.45

%

3.57

%

4.35

%

3.69

%

4.46

%

Efficiency ratio (tax equivalent basis) (2)

56.27

61.93

53.21

60.37

54.08

Adjusted return on average assets * (2)

1.22

%

0.96

%

1.78

%

1.08

%

1.78

%

Adjusted return on average stockholders' equity * (2)

12.04

9.54

16.32

10.50

16.68

Return on average tangible common equity * (2)

12.80

%

9.34

%

21.58

%

10.08

%

21.46

%

C Corp equivalent return on average tangible common equity * (1) (2)

N/A

N/A

16.24

N/A

16.18

Adjusted return on average tangible common equity * (2)

13.03

10.35

17.75

11.40

18.18


* Annualized measure.
(1) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.
(2) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
N/A Not applicable.


Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

2020

2020

2019

2020

2019

(dollars in thousands)

Net income

$

10,563

$

7,419

$

17,437

$

24,203

$

50,778

C Corp equivalent adjustment (2)

(4,315

)

(12,494

)

C Corp equivalent net income (2)

10,563

7,419

13,122

24,203

38,284

Adjustments:

Net earnings (losses) from closed or sold operations, including gains on sale (1)

(3

)

533

Charges related to termination of certain employee benefit plans

(609

)

(845

)

(1,457

)

(4,161

)

Mortgage servicing rights fair value adjustment

(268

)

(508

)

(860

)

(2,947

)

(2,982

)

Total adjustments

(268

)

(1,117

)

(1,708

)

(4,404

)

(6,610

)

Tax effect of adjustments

76

318

487

1,255

1,884

Less adjustments after tax effect

(192

)

(799

)

(1,221

)

(3,149

)

(4,726

)

Adjusted net income

$

10,755

$

8,218

$

14,343

$

27,352

$

43,010

Average assets

$

3,512,691

$

3,453,149

$

3,202,642

$

3,385,015

$

3,224,000

Return on average assets *

1.20

%

0.86

%

2.16

%

0.96

2.11

%

C Corp equivalent return on average assets * (2)

N/A

N/A

1.63

N/A

1.59

Adjusted return on average assets *

1.22

0.96

1.78

1.08

1.78


* Annualized measure.
(1) Closed or sold operations include HB Credit Company, HBT Insurance, and First Community Title Services, Inc.
(2) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.
N/A Not applicable.


Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

2020

2020

2019

2020

2019

(dollars in thousands, except per share amounts)

Numerator:

Net income

$

10,563

</