HBT - HBT Financial Inc. Announces Second Quarter 2021 Financial Results

EXHIBIT 99.1

Second Quarter Highlights

• Net income of $13.7 million, or $0.50 per diluted share; return on average assets (ROAA) of 1.40%; return on average stockholders' equity (ROAE) of 15.07%; and return on average tangible common equity (ROATCE) ⁽¹⁾ of 16.22%
• Adjusted net income ⁽¹⁾ of $14.2 million; or $0.52 per diluted share, adjusted ROAA ⁽¹⁾ of 1.45%; adjusted ROAE ⁽¹⁾ of 15.56%; and adjusted ROATCE ⁽¹⁾ of 16.76%

BLOOMINGTON, Ill., July 26, 2021 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial” or “HBT”), the holding company for Heartland Bank and Trust Company, today reported net income of $13.7 million, or $0.50 diluted earnings per share, for the second quarter of 2021. This compares to net income of $15.2 million, or $0.55 diluted earnings per share, for the first quarter of 2021, and net income of $7.4 million, or $0.27 diluted earnings per share, for the second quarter of 2020.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “As economic activity increased in our markets, we saw strong performance among our customer base resulting in continued inflows of core deposits, growth in earning assets, increases in card income and wealth management revenue, and further improvement in asset quality. Combined with disciplined expense control, these positive trends resulted in continued solid results for the Company. As economic conditions further improve during the second half of the year, we are hopeful to see higher levels of loan demand that will allow us to deploy our significant excess liquidity. We are also focused on completing our acquisition of NXT Bancorporation, which we still expect to occur in the fourth quarter of 2021. We believe the addition of NXT and the presence it will provide in faster growing markets in Iowa will enhance the value of our franchise and improve our ability to generate higher levels of organic growth in the years ahead.”

Adjusted Net Income

In addition to reporting GAAP 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, acquisition expenses, branch closure expenses, 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 $14.2 million, or $0.52 adjusted diluted earnings per share, for the second quarter of 2021. This compares to adjusted net income of $14.0 million, or $0.51 adjusted diluted earnings per share, for the first quarter of 2021, and adjusted net income of $8.2 million, or $0.30 adjusted diluted earnings per share, for the second quarter of 2020 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2021 was $29.7 million, an increase of 2.0% from $29.1 million for the first quarter of 2021. The increase was primarily attributable to an increase in interest-earning assets.

Relative to the second quarter of 2020, net interest income increased $0.8 million, or 2.7%. The increase was primarily attributable to an increase in interest-earning assets.

Net interest margin for the second quarter of 2021 was 3.14%, compared to 3.25% for the first quarter of 2021. The decrease was primarily attributable to an unfavorable shift in the mix of earning assets, primarily due to increased deposit balances being held in cash and lower-yielding securities.

Relative to the second quarter of 2020, net interest margin decreased from 3.51%. The decrease was primarily due to a decline in the average yield on earning assets and increased deposit balances being held in cash and lower-yielding securities.

Noninterest Income

Noninterest income for the second quarter of 2021 was $8.8 million, a decrease of 18.8% from $10.8 million for the first quarter of 2021. Second quarter 2021 results included a negative $0.3 million mortgage servicing rights (“MSR”) fair value adjustment compared to a positive $1.7 million fair value adjustment in the first quarter of 2021. Additionally, gains on sale of mortgage loans decreased $0.5 million due to a lower level of mortgage refinancing activity.

Relative to the second quarter of 2020, noninterest income increased 8.9% from $8.1 million, primarily attributable to an increase in wealth management fees and card income. Wealth management fees increased $0.5 million as a result of higher values of assets under management during second quarter of 2021 relative to the second quarter of 2020. Card income increased $0.5 million as a result of increased card transaction volume driven by the full reopening of Illinois following COVID-19 prevention measures. Partially offsetting these increases was a $0.6 million decrease in gains on sale of mortgage of loans due to a lower level of mortgage refinancing activity.

Noninterest Expense

Noninterest expense for the second quarter of 2021 was $22.2 million, down slightly from $22.5 million for the first quarter of 2021. Decreases in occupancy of bank premises and salaries expenses were mostly offset by increases in marketing and other noninterest expenses.

Relative to the second quarter of 2020, noninterest expense decreased 5.7% from $23.5 million. The decline was primarily attributable to the second quarter of 2020 results including a $0.6 million charge for the supplemental executive retirement plan (SERP) which was terminated in June 2019 and paid out in June 2020.

NXT Bancorporation, Inc. Pending Acquisition

On June 7, 2021, HBT and NXT Bancorporation, Inc. (NXT), the holding company for NXT Bank, jointly announced the signing of a definitive agreement pursuant to which HBT will acquire NXT and NXT Bank. The acquisition will expand HBT’s footprint into Iowa. Acquisition-related expenses were $157 thousand during the second quarter of 2021.

Branch Rationalization Plan

In April 2021, the Company made plans to close or consolidate six branches. One branch was consolidated during the second quarter of 2021, and the remaining five branches are expected to close during the third quarter of 2021. This branch rationalization plan is expected to result in approximately $0.8 million of total pre-tax nonrecurring costs, primarily related to asset impairment charges and severance payments. When fully realized, the Company estimates annual cost savings, net of associated revenue impacts, related to the branch rationalization plan to be approximately $1.1 million. Branch closure expenses were $104 thousand during the second quarter of 2021.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.15 billion at June 30, 2021, compared with $2.27 billion at March 31, 2021 and $2.28 billion at June 30, 2020. The $118.6 million decrease in loans from March 31, 2021 was primarily attributable to a decrease in PPP loans, as PPP loan forgiveness exceeded originations on second draw PPP loans as well as lower non-PPP commercial and industrial, multi-family and commercial real estate - owner occupied loans.

Deposits

Total deposits were $3.42 billion at June 30, 2021, compared with $3.36 billion at March 31, 2021 and $3.02 billion at June 30, 2020. The $68.7 million increase in total deposits from March 31, 2021 was primarily due to a $61.1 million increase in public funds deposits as a result of real estate tax collections.

Asset Quality

Nonperforming loans totaled $7.4 million, or 0.34% of total loans, at June 30, 2021, compared with $9.1 million, or 0.40% of total loans, at March 31, 2021, and $14.0 million, or 0.61% of total loans, at June 30, 2020. The $1.7 million reduction in nonperforming loans from March 31, 2021 was primarily attributable to the transfer of one loan to foreclosed assets, partially offset by one relationship moving to nonaccrual status that totaled $2.9 million at June 30, 2021. The $6.5 million reduction in nonperforming loans from June 30, 2020 was primarily attributable to the return to accrual status of one agricultural credit that totaled $4.8 million at June 30, 2020.

The Company recorded a negative provision for loan losses of $2.2 million for the second quarter of 2021, compared to a negative provision for loan losses of $3.4 million for the first quarter of 2021. The negative provision was primarily due to a $1.3 million decrease in specific reserves on loans individually evaluated for impairment. Additionally, changes to qualitative factors resulted in a $0.5 million decrease in required reserve, primarily reflecting the shrinking impact of the COVID-19 pandemic on our borrowers.

Net charge-offs for the second quarter of 2021 were $90 thousand, or 0.02% of average loans on an annualized basis, compared to net recoveries of $0.3 million, or (0.06)% of average loans on an annualized basis, for the first quarter of 2021, and net recoveries of $63 thousand, or (0.01)% of average loans on an annualized basis, for the second quarter of 2020.

The Company’s allowance for loan losses was 1.23% of total loans and 357.91% of nonperforming loans at June 30, 2021, compared with 1.27% of total loans and 315.48% of nonperforming loans at March 31, 2021.

Capital

At June 30, 2021, the Company exceeded all regulatory capital requirements under Basel III and was considered to be “well-capitalized,” as summarized in the following table:

Stock Repurchase Program

During the second quarter of 2021, the Company repurchased 27,016 shares of its common stock at a weighted average price of $17.22 under its stock repurchase program. Purchases were conducted in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company’s Board of Directors authorized the repurchase of up to $15 million of its common stock under its stock repurchase program in effect until December 31, 2021. As of June 30, 2021, the Company had $13.0 million remaining under the current stock repurchase authorization.

About HBT Financial, Inc.

HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company. The bank provides a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 62 branches. As of June 30, 2021, HBT had total assets of $4.0 billion, total loans of $2.2 billion, and total deposits of $3.4 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back to 1920.

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 Company’s plans, objectives, future performance, goals, future earnings levels, future loan growth, and the potential acquisition of NXT and NXT Bank. 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 the potential acquisition of NXT, including the possibility that shareholders of NXT may not approve the merger agreement, that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; the ultimate timing, outcome and results of integrating the operations of NXT into those of HBT; the effects of the merger in HBT’s future financial condition, results of operations, strategy and plans; risks relating to other acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission (“SEC”). 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.

Important Information and Where to Find It

In connection with the proposed acquisition of NXT, HBT and NXT intend to file materials with the SEC, including a Registration Statement on Form S-4 of HBT that will include a joint proxy statement/prospectus of HBT and NXT. After the Registration Statement is declared effective by the SEC, HBT and NXT intend to mail a definitive proxy statement/prospectus to the shareholders of NXT. This press release is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that HBT or NXT may file with the SEC and send to NXT’s shareholders in connection with the proposed transaction. NXT’S SHAREHOLDERS ARE URGED TO CAREFULLY AND THOROUGHLY READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT, AS MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY HBT WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HBT, NXT, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.

Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by HBT with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov . Copies of documents filed with the SEC by HBT will be available free of charge from HBT’s website at https://ir.hbtfinancial.com or by contacting HBT’s Investor Relations Department at HBTIR@hbtbank.com .

Participants in the Proxy Solicitation

HBT, NXT and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from NXT’s shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of HBT is included in its definitive proxy statement for its 2021 annual meeting filed with the SEC on April 7, 2021. Information regarding the executive officers and directors of NXT and additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.

No Offer or Solicitation

This press release does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition of NXT or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

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

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