HBT Financial, Inc. Announces Second Quarter 2025 Financial Results
Second Quarter Highlights
Net income of $19.2 million, or $0.61 per diluted share; return on average assets ("ROAA") of 1.53%; return on average stockholders' equity ("ROAE") of 13.47%; and return on average tangible common equity ("ROATCE")(1) of 15.55%
Adjusted net income(1) of $19.8 million; or $0.63 per diluted share; adjusted ROAA(1) of 1.58%; adjusted ROAE(1) of 13.87%; and adjusted ROATCE(1) of 16.02%
Asset quality remained strong with nonperforming assets to total assets of 0.13% and net charge-offs to average loans of 0.12%, on an annualized basis
Net interest margin increased 2 basis points to 4.14% and net interest margin (tax-equivalent basis)(1) increased 3 basis points to 4.19%
BLOOMINGTON, Ill., July 21, 2025 (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 $19.2 million, or $0.61 diluted earnings per share, for the second quarter of 2025. This compares to net income of $19.1 million, or $0.60 diluted earnings per share, for the first quarter of 2025, and net income of $18.1 million, or $0.57 diluted earnings per share, for the second quarter of 2024.
J. Lance Carter, President and Chief Executive Officer of HBT Financial, said, "During the second quarter of 2025, our team continued to deliver consistently strong earnings with adjusted net income(1) of $19.8 million, or $0.63 per diluted share. This was driven by an increase in adjusted pre-provision net revenue(1) of 5.2%, compared to the first quarter of 2025. Adjusted ROAA(1) was 1.58% and adjusted ROATCE(1) was 16.02% for the second quarter while our net interest margin on a tax equivalent basis(1) increased 3 basis points to 4.19%. Our strong profitability coupled with an improvement in our accumulated other comprehensive income due to lower interest rates resulted in a $0.59 increase in our tangible book value per share(1) to $16.02, an increase of 3.8% for the quarter and 17.4% over the last 12 months.
Our balance sheet remains strong as all capital ratios increased during the quarter and asset quality remained stable with nonperforming assets to total assets of only 0.13%. We saw a decrease in loans during the quarter as seasonal paydowns on grain elevator lines of credit caused a decrease in commercial and industrial loans and a higher amount of property sales caused higher payoffs in several other portfolios. We expect to see loan growth return in the third quarter of 2025 due to higher loan pipelines at the end of the second quarter than at the end of the first quarter and fewer payoffs projected.
Our credit discipline, strong profitability and solid balance sheet give us confidence that we are prepared for a variety of economic and interest rate environments. Our capital levels and operational structure support attractive acquisition opportunities should the right opportunity arise."____________________________________(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
Adjusted Net Income
In addition to reporting GAAP results, the Company believes non-GAAP measures such as adjusted net income and adjusted earnings per share, which adjust for acquisition expenses, branch closure expenses, gains (losses) on closed branch premises, realized gains (losses) on sales of securities, mortgage servicing rights fair value adjustments, and the tax effect of these pre-tax adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $19.8 million, or $0.63 adjusted diluted earnings per share, for the second quarter of 2025. This compares to adjusted net income of $19.3 million, or $0.61 adjusted diluted earnings per share, for the first quarter of 2025, and adjusted net income of $18.1 million, or $0.57 adjusted diluted earnings per share, for the second quarter of 2024 (see "Reconciliation of Non-GAAP Financial Measures" tables below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures).
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2025 was $49.7 million, an increase of 2.0% from $48.7 million for the first quarter of 2025. The increase was primarily attributable to improved yields on debt securities and lower funding costs which were partially offset by a decrease in average loan balances.
Relative to the second quarter of 2024, net interest income increased 5.6% from $47.0 million. The increase was primarily attributable to lower funding costs, improved yields on debt securities, and higher average loan balances. Additionally, a $0.5 million increase in nonaccrual interest recoveries and loan fees contributed to the increase in net interest income.
Net interest margin for the second quarter of 2025 was 4.14%, compared to 4.12% for the first quarter of 2025, and net interest margin (tax-equivalent basis)(1) for the second quarter of 2025 was 4.19%, compared to 4.16% for the first quarter of 2025. The increase was primarily attributable to improved yields on debt securities, which increased 11 basis points to 2.60%, and lower funding costs, which decreased 3 basis points to 1.29%.
Relative to the second quarter of 2024, net interest margin increased 19 basis points from 3.95% and net interest margin (tax-equivalent basis)(1) increased 19 basis points from 4.00%. The increase was primarily attributable to lower funding costs, higher yields on interest-earning assets, and an increase in nonaccrual interest recoveries and loan fees. The increase in the contribution of nonaccrual interest recoveries and loan fees accounted for 4 basis points of the increase in net interest margin.____________________________________(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
Noninterest Income
Noninterest income for the second quarter of 2025 was $9.1 million, a 1.8% decrease from $9.3 million for the first quarter of 2025. The decrease was primarily attributable to changes in the mortgage servicing rights ("MSR") fair value adjustment, with a $0.8 million negative MSR fair value adjustment included in the second quarter 2025 results compared to a $0.3 million negative MSR fair value adjustment included in the first quarter 2025 results. Partially offsetting this decrease were seasonal increases in card income of $0.2 million and gains on sale of mortgage loans of $0.2 million.
Relative to the second quarter of 2024, noninterest income decreased 4.9% from $9.6 million. The decrease was primarily attributable to changes in the MSR fair value adjustment, with a $0.8 million negative MSR fair value adjustment included in the second quarter 2025 results compared to a $0.1 million negative MSR fair value adjustment included in the second quarter 2024 results. Partially offsetting the decrease was a $0.2 million increase in wealth management fees.
Noninterest Expense
Noninterest expense for the second quarter of 2025 was $31.9 million, nearly unchanged from the first quarter of 2025. A $0.6 million decrease in salaries expense, which was impacted by seasonal variations in vacation accruals, was largely offset by a $0.4 million increase in other noninterest expense and a $0.3 million increase in employee benefits expense, primarily driven by higher medical benefit costs.
Relative to the second quarter of 2024, noninterest expense increased 4.6% from $30.5 million. The increase was primarily attributable to a $0.7 million increase in employee benefits expense, primarily driven by higher medical benefit costs, a $0.3 million increase in other noninterest expense, and a $0.2 million increase in bank occupancy expense, primarily due to planned building maintenance and upgrades.
Income Taxes
During the second quarter of 2025 our effective tax rate increased to 27.0% when compared to 25.2% during the first quarter of 2025. This increase was primarily related to $0.3 million of additional tax expense related to the nonrecurring 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 during the second quarter of 2025. Additionally, the first quarter of 2025 included a $0.2 million tax benefit from stock-based compensation that vested during the quarter.
Loan Portfolio
Total loans outstanding, before allowance for credit losses, were $3.35 billion at June 30, 2025, compared with $3.46 billion at March 31, 2025, and $3.39 billion at June 30, 2024. The $113.6 million decrease from March 31, 2025 was primarily attributable to $72.0 million of paydowns from property sales, a seasonal reduction of $25.1 million in grain elevator lines of credit included in the commercial and industrial segment, and additional payoffs across other segments. These reductions were partially offset by draws on existing loans in the construction and development segment and new originations to existing customers. Additionally, increases in the multi-family and commercial real estate, non-owner occupied segments were primarily due to completed projects being moved out of the construction and land development category.
Deposits
Total deposits were $4.31 billion at June 30, 2025, compared with $4.38 billion at March 31, 2025, and $4.32 billion at June 30, 2024. The $78.1 million decrease from March 31, 2025 was primarily attributable to higher outflows for tax payments by depositors and lower balances maintained in existing retail accounts which were partially offset by higher public funds balances.
Asset Quality
Nonperforming assets totaled $6.5 million, or 0.13% of total assets, at June 30, 2025, compared with $5.6 million, or 0.11% of total assets, at March 31, 2025, and $8.8 million, or 0.17% of total assets, at June 30, 2024. Additionally, of the $5.6 million of nonperforming loans held as of June 30, 2025, $1.9 million were either wholly or partially guaranteed by the U.S. government. The $0.9 million increase in nonperforming assets from March 31, 2025 was primarily attributable to higher nonperforming loan balances in the commercial and industrial and the construction and land development segments.
The Company recorded a provision for credit losses of $0.5 million for the second quarter of 2025. The provision for credit losses primarily reflects a $1.0 million increase in required reserves driven by changes in the economic forecast; a $0.8 million increase in required reserves resulting from changes in qualitative factors; a $1.2 million decrease in required reserves driven by changes within the portfolio; and a $0.1 million decrease in specific reserves.The Company had net charge-offs of $1.0 million, or 0.12% of average loans on an annualized basis, for the second quarter of 2025, compared to net charge-offs of $0.4 million, or 0.05% of average loans on an annualized basis, for the first quarter of 2025, and net charge-offs of $0.7 million, or 0.08% of average loans on an annualized basis, for the second quarter of 2024. Charge-offs during second quarter of 2025 were primarily recognized in the commercial and industrial and one-to-four family residential segments.
The Company's allowance for credit losses was 1.24% of total loans and 741% of nonperforming loans at June 30, 2025, compared with 1.22% of total loans and 825% of nonperforming loans at March 31, 2025. In addition, the allowance for credit losses on unfunded lending-related commitments totaled $3.1 million as of June 30, 2025, compared with $3.2 million as of March 31, 2025.
Capital
As of June 30, 2025, the Company exceeded all regulatory capital requirements under Basel III as summarized in the following table:
June 30, 2025
For CapitalAdequacy PurposesWith CapitalConservation Buffer
Total capital to risk-weighted assets
17.74
%
10.50
%
Tier 1 capital to risk-weighted assets
15.60
8.50
Common equity tier 1 capital ratio
14.26
7.00
Tier 1 leverage ratio
11.86
4.00
The ratio of tangible common equity to tangible assets(1) increased to 10.21% as of June 30, 2025, from 9.73% as of March 31, 2025, and tangible book value per share(1) increased by $0.59 to $16.02 as of June 30, 2025, when compared to March 31, 2025.
During the second quarter of 2025, the Company repurchased 135,997 shares of its common stock at a weighted average price of $21.30 under its stock repurchase program. The Company's Board of Directors has authorized the repurchase of up to $15.0 million of HBT Financial common stock under its stock repurchase program, which is in effect until January 1, 2026. As of June 30, 2025, the Company had $12.1 million remaining under the stock repurchase program.____________________________________(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.
About HBT Financial, Inc.
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. HBT Financial provides a comprehensive suite of financial products and services to consumers, businesses, and municipal entities throughout Illinois and eastern Iowa through 66 full-service branches. As of June 30, 2025, HBT Financial had total assets of $5.0 billion, total loans of $3.3 billion, and total deposits of $4.3 billion.
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 adjusted net income, adjusted earnings per share, adjusted ROAA, pre-provision net revenue, pre-provision net revenue less charge-offs (recoveries), adjusted pre-provision net revenue, adjusted pre-provision net revenue less charge-offs (recoveries), net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), efficiency ratio (tax-equivalent basis), adjusted efficiency ratio (tax-equivalent basis), the ratio of tangible common equity to tangible assets, tangible book value per share, adjusted ROAE, ROATCE, and adjusted ROATCE. 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 contains, and future oral and written statements of the Company and its management may contain, "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. 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," "continue," or "should," 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.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: (i) the strength of the local, state, national and international economies and financial markets (including effects of inflationary pressures and supply chain constraints); (ii) effects on the U.S. economy resulting from the threat or implementation of, or changes to, existing policies and executive orders including tariffs, immigration policy, regulatory or other governmental agencies, foreign policy and tax regulations; (iii) the economic impact of any future terrorist threats and attacks, widespread disease or pandemics, acts of war or other threats thereof (including the Russian invasion of Ukraine and ongoing conflicts in the Middle East), or other adverse events that could cause economic deterioration or instability in credit markets, and the response of the local, state and national governments to any such adverse external events; (iv) new and revised accounting policies and practices, as may be adopted by state and federal regulatory banking agencies, the Financial Accounting Standards Board or the Public Company Accounting Oversight Board; (v) changes in local, state and federal laws, regulations and governmental policies concerning the Company's general business and any changes in response to bank failures; (vi) the imposition of tariffs or other governmental policies impacting the value of products produced by the Company's commercial borrowers; (vii) changes in interest rates and prepayment rates of the Company's assets; (viii) increased competition in the financial services sector, including from non-bank competitors such as credit unions and fintech companies, and the inability to attract new customers; (ix) technological changes implemented by us and other parties, including our third-party vendors, which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; (x) unexpected results of acquisitions, which may include failure to realize the anticipated benefits of acquisitions and the possibility that transaction costs may be greater than anticipated; (xi) the loss of key executives and employees, talent shortages and employee turnover; (xii) changes in consumer spending; (xiii) unexpected outcomes or costs of existing or new litigation or other legal proceedings and regulatory actions involving the Company; (xiv) the economic impact on the Company and its customers of climate change, natural disasters and of exceptional weather occurrences such as tornadoes, floods and blizzards; (xv) fluctuations in the value of securities held in our securities portfolio, including as a result of changes in interest rates; (xvi) credit risks and risks from concentrations (by type of borrower, geographic area, collateral and industry) within our loan portfolio (including commercial real estate loans) and large loans to certain borrowers; (xvii) the overall health of the local and national real estate market; (xviii) the ability to maintain an adequate level of allowance for credit losses on loans; (xix) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and who may withdraw deposits to diversify their exposure; (xx) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact the Company's cost of funds; (xxi) the level of nonperforming assets on our balance sheet; (xxii) interruptions involving our information technology and communications systems or third-party servicers; (xxiii) the occurrence of fraudulent activity, breaches or failures of our third-party vendors' information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; (xxiv) the effectiveness of the Company's risk management framework, and (xxv) the ability of the Company to manage the risks associated with the foregoing as well as anticipated. 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. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.
CONTACT:Peter 664-4556
HBT Financial, Inc.Unaudited Consolidated Financial Summary
As of or for the Three Months Ended
Six Months Ended June 30,
(dollars in thousands, except per share data)
June 30,2025
March 31,2025
June 30,2024
2025
2024
Interest and dividend income
$
63,919
$
63,138
$
62,824
$
127,057
$
124,785
Interest expense
14,261
14,430
15,796
28,691
31,069
Net interest income
49,658
48,708
47,028
98,366
93,716
Provision for credit losses
526
576
1,176
1,102
1,703
Net interest income after provision for credit losses
49,132
48,132
45,852
97,264
92,013
Noninterest income
9,140
9,306
9,610
18,446
15,236
Noninterest expense
31,914
31,935
30,509
63,849
61,777
Income before income tax expense
26,358
25,503
24,953
51,861
45,472
Income tax expense
7,128
6,428
6,883
13,556
12,144
Net income
$
19,230
$
19,075
$
18,070
$
38,305
$
33,328
Earnings per share - diluted
$
0.61
$
0.60
$
0.57
$
1.21
$
1.05
Adjusted net income (1)
$
19,803
$
19,253
$
18,139
$
39,056
$
36,212
Adjusted earnings per share - diluted (1)
0.63
0.61
0.57
1.23
1.14
Book value per share
$
18.44
$
17.86
$
16.14
Tangible book value per share (1)
16.02
15.43
13.64
Shares of common stock outstanding
31,495,434
31,631,431
31,559,366
Weighted average shares of common stock outstanding, including all dilutive potential shares
31,588,541
31,711,671
31,666,811
31,649,766
31,734,999
SUMMARY RATIOS
Net interest margin *
4.14
%
4.12
%
3.95
%
4.13
%
3.95
%
Net interest margin (tax-equivalent basis) * (1)(2)
4.19
4.16
4.00
4.18
3.99
Efficiency ratio
53.10
%
53.85
%
52.61
%
53.47
%
55.40
%
Efficiency ratio (tax-equivalent basis) (1)(2)
52.61
53.35
52.10
52.97
54.83
Loan to deposit ratio
77.75
%
78.95
%
78.39
%
Return on average assets *
1.53
%
1.54
%
1.45
%
1.53
%
1.34
%
Return on average stockholders' equity *
13.47
13.95
14.48
13.70
13.46
Return on average tangible common equity * (1)
15.55
16.20
17.21
15.87
16.03
Adjusted return on average assets * (1)
1.58
%
1.55
%
1.45
%
1.56
%
1.45
%
Adjusted return on average stockholders' equity * (1)
13.87
14.08
14.54
13.97
14.63
Adjusted return on average tangible common equity * (1)
16.02
16.36
17.27
16.18
17.42
CAPITAL
Total capital to risk-weighted assets
17.74
%
16.85
%
16.01
%
Tier 1 capital to risk-weighted assets
15.60
14.77
13.98
Common equity tier 1 capital ratio
14.26
13.48
12.66
Tier 1 leverage ratio
11.86
11.64
10.83
Total stockholders' equity to total assets
11.58
11.10
10.18
Tangible common equity to tangible assets (1)
10.21
9.73
8.74
ASSET QUALITY
Net charge-offs (recoveries) to average loans *
0.12
%
0.05
%
0.08
%
0.09
%
0.03
%
Allowance for credit losses to loans, before allowance for credit losses
1.24
1.22
1.21
Nonperforming loans to loans, before allowance for credit losses
0.17
0.15
0.25
Nonperforming assets to total assets
0.13
0.11
0.17
____________________________________
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most closely comparable GAAP financial measures.(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.
HBT Financial, Inc.Unaudited Consolidated Financial SummaryConsolidated Statements of Income
Three Months Ended
Six Months Ended June 30,
(dollars in thousands, except per share data)
June 30,2025
March 31,2025
June 30,2024
2025
2024
INTEREST AND DIVIDEND INCOME
Loans, including fees:
Taxable
$
53,156
$
53,369
$
52,177
$
106,525
$
104,103
Federally tax exempt
1,215
1,168
1,097
2,383
2,191
Debt securities:
Taxable
7,434
6,936
6,315
14,370
12,519
Federally tax exempt
457
469
521
926
1,118
Interest-bearing deposits in bank
1,544
1,065
2,570
2,609
4,522
Other interest and dividend income
113
131
144
244
332
Total interest and dividend income
63,919
63,138
62,824
127,057
124,785
INTEREST EXPENSE
Deposits
12,835
12,939
14,133
25,774
27,726
Securities sold under agreements to repurchase
—
22
129
22
281
Borrowings
30
109
121
139
246
Subordinated notes
469
470
469
939
939
Junior subordinated debentures issued to capital trusts
927
890
944
1,817
1,877
Total interest expense
14,261
14,430
15,796
28,691
31,069
Net interest income
49,658
48,708
47,028
98,366
93,716
PROVISION FOR CREDIT LOSSES
526
576
1,176
1,102
1,703
Net interest income after provision for credit losses
49,132
48,132
45,852
97,264
92,013
NONINTEREST INCOME
Card income
2,797
2,548
2,885
5,345
5,501
Wealth management fees
2,826
2,841
2,623
5,667
5,170
Service charges on deposit accounts
1,915
1,944
1,902
3,859
3,771
Mortgage servicing
1,042
990
1,111
2,032
2,166
Mortgage servicing rights fair value adjustment
(751
)
(308
)
(97
)
(1,059
)
(17
)
Gains on sale of mortgage loans
459
252
443
711
741
Realized gains (losses) on sales of securities
—
—
—
—
(3,382
)
Unrealized gains (losses) on equity securities
23
8
(96
)
31
(112
)
Gains (losses) on foreclosed assets
14
13
(28
)
27
59
Gains (losses) on other assets
(128
)
54
—
(74
)
(635
)
Income on bank owned life insurance
167
164
166
331
330
Other noninterest income
776
800
701
1,576
1,644
Total noninterest income
9,140
9,306
9,610
18,446
15,236
NONINTEREST EXPENSE
Salaries
16,452
17,053
16,364
33,505
33,021
Employee benefits
3,580
3,285
2,860
6,865
5,665
Occupancy of bank premises
2,471
2,625
2,243
5,096
4,825
Furniture and equipment
575
445
548
1,020
1,098
Data processing
2,687
2,717
2,606
5,404
5,531
Marketing and customer relations
1,020
1,144
996
2,164
1,992
Amortization of intangible assets
694
695
710
1,389
1,420
FDIC insurance
551
562
565
1,113
1,125
Loan collection and servicing
360
383
475
743
927
Foreclosed assets
67
5
10
72
59
Other noninterest expense
3,457
3,021
3,132
6,478
6,114
Total noninterest expense
31,914
31,935
30,509
63,849
61,777
INCOME BEFORE INCOME TAX EXPENSE
26,358
25,503
24,953
51,861
45,472
INCOME TAX EXPENSE
7,128
6,428
6,883
13,556
12,144
NET INCOME
$
19,230
$
19,075
$
18,070
$
38,305
$
33,328
EARNINGS PER SHARE - BASIC
$
0.61
$
0.60
$
0.57
$
1.21
$
1.05
EARNINGS PER SHARE - DILUTED
$
0.61
$
0.60
$
0.57
$
1.21
$
