HBT Financial, Inc. 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. HBT Financial, Inc. is the holding company for Heartland Bank and Trust Company, operating primarily in Illinois, eastern Iowa, and suburban St. Louis. The reporting period is significantly impacted by the acquisition of CNB Bank Shares, Inc. ("CNB") on March 1, 2026, which expanded the company's footprint and asset base.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Net Income | $27.8 million | $19.2 million | $39.0 million | $38.3 million |
| Diluted EPS | $0.76 | $0.61 | $1.12 | $1.21 |
| Net Interest Income | $69.1 million | $49.7 million | $125.4 million | $98.4 million |
| Net Interest Margin (TE) | 4.38% | 4.19% | 4.32% | 4.18% |
| Noninterest Income | $11.8 million | $9.1 million | $22.8 million | $18.4 million |
| Noninterest Expense | $42.4 million | $31.9 million | $94.9 million | $63.8 million |
| Provision for Credit Losses | $0.7 million | $0.5 million | $0.5 million | $1.1 million |
| Total Assets | $6.73 billion | $5.04 billion | $6.73 billion | $5.03 billion |
| Total Loans | $4.75 billion | $3.42 billion | $4.75 billion | $3.42 billion |
| Total Deposits | $5.76 billion | $4.33 billion | $5.76 billion | $4.33 billion |
| Stockholders' Equity | $764.7 million | $580.9 million | $764.7 million | $580.9 million |
Material Changes vs. Prior Period
- Acquisition Impact: The CNB acquisition added approximately $1.81 billion in assets, $1.30 billion in loans, and $1.52 billion in deposits. Acquisition-related expenses totaled $0.3 million for Q2 and $15.9 million for the six months ended June 30, 2026.
- Revenue Growth: Net interest income increased $19.4 million (39.1%) in Q2 2026 compared to Q2 2025, driven by higher average interest-earning asset balances and improved yields on debt securities. Noninterest income rose 29.6% in Q2, led by wealth management fees and card income.
- Expense Increases: Noninterest expense increased 33.0% in Q2 2026. Excluding acquisition costs, the increase was primarily due to the integration of CNB operations, including higher salaries and data processing costs.
- Capital Actions: In March 2026, the company issued $85.0 million of fixed-to-floating rate subordinated notes. The company also repurchased 15,466 shares of common stock in Q2 2026.
- Asset Quality: Nonperforming assets increased to $9.9 million (0.15% of total assets) from $8.7 million at year-end 2025, largely due to loans acquired in the CNB merger. Net charge-offs were $0.1 million for Q2 2026.
Guidance, Outlook, and Risks
Management Commentary: Management attributes the increase in net interest margin to improved yields on debt securities and a favorable asset mix following the CNB merger. The company sold $313.1 million of acquired CNB securities to reduce higher-cost funding and purchase higher-yield assets. The dividend was increased to $0.25 per share in July 2026.
Outlook: Management expects net interest income and margin to generally increase with rising market rates, though decreases in rates could put downward pressure on margins. The company continues to focus on growing core deposits and managing liquidity.
Risks and Contingencies:
- Interest Rate Risk: Sensitivity analysis indicates that a 200 basis point decrease in rates could reduce Economic Value of Equity (EVE) by 23.8% and Year 1 net interest income by 3.1%.
- Acquisition Integration: Risks include failure to realize anticipated synergies and higher-than-anticipated transaction costs.
- Credit Risk: Concentrations in commercial real estate (non-owner occupied and multi-family) and agricultural loans require ongoing monitoring.
- Regulatory and Legal: Exposure to changes in banking regulations, tariffs, and potential litigation.
Investor Verification Checklist
- Acquisition Synergies: Verify the timeline and cost savings associated with the CNB integration, particularly regarding data processing and branch consolidation.
- Deposit Stability: Monitor the run-off of higher-cost time deposits and the retention of core deposits post-acquisition.
- Asset Quality Trends: Track the performance of acquired CNB loans, specifically the $163.9 million in purchased credit deteriorated (PCD) loans and the increase in substandard risk ratings.
- Interest Rate Sensitivity: Review the company's hedging strategy (e.g., the $85 million interest rate swap) and its effectiveness in managing asset sensitivity in a changing rate environment.
- Capital Ratios: Confirm that the company maintains "well capitalized" status under Prompt Corrective Action provisions following the issuance of subordinated notes and stock repurchases.