XML 35 R24.htm IDEA: XBRL DOCUMENT

STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2021

NOTE 16 – STOCK-BASED COMPENSATION PLANS

The Company has adopted the HBT Financial, Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. The maximum number of shares of common stock available for issuance under the Omnibus Incentive Plan is 1,820,000 shares.

The following is a summary of stock-based compensation expense (benefit):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(dollars in thousands)
Restricted stock units	$	153	$	100	$	415	$	263
Performance restricted stock units		75		—		123		—
Total awards classified as equity		228		100		538		263
Stock appreciation rights		(87)		(75)		43		(303)
Total stock-based compensation expense (benefit)	$	141	$	25	$	581	$	(40)

Restricted Stock Units

A restricted stock unit grants a participant the right to receive one share of common stock, following the completion of the requisite service period. Restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and is recognized on a straight-line basis over the service period for the entire award. Dividend equivalents on restricted stock units, which are either accrued until vested or paid at the same time as dividends on common stock, are classified as dividends charged to retained earnings.

On February 19, 2021, the Company granted 43,047 restricted stock units to certain key employees which vest in three annual installments beginning on February 28, 2022. On February 19, 2021, the Company also granted 3,300 restricted stock units to non-employee directors which vest on February 28, 2022. The total fair value of the restricted stock units granted on February 19, 2021, was $720,000, based on the grant date closing price of $15.53 per share.

On April 27, 2021, the Company granted 4,000 restricted stock units to certain key employees which vest in four equal annual installments beginning on February 28, 2022. The total fair value of the restricted stock units granted on April 27, 2021, was $72,000, based on the grant date closing price of $17.93 per share.

The following is a summary of restricted stock unit activity:


	Three Months Ended September 30,
	2021			2020
		Weighted			Weighted
		Average			Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	99,597	$	17.37	73,700	$	18.98
Granted	—		—	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	99,597	$	17.37	73,700	$	18.98

	Nine Months Ended September 30,
	2021			2020
		Weighted			Weighted
		Average			Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	71,000	$	18.98	—	$	—
Granted	50,347		15.72	73,700		18.98
Vested	(20,225)		18.86	—		—
Forfeited	(1,525)		18.11	—		—
Ending balance	99,597	$	17.37	73,700	$	18.98

As of September 30, 2021, unrecognized compensation cost related to the non-vested restricted stock units was $1,346,000. This cost is expected to be recognized over the weighted average remaining contractual term of 2.2 years.

Performance Restricted Stock Units

A performance restricted stock unit is similar to a restricted stock unit, except that the number of shares of common stock awarded is based on a performance condition and the completion of the requisite service period. Performance restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and an assessment of the probable outcome of the performance condition. Compensation cost is recognized on a straight-line basis over the service period of the entire award. Dividend equivalents on performance restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings.

On February 19, 2021, the Company granted 28,697 performance restricted stock units to certain key employees which vest on February 28, 2024. The performance condition is based on the average annual return on average tangible common equity during a three-year performance period. The number of shares of common stock that may be earned ranges from 0% to 150% of the number of performance restricted stock units granted. The total fair value of the performance restricted stock units granted on February 19, 2021, was $405,000, based on the grant date closing price of $15.53 per share and an assessment of the probable outcome of the performance condition on the grant date.

The following is a summary of performance restricted stock unit activity:


	Three Months Ended September 30,
	2021			2020
	Maximum			Maximum
	Awarded	Weighted		Awarded	Weighted
	Performance	Average		Performance	Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	43,046	$	15.53	—	$	—
Granted	—		—	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	43,046	$	15.53	—	$	—

	Nine months ended September 30,
	2021			2020
	Maximum			Maximum
	Awarded	Weighted		Awarded	Weighted
	Performance	Average		Performance	Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	—	$	—	—	$	—
Granted	43,046		15.53	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	43,046	$	15.53	—	$	—

As of September 30, 2021, unrecognized compensation cost related to non-vested performance restricted stock units was $485,000, based on the current assessment of the probable outcome of the performance condition. This cost is expected to be recognized over the weighted average remaining contractual term of 2.4 years.

Stock Appreciation Rights

A stock appreciation right grants a participant the right to receive an amount of cash, the value of which equals the appreciation in the Company’s stock price between the grant date and the exercise date. Stock appreciation rights are classified as liabilities. The liability is based on an option-pricing model used to estimate the fair value of the stock appreciation rights. Compensation cost for non-vested stock appreciation rights is recognized on a straight line basis over the service period of the entire award. The non-vested stock appreciation rights vest in four equal annual installments beginning on the first anniversary of the grant date.

The following is a summary of stock appreciation rights activity:


	Three Months Ended September 30,
	2021			2020
	Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value
Beginning balance	97,920	$	16.32	110,160	$	16.32
Granted	—		—	—		—
Exercised	—		—	—		—
Expired	—		—	—		—
Forfeited	—		—	—		—
Ending balance	97,920	$	16.32	110,160	$	16.32

	Nine Months Ended September 30,
	2021			2020
	Stock Appreciation Rights	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights	Weighted Average Grant Date Assigned Value
Beginning balance	105,570	$	16.32	110,160	$	16.32
Granted	—		—	—		—
Exercised	(6,120)		16.32	—		—
Expired	(1,530)		16.32	—		—
Forfeited	—		—	—		—
Ending balance	97,920	$	16.32	110,160	$	16.32

A further summary of stock appreciation rights as of September 30, 2021, is as follows:


			Weighted Average
	Stock Appreciation Rights		Remaining
Grant Date Assigned Values	Outstanding	Exercisable	Contractual Term
$ 16.32	97,920	85,680	7.5	years

As of September 30, 2021, unrecognized compensation cost related to non-vested stock appreciation rights was $41,000.

As of September 30, 2021 and December 31, 2020, the liability recorded for outstanding stock appreciation rights was $302,000 and $272,000, respectively. The Company used an option pricing model to value the stock appreciation rights, using the assumptions in the following table. Expected volatility is derived from the historical volatility of the Company’s stock price and a selected peer group of industry-related companies.


	September 30,			December 31,
	2021			2020
Risk-free interest rate		1.33	%		0.80	%
Expected volatility		35.36	%		34.72	%
Expected life (in years)		7.9			8.7
Expected dividend yield		3.86	%		3.96	%

As of September 30, 2021, the liability recorded for previously exercised stock appreciation rights was $797,000, which will be paid in three remaining equal annual installments. As of December 31, 2020, the liability recorded for previously exercised units was $1,087,000.