XML 26 R11.htm IDEA: XBRL DOCUMENT

ACQUISITIONS

12 Months Ended

Dec. 31, 2021

NOTE 2 – ACQUISITIONS

NXT Bancorporation, Inc.

On October 1, 2021, HBT Financial acquired 100% of the outstanding common stock of NXT Bancorporation, Inc. (“NXT”), and its wholly-owned subsidiary NXT Bank, pursuant to an Agreement and Plan of Merger dated June 7, 2021. Under the Agreement and Plan of Merger, NXT merged with and into HBT Financial, with HBT Financial as the surviving entity, on October 1, 2021. Additionally, NXT Bank was merged with and into Heartland Bank, with Heartland Bank as the surviving entity, in December 2021.

At the effective time of the merger, each share of NXT was converted into the right to receive 67.6783 shares of HBT Financial common stock, cash in lieu of fractional shares, and $400 in cash. There were 1,799,016 shares of HBT Financial common stock issued at the effective time of the acquisition with a market value of $29,270,000, based on the closing stock price of $16.27 on October 1, 2021. This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. Goodwill of $5,702,000 was recorded in the acquisition, which reflects expected synergies from combining the operations of HBT Financial and NXT, and is nondeductible for tax purposes.

The acquisition of NXT provides an opportunity to utilize Heartland Bank’s existing excess liquidity to replace NXT Bank’s higher cost funding. Additionally, Heartland Bank’s broader range of products and services and greater ability to meet larger borrowing needs provides an opportunity to expand NXT Bank customer relationships.

During the year ended December 31, 2021, the HBT Financial incurred $1,416,000 in pre-tax acquisition expenses related to the acquisition of NXT, comprised primarily of professional fees and data processing expense. These expenses are reflected in noninterest expense on the consolidated statements of income.

The fair value of the assets acquired and liabilities assumed from NXT on the acquisition date were as follows (dollars in thousands):


	Fair Value
Assets acquired:
Cash and cash equivalents	$	5,862
Interest-bearing time deposits with banks		739
Debt securities		18,295
Equity securities with readily determinable fair value		43
Restricted stock		796
Loans		194,576
Bank owned life insurance		7,352
Bank premises and equipment		3,667
Core deposit intangible assets		199
Mortgage servicing rights		370
Accrued interest receivable		886
Other assets		1,340
Total assets acquired		234,125

Liabilities assumed:
Deposits		181,586
Securities sold under agreements to repurchase		4,080
FHLB advances		12,625
Other liabilities		1,633
Total liabilities assumed		199,924
Net assets acquired	$	34,201

Consideration paid:
Cash	$	10,633
Common stock		29,270
Total consideration paid	$	39,903

Goodwill	$	5,702

The following table presents the acquired non-impaired loans as of the acquisition date (dollars in thousands):


Fair Value	$	194,576
Gross contractual amounts receivable		196,104
Estimate of contractual cash flows not expected to be collected		1,045

There were no loans acquired with deteriorated credit quality from NXT.

The following table provides the pro forma information for the results of operations for the years ended December 31, 2021 and 2020, as if the acquisition had occurred on January 1, 2020. The pro forma results combine the historical results of NXT into HBT Financial’s consolidated statements of income, including the impact of certain acquisition accounting adjustments, which include loan discount accretion, intangible assets amortization, deposit premium amortization, and borrowing premium amortization. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2020. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for loan losses, expense efficiencies or asset dispositions. The acquisition-related expenses that have been recognized are included in net income in the following table.


	Pro Forma
	Year Ended December 31,
	2021		2020

	(dollars in thousands, except per share data)
Total revenues (net interest income and noninterest income)	$	166,677	$	161,005
Net income		57,883		39,263
Earnings per share - basic		1.98		1.34
Earnings per share - diluted		1.98		1.34