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STOCK-BASED COMPENSATION PLANS

9 Months Ended

Sep. 30, 2022

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

NOTE 11 – 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,

​

2022

2021

2022

2021

​

​

(dollars in thousands)

Restricted stock units

​

$

230

​

$

153

​

$

1,072

​

$

415

Performance restricted stock units

​

​

119

​

​

75

​

​

530

​

​

123

Total awards classified as equity

​

​

349

​

​

228

​

​

1,602

​

​

538

Stock appreciation rights

​

​

51

​

​

(87)

​

​

35

​

​

43

Total stock-based compensation expense

​

$

400

​

$

141

​

$

1,637

​

$

581

​

In February 2022, all outstanding restricted stock unit and performance restricted stock unit agreements were modified to address treatment upon retirement. In the event of retirement, and if the retirement eligibility requirements are met, then 100% of unvested restricted stock units and performance restricted stock units will continue to vest in accordance with the originally established vesting schedule. The retirement modification resulted in the acceleration of $0.6 million of expense, although total compensation costs related to the modified agreements remained the same.

​

Restricted Stock Units

A restricted stock unit grants a participant the right to receive one share of the Company’s 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.

During the nine months ended September 30, 2022 and 2021, the total grant date fair value of the restricted stock units granted was $0.9 million and $0.8 million, respectively, based on the grant date closing prices. The total intrinsic value of restricted stock that vested during the nine months ended September 30, 2022 and 2021 was $0.7 million and $0.3 million, respectively.

The following is a summary of restricted stock unit activity:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended September 30,
​	​	2022				​	2021
​	​	​	​	Weighted		​	​	​	Weighted
​	​	​	​	Average		​	​	​	Average
​	​	Restricted	​	Grant Date		​	Restricted	​	Grant Date
​		Stock Units		Fair Value			Stock Units		Fair Value
Beginning balance	​	120,631	​	$	17.98	​	99,597	​	$	17.37
Granted	​	—	​	​	—	​	—	​	​	—
Vested	​	—	​	​	—	​	—	​	​	—
Forfeited	​	(1,328)	​	​	18.35	​	—	​	​	—
Ending balance	​	119,303	​	$	17.98	​	99,597	​	$	17.37
​	​	​	​	​	​	​	​	​	​	​
​	​	Nine Months Ended September 30,
​	​	2022				​	2021
​	​	​	​	Weighted		​	​	​	Weighted
​	​	​	​	Average		​	​	​	Average
​	​	Restricted	​	Grant Date		​	Restricted	​	Grant Date
​		Stock Units		Fair Value			Stock Units		Fair Value
Beginning balance	​	109,244	​	$	17.27	​	71,000	​	$	18.98
Granted	​	46,312	​	​	19.11	​	50,347	​	​	15.72
Vested	​	(34,925)	​	​	17.26	​	(20,225)	​	​	18.86
Forfeited	​	(1,328)	​	​	18.35	​	(1,525)	​	​	18.11
Ending balance	​	119,303	​	$	17.98	​	99,597	​	$	17.37

​

As of September 30, 2022, unrecognized compensation cost related to the non-vested restricted stock units was $1.1 million. This cost is expected to be recognized over the weighted average remaining service period of 1.7 years.

​

Performance Restricted Stock Units

A performance restricted stock unit is similar to a restricted stock unit, except that the number of shares of the Company’s common stock awarded is based on a performance condition and the completion of the requisite service period. The number of shares of the Company’s common stock that may be earned ranges from 0% to 150% of the number of performance restricted stock units granted. 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. Changes in the performance condition probability assessment result in cumulative catch-up adjustments to the compensation cost recognized. Dividend equivalents on performance restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings.

During the nine months ended September 30, 2022 and 2021, the total fair value of the performance restricted stock units granted was $0.5 million and $0.4 million, respectively, based on the grant date closing prices 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,
​	​	2022				​	2021
​	​	​	​	Weighted		​	​	​	Weighted
​	​	Performance	​	Average		​	Performance	​	Average
​	​	Restricted	​	Grant Date		​	Restricted	​	Grant Date
​		Stock Units		Fair Value			Stock Units		Fair Value
Beginning balance	​	62,067	​	$	17.02	​	28,697	​	$	15.53
Granted	​	—	​	​	—	​	—	​	​	—
Vested	​	—	​	​	—	​	—	​	​	—
Forfeited	​	—	​	​	—	​	—	​	​	—
Ending balance	​	62,067	​	$	17.02	​	28,697	​	$	15.53
​	​	​	​	​	​	​	​	​	​	​
​	​	Nine months ended September 30,
​	​	2022				​	2021
​	​	​	​	Weighted		​	​	​	Weighted
​	​	Performance	​	Average		​	Performance	​	Average
​	​	Restricted	​	Grant Date		​	Restricted	​	Grant Date
​		Stock Units		Fair Value			Stock Units		Fair Value
Beginning balance	​	38,344	​	$	15.72	​	—	​	$	—
Granted	​	23,723	​	​	19.14	​	28,697	​	​	15.53
Vested	​	—	​	​	—	​	—	​	​	—
Forfeited	​	—	​	​	—	​	—	​	​	—
Ending balance	​	62,067	​	$	17.02	​	28,697	​	$	15.53

​

As of September 30, 2022, unrecognized compensation cost related to non-vested performance restricted stock units was $0.5 million, based on the current assessment of the probable outcome of the performance conditions. This cost is expected to be recognized over the weighted average remaining service period of 1.7 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,
​	​	2022				​	2021
​		Stock Appreciation Rights Outstanding		Weighted Average Grant Date Assigned Value			Stock Appreciation Rights Outstanding		Weighted Average Grant Date Assigned Value
Beginning balance	​	91,800	​	$	16.32	​	97,920	​	$	16.32
Granted	​	—	​	​	—	​	—	​	​	—
Exercised	​	—	​	​	—	​	—	​	​	—
Expired	​	—	​	​	—	​	—	​	​	—
Forfeited	​	—	​	​	—	​	—	​	​	—
Ending balance	​	91,800	​	$	16.32	​	97,920	​	$	16.32
​	​	​	​	​	​	​	​	​	​	​
​	​	Nine Months Ended September 30,
​	​	2022				​	2021
​		Stock Appreciation Rights		Weighted Average Grant Date Assigned Value			Stock Appreciation Rights		Weighted Average Grant Date Assigned Value
Beginning balance	​	97,920	​	$	16.32	​	105,570	​	$	16.32
Granted	​	—	​	​	—	​	—	​	​	—
Exercised	​	(6,120)	​	​	16.32	​	(6,120)	​	​	16.32
Expired	​	—	​	​	—	​	(1,530)	​	​	16.32
Forfeited	​	—	​	​	—	​	—	​	​	—
Ending balance	​	91,800	​	$	16.32	​	97,920	​	$	16.32

​

A further summary of stock appreciation rights as of September 30, 2022, is as follows:

​	​	​	​	​	​	​	​
​	​	​	​	​	​	Weighted Average
​	​	Stock Appreciation Rights			​	Remaining
Grant Date Assigned Values		Outstanding		Exercisable		Contractual Term
$ 16.32	​	91,800	​	85,680	​	6.5	years

​

As of September 30, 2022, unrecognized compensation cost related to non-vested stock appreciation rights was $33 thousand.

​

As of September 30, 2022 and December 31, 2021, the liability recorded for outstanding stock appreciation rights was $0.5 million and $0.5 million, 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, 2022			December 31, 2021		​
Risk-free interest rate	​	​	3.97	%	​	1.40	%
Expected volatility	​	​	36.17	%	​	35.52	%
Expected life (in years)	​	​	6.9	​	​	7.7	​
Expected dividend yield	​	​	3.53	%	​	3.20	%

​

As of September 30, 2022, the liability recorded for previously exercised stock appreciation rights was $0.5 million, which will be paid in two remaining annual installments in 2023 and 2024. As of December 31, 2021, the liability recorded for previously exercised stock appreciation rights was $0.8 million.

X

- Definition

The entire disclosure for share-based payment arrangement.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
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-Name Accounting Standards Codification
-Topic 718
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
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-Section 50
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-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (h)(2)(i)
-URI https://asc.fasb.org/extlink&oid=128089324&loc=d3e5070-113901

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (h)(2)
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