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ACQUISITIONS
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS ACQUISITIONS
Town and Country Financial Corporation
On February 1, 2023, HBT Financial acquired 100% of the issued and outstanding common stock of Town and Country Financial Corporation (“Town and Country”), the holding company for Town and Country Bank, pursuant to an Agreement and Plan of Merger dated August 23, 2022. Under the Agreement and Plan of Merger, Town and Country merged with and into HBT Financial, with HBT Financial as the surviving entity, immediately followed by the merger of Town and Country Bank with and into Heartland Bank, with Heartland Bank as the surviving entity.
At the effective time of the merger, each share of Town and Country was converted into the right to receive, subject to the election and proration procedures as provided in the Merger Agreement, one of the following: (i) 1.9010 shares of HBT Financial’s common stock, or (ii) $35.66 in cash, or (iii) a combination of cash and HBT Financial common stock. Total consideration consisted of 3,378,600 shares of HBT Financial’s common stock and $38.0 million in cash. In lieu of fractional shares, holders of Town and Country common stock received cash. Based upon the closing price of HBT Financial common stock of $21.12 on February 1, 2023, the aggregate transaction value was approximately $109.4 million.
This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the date of acquisition. Fair values are subject to refinement for up to one year after the closing date of February 1, 2023. Measurement period adjustments of $0.1 million were recorded in the third quarter of 2023 as more information became available regarding Town and Country's tax assets and liabilities. Goodwill of $30.5 million was recorded in the acquisition, which reflects expected synergies from combining the operations of HBT Financial and Town and Country, and is nondeductible for tax purposes.
The acquisition of Town and Country further enhanced HBT Financial’s footprint in Central Illinois, and expanded our footprint into metro-east St. Louis. During the years ended December 31, 2023 and 2022, HBT Financial incurred the following expenses related to the acquisition of Town and Country:
Year Ended
(dollars in thousands)December 31, 2023December 31, 2022
PROVISION FOR CREDIT LOSSES$5,924$—
NONINTEREST EXPENSE
Salaries3,584—
Furniture and equipment39—
Data processing2,031304
Marketing and customer relations24—
Loan collection and servicing125—
Legal fees and other noninterest expense1,964788
Total noninterest expense7,7671,092
Total Town and Country acquisition-related expenses$13,691$1,092
The fair value of the assets acquired and liabilities assumed from Town and Country on the acquisition date of February 1, 2023 were as follows (dollars in thousands):
Fair Value
Assets acquired:
Cash and cash equivalents$23,542
Interest-bearing time deposits with banks249
Debt securities167,869
Equity securities301
Restricted stock2,822
Loans held for sale1,612
Loans, before allowance for credit losses635,376
Allowance for credit losses(1,247)
Loans, net of allowance for credit losses634,129
Bank owned life insurance15,782
Bank premises and equipment14,828
Foreclosed assets271
Intangible assets22,282
Mortgage servicing rights10,469
Investments in unconsolidated subsidiaries449
Accrued interest receivable3,113
Other assets8,940
Total assets acquired906,658
Liabilities assumed:
Deposits720,417
FHLB advances86,439
Junior subordinated debentures14,949
Other liabilities5,999
Total liabilities assumed827,804
Net assets acquired$78,854
Consideration paid:
Cash$37,996
Common stock71,356
Total consideration paid$109,352
Goodwill$30,498
Of the loans acquired, there were $89.8 million which exhibited more-than-insignificant credit deterioration on the acquisition date. The following table provides a summary of these PCD loans at acquisition (dollars in thousands):
Unpaid principal balance$89,822
Allowance for credit losses at acquisition(1,247)
Non-credit discount(2,218)
Purchase price$86,357
Additionally, subsequent to the Town and Country acquisition, HBT Financial recognized an allowance for credit losses on non-PCD loans of $5.2 million and an allowance for credit losses on unfunded commitments of $0.7 million through an increase to the provision for credit losses.
The following table provides the pro forma information for the results of operations for the years ended December 31, 2023 and 2022, as if the acquisition of Town and Country had occurred on January 1, 2022. The pro forma results combine the historical results of Town and Country 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, 2022. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for credit 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,
(dollars in thousands, except per share data)20232022
Total revenues (net interest income and noninterest income)$230,171$226,229
Net income66,05668,417
Earnings per share - basic2.072.12
Earnings per share - diluted2.062.12
NXT Bancorporation, Inc.
On October 1, 2021, HBT Financial acquired 100% of the issued and outstanding common stock of NXT Bancorporation, Inc. (“NXT”), the holding company for 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 an aggregate market value of $29.3 million, 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 $5.7 million 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 provided an opportunity to utilize Heartland Bank’s excess liquidity at the time of acquisition to replace NXT Bank’s higher-cost funding. Additionally, Heartland Bank’s broader range of products and services, as well as a greater ability to meet larger borrowing needs, has provided an opportunity to expand NXT Bank’s customer relationships.
During the year ended December 31, 2021, HBT Financial incurred the following expenses related to the acquisition of NXT (dollars in thousands):
Salaries$65
Furniture and equipment18
Data processing355
Marketing and customer relations12
Loan collection and servicing11
Legal fees and other noninterest expense955
Total NXT acquisition-related expenses$1,416
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 banks739 
Debt securities18,295 
Equity securities with readily determinable fair value43 
Restricted stock796 
Loans194,576 
Bank owned life insurance7,352 
Bank premises and equipment3,667 
Core deposit intangible assets199 
Mortgage servicing rights370 
Accrued interest receivable886 
Other assets1,340 
Total assets acquired234,125 
Liabilities assumed:
Deposits181,586 
Securities sold under agreements to repurchase4,080 
FHLB advances12,625 
Other liabilities1,633 
Total liabilities assumed199,924 
Net assets acquired$34,201 
Consideration paid:
Cash$10,633 
Common stock29,270 
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 receivable196,104 
Estimate of contractual cash flows not expected to be collected1,045 
There were no loans acquired with deteriorated credit quality from NXT.