HBT Financial (HBT) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $18.1 million ($0.57 per diluted share), up from Q1 2024 but down 2.2% from Q2 2023; ROAA was 1.45% and ROATCE 17.21%. Tangible book value per share rose 17.8% year-over-year.

• Total assets were $5.0 billion, loans held for investment $3.4 billion, and total deposits $4.3 billion as of June 30, 2024.

• Asset quality remained strong, with nonperforming assets at 0.17% of total assets, near historic lows.

• The Town and Country acquisition in 2023 expanded the company’s footprint and contributed to higher average balances in 2024.

• Loan growth was $39.5 million (1.2% sequentially, 4.7% annualized), with stable core deposits but a $41.9 million decline mainly from lower brokered and reciprocal deposits.

Financial highlights

• Net interest income for Q2 2024 was $47.0 million, up 0.7% sequentially but down $1.8 million year-over-year due to higher funding costs.

• Net interest margin was 3.95% (tax-equivalent 4.00%), stable sequentially but down from 4.16% in Q2 2023 as funding costs outpaced asset yield improvements.

• Noninterest income was $9.6 million, up from Q1 2024 but down 3.1% year-over-year; noninterest expense fell 10.2% year-over-year due to cost controls and absence of acquisition-related costs.

• Provision for credit losses was $1.2 million, up from a negative provision in Q2 2023, reflecting economic forecasts and loan growth.

• Efficiency ratio (tax-equivalent) improved to 52.1% from 55.9% in Q2 2023.

Outlook and guidance

• Deferred tax asset write-down recognized in Q2 2024 is expected to be earned back over several years through reduced tax expense.

• NIM is anticipated to remain at or near current levels for Q3 and Q4 2024; noninterest income expected to grow in low single digits for the remainder of 2024.

• Noninterest expense forecasted between $30 million and $32 million per quarter for 2024; asset quality expected to remain solid, though credit metrics may normalize if economic conditions worsen.

• Stock repurchase program remains active, with $10.6 million available through January 2025.

• The company continues to monitor funding costs and deposit competition, with net interest margin stabilization expected if market rates remain steady.