Executive Summary

Solid quarter with consistent profitability: net income $19.2M and diluted EPS $0.61; adjusted EPS $0.63; NIM expanded 2 bps to 4.14% as debt securities yields rose and funding costs fell .
EPS beat Wall Street: Primary EPS $0.63* vs $0.602* consensus; revenue (S&P definition) $58.3M* vs $59.4M* consensus; beat on EPS, slight revenue miss as MSR fair-value adjustment weighed on noninterest income (–$0.8M) . Values retrieved from S&P Global.
Balance sheet quality remained strong (NPAs 0.13% of assets; NCOs 0.12% annualized) while loans and deposits dipped on seasonal factors; TBV/share rose $0.59 to $16.02; TCE/TA improved to 10.21% .
Outlook: mgmt expects Q3 loan growth of 2–5% annualized, flat deposits, NIM “at current levels,” noninterest income in line, and opex $31–33M; repurchases to continue opportunistically ($12.1M remaining) .
Potential catalysts: resilient margin management (lower deposit costs), tangible book growth, and capital return (buybacks); watch for sub debt call in Sep-25 which would trigger a ~$0.4M one-time loss if executed .

What Went Well and What Went Wrong

What Went Well
- NIM expansion and funding discipline: NIM rose to 4.14% (+2 bps q/q) as debt securities yields increased 11 bps to 2.60% and cost of funds fell 3 bps to 1.29% .
- Strong capital/tangible book growth: TBV/share up $0.59 to $16.02; TCE/TA to 10.21%; all regulatory ratios well above buffers .
- CEO tone: “continued to deliver consistently strong earnings,” with adjusted PPNR up 5.2% q/q; adjusted ROAA 1.58%; adjusted ROATCE 16.02% .
What Went Wrong
- Noninterest income pressure from MSR: $0.8M negative MSR fair-value adjustment (vs –$0.3M in Q1), offsetting seasonal card and mortgage gains .
- Loan balances contracted $113.6M q/q on seasonal C&I paydowns (grain elevators) and higher property sale payoffs; multi-family and CRE non-owner occupied grew as projects moved out of construction .
- Credit costs ticked up: NCOs annualized 0.12% (vs 0.05% in Q1) and nonperformers up modestly to 0.13% of assets, though reserve coverage remains strong (ACL 1.24% of loans; 741% of NPLs) .

Financial Results

Overall P&L and KPIs (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Operating Revenue ($M)	56.64	58.01	58.80
Net Interest Income ($M)	47.03	48.71	49.66
Noninterest Income ($M)	9.61	9.31	9.14
Net Income ($M)	18.07	19.08	19.23
Diluted EPS ($)	0.57	0.60	0.61
Adjusted Diluted EPS ($)	0.57	0.61	0.63
Net Interest Margin (%)	3.95	4.12	4.14
ROAA (%)	1.45	1.54	1.53
Efficiency Ratio (TE) (%)	52.10	53.35	52.61
NCOs / Avg Loans (%)	0.08	0.05	0.12

Balance sheet and liquidity (period-end)

Metric	Q2 2024	Q1 2025	Q2 2025
Loans ($B)	3.386	3.462	3.348
Deposits ($B)	4.319	4.385	4.307
Loan/Deposit Ratio (%)	78.39	78.95	77.75
NPAs / Assets (%)	0.17	0.11	0.13
ACL / Loans (%)	1.21	1.22	1.24
TCE / TA (%)	8.74	9.73	10.21
Tangible Book Value/Share ($)	13.64	15.43	16.02

Margins and funding costs

Metric	Q2 2024	Q1 2025	Q2 2025
NIM (TE) (%)	4.00	4.16	4.19
Cost of Total Deposits (%)	1.31	1.21	1.19
Cost of Funds (%)	1.42	1.32	1.29

Loan portfolio mix ($M)

Category	Q2 2024	Q1 2025	Q2 2025
Commercial & Industrial	400.3	441.3	419.4
CRE – Owner Occupied	290.0	322.0	317.5
CRE – Non-Owner Occupied	889.2	891.0	907.1
Construction & Land Dev.	365.4	376.0	310.3
Multi-family	430.0	424.1	453.8
1–4 Family Residential	484.3	455.4	451.2
Agricultural & Farmland	285.8	292.2	271.6
Municipal, Consumer & Other	240.5	259.7	217.3
Total Loans	3,385.5	3,461.8	3,348.2

Vs. Wall Street consensus (S&P Global definitions)

Metric	Consensus	Actual	Surprise
Primary EPS ($)	0.602*	0.63*	+0.028*
Revenue ($M)	59.43*	58.27*	–1.15*

Values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Loan Growth	Q3 2025	Q2’25: q/e loans down slightly; avg up slightly	2%–5% annualized growth	Raised (from flat/down to positive)
Deposits	Q3 2025	Flat in Q2’25	Flat in Q3’25	Maintained
Net Interest Margin	Q3 2025	Q4’24 view: gradual increase in 2025	Remain at current levels in Q3’25	Lowered near-term
Noninterest Income	Q3 2025	Slight increase in Q2’25 vs Q1	In line with Q2’25	Lowered
Noninterest Expense	Q3 2025	$31–$33M per quarter in 2025	$31–$33M in Q3’25	Maintained
Securities Portfolio	Q3 2025	May increase purchases if yields attractive	Purchase to maintain balances near current levels	More explicit
Asset Quality	Q3 2025	Solid; possible normalization if economy softens	Solid; possible normalization; CECL volatility if macro shifts	Maintained (added CECL caveat)
Capital Actions	Through 1/1/26	Repurchase program $15M available (Q1)	$12.1M remaining (Q2)	Updated usage
Subordinated Debt	Q3 2025	—	Callable; rate to float Sep-25; calling would create ~$0.4M loss	New disclosure

Earnings Call Themes & Trends

Note: No Q2 2025 earnings-call transcript was available in our document set; company furnished an investor presentation (Ex. 99.2) alongside the 8‑K .

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
NIM trajectory	Q4’24: Gradual increase expected in 2025	Q3’25 NIM to remain at current levels	Near-term pause vs prior uptrend
Deposit costs/beta	Falling costs; deposit beta below peers (Q4’24)	Costs declined further (total deposits 1.19%; funds 1.29%)	Improving
Loan growth cadence	Q1’25: q/e down slightly; avg up slightly	Q3’25 growth 2%–5% annualized	Improving into H2
Securities strategy	Q4’24: reinvest ~½ of runoff ; Q1’25: may increase purchases	Maintain balances via purchases in Q3	Neutral/steady
Asset quality	Solid; normalization possible (Q4/Q1)	Solid; similar caution and CECL volatility watch	Stable
Capital return	New $15M buyback (Q4) ; no Q1 usage	Repurchased 136k shares; $12.1M remaining	More active

Management Commentary

“During the second quarter of 2025, our team continued to deliver consistently strong earnings with adjusted net income of $19.8 million, or $0.63 per diluted share… adjusted PPNR up 5.2% q/q… NIM (TE) increased 3 bps to 4.19%” — J. Lance Carter, President & CEO .
“Our balance sheet remains strong as all capital ratios increased during the quarter and asset quality remained stable… We expect to see loan growth return in the third quarter of 2025 due to higher loan pipelines and fewer payoffs projected” .
“Our capital levels and operational structure support attractive acquisition opportunities should the right opportunity arise.” .

Q&A Highlights

No Q2 2025 earnings-call transcript was available in our document library; HBT furnished an investor presentation with a near-term outlook, including Q3’25 guidance on loans, deposits, NIM, fees, expenses, asset quality, buybacks, and subordinated debt (call optionality) .

Estimates Context

EPS beat: Primary EPS $0.63* vs $0.602* consensus (approx. +$0.03*). Drivers: stronger NIM from higher securities yields and lower funding costs; adjusted PPNR +5.2% q/q; partially offset by negative MSR fair-value adjustment . Values retrieved from S&P Global.
Revenue (S&P definition) slight miss: $58.27M* vs $59.43M* consensus, reflecting MSR headwinds in noninterest income; note company’s “Operating revenue” (net interest income + noninterest income) printed $58.80M . Values retrieved from S&P Global.

Key Takeaways for Investors

Margin resilience remains intact: NIM expanded despite seasonal loan softness, supported by lower deposit costs and better securities yields—constructive for NII durability if funding costs continue to drift lower .
Credit metrics remain benign and well-reserved (ACL 1.24% of loans; coverage ~741% of NPLs), giving flexibility to pursue growth into H2’25 .
Loan growth should reaccelerate in Q3 (2%–5% annualized) as pipelines convert and payoffs normalize, a potential catalyst for sequential PPNR .
Capital return is active (136k shares repurchased; $12.1M remaining), while TBV/share rose 3.8% q/q; watch for optional sub debt call in Sep-25 (one-time ~$0.4M loss if executed) .
Watch noninterest income volatility from MSR fair-value marks; absent MSR drag, fee lines (card, mortgage gains, wealth) are seasonally constructive .
Near-term NIM guide is “flat” for Q3; sustained improvement likely requires further deposit cost relief and asset repricing tailwinds .
M&A optionality remains on the table given capital and operating leverage, but strategy stays disciplined and opportunistic .

Notes on prior two quarters (for context):

Q1 2025: EPS $0.60; NIM 4.12% (TE 4.16%); deposits +1.5% q/q; TBV/share +$0.63; guidance then implied stable NIM and modest fee increase into Q2 .
Q4 2024: EPS $0.64; NIM 3.96% (TE 4.01%); dividend raised to $0.21; outlook called for gradual NIM improvement through 2025, flat/low-single-digit deposit growth, and opex $31–33M/quarter .

HBT Financial, Inc. (HBT)·Q2 2025 Earnings Summary