EARNINGS PER SHARE
The Company previously granted restricted stock units that contained non-forfeitable rights to dividend equivalents which were considered participating securities. Prior to 2024, these restricted stock units were included in the calculation of basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.
Diluted earnings per share is computed using the treasury stock method and reflects the potential dilution from the Company’s outstanding restricted stock units and performance restricted stock units.
The following table sets forth the computation of basic and diluted earnings per share:
Year Ended December 31,
(dollars in thousands)202420232022
Numerator:
Net income$71,780 $65,842 $56,456 
Earnings allocated to participating securities— (36)(66)
Numerator for earnings per share - basic and diluted$71,780 $65,806 $56,390 
Denominator:
Weighted average common shares outstanding31,590,11731,626,30828,853,697
Dilutive effect of outstanding restricted stock units122,363111,83965,619
Weighted average common shares outstanding, including all dilutive potential shares31,712,48031,738,14728,919,316
Earnings per share - Basic$2.27 $2.08 $1.95 
Earnings per share - Diluted$2.26 $2.07 $1.95 
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About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.