HBT Financial, Inc.HBT
HBT Financial, Inc. Stock Compensation Disclosure
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 (vii) 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):
| Year Ended December 31, | |||||||||||||||||
| (dollars in thousands) | 2024 | 2023 | 2022 | ||||||||||||||
| Restricted stock units | $ | 1,061 | $ | 1,204 | $ | 1,334 | |||||||||||
| Performance restricted stock units | 691 | 749 | 615 | ||||||||||||||
| Total awards classified as equity | 1,752 | 1,953 | 1,949 | ||||||||||||||
| Stock appreciation rights | (32) | 95 | 88 | ||||||||||||||
| Total stock-based compensation expense | $ | 1,720 | $ | 2,048 | $ | 2,037 | |||||||||||
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, are classified as dividends charged to retained earnings.
During the years ended December 31, 2024, 2023, and 2022, the total grant date fair value of the restricted stock units granted was $1.0 million, $1.0 million, and $1.3 million, respectively, based on the grant date closing prices. The total intrinsic value of restricted stock units that vested during the years ended December 31, 2024, 2023, 2022 were $1.4 million, $1.1 million, and $0.7 million, respectively.
The following is a summary of restricted stock unit activity:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
| Restricted Stock Units | Weighted Average Grant Date Fair Value | Restricted Stock Units | Weighted Average Grant Date Fair Value | Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Beginning balance | 128,159 | $ | 19.56 | 139,986 | $ | 18.01 | 109,244 | $ | 17.27 | ||||||||||||||||||||||||||
| Granted | 51,246 | 19.06 | 41,847 | 22.72 | 66,995 | 18.81 | |||||||||||||||||||||||||||||
| Vested | (70,540) | 18.96 | (51,693) | 17.91 | (34,925) | 17.26 | |||||||||||||||||||||||||||||
| Forfeited | (262) | 19.06 | (1,981) | 19.55 | (1,328) | 18.35 | |||||||||||||||||||||||||||||
| Ending balance | 108,603 | $ | 19.71 | 128,159 | $ | 19.56 | 139,986 | $ | 18.01 | ||||||||||||||||||||||||||
As of December 31, 2024, unrecognized compensation cost related to the non-vested restricted stock units was $0.9 million. This cost is expected to be recognized over the weighted average remaining service period of 1.5 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 years ended December 31, 2024, 2023, and 2022, the total fair value of the performance restricted stock units granted was $0.4 million, $0.4 million, and $0.5 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 total intrinsic value of performance restricted stock units that vested during the year ended December 31, 2024 was $0.8 million.
The following is a summary of performance restricted stock unit activity:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
| Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | Performance Restricted Stock Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Beginning balance | 79,097 | $ | 18.25 | 62,067 | $ | 17.02 | 38,344 | $ | 15.72 | ||||||||||||||||||||||||||
| Granted | 19,933 | 19.06 | 17,030 | 22.72 | 23,723 | 19.14 | |||||||||||||||||||||||||||||
| Adjustment for performance condition | 14,349 | 15.53 | — | — | — | — | |||||||||||||||||||||||||||||
| Vested | (43,046) | 15.53 | — | — | — | — | |||||||||||||||||||||||||||||
| Forfeited | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Ending balance | 70,333 | $ | 19.59 | 79,097 | $ | 18.25 | 62,067 | $ | 17.02 | ||||||||||||||||||||||||||
As of December 31, 2024, unrecognized compensation cost related to non-vested performance restricted stock units was $0.4 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 1.2 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 following is a summary of stock appreciation rights activity:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||||||||||||||||||||
| Stock Appreciation Rights | Weighted Average Grant Date Assigned Value | Stock Appreciation Rights | Weighted Average Grant Date Assigned Value | Stock Appreciation Rights | Weighted Average Grant Date Assigned Value | ||||||||||||||||||||||||||||||
| Beginning balance | 73,440 | $ | 16.32 | 73,440 | $ | 16.32 | 97,920 | $ | 16.32 | ||||||||||||||||||||||||||
| Granted | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Exercised | — | — | — | — | (24,480) | 16.32 | |||||||||||||||||||||||||||||
| Expired | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Forfeited | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Ending balance | 73,440 | $ | 16.32 | 73,440 | $ | 16.32 | 73,440 | $ | 16.32 | ||||||||||||||||||||||||||
As of December 31, 2024, all stock appreciation rights were exercisable and had a weighted average remaining term of 4.3 years. There was no unrecognized compensation cost for stock appreciation rights as of December 31, 2024.
As of December 31, 2024 and 2023, the liability recorded for outstanding stock appreciation rights was $0.5 million and $0.6 million, respectively. The Company uses 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.
| December 31, 2024 | December 31, 2023 | ||||||||||
| Risk-free interest rate | 4.37 | % | 3.85 | % | |||||||
| Expected volatility | 30.95 | % | 37.37 | % | |||||||
| Expected life (in years) | 4.7 | 5.7 | |||||||||
| Expected dividend yield | 3.47 | % | 3.22 | % | |||||||
As of December 31, 2023, the liability recorded for previously exercised stock appreciation rights was $0.2 million which was paid in 2024.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.