DEF 14A of HBT Financial, Inc.
Filed Apr 17, 2024 · FY20230001628280-24-016493
PROPOSAL 1—ELECTION OF DIRECTORS
PROPOSAL 1—ELECTION OF DIRECTORS Our bylaws provide that the number of directors will be fixed from time to time by resolution of the Board. The Board currently consists of nine directors: Roger A. Baker, C. Alvin Bowman, Eric E. Burwell, Patrick F. Busch, J. Lance Carter, Allen C. Drake, Fred L. Drake, Linda J. Koch, and Gerald E. Pfeiffer. The Board consists of one class of directors serving one-year terms and until their successors are duly elected and qualified. We are soliciting proxies in favor of the election of each of the nominees identified below. The shares represented by proxies will be voted in favor of the election of each of the nominees whose names are set forth below unless such proxy is specifically marked to “withhold” authority to vote for a particular nominee. All nominees have consented to serve as directors, if elected. If any nominee is unwilling to serve as a director at the time of the Annual Meeting, the persons who are designated as proxies intend to vote, in their discretion, for such other persons, if any, as may be designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any of the persons named below will be unable or unwilling to stand as a nominee or serve as a director, if elected. The Board believes that each nominee has valuable individual skills and experiences that, taken together, provide us with the knowledge, judgment and strategic vision necessary to provide effective oversight of HBT Financial. The biographies below reflect the particular experience, qualifications, attributes and skills that led the Board to conclude that each nominee should serve on the Board. Fred L. Drake, our Executive Chairman, and Director Allen C. Drake are brothers, and there are no other related persons on the Board.
Director Nominees
Director Nominees The names of the nominees are as follows:
Roger A. Baker
Roger A. Baker
Age: 72
Age: 72 Roger A. Baker has been a director of the Company and Heartland Bank since March 1, 2022. Mr. Baker previously served as the Chairman and President of NXT Bancorporation, Inc. and Chairman of NXT Bank, which were acquired by HBT Financial on October 1, 2021. In addition to NXT Bank, Mr. Baker previously served on the Board of Directors of two other Iowa-based banks, Lincoln Savings Bank and Liberty Bank. Mr. Baker has owned several businesses over the years, and is actively engaged in the business community throughout our Iowa markets. Mr. Baker graduated from Iowa State University with a BS in Agricultural Economics. Mr. Baker was selected to serve as a director for his experience in the banking and agricultural industries and his familiarity with our Iowa markets.
C. Alvin Bowman
C. Alvin Bowman
Age: 71
Age: 71 C. Alvin Bowman has been a director of the Company and Heartland Bank since 2019. Dr. Bowman served as the 17th President of Illinois State University for ten years before retiring in 2013. Prior to his term as President, he served in various capacities, including Department Chair of its Speech Pathology and Audiology Department and as Interim Provost. Additionally, he was the Executive Director of the Illinois Board of Higher Education from November 2017 to December 2018. Dr. Bowman received a BA in Speech Pathology from Augustana College, a Master’s in Speech-Language Pathology from Eastern Illinois University and a PhD in Speech and Hearing Science from the University of Illinois. He has 36 years of experience in higher education. Mr. Bowman was selected to serve as a director for his leadership, communication and organizational skills gained over the course of his career.
Eric E. Burwell
Eric E. Burwell Eric E. Burwell has been a director of the Company since 2009 and a director of Heartland Bank since 2005. Mr. Burwell is a Principal of Burwell Management Company, a family-owned property management company, investing in a variety of real estate, private equity, venture capital and liquid investments. Mr. Burwell received a BS in Business Administration and a BS in Finance, both from Illinois State University and holds an MBA from Loyola University of Chicago. Mr. Burwell is also an Illinois licensed real estate managing broker. Mr. Burwell was selected to serve as a director for his knowledge of the real estate industry and his investment and business experience.
Patrick F. Busch
Patrick F. Busch Patrick F. Busch has been a director of the Company since 1998 and a director of Heartland Bank since 1995. Mr. Busch is Vice Chairman of Heartland Bank. He joined us in 1995 and was President and Chief Lending Officer of Heartland Bank from March 2010 until December 2022 and Executive Vice President of the Company from December 2009 to December 2022. As Chief Lending Officer, Mr. Busch was critical in establishing the loan culture and integrating acquisitions over the years. He played a leading role in Heartland Bank’s organic growth in Bloomington-Normal, Champaign and Peoria. As Vice Chairman, he is responsible for oversight of the Cook County and Chicago Suburban senior lenders and mortgage lending. Mr. Busch received a BS in Business Administration from Illinois Wesleyan University and completed the Stonier Graduate School of Banking. Mr. Busch was selected to serve as a director for his deep understanding of the banking industry and his experience establishing our loan culture and integrating acquisitions during his tenure with us.
J. Lance Carter
J. Lance Carter
Age: 53
Age: 53 J. Lance Carter has been a director of the Company and Heartland Bank since 2011. Mr. Carter is President and Chief Executive Officer of the Company and Heartland Bank. Mr. Carter joined us in 2001 and served as Heartland Bank’s Chief Credit Officer from March 2010 to December 2018. He was named Executive Vice President of the Company in December 2011 and Chief Operating Officer in June 2015. Mr. Carter was named President of the Company in August 2019, and President of Heartland Bank in January 2023. In May of 2023, Mr. Carter was named Chief Executive Officer of the Company and Heartland Bank, and no longer serves as Chief Operating Officer of the Company and Heartland Bank. Mr. Carter’s responsibilities include oversight of day-to-day operations of all areas of Heartland Bank. Mr. Carter holds a BS in Finance and an MBA from the University of Illinois. He has also completed the Graduate School of Banking at the University of Wisconsin-Madison. Mr. Carter was selected to serve as a director for his experience in the banking industry and knowledge of the Company gained during his tenure with us.
Allen C. Drake
Allen C. Drake
Age: 72
Age: 72 Allen C. Drake has been a director of the Company and Heartland Bank since 1981. He became an officer of Heartland Bank in 1979 and served for 28 years, until retiring as Chairman and Chief Financial Officer in 2007. During his tenure as an executive officer with us, he was President of one of our predecessor banks and served on the board of several of our predecessor banks. He was involved in merger and acquisition activities, technology innovation, trust, finance and systems integrations. Mr. Drake received a BS and MS in Electrical Engineering from the University of Illinois. Mr. Drake was selected to serve as a director for his knowledge of Heartland Bank gained during his tenure with the Bank, including his experience with lending, administration, technology, personnel, finance, trust and strategic planning.
Fred L. Drake
Fred L. Drake Fred L. Drake serves as Executive Chairman of the board for both the Company and of Heartland Bank. He has served as Chairman since 2006 and been a director of the Company since 1984 and a director of Heartland Bank since 1982. Mr. Drake is Executive Chairman of the Company and Heartland Bank and provides leadership in all facets, including overall strategy, growth, and acquisitions. Mr. Drake became an officer of Heartland Bank in 1983 and served as the Company’s Chief Executive Officer until May 2023. He also served as our President from 1998 to August 2019. In 1992, as President of Heartland Bank, he led our entry into the Bloomington-Normal market, one of the Bank’s most successful initiatives, setting the tone for the Company’s organic growth in the 1990s and early 2000s. Mr. Drake received a BS in Finance and an MBA, both from the University of Illinois. Mr. Drake serves as a director for his leadership in all facets of our company, including overall strategy, organic growth and acquisitions, overall experience in the banking industry and his knowledge of the Company gained during his tenure with us.
Linda J. Koch
Linda J. Koch Linda J. Koch has been a director of the Company and Heartland Bank since 2020. Ms. Koch served as the President and Chief Executive Officer of the Illinois Bankers Association from 2001 to 2020. As President and Chief Executive Officer, Ms. Koch was responsible for the leadership, strategy, and operational management of the Illinois Bankers Association. During that same time, Ms. Koch served on the Board of Trustees of the Graduate School of Banking at the University of Wisconsin-Madison. Ms. Koch received a BA in Legal Studies from the University of Illinois Springfield and is a certified association executive (CAE). Ms. Koch was selected to serve as a director for her experience in the banking industry and her leadership, communication, and strategic planning skills gained over the course of her career.
Gerald E. Pfeiffer
Gerald E. Pfeiffer
Age: 73
Age: 73 Gerald E. Pfeiffer has been a director of the Company and Heartland Bank since 2019. Mr. Pfeiffer served as Partner/Principal at CliftonLarsonAllen LLP from 1994 until December 2016, where he was responsible for audit engagement services to financial institutions and oversight of income tax, regulatory compliance and information technology services. Mr. Pfeiffer also served as the Chief Financial Officer for Bridgeview Bancorp, Inc. from January 2017 to May 2019, where he was responsible for oversight of all financial reporting functions. Mr. Pfeiffer received a BS in Accounting from Bradley University and has 46 years of experience in providing professional services to financial institutions. Mr. Pfeiffer was selected to serve as a director for his experience overseeing financial reporting functions and providing professional services to financial institutions. THE BOARD RECOMMENDS A VOTE “FOR” ALL THE NOMINEES FOR DIRECTOR. IF NOT OTHERWISE SPECIFIED, PROXIES WILL BE VOTED “FOR” ALL THE NOMINEES FOR DIRECTOR.
Summary Compensation Table
Summary Compensation Table The following table presents summary information regarding the total compensation paid to, earned by and awarded to each of our Named Executive Officers for 2023 and 2022.
Summary Compensation Table
| Name and Principal Position(s) | Year | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | Fred L. Drake | 2023 | $449,992 | $237,197(2) | $235,364(3) | $2,210(4) | $924,763 | | Executive Chairman (1) | 2022 | $589,915 | $234,848 | $337,804 | $2,930 | $1,165,497 | | J. Lance Carter | 2023 | $514,301 | $187,258(2) | $274,958(3) | $38,948(4) | $1,015,465 | | President, Chief Executive Officer and Director (5) | 2022 | $465,723 | $185,428 | $266,687 | $28,117 | $945,955 | | Peter R. Chapman | 2023 | $320,000 | $64,002(2) | $169,178(3) | $42,561(4) | $595,741 | | Executive Vice President and Chief Financial Officer (6) | | | | | | |
Summary Compensation Table
(1)On May 24, 2023, Mr. Drake transitioned to the role of Executive Chairman of the Company and Heartland Bank. In addition to his new role, Mr. Drake continues to serve as a Director of the Company and Heartland Bank. (2)Reflects the aggregate grant date fair value of awards calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating these amounts are set forth in Note 19 to the consolidated financial statements in our 2023 Annual Report on Form 10-K. For 2023, the fair value of time-based RSUs is based on the value of the underlying shares on the grant date under the Company’s long-term incentive plan. The fair value of PRSUs is based on the value of the underlying shares on the grant date at target performance. In the event of threshold or maximum performance, the value of the PRSUs is summarized as follows:
Summary Compensation Table
| | Grant Date Fair Value of 2023 PRSUs at | | | | | Name | Below Threshold Performance | Threshold Performance | Target Performance | Maximum Performance | | Fred L. Drake | $— | $29,650 | $118,598 | $177,898 | | J. Lance Carter | $— | $23,407 | $93,629 | $140,444 | | Peter R. Chapman | $— | $16,001 | $64,002 | $96,003 |
Summary Compensation Table
(3)Amounts for 2023 represent cash bonuses paid in March 2024 as short-term incentive awards for the 2023 performance period, which were determined after the Compensation Committee reviewed final financial results for 2023. The performance measures are described below under “Non-Equity Incentive Compensation.” (4)The items comprising "All Other Compensation" for 2023 are as follows:
Summary Compensation Table
| Name | Installment Payment for Exercise of Stock Appreciation Rights | Term Life Insurance Premiums | Group Term Life Insurance Premiums | 401(k) Match | Moving Expenses | Total | | Fred L. Drake | $— | $— | $2,210 | $— | $— | $2,210 | | J. Lance Carter | $23,298 | $1,509 | $690 | $13,451 | $— | $38,948 | | Peter R. Chapman | $— | $— | $690 | $4,677 | $37,194 | $42,561 |
Summary Compensation Table
(5)On May 24, 2023, Mr. Carter transitioned to the role of President and Chief Executive Officer of the Company and Heartland Bank. In addition to his new role, Mr. Carter continues to serve as a Director of the Company and Heartland Bank. (6)On January 1, 2023, Mr. Chapman transitioned to the role of Executive Vice President and Chief Financial Officer of the Company and Heartland Bank.
Equity Compensation
Equity Compensation On February 28, 2023, we awarded 5,220 RSUs and 5,220 PRSUs to Mr. Drake, 4,121 RSUs and 4,121 PRSUs to Mr. Carter, and 2,817 PRSUs to Mr. Chapman under our Omnibus Incentive Plan. The RSUs include dividend equivalent rights and vest in three annual installments, with 33% vesting on February 29, 2024, 33% vesting on February 28, 2025, and 34% vesting on February 28, 2026. The PRSUs include dividend equivalent rights and vest on February 28, 2026. The number of PRSUs which may be earned and become vested depends on the Company’s achievement of average annual return on average assets (“ROAA”), both in absolute and relative terms, over a three-year performance period (the “Performance Period”). If average annual ROAA for the Performance Period is less than 0.50%, no PRSUs will be earned. If average annual ROAA for the Performance Period is 0.50% or more but less than 1.50%, the PRSUs will be earned at between 25% and 150% of target depending upon percentile rank within a group of companies. If average annual ROAA for the Performance Period is 1.50% or greater, the PRSUs will be earned at 150%. Dividend equivalents on the RSUs and PRSUs are accrued and are paid in cash at the time the RSUs and PRSUs vest. If a recipient’s employment is terminated for any reason other than death, disability, or retirement, then the unvested RSUs and PRSUs will be forfeited. In the event of death or disability, then 100% of unvested RSUs and PRSUs will become vested. In the event of retirement, if the RSUs or PRSUs were awarded at least 12 months prior to retirement and if the recipient has met the retirement eligibility requirements, defined as (1) attained either age 55 and 15 years of continuous service or age 60 and 5 years of continuous service, and (2) the recipient has provided for an orderly transition of duties to a successor, then 100% of unvested RSUs and PRSUs will continue to vest in accordance with the originally established vesting schedule.
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table summarizes, for each of our Named Executive Officers, the number of shares of our common stock underlying outstanding equity awards held as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year End
| | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Shares of Stock That Have Not Vested (#) | Market Value of Shares or Shares of Stock That Have Not Vested ($) | | Fred L. Drake | — | — | — | — | 33,639(2) | $710,119(3) | | J. Lance Carter | 6,120(1) | — | $16.32 | 9/1/2029 | 26,691(2) | $563,447(3) | | Peter R. Chapman | — | — | — | — | 23,500(2) | $496,085(3) |
Outstanding Equity Awards at 2023 Fiscal Year End
(1)Reflects cash-settled stock appreciation rights. Upon exercise of a stock appreciation right, the holder is entitled to receive a lump sum cash payment in an amount equal to the excess of the Company’s stock price on the date of exercise over the exercise price specified in the stock appreciation rights agreement. (2)Reflects unvested RSUs and PRSUs with dividend equivalent rights which vest in accordance with the schedules set forth below, subject to the participant’s continued service through the vesting date. The number of PRSUs are reported at target performance.
Outstanding Equity Awards at 2023 Fiscal Year End
| | | Number of Shares | | | Name | Year | Restricted Stock Units | Performance Restricted Stock Units | | Fred L. Drake | 2024 | 9,273 | 7,428 | | | 2025 | 3,808 | 6,135 | | | 2026 | 1,775 | 5,220 | | J. Lance Carter | 2024 | 7,453 | 5,865 | | | 2025 | 3,007 | 4,844 | | | 2026 | 1,401 | 4,121 | | Peter R. Chapman | 2024 | 6,825 | — | | | 2025 | 6,826 | — | | | 2026 | 7,032 | 2,817 |
Outstanding Equity Awards at 2023 Fiscal Year End
(3)Market value is calculated based on the closing stock price of $21.11 on December 29, 2023 (the last trading day of the year).
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table presents the total compensation we paid to non-employee directors for service on our Board during 2023.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) | Total ($) | | Roger A. Baker | $16,750 | $12,496 | $4,500(2) | $33,746 | | C. Alvin Bowman | $20,150 | $12,496 | $5,900(3) | $38,546 | | Eric E. Burwell | $21,500 | $12,496 | $4,500(4) | $38,496 | | Allen C. Drake | $15,000 | $12,496 | $5,900(5) | $33,396 | | Linda J. Koch | $21,850 | $12,496 | $4,500(6) | $38,846 | | Gerald E. Pfeiffer | $25,250 | $12,496 | $4,500(7) | $42,246 |
DIRECTOR COMPENSATION
__________________________________________ (1)Reflects the grant date fair value of awards of time-based restricted stock units with dividend equivalent rights granted in 2023. The grant date fair value was calculated in accordance with FASB ASC Topic 718, based on the value of the underlying shares on the date of the grant. Assumptions used in calculating the value of these awards are discussed in Note 19 to the consolidated financial statements in our 2023 Annual Report on Form 10-K. (2)Reflects $4,500 in director fees from Heartland Bank. (3)Reflects $4,500 in director fees from Heartland Bank and $1,400 in committee fees from Heartland Bank. (4)Reflects $4,500 in director fees from Heartland Bank. (5)Reflects $4,500 in director fees from Heartland Bank and $1,400 in committee fees from Heartland Bank. (6)Reflects $4,500 in director fees from Heartland Bank. (7)Reflects $4,500 in director fees from Heartland Bank. Through March 31, 2024, each of our non-employee directors received an annual retainer of $12,000. The Chair of the Audit Committee received an additional annual fee of $5,000; the Chair of the Compensation Committee received an additional annual fee of $3,000; and the Chair of the Nominating and Corporate Governance Committee received an additional annual fee of $2,000. Additionally, Ms. Koch received an additional annual fee of $3,000 for legislative and regulatory updates in the banking industry. We also paid our non-employee directors a meeting fee of $300 for each meeting of the Company’s Board, a meeting fee of $350 for each committee meeting and a meeting fee of $500 for each meeting of Heartland Bank’s board of directors. In addition, we made annual equity awards to our non-employee directors. Beginning April 1, 2024, each of our non-employee directors will receive an annual retainer of $18,000. The Chair of the Audit Committee will receive an additional annual fee of $7,500; the Chair of the Compensation Committee will receive an additional annual fee of $5,000; the Chair of the Nominating and Corporate Governance Committee will receive an additional annual fee of $3,000; and the Chair of Heartland Bank's Trust Committee will receive an additional annual fee of $5,000. We will also pay our non-employee directors a meeting fee of $750 for each meeting of the Company’s Board, a meeting fee of $500 for each committee meeting and a meeting fee of $750 for each meeting of Heartland Bank’s board of directors. In addition, we will make annual equity awards to our non-employee directors.