HBT HBT Financial Inc

HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company and State Bank of Lincoln, today reported net income of $10.6 million, or $0.38 diluted earnings per share, for the third quarter of 2020. This compares to net income of $7.4 million, or $0.27 diluted earnings per share, for the second quarter of 2020, and net income of $17.4 million, or $0.97 diluted earnings per share, for the third quarter of 2019.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “We delivered solid results in the third quarter despite the challenges presented by the low interest rate environment and economic uncertainty. Our banks have long prioritized safety and soundness, disciplined growth, and consistent through-the-cycle profitability, and I am pleased to see this focus maintained as we completed our first year as a public company earlier this month. While we remain conservative in building our loan loss reserves to address possible credit deterioration as the pandemic continues, we are encouraged by the stability we are seeing in asset quality, which reflects the strength of our borrowers and our conservative approach to credit. Our nonperforming loans are down from a year ago and our annualized net charge-offs through the first nine months of 2020 amounted to just 0.04% of average loans. In addition, our COVID-19 loan modifications declined by 82% to $36 million, or just 1.6% of our total loans, at the end of the third quarter. With ample liquidity and capital levels, strong asset quality, and a stable deposit base, we are well positioned to continue supporting our customers and communities through this crisis while generating solid results for our shareholders.”

C Corp Equivalent Net Income

Prior to October 11, 2019, the Company operated as an S Corporation for U.S. federal and state income tax purposes. Effective October 11, 2019, the Company voluntarily revoked its S Corporation status and became a taxable entity (C Corporation). As such, any periods prior to October 11, 2019 only reflect state replacement taxes. To facilitate comparison, the Company reports its C Corp equivalent financial results, which do not reflect the additional shares issued in the initial public offering (the “IPO”) for periods prior to the IPO.

The Company reported C Corp equivalent net income of $13.1 million, or $0.73 diluted earnings per share, for the third quarter of 2019. Adjusted Net Income

In addition to reporting C Corp equivalent results, the Company believes adjusted net income and adjusted earnings per share, which adjust for the additional C Corp equivalent tax expense for periods prior to October 11, 2019, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights (“MSR”) fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $10.8 million, or $0.39 adjusted diluted earnings per share, for the third quarter of 2020. This compares to adjusted net income of $8.2 million, or $0.30 adjusted diluted earnings per share, for the second quarter of 2020, and adjusted net income of $14.3 million, or $0.80 adjusted diluted earnings per share, for the third quarter of 2019 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2020 was $28.9 million, nearly unchanged from the second quarter of 2020 as growth in average interest-earning assets was largely offset by lower yields on loans and securities.

Relative to the third quarter of 2019, net interest income decreased $4.3 million, or 12.9%. The decline was primarily attributable to lower yields on average interest-earning assets.

Net interest margin for the third quarter of 2020 was 3.39% compared to 3.51% for the second quarter of 2020. The decrease was primarily attributable to the decline in the average yield on earning assets, partially due to the addition of lower yielding Paycheck Protection Program (PPP) loans. The contribution of acquired loan discount accretion to net interest margin remained low at 2 basis points during the third quarter of 2020 compared to less than 1 basis point during the second quarter of 2020.

Relative to the third quarter of 2019, net interest margin decreased from 4.27%. The decrease was due primarily to the decline in the average yield on earning assets. The contribution of acquired loan discount accretion to net interest margin was 4 basis points during the third quarter of 2019.

Noninterest Income

Noninterest income for the third quarter of 2020 was $10.1 million, an increase of 24.7% from $8.1 million for the second quarter of 2020. The increase was primarily attributable to a $1.0 million increase in gains on sale of mortgage loans attributable to a strong mortgage refinancing environment and a $0.4 million increase in service charges on deposit accounts. Third quarter 2020 results included a negative $0.3 million mortgage servicing rights (“MSR”) fair value adjustment compared to a negative $0.5 million fair value adjustment in the second quarter of 2020.

Relative to the third quarter of 2019, noninterest income increased 32.6% from $7.6 million. The increase was primarily attributable to higher gains on sale of mortgage loans and a less negative MSR fair value adjustment. Partially offsetting these increases was a $0.6 million decline in service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $22.5 million, a decrease of 4.3% from $23.5 million for the second quarter of 2020. The decrease was primarily attributable to lower employee benefits expense as second quarter of 2020 results included a $0.6 million charge related to the termination of the supplemental executive retirement plan (SERP) that was paid out in June 2020.

Relative to the third quarter of 2019, noninterest expense increased 0.8% from $22.3 million. Lower employee benefits expense, due to the termination and liquidation of the SERP, was more than offset by increases in salaries, FDIC insurance, and other noninterest expenses. Higher salaries expense was driven by increases in mortgage lender commissions and overtime for mortgage support personnel, as a result of increased residential mortgage origination volume.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.28 billion at September 30, 2020, compared with $2.28 billion at June 30, 2020 and $2.17 billion at September 30, 2019. The $3.8 million increase in loans from June 30, 2020 was primarily attributable to an $18.1 million increase in construction and land development loans and a $13.0 million increase in multi-family loans being largely offset by a $19.0 million reduction in commercial and industrial loans, a $3.5 million decline in agricultural and farmland loans and a $3.2 million reduction in commercial real estate - owner occupied loans. The $71.1 million decrease in total loans outstanding, net of PPP loans from September 30, 2019 was primarily due to a $65.7 million reduction in participation loan balances.

Deposits

Total deposits were $3.02 billion at September 30, 2020 and at June 30, 2020, compared with $2.70 billion at September 30, 2019. Increases in interest-bearing demand and savings balances were substantially offset by declines in noninterest-bearing, money market and time deposit balances in the third quarter.

Asset Quality

Nonperforming loans totaled $15.2 million, or 0.67% of total loans, at September 30, 2020, compared with $14.0 million, or 0.61% of total loans, at June 30, 2020, and $19.1 million, or 0.88% of total loans, at September 30, 2019. The increase in nonperforming loans from the end of the prior quarter was primarily attributable to the movement of one $4.1 million loan to nonaccrual partially offset by reductions from the pay-off or pay-down on three relationships combined with a charge-down of one relationship.

The Company recorded a provision for loan losses of $2.2 million for the third quarter of 2020, which was primarily due to adjustments to qualitative factors to reflect changes in the economic environment.

Net charge-offs for the third quarter of 2020 were $0.2 million, or 0.04% of average loans on an annualized basis compared to net recoveries of $63 thousand, or 0.01% of average loans on an annualized basis, for the second quarter of 2020, and net charge-offs of $0.5 million, or 0.08% of average loans on an annualized basis, for the third quarter of 2019.

The Company’s allowance for loan losses was 1.39% of total loans and 208.14% of nonperforming loans at September 30, 2020, compared with 1.31% of total loans and 213.04% of nonperforming loans at June 30, 2020.

Capital

At September 30, 2020, the Company exceeded all regulatory capital requirements under Basel III and was considered to be “well-capitalized,” as summarized in the following table:

			Well Capitalized
	September 30,		Regulatory
	2020		Requirements
Total capital to risk-weighted assets	16.81	%	10.00	%
Tier 1 capital to risk-weighted assets	13.98	%	8.00	%
Common equity tier 1 capital ratio	12.52	%	6.50	%
Tier 1 leverage ratio	10.04	%	5.00	%
Total stockholders' equity to total assets	10.05	%	N/A
Tangible common equity to tangible assets (1)	9.36	%	N/A

(1)  See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.

Subordinated Note Issuance

To further enhance the Company’s strong capital and liquidity positions, HBT Financial successfully completed a private placement of $40.0 million 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 during the quarter. This issuance of subordinated notes, which qualify as Tier 2 regulatory capital, contributed to an increase in HBT Financial’s total risk based capital ratio, which was 16.81% at September 30, 2020, compared to 15.13% at June 30, 2020, while also significantly bolstering the cash reserves held at the holding company.

Annualization Factor

The method used to calculate annualization factors for interim period ratios has changed from financial information previously presented. The annualization factor is now calculated using the number of days in the year divided by the number of days in the interim period. Previously, annualization factors were calculated as 4 divided by the number of quarters in the interim period, or an annualization factor of 4 for a quarterly period. The change was applied retrospectively to all periods presented and did not have a material impact on the annualized interim ratios.

About HBT Financial, Inc.

HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company and State Bank of Lincoln. The banks provide a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 63 branches. As of September 30, 2020, HBT had total assets of $3.5 billion, total loans of $2.3 billion, and total deposits of $3.0 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back 100 years.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), originated loans and acquired loans and any ratios derived therefrom, efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, adjusted net income, adjusted return on average assets, adjusted return on average stockholders' equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the "Reconciliation of Non-GAAP Financial Measures" tables.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals, future earnings levels, and future loan growth. These statements are subject to many risks and uncertainties, that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; changes in interest rates and general economic, business and political conditions in the United States generally or in Illinois in particular, including in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACT:Matthew KeatingHBTIR@hbtbank.com(310) 622-8230

HBT Financial, Inc.Consolidated Financial SummaryConsolidated Statements of Income

		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2020				2020				2019				2020				2019
INTEREST AND DIVIDEND INCOME		(dollars in thousands, except per share amounts)
Loans, including fees:
Taxable		$	25,118			$	25,337			$	29,308			$	77,396			$	89,257
Federally tax exempt			542				532				684				1,748				2,130
Securities:
Taxable			3,266				3,172				3,572				9,772				11,295
Federally tax exempt			1,233				1,227				1,395				3,488				4,459
Interest-bearing deposits in bank			65				79				662				873				1,948
Other interest and dividend income			14				14				15				42				46
Total interest and dividend income			30,238				30,361				35,636				93,319				109,135
INTEREST EXPENSE
Deposits			843				1,042				2,000				3,480				6,094
Securities sold under agreements to repurchase			9				11				17				40				48
Borrowings			1				1				—				2				7
Subordinated notes			147				—				—				147				—
Junior subordinated debentures issued to capital trusts			367				399				478				1,209				1,462
Total interest expense			1,367				1,453				2,495				4,878				7,611
Net interest income			28,871				28,908				33,141				88,441				101,524
PROVISION FOR LOAN LOSSES			2,174				3,573				684				10,102				3,266
Net interest income after provision for loan losses			26,697				25,335				32,457				78,339				98,258
NONINTEREST INCOME
Card income			2,146				1,998				1,985				5,936				5,813
Service charges on deposit accounts			1,493				1,133				2,111				4,460				5,805
Wealth management fees			1,646				1,507				1,676				4,967				4,916
Mortgage servicing			724				727				795				2,175				2,342
Mortgage servicing rights fair value adjustment			(268	)			(508	)			(860	)			(2,947	)			(2,982	)
Gains on sale of mortgage loans			3,184				2,135				992				5,855				2,177
Gains (losses) on securities			(2	)			57				(73	)			3				42
Gains (losses) on foreclosed assets			27				58				(20	)			120				132
Gains (losses) on other assets			1				(69	)			(29	)			(71	)			1,244
Title insurance activity			—				—				—				—				167
Other noninterest income			1,101				1,022				1,005				2,866				2,759
Total noninterest income			10,052				8,060				7,582				23,364				22,415
NONINTEREST EXPENSE
Salaries			12,595				12,674				12,303				38,023				36,422
Employee benefits			1,666				2,455				2,253				6,555				8,220
Occupancy of bank premises			1,609				1,642				1,785				5,079				5,260
Furniture and equipment			679				609				545				1,891				2,050
Data processing			1,583				1,672				1,471				4,841				4,023
Marketing and customer relations			690				817				801				2,551				2,837
Amortization of intangible assets			305				305				335				927				1,087
FDIC insurance			222				218				8				476				435
Loan collection and servicing			450				494				547				1,292				1,901
Foreclosed assets			226				88				196				403				525
Other noninterest expense			2,460				2,525				2,059				7,253				6,316
Total noninterest expense			22,485				23,499				22,303				69,291				69,076
INCOME BEFORE INCOME TAX EXPENSE			14,264				9,896				17,736				32,412				51,597
INCOME TAX EXPENSE			3,701				2,477				299				8,209				819
NET INCOME		$	10,563			$	7,419			$	17,437			$	24,203			$	50,778
EARNINGS PER SHARE - BASIC		$	0.38			$	0.27			$	0.97			$	0.88			$	2.82
EARNINGS PER SHARE - DILUTED		$	0.38			$	0.27			$	0.97			$	0.88			$	2.82
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING			27,457,306				27,457,306				18,027,512				27,457,306				18,027,512
PRO FORMA C CORP EQUIVALENT INFORMATION
Historical income before income tax expense										$	17,736							$	51,597
Pro forma C Corp equivalent income tax expense											4,614								13,313
Pro forma C Corp equivalent net income										$	13,122							$	38,284
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC										$	0.73							$	2.12
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED										$	0.73							$	2.12

 

HBT Financial, Inc.Consolidated Financial SummaryConsolidated Balance Sheets

		September 30,				June 30,				September 30,
		2020				2020				2019
		(dollars in thousands)
ASSETS
Cash and due from banks		$	22,347			$	21,789			$	19,969
Interest-bearing deposits with banks			214,377				292,576				134,972
Cash and cash equivalents			236,724				314,365				154,941
Interest-bearing time deposits with banks			—				—				248
Debt securities available-for-sale, at fair value			814,798				701,353				618,120
Debt securities held-to-maturity			74,510				73,823				99,861
Equity securities			4,814				4,815				4,436
Restricted stock, at cost			2,498				2,498				2,425
Loans held for sale			23,723				25,934				7,608
Loans, before allowance for loan losses			2,279,639				2,275,795				2,171,014
Allowance for loan losses			(31,654	)			(29,723	)			(22,761	)
Loans, net of allowance for loan losses			2,247,985				2,246,072				2,148,253
Bank premises and equipment, net			53,271				53,883				54,105
Bank premises held for sale			121				121				121
Foreclosed assets			3,857				4,450				6,574
Goodwill			23,620				23,620				23,620
Core deposit intangible assets, net			3,103				3,408				4,366
Mortgage servicing rights, at fair value			5,571				5,839				7,936
Investments in unconsolidated subsidiaries			1,165				1,165				1,165
Accrued interest receivable			13,820				12,661				14,816
Other assets			25,643				27,405				18,018
Total assets		$	3,535,223			$	3,501,412			$	3,166,613
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing		$	850,306			$	856,030			$	649,316
Interest-bearing			2,166,355				2,159,083				2,054,742
Total deposits			3,016,661				3,015,113				2,704,058
Securities sold under agreements to repurchase			45,438				51,354				32,267
Subordinated notes			39,218				—				—
Junior subordinated debentures issued to capital trusts			37,632				37,616				37,566
Other liabilities			40,980				49,489				43,786
Total liabilities			3,179,929				3,153,572				2,817,677
Stockholders' Equity
Common stock			275				275				181
Surplus			190,787				190,687				32,288
Retained earnings			146,101				139,667				311,055
Accumulated other comprehensive income			18,131				17,211				8,431
Less cost of treasury stock held			—				—				(3,019	)
Total stockholders’ equity			355,294				347,840				348,936
Total liabilities and stockholders’ equity		$	3,535,223			$	3,501,412			$	3,166,613
SHARE INFORMATION
Ending number shares of common stock outstanding			27,457,306				27,457,306				18,027,512

 

HBT Financial, Inc.Consolidated Financial Summary

		September 30,			June 30,			September 30,
		2020			2020			2019
		(dollars in thousands)
LOANS
Commercial and industrial		$	389,231		$	408,230		$	340,650
Agricultural and farmland			235,597			239,101			205,041
Commercial real estate - owner occupied			225,345			228,506			239,805
Commercial real estate - non-owner occupied			532,454			535,339			552,262
Multi-family			199,441			186,440			191,646
Construction and land development			265,758			247,640			210,939
One-to-four family residential			308,365			308,133			321,947
Municipal, consumer, and other			123,448			122,406			108,724
Loans, before allowance for loan losses		$	2,279,639		$	2,275,795		$	2,171,014
PPP LOANS (included above)
Commercial and industrial		$	168,466		$	166,868		$	—
Agricultural and farmland			4,179			4,027			—
Municipal, consumer, and other			7,095			7,063			—
Total PPP Loans		$	179,740		$	177,958		$	—

		September 30,			June 30,			September 30,
		2020			2020			2019
		(dollars in thousands)
DEPOSITS
Noninterest-bearing		$	850,306		$	856,030		$	649,316
Interest-bearing demand			885,719			880,007			800,471
Money market			475,047			480,497			463,444
Savings			497,682			487,761			426,707
Time			307,907			310,818			364,120
Total deposits		$	3,016,661		$	3,015,113		$	2,704,058

 

HBT Financial, Inc.Consolidated Financial Summary

		Three Months Ended
		September 30, 2020									June 30, 2020									September 30, 2019
		Average									Average									Average
		Balance				Interest			Yield/Cost *		Balance				Interest			Yield/Cost *		Balance				Interest			Yield/Cost *
		(dollars in thousands)
ASSETS
Loans		$	2,277,826			$	25,660		4.48	%	$	2,265,032			$	25,869		4.59	%	$	2,191,230			$	29,992		5.43	%
Securities			831,120				4,499		2.15			721,817				4,399		2.45			745,532				4,967		2.64
Deposits with banks			274,022				65		0.09			326,216				79		0.10			136,635				662		1.93
Other			2,498				14		2.29			2,496				14		2.21			2,425				15		2.35
Total interest-earning assets			3,385,466			$	30,238		3.55	%		3,315,561			$	30,361		3.68	%		3,075,822			$	35,636		4.60	%
Allowance for loan losses			(30,221	)								(26,125	)								(22,326	)
Noninterest-earning assets			157,446									163,713									149,146
Total assets		$	3,512,691								$	3,453,149								$	3,202,642
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand		$	888,941			$	123		0.05	%	$	860,131			$	162		0.08	%	$	812,526			$	347		0.17	%
Money market			479,314				96		0.08			477,441				118		0.10			468,139				497		0.42
Savings			493,278				37		0.03			474,609				50		0.04			428,447				70		0.06
Time			306,154				587		0.76			317,965				712		0.90			383,070				1,086		1.12
Total interest-bearing deposits			2,167,687				843		0.15			2,130,146				1,042		0.20			2,092,182				2,000		0.38
Securities sold under agreements to repurchase			51,686				9		0.06			53,867				11		0.08			35,757				17		0.18
Borrowings			1,196				1		0.47			2,582				1		0.03			33				—		2.40
Subordinated notes			11,976				147		4.87			—				—		—			—				—		—
Junior subordinated debentures issued to capital trusts			37,621				367		3.89			37,605				399		4.26			37,561				478		5.05
Total interest-bearing liabilities			2,270,166			$	1,367		0.24	%		2,224,200			$	1,453		0.26	%		2,165,533			$	2,495		0.46	%
Noninterest-bearing deposits			846,808									824,232									651,085
Noninterest-bearing liabilities			40,421									58,177									37,274
Total liabilities			3,157,395									3,106,609									2,853,892
Stockholders' Equity			355,296									346,540									348,750
Total liabilities and stockholders’ equity		$	3,512,691								$	3,453,149								$	3,202,642
Net interest income/Net interest margin (3)						$	28,871		3.39	%					$	28,908		3.51	%					$	33,141		4.27	%
Tax-equivalent adjustment (2)							495		0.06							483		0.06							559		0.08
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2)						$	29,366		3.45	%					$	29,391		3.57	%					$	33,700		4.35	%
Net interest rate spread (4)									3.31	%								3.42	%								4.14	%
Net interest-earning assets (5)		$	1,115,300								$	1,091,361								$	910,289
Ratio of interest-earning assets to interest-bearing liabilities			1.49									1.49									1.42
Cost of total deposits									0.11	%								0.14	%								0.29	%

*  Annualized measure.(1)  See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.(2)  On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.(3)  Net interest margin represents net interest income divided by average total interest-earning assets.(4)  Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.(5)  Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

HBT Financial, Inc.Consolidated Financial Summary

		Nine Months Ended
		September 30, 2020									September 30, 2019
		Average									Average
		Balance				Interest			Yield/Cost *		Balance				Interest			Yield/Cost *
		(dollars in thousands)
ASSETS
Loans		$	2,228,145			$	79,144		4.74	%	$	2,184,263			$	91,387		5.59	%
Securities			740,834				13,260		2.39			779,375				15,754		2.70
Deposits with banks			283,730				873		0.41			131,209				1,948		1.99
Other			2,473				42		2.29			2,527				46		2.42
Total interest-earning assets			3,255,182			$	93,319		3.83	%		3,097,374			$	109,135		4.71	%
Allowance for loan losses			(26,288	)								(21,346	)
Noninterest-earning assets			156,121									147,972
Total assets		$	3,385,015								$	3,224,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand		$	853,775			$	536		0.08	%	$	821,848			$	1,175		0.19	%
Money market			473,647				608		0.17			455,469				1,356		0.40
Savings			467,482				157		0.04			428,865				207		0.06
Time			321,905				2,179		0.90			408,972				3,356		1.10
Total interest-bearing deposits			2,116,809				3,480		0.22			2,115,154				6,094		0.39
Securities sold under agreements to repurchase			49,183				40		0.11			39,542				48		0.16
Borrowings			1,333				2		0.19			378				7		2.61
Subordinated notes			4,021				147		4.87			—				—		—
Junior subordinated debentures issued to capital trusts			37,605				1,209		4.30			37,544				1,462		5.21
Total interest-bearing liabilities			2,208,951			$	4,878		0.29	%		2,192,618			$	7,611		0.46	%
Noninterest-bearing deposits			780,826									654,818
Noninterest-bearing liabilities			47,426									31,720
Total liabilities			3,037,203									2,879,156
Stockholders' Equity			347,812									344,844
Total liabilities and stockholders’ equity		$	3,385,015									3,224,000
Net interest income/Net interest margin (3)						$	88,441		3.63	%					$	101,524		4.38	%
Tax-equivalent adjustment (2)							1,441		0.06							1,775		0.08
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2)						$	89,882		3.69	%					$	103,299		4.46	%
Net interest rate spread (4)									3.54	%								4.25	%
Net interest-earning assets (5)		$	1,046,231								$	904,756
Ratio of interest-earning assets to interest-bearing liabilities			1.47									1.41
Cost of  total deposits									0.16	%								0.29	%

*  Annualized measure.(1)  See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.(2)  On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.(3)  Net interest margin represents net interest income divided by average total interest-earning assets.(4)  Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.(5)  Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

HBT Financial, Inc.Consolidated Financial Summary

		September 30,			June 30,			September 30,
		2020			2020			2019
		(dollars in thousands)
NONPERFORMING ASSETS
Nonaccrual		$	15,191		$	13,945		$	18,977
Past due 90 days or more, still accruing (1)			17			7			95
Total nonperforming loans			15,208			13,952			19,072
Foreclosed assets			3,857			4,450			6,574
Total nonperforming assets		$	19,065		$	18,402		$	25,646
NONPERFORMING ASSETS (Originated) (2)
Nonaccrual		$	10,179		$	9,059		$	11,268
Past due 90 days or more, still accruing			17			7			95
Total nonperforming loans (originated)			10,196			9,066			11,363
Foreclosed assets			939			1,092			1,048
Total nonperforming (originated)		$	11,135		$	10,158		$	12,411
NONPERFORMING ASSETS (Acquired) (2)
Nonaccrual		$	5,012		$	4,886		$	7,709
Past due 90 days or more, still accruing (1)			—			—			—
Total nonperforming loans (acquired)			5,012			4,886			7,709
Foreclosed assets			2,918			3,358			5,526
Total nonperforming assets (acquired)		$	7,930		$	8,244		$	13,235
Allowance for loan losses		$	31,654		$	29,723		$	22,761
Loans, before allowance for loan losses		$	2,279,639		$	2,275,795		$	2,171,014
Loans, before allowance for loan losses (originated) (2)			2,148,074			2,132,189			1,987,265
Loans, before allowance for loan losses (acquired) (2)			131,565			143,606			183,749
CREDIT QUALITY RATIOS
Allowance for loan losses to loans, before allowance for loan losses			1.39	%		1.31	%		1.05	%
Allowance for loan losses to nonperforming loans			208.14			213.04			119.34
Nonperforming loans to loans, before allowance for loan losses			0.67			0.61			0.88
Nonperforming assets to total assets			0.54			0.53			0.81
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets			0.83			0.81			1.18
CREDIT QUALITY RATIOS (Originated) (2)
Nonperforming loans to loans, before allowance for loan losses			0.47	%		0.43	%		0.57	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets			0.52			0.48			0.62
CREDIT QUALITY RATIOS (Acquired) (2)
Nonperforming loans to loans, before allowance for loan losses			3.81	%		3.40	%		4.20	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets			5.90			5.61			6.99

(1)  Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $30 thousand, $0.1 million, and $0.7 million as of September 30, 2020, June 30, 2020, and September 30, 2019, respectively.(2)  Originated loans and acquired loans along with the related credit quality ratios such as nonperforming loans to loans, before allowance for loan losses (originated and acquired) and nonperforming assets to loans, before allowance for loan losses and foreclosed assets (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.

HBT Financial, Inc.Consolidated Financial Summary

		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2020				2020				2019				2020				2019
ALLOWANCE FOR LOAN LOSSES		(dollars in thousands)
Beginning balance		$	29,723			$	26,087			$	22,542			$	22,299			$	20,509
Provision			2,174				3,573				684				10,102				3,266
Charge-offs			(1,078	)			(160	)			(937	)			(2,459	)			(2,436	)
Recoveries			835				223				472				1,712				1,422
Ending balance		$	31,654			$	29,723			$	22,761			$	31,654			$	22,761
Net charge-offs (recoveries)		$	243			$	(63	)		$	465			$	747			$	1,014
Net charge-offs (recoveries) - (originated) (1)			(20	)			3				224				155				182
Net charge-offs (recoveries) - (acquired) (1)			263				(66	)			241				592				832
Average loans, before allowance for loan losses		$	2,277,826			$	2,265,032			$	2,191,230			$	2,228,145			$	2,184,263
Average loans, before allowance for loan losses (originated) (1)			2,140,376				2,117,131				2,001,803				2,080,668				1,979,383
Average loans, before allowance for loan losses (acquired) (1)			137,450				147,901				189,427				147,477				204,880
Net charge-offs to average loans, before allowance for loan losses *			0.04		%		(0.01	)	%		0.08		%		0.04		%		0.06		%
Net charge-offs to average loans, before allowance for loan losses (originated) * (1)			—				—				0.04				0.01				0.01
Net charge-offs to average loans, before allowance for loan losses (acquired) * (1)			0.76				(0.18	)			0.50				0.54				0.54

*  Annualized measure.(1)  Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs (originated and acquired), average loans, before allowance for loan losses (originated and acquired), and net charge-offs to average loans, before allowance for loan losses (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.

HBT Financial, Inc.Consolidated Financial Summary

		As of or for the Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
		2020			2020			2019			2020			2019
		(dollars in thousands, except per share amounts)
EARNINGS AND PER SHARE INFORMATION
Net income		$	10,563		$	7,419		$	17,437		$	24,203		$	50,778
Earnings per share - Basic			0.38			0.27			0.97			0.88			2.82
Earnings per share - Diluted			0.38			0.27			0.97			0.88			2.82
C Corp equivalent net income (1)			N/A			N/A		$	13,122			N/A		$	38,284
C Corp equivalent earnings per share - Basic (1)			N/A			N/A			0.73			N/A			2.12
C Corp equivalent earnings per share - Diluted (1)			N/A			N/A			0.73			N/A			2.12
Book value per share		$	12.94		$	12.67		$	19.36
Ending number shares of common stock outstanding			27,457,306			27,457,306			18,027,512
Weighted average shares of common stock outstanding			27,457,306			27,457,306			18,027,512			27,457,306			18,027,512
SUMMARY RATIOS
Net interest margin *			3.39	%		3.51	%		4.27	%		3.63	%		4.38	%
Efficiency ratio			56.98			62.74			53.94			61.15			54.86
Loan to deposit ratio			75.57			75.48			80.29
Return on average assets *			1.20	%		0.86	%		2.16	%		0.96	%		2.11	%
Return on average stockholders' equity *			11.83			8.61			19.84			9.30			19.69
C Corp equivalent return on average assets * (1)			N/A			N/A			1.63	%		N/A			1.59	%
C Corp equivalent return on average stockholders' equity * (1)			N/A			N/A			14.93			N/A			14.84
NON-GAAP FINANCIAL MEASURES
Adjusted net income (2)		$	10,755		$	8,218		$	14,343		$	27,352		$	43,010
Adjusted earnings per share - Basic (2)			0.39			0.30			0.80			0.99			2.39
Adjusted earnings per share - Diluted (2)			0.39			0.30			0.80			0.99			2.39
Tangible book value per share (2)		$	11.97		$	11.68		$	17.80
Net interest margin (tax equivalent basis) * (2)			3.45	%		3.57	%		4.35	%		3.69	%		4.46	%
Efficiency ratio (tax equivalent basis) (2)			56.27			61.93			53.21			60.37			54.08
Adjusted return on average assets * (2)			1.22	%		0.96	%		1.78	%		1.08	%		1.78	%
Adjusted return on average stockholders' equity * (2)			12.04			9.54			16.32			10.50			16.68
Return on average tangible common equity * (2)			12.80	%		9.34	%		21.58	%		10.08	%		21.46	%
C Corp equivalent return on average tangible common equity * (1) (2)			N/A			N/A			16.24			N/A			16.18
Adjusted return on average tangible common equity * (2)			13.03			10.35			17.75			11.40			18.18

*  Annualized measure.(1)  Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.(2)  See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.N/A  Not applicable.

Reconciliation of Non-GAAP Financial Measures –Adjusted Net Income and Adjusted Return on Average Assets

		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2020				2020				2019				2020				2019
		(dollars in thousands)
Net income		$	10,563			$	7,419			$	17,437			$	24,203			$	50,778
C Corp equivalent adjustment (2)			—				—				(4,315	)			—				(12,494	)
C Corp equivalent net income (2)			10,563				7,419				13,122				24,203				38,284
Adjustments:
Net earnings (losses) from closed or sold operations, including gains on sale (1)			—				—				(3	)			—				533
Charges related to termination of certain employee benefit plans			—				(609	)			(845	)			(1,457	)			(4,161	)
Mortgage servicing rights fair value adjustment			(268	)			(508	)			(860	)			(2,947	)			(2,982	)
Total adjustments			(268	)			(1,117	)			(1,708	)			(4,404	)			(6,610	)
Tax effect of adjustments			76				318				487				1,255				1,884
Less adjustments after tax effect			(192	)			(799	)			(1,221	)			(3,149	)			(4,726	)
Adjusted net income		$	10,755			$	8,218			$	14,343			$	27,352			$	43,010
Average assets		$	3,512,691			$	3,453,149			$	3,202,642			$	3,385,015			$	3,224,000
Return on average assets *			1.20		%		0.86		%		2.16		%		0.96				2.11		%
C Corp equivalent return on average assets * (2)			N/A				N/A				1.63				N/A				1.59
Adjusted return on average assets *			1.22				0.96				1.78				1.08				1.78

*  Annualized measure.(1)  Closed or sold operations include HB Credit Company, HBT Insurance, and First Community Title Services, Inc.(2)  Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.N/A  Not applicable.

Reconciliation of Non-GAAP Financial Measures – Adjusted Earnings Per Share

		Three Months Ended											Nine Months Ended
		September 30,				June 30,				September 30,			September 30,
		2020				2020				2019			2020				2019
		(dollars in thousands, except per share amounts)
Numerator:
Net income		$	10,563			$	7,419			$	17,437		$	24,203			$	50,778
Earnings allocated to unvested restricted stock units (1)			(28	)			(19	)			—			(62	)			—
Numerator for earnings per share - basic and diluted		$	10,535			$	7,400			$	17,437		$	24,141			$	50,778
C Corp equivalent net income (3)			N/A				N/A			$	13,122			N/A			$	38,284
Earnings allocated to unvested restricted stock units (1) (3)			N/A				N/A				—			N/A				—
Numerator for C Corp equivalent earnings per share - basic and diluted (3)			N/A				N/A			$	13,122			N/A			$	38,284
Adjusted net income		$	10,755			$	8,218			$	14,343		$	27,352			$	43,010
Earnings allocated to unvested restricted stock units (1)			(28	)			(22	)			—			(69	)			—
Numerator for adjusted earnings per share - basic and diluted		$	10,727			$	8,196			$	14,343		$	27,283			$	43,010
Denominator:
Weighted average common shares outstanding			27,457,306				27,457,306				18,027,512			27,457,306				18,027,512
Dilutive effect of outstanding restricted stock units (2)			—				—				—			—				—
Weighted average common shares outstanding, including all dilutive potential shares			27,457,306				27,457,306				18,027,512			27,457,306				18,027,512
Earnings per share - Basic		$	0.38			$	0.27			$	0.97		$	0.88			$	2.82
Earnings per share - Diluted		$	0.38			$	0.27			$	0.97		$	0.88			$	2.82
C Corp equivalent earnings per share - Basic (3)			N/A				N/A			$	0.73			N/A			$	2.12
C Corp equivalent earnings per share - Diluted (3)			N/A				N/A			$	0.73			N/A			$	2.12
Adjusted earnings per share - Basic		$	0.39			$	0.30			$	0.80		$	0.99			$	2.39
Adjusted earnings per share - Diluted		$	0.39			$	0.30			$	0.80		$	0.99			$	2.39

(1)  The Company has granted restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate 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.(2)  Restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents during the three months ended September 30, 2020 and June 30, 2020 and during the nine months ended September 30, 2020. There were no restricted stock units outstanding during the three and nine months ended September 30, 2019.(3)  Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.N/A  Not applicable.

Reconciliation of Non-GAAP Financial Measures – Net Interest Margin (Tax Equivalent Basis)

		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
		2020			2020			2019			2020			2019
		(dollars in thousands)
Net interest income (tax equivalent basis)
Net interest income		$	28,871		$	28,908		$	33,141		$	88,441		$	101,524
Tax-equivalent adjustment (1)			495			483			559			1,441			1,775
Net interest income (tax equivalent basis) (1)		$	29,366		$	29,391		$	33,700		$	89,882		$	103,299
Net interest margin (tax equivalent basis)
Net interest margin *			3.39	%		3.51	%		4.27	%		3.63	%		4.38	%
Tax-equivalent adjustment * (1)			0.06			0.06			0.08			0.06			0.08
Net interest margin (tax equivalent basis) * (1)			3.45	%		3.57	%		4.35	%		3.69	%		4.46	%
Average interest-earning assets		$	3,385,466		$	3,315,561		$	3,075,822		$	3,255,182		$	3,097,374

*  Annualized measure.(1)  On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.

Reconciliation of Non-GAAP Financial Measures – Efficiency Ratio (Tax Equivalent Basis)

		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
		2020			2020			2019			2020			2019
		(dollars in thousands)
Efficiency ratio (tax equivalent basis)
Total noninterest expense		$	22,485		$	23,499		$	22,303		$	69,291		$	69,076
Less: amortization of intangible assets			305			305			335			927			1,087
Adjusted noninterest expense		$	22,180		$	23,194		$	21,968		$	68,364		$	67,989
Net interest income		$	28,871		$	28,908		$	33,141		$	88,441		$	101,524
Total noninterest income			10,052			8,060			7,582			23,364			22,415
Operating revenue			38,923			36,968			40,723			111,805			123,939
Tax-equivalent adjustment (1)			495			483			559			1,441			1,775
Operating revenue (tax equivalent basis) (1)		$	39,418		$	37,451		$	41,282		$	113,246		$	125,714
Efficiency ratio			56.98	%		62.74	%		53.94	%		61.15	%		54.86	%
Efficiency ratio (tax equivalent basis) (1)			56.27			61.93			53.21			60.37			54.08

(1)  On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.

Reconciliation of Non-GAAP Financial Measures – Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share

		September 30,			June 30,			September 30,
		2020			2020			2019
		(dollars in thousands)
Tangible Common Equity
Total stockholders' equity		$	355,294		$	347,840		$	348,936
Less: Goodwill			23,620			23,620			23,620
Less: Core deposit intangible assets, net			3,103			3,408			4,366
Tangible common equity		$	328,571		$	320,812		$	320,950
Tangible assets
Total assets		$	3,535,223		$	3,501,412		$	3,166,613
Less: Goodwill			23,620			23,620			23,620
Less: Core deposit intangible assets, net			3,103			3,408			4,366
Tangible assets		$	3,508,500		$	3,474,384		$	3,138,627
Total stockholders' equity to total assets			10.05	%		9.93	%		11.02	%
Tangible common equity to tangible assets			9.36			9.23			10.23
Ending number shares of common stock outstanding			27,457,306			27,457,306			18,027,512
Book value per share		$	12.94		$	12.67		$	19.36
Tangible book value per share			11.97			11.68			17.80

Reconciliation of Non-GAAP Financial Measures – Adjusted Return on Average Stockholders' Equity and Adjusted Return on Tangible Common Equity

		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,
		2020			2020			2019			2020			2019
		(dollars in thousands)
Average Tangible Common Equity
Total stockholders' equity		$	355,296		$	346,540		$	348,750		$	347,812		$	344,844
Less: Goodwill			23,620			23,620			23,620			23,620			23,620
Less: Core deposit intangible assets, net			3,284			3,589			4,561			3,589			4,924
Average tangible common equity		$	328,392		$	319,331		$	320,569		$	320,603		$	316,300
Net income		$	10,563		$	7,419		$	17,437		$	24,203		$	50,778
C Corp equivalent net income (1)			N/A			N/A			13,122			N/A			38,284
Adjusted net income			10,755			8,218			14,343			27,352			43,010
Return on average stockholders' equity *			11.83	%		8.61	%		19.84	%		9.30	%		19.69	%
C Corp equivalent return on average stockholders' equity * (1)			N/A			N/A			14.93			N/A			14.84
Adjusted return on average stockholders' equity *			12.04			9.54			16.32			10.50			16.68
Return on average tangible common equity *			12.80	%		9.34	%		21.58	%		10.08	%		21.46	%
C Corp equivalent return on average tangible common equity * (1)			N/A			N/A			16.24			N/A			16.18
Adjusted return on average tangible common equity *			13.03			10.35			17.75			11.40			18.18

*  Annualized measure.(1)  Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.N/A  Not applicable.