HBT HBT Financial Inc

HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company, today reported net income of $12.6 million, or $0.46 diluted earnings per share, for the fourth quarter of 2020. This compares to net income of $10.6 million, or $0.38 diluted earnings per share, for the third quarter of 2020, and net income of $16.1 million, or $0.61 diluted earnings per share, for the fourth quarter of 2019.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “Despite the ongoing challenges presented by the pandemic that have impacted loan demand in our markets, we continued to produce a high level of profitability. Our consistent performance reflects the strong foundation we have built upon an attractive, stable deposit base, conservative underwriting, and diverse sources of non-interest income.

“With ample liquidity, capital and reserves, we are well positioned to continue supporting our customers and communities through this crisis while generating solid results for our shareholders. As economic conditions improve, we will be well positioned to continue growing our balance sheet through our ongoing expansion in our existing markets and potential acquisition opportunities, which we believe will help us to generate earnings growth and further enhance the value of our franchise in the years ahead,” said Mr. Drake.

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 $15.1 million, or $0.58 diluted earnings per share, for the fourth 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 $12.4 million, or $0.45 adjusted diluted earnings per share, for the fourth quarter of 2020. This compares to adjusted net income of $10.8 million, or $0.39 adjusted diluted earnings per share, for the third quarter of 2020, and adjusted net income of $14.4 million, or $0.55 adjusted diluted earnings per share, for the fourth quarter of 2019 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2020 was $29.2 million, an increase of 1.0% from $28.9 million for the third quarter of 2020 due primarily to growth in average interest-earning assets.

Relative to the fourth quarter of 2019, net interest income decreased $3.1 million, or 9.6%. The decline was primarily attributable to lower yields on average interest-earning assets.

Net interest margin for the fourth quarter of 2020 was 3.31%, compared to 3.39% for the third quarter of 2020. The decrease was primarily attributable to a full quarter’s impact of subordinated notes issued in September 2020. The contribution of acquired loan discount accretion to net interest margin remained low at 2 basis points during both the third and fourth quarter of 2020.

Relative to the fourth quarter of 2019, net interest margin decreased from 4.09%. 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 2 basis points during the fourth quarter of 2019.

Noninterest Income

Noninterest income for the fourth quarter of 2020 was $11.1 million, an increase of 10.3% from $10.1 million for the third quarter of 2020. The increase was partially attributable to a $0.6 million increase in wealth management fees. Fourth quarter 2020 results included a positive $0.4 million mortgage servicing rights (“MSR”) fair value adjustment compared to a negative $0.3 million fair value adjustment in the third quarter of 2020.

Relative to the fourth quarter of 2019, noninterest income increased 7.3% from $10.3 million. The increase was primarily attributable to higher gains on sale of mortgage loans and higher wealth management fees. Partially offsetting these increases were a $0.5 million decline in service charges on deposit accounts and a $0.4 million decline in other noninterest income.

Noninterest Expense

Noninterest expense for the fourth quarter of 2020 was $22.7 million, an increase of 0.8% from $22.5 million for the third quarter of 2020. The increase was primarily attributable to a $0.3 million increase in data processing costs, including $0.2 million of nonrecurring costs related to systems conversion for the consolidation of State Bank of Lincoln into Heartland Bank and Trust Company.

Relative to the third quarter of 2019, noninterest expense increased 3.3% from $22.0 million. Lower loan collection and servicing expense was more than offset by increases in FDIC insurance, data processing and other noninterest expenses. 

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.25 billion at December 31, 2020, compared with $2.28 billion at September 30, 2020 and $2.16 billion at December 31, 2019. The $32.6 million decrease in loans from September 30, 2020 includes a $16.2 million decrease in PPP loans. The remaining decrease was not attributable to any specific factor. The $80.3 million decrease in total loans outstanding, net of PPP loans from December 31, 2019 was primarily due to a $43.2 million reduction in balances on existing lines of credit and a $19.0 million decrease in balances of participation loans purchased.

Deposits

Total deposits were $3.13 billion at December 31, 2020, compared with $3.02 billion at September 30, 2020 and $2.78 billion at December 31, 2019. Relative to the previous quarter, increases in interest-bearing demand, noninterest-bearing and savings balances were partially offset by declines in money market and time deposit balances in the fourth quarter of 2020.

Asset Quality

Nonperforming loans totaled $10.0 million, or 0.44% of total loans, at December 31, 2020, compared with $15.2 million, or 0.67% of total loans, at September 30, 2020, and $19.0 million, or 0.88% of total loans, at December 31, 2019. The decrease in nonperforming loans from September 30, 2020 was primarily attributable to the pay down and subsequent return to accrual status of one agriculture credit that totaled $4.2 million at September 30, 2020 and $3.8 million at December 31, 2020. The $9.0 million reduction in nonperforming loans from December 31, 2019 was primarily due to the referenced agriculture credit that totaled $5.0 million at December 31, 2019, as well as the payoff/pay down of 5 loan relationships that totaled approximately $4.2 million since December 31, 2019.

The Company recorded a provision for loan losses of $0.4 million for the fourth quarter of 2020, which was primarily due to a $3.2 million increase in specific reserves on loans individually evaluated for impairment, significantly offset by adjustments to qualitative factors to reflect changes in the economic environment and improved asset quality metrics.

Net charge-offs for the fourth quarter of 2020 were $0.2 million, or 0.04% of average loans on an annualized basis, compared to net charge-offs of $0.2 million, or 0.04% of average loans on an annualized basis, for the third quarter of 2020, and net charge-offs of $0.6 million, or 0.11% of average loans on an annualized basis, for the fourth quarter of 2019.

The Company’s allowance for loan losses was 1.42% of total loans and 319.66% of nonperforming loans at December 31, 2020, compared with 1.39% of total loans and 208.14% of nonperforming loans at September 30, 2020.

Capital

At December 31, 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
	December 31,		Regulatory
	2020		Requirements
Total capital to risk-weighted assets	17.45	%	10.00	%
Tier 1 capital to risk-weighted assets	14.55	%	8.00	%
Common equity tier 1 capital ratio	13.06	%	6.50	%
Tier 1 leverage ratio	9.94	%	5.00	%
Total stockholders' equity to total assets	9.93	%	N/A
Tangible common equity to tangible assets (1)	9.27	%	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.

Stock Repurchase Program

On November 3, 2020, the Company announced that its Board of Directors approved a stock repurchase program that authorizes the Company to repurchase up to $15 million of its common stock. The Company did not repurchase any shares of its common stock during the fourth quarter of 2020.

Annualization Factor

The method used to calculate annualization factors for interim period ratios changed in the third quarter of 2020 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. Prior to the third quarter of 2020, 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. The bank provides 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 December 31, 2020, HBT had total assets of $3.7 billion, total loans of $2.2 billion, and total deposits of $3.1 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											Year Ended
	December 31,			September 30,				December 31,				December 31,
	2020			2020				2019				2020				2019
INTEREST AND DIVIDEND INCOME	(dollars in thousands, except per share amounts)
Loans, including fees:
Taxable	$	25,497		$	25,118			$	28,039			$	102,893			$	117,296
Federally tax exempt		555			542				716				2,303				2,846
Securities:
Taxable		3,407			3,266				3,559				13,179				14,854
Federally tax exempt		1,208			1,233				1,269				4,696				5,728
Interest-bearing deposits in bank		65			65				1,003				938				2,951
Other interest and dividend income		14			14				14				56				60
Total interest and dividend income		30,746			30,238				34,600				124,065				143,735
INTEREST EXPENSE
Deposits		741			843				1,838				4,221				7,932
Securities sold under agreements to repurchase		8			9				24				48				72
Borrowings		—			1				2				2				9
Subordinated notes		469			147				—				616				—
Junior subordinated debentures issued to capital trusts		364			367				460				1,573				1,922
Total interest expense		1,582			1,367				2,324				6,460				9,935
Net interest income		29,164			28,871				32,276				117,605				133,800
PROVISION FOR LOAN LOSSES		430			2,174				138				10,532				3,404
Net interest income after provision for loan losses		28,734			26,697				32,138				107,073				130,396
NONINTEREST INCOME
Card income		2,151			2,146				1,952				8,087				7,765
Service charges on deposit accounts		1,527			1,493				2,065				5,987				7,870
Wealth management fees		2,270			1,646				1,911				7,237				6,827
Mortgage servicing		803			724				801				2,978				3,143
Mortgage servicing rights fair value adjustment		363			(268	)			582				(2,584	)			(2,400	)
Gains on sale of mortgage loans		2,980			3,184				915				8,835				3,092
Gains (losses) on securities		30			(2	)			(47	)			33				(5	)
Gains (losses) on foreclosed assets		22			27				808				142				940
Gains (losses) on other assets		—			1				—				(71	)			1,244
Title insurance activity		—			—				—				—				167
Other noninterest income		946			1,101				1,349				3,812				4,108
Total noninterest income		11,092			10,052				10,336				34,456				32,751
NONINTEREST EXPENSE
Salaries		12,593			12,595				12,581				50,616				49,003
Employee benefits		1,490			1,666				1,663				8,045				9,883
Occupancy of bank premises		1,501			1,609				1,607				6,580				6,867
Furniture and equipment		556			679				763				2,447				2,813
Data processing		1,901			1,583				1,547				6,742				5,570
Marketing and customer relations		925			690				1,036				3,476				3,873
Amortization of intangible assets		305			305				336				1,232				1,423
FDIC insurance		231			222				(237	)			707				198
Loan collection and servicing		463			450				732				1,755				2,633
Foreclosed assets		154			226				151				557				676
Other noninterest expense		2,546			2,460				1,771				9,799				8,087
Total noninterest expense		22,665			22,485				21,950				91,956				91,026
INCOME BEFORE INCOME TAX EXPENSE		17,161			14,264				20,524				49,573				72,121
INCOME TAX EXPENSE		4,519			3,701				4,437				12,728				5,256
NET INCOME	$	12,642		$	10,563			$	16,087			$	36,845			$	66,865
EARNINGS PER SHARE - BASIC	$	0.46		$	0.38			$	0.61			$	1.34			$	3.33
EARNINGS PER SHARE - DILUTED	$	0.46		$	0.38			$	0.61			$	1.34			$	3.33
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING		27,457,306			27,457,306				26,211,282				27,457,306				20,090,270
PRO FORMA C CORP EQUIVALENT INFORMATION
Historical income before income tax expense								$	20,524							$	72,121
Pro forma C Corp equivalent income tax expense									5,436								18,749
Pro forma C Corp equivalent net income								$	15,088							$	53,372
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC								$	0.58							$	2.66
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED								$	0.58							$	2.66

HBT Financial, Inc.Consolidated Financial SummaryConsolidated Balance Sheets

	December 31,				September 30,				December 31,
	2020				2020				2019
	(dollars in thousands)
ASSETS
Cash and due from banks	$	24,912			$	22,347			$	22,112
Interest-bearing deposits with banks		287,539				214,377				261,859
Cash and cash equivalents		312,451				236,724				283,971
Interest-bearing time deposits with banks		—				—				248
Debt securities available-for-sale, at fair value		922,869				814,798				592,404
Debt securities held-to-maturity		68,395				74,510				88,477
Equity securities		4,844				4,814				4,389
Restricted stock, at cost		2,498				2,498				2,425
Loans held for sale		14,713				23,723				4,531
Loans, before allowance for loan losses		2,247,006				2,279,639				2,163,826
Allowance for loan losses		(31,838	)			(31,654	)			(22,299	)
Loans, net of allowance for loan losses		2,215,168				2,247,985				2,141,527
Bank premises and equipment, net		52,904				53,271				53,987
Bank premises held for sale		121				121				121
Foreclosed assets		4,168				3,857				5,099
Goodwill		23,620				23,620				23,620
Core deposit intangible assets, net		2,798				3,103				4,030
Mortgage servicing rights, at fair value		5,934				5,571				8,518
Investments in unconsolidated subsidiaries		1,165				1,165				1,165
Accrued interest receivable		14,255				13,820				13,951
Other assets		20,664				25,643				16,640
Total assets	$	3,666,567			$	3,535,223			$	3,245,103
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	882,939			$	850,306			$	689,116
Interest-bearing		2,247,595				2,166,355				2,087,739
Total deposits		3,130,534				3,016,661				2,776,855
Securities sold under agreements to repurchase		45,736				45,438				44,433
Subordinated notes		39,238				39,218				—
Junior subordinated debentures issued to capital trusts		37,648				37,632				37,583
Other liabilities		49,494				40,980				53,314
Total liabilities		3,302,650				3,179,929				2,912,185
Stockholders' Equity
Common stock		275				275				275
Surplus		190,875				190,787				190,524
Retained earnings		154,614				146,101				134,287
Accumulated other comprehensive income		18,153				18,131				7,832
Total stockholders’ equity		363,917				355,294				332,918
Total liabilities and stockholders’ equity	$	3,666,567			$	3,535,223			$	3,245,103
SHARE INFORMATION
Ending number shares of common stock outstanding		27,457,306				27,457,306				27,457,306

HBT Financial, Inc.Consolidated Financial Summary

	December 31,			September 30,			December 31,
	2020			2020			2019
	(dollars in thousands)
LOANS
Commercial and industrial	$	393,312		$	389,231		$	307,175
Agricultural and farmland		222,723			235,597			207,776
Commercial real estate - owner occupied		222,360			225,345			231,162
Commercial real estate - non-owner occupied		520,395			532,454			579,757
Multi-family		236,391			199,441			179,073
Construction and land development		225,652			265,758			224,887
One-to-four family residential		306,775			308,365			313,580
Municipal, consumer, and other		119,398			123,448			120,416
Loans, before allowance for loan losses	$	2,247,006		$	2,279,639		$	2,163,826
PPP LOANS (included above)
Commercial and industrial	$	153,860		$	168,466		$	—
Agricultural and farmland		3,049			4,179			—
Municipal, consumer, and other		6,587			7,095			—
Total PPP Loans	$	163,496		$	179,740		$	—

	December 31,			September 30,			December 31,
	2020			2020			2019
	(dollars in thousands)
DEPOSITS
Noninterest-bearing	$	882,939		$	850,306		$	689,116
Interest-bearing demand		968,592			885,719			814,639
Money market		462,056			475,047			477,765
Savings		517,473			497,682			438,927
Time		299,474			307,907			356,408
Total deposits	$	3,130,534		$	3,016,661		$	2,776,855

HBT Financial, Inc.Consolidated Financial Summary

	Three Months Ended
	December 31, 2020									September 30, 2020									December 31, 2019
	Average									Average									Average
	Balance				Interest			Yield/Cost *		Balance				Interest			Yield/Cost *		Balance				Interest			Yield/Cost *
	(dollars in thousands)
ASSETS
Loans	$	2,295,569			$	26,052		4.51	%	$	2,277,826			$	25,660		4.48	%	$	2,162,975			$	28,755		5.27	%
Securities		932,698				4,615		1.97			831,120				4,499		2.15			700,441				4,828		2.73
Deposits with banks		277,363				65		0.09			274,022				65		0.09			265,237				1,003		1.50
Other		2,498				14		2.26			2,498				14		2.29			2,425				14		2.37
Total interest-earning assets		3,508,128			$	30,746		3.49	%		3,385,466			$	30,238		3.55	%		3,131,078			$	34,600		4.38	%
Allowance for loan losses		(31,749	)								(30,221	)								(22,766	)
Noninterest-earning assets		157,208									157,446									152,961
Total assets	$	3,633,587								$	3,512,691								$	3,261,273
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand	$	930,494			$	111		0.05	%	$	888,941			$	123		0.05	%	$	820,390			$	299		0.14	%
Money market		475,183				89		0.07			479,314				96		0.08			486,288				481		0.39
Savings		506,381				39		0.03			493,278				37		0.03			434,241				71		0.06
Time		303,617				502		0.66			306,154				587		0.76			359,731				987		1.09
Total interest-bearing deposits		2,215,675				741		0.13			2,167,687				843		0.15			2,100,650				1,838		0.35
Securities sold under agreements to repurchase		51,297				8		0.06			51,686				9		0.06			46,028				24		0.21
Borrowings		326				—		0.51			1,196				1		0.47			272				2		2.58
Subordinated notes		39,219				469		4.76			11,976				147		4.87			—				—		—
Junior subordinated debentures issued to capital trusts		37,638				364		3.84			37,621				367		3.89			37,577				460		4.86
Total interest-bearing liabilities		2,344,155			$	1,582		0.27	%		2,270,166			$	1,367		0.24	%		2,184,527			$	2,324		0.42	%
Noninterest-bearing deposits		888,390									846,808									699,373
Noninterest-bearing liabilities		41,730									40,421									45,589
Total liabilities		3,274,275									3,157,395									2,929,489
Stockholders' Equity		359,312									355,296									331,784
Total liabilities and stockholders’ equity	$	3,633,587								$	3,512,691								$	3,261,273
Net interest income/Net interest margin (3)					$	29,164		3.31	%					$	28,871		3.39	%					$	32,276		4.09	%
Tax-equivalent adjustment (2)						502		0.05							495		0.06							534		0.07
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2)					$	29,666		3.36	%					$	29,366		3.45	%					$	32,810		4.16	%
Net interest rate spread (4)								3.22	%								3.31	%								3.96	%
Net interest-earning assets (5)	$	1,163,973								$	1,115,300								$	946,551
Ratio of interest-earning assets to interest-bearing liabilities		1.50									1.49									1.43
Cost of total deposits								0.09	%								0.11	%								0.26	%

*	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

	Year Ended
	December 31, 2020									December 31, 2019
	Average									Average
	Balance				Interest			Yield/Cost		Balance				Interest			Yield/Cost
	(dollars in thousands)
ASSETS
Loans	$	2,245,093			$	105,196		4.69	%	$	2,178,897			$	120,142		5.51	%
Securities		789,062				17,875		2.27			759,479				20,582		2.71
Deposits with banks		282,130				938		0.33			164,986				2,951		1.79
Other		2,479				56		2.28			2,501				60		2.41
Total interest-earning assets		3,318,764			$	124,065		3.74	%		3,105,863			$	143,735		4.63	%
Allowance for loan losses		(27,661	)								(21,704	)
Noninterest-earning assets		156,397									149,227
Total assets	$	3,447,500								$	3,233,386
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand	$	873,060			$	647		0.07	%	$	821,480			$	1,474		0.18	%
Money market		474,033				697		0.15			463,233				1,837		0.40
Savings		477,260				196		0.04			430,220				278		0.06
Time		317,308				2,681		0.84			396,560				4,343		1.10
Total interest-bearing deposits		2,141,661				4,221		0.20			2,111,493				7,932		0.38
Securities sold under agreements to repurchase		49,714				48		0.10			41,177				72		0.18
Borrowings		1,080				2		0.22			351				9		2.60
Subordinated notes		12,869				616		4.79			—				—		—
Junior subordinated debentures issued to capital trusts		37,613				1,573		4.18			37,553				1,922		5.12
Total interest-bearing liabilities		2,242,937			$	6,460		0.29	%		2,190,574			$	9,935		0.45	%
Noninterest-bearing deposits		807,864									666,055
Noninterest-bearing liabilities		45,996									35,213
Total liabilities		3,096,797									2,891,842
Stockholders' Equity		350,703									341,544
Total liabilities and stockholders’ equity	$	3,447,500									3,233,386
Net interest income/Net interest margin (3)					$	117,605		3.54	%					$	133,800		4.31	%
Tax-equivalent adjustment (2)						1,943		0.06							2,309		0.07
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2)					$	119,548		3.60	%					$	136,109		4.38	%
Net interest rate spread (4)								3.45	%								4.18	%
Net interest-earning assets (5)	$	1,075,827								$	915,289
Ratio of interest-earning assets to interest-bearing liabilities		1.48									1.42
Cost of total deposits								0.14	%								0.29	%

(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

	December 31,			September 30,			December 31,
	2020			2020			2019
	(dollars in thousands)
NONPERFORMING ASSETS
Nonaccrual	$	9,939		$	15,191		$	19,019
Past due 90 days or more, still accruing (1)		21			17			30
Total nonperforming loans		9,960			15,208			19,049
Foreclosed assets		4,168			3,857			5,099
Total nonperforming assets	$	14,128		$	19,065		$	24,148
NONPERFORMING ASSETS (Originated) (2)
Nonaccrual	$	2,908		$	10,179		$	10,811
Past due 90 days or more, still accruing		21			17			30
Total nonperforming loans (originated)		2,929			10,196			10,841
Foreclosed assets		674			939			1,022
Total nonperforming (originated)	$	3,603		$	11,135		$	11,863
NONPERFORMING ASSETS (Acquired) (2)
Nonaccrual	$	7,031		$	5,012		$	8,208
Past due 90 days or more, still accruing (1)		—			—			—
Total nonperforming loans (acquired)		7,031			5,012			8,208
Foreclosed assets		3,494			2,918			4,077
Total nonperforming assets (acquired)	$	10,525		$	7,930		$	12,285
Allowance for loan losses	$	31,838		$	31,654		$	22,299
Loans, before allowance for loan losses	$	2,247,006		$	2,279,639		$	2,163,826
Loans, before allowance for loan losses (originated) (2)		2,126,323			2,148,074			1,998,496
Loans, before allowance for loan losses (acquired) (2)		120,683			131,565			165,330
CREDIT QUALITY RATIOS
Allowance for loan losses to loans, before allowance for loan losses		1.42	%		1.39	%		1.03	%
Allowance for loan losses to nonperforming loans		319.66			208.14			117.06
Nonperforming loans to loans, before allowance for loan losses		0.44			0.67			0.88
Nonperforming assets to total assets		0.39			0.54			0.74
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		0.63			0.83			1.11
CREDIT QUALITY RATIOS (Originated) (2)
Nonperforming loans to loans, before allowance for loan losses		0.14	%		0.47	%		0.54	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		0.17			0.52			0.59
CREDIT QUALITY RATIOS (Acquired) (2)
Nonperforming loans to loans, before allowance for loan losses		5.83	%		3.81	%		4.96	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		8.48			5.90			7.25

(1)

Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $0.6 million, $30 thousand, and $0.1 million as of December 31, 2020, September 30, 2020, and December 31, 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 the Company. 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												Year Ended
	December 31,				September 30,				December 31,				December 31,
	2020				2020				2019				2020				2019
ALLOWANCE FOR LOAN LOSSES	(dollars in thousands)
Beginning balance	$	31,654			$	29,723			$	22,761			$	22,299			$	20,509
Provision		430				2,174				138				10,532				3,404
Charge-offs		(509	)			(1,078	)			(837	)			(2,968	)			(3,273	)
Recoveries		263				835				237				1,975				1,659
Ending balance	$	31,838			$	31,654			$	22,299			$	31,838			$	22,299
Net charge-offs (recoveries)	$	246			$	243			$	600			$	993			$	1,614
Net charge-offs (recoveries) - (originated) (1)		190				(20	)			550				345				732
Net charge-offs (recoveries) - (acquired) (1)		56				263				50				648				882
Average loans, before allowance for loan losses	$	2,295,569			$	2,277,826			$	2,162,975			$	2,245,093			$	2,178,897
Average loans, before allowance for loan losses (originated) (1)		2,169,256				2,140,376				1,988,658				2,102,904				1,981,658
Average loans, before allowance for loan losses (acquired) (1)		126,313				137,450				174,317				142,189				197,239
Net charge-offs to average loans, before allowance for loan losses *		0.04		%		0.04		%		0.11		%		0.04		%		0.07		%
Net charge-offs to average loans, before allowance for loan losses (originated) * (1)		0.03				—				0.11				0.02				0.04
Net charge-offs to average loans, before allowance for loan losses (acquired) * (1)		0.18				0.76				0.11				0.46				0.45

*

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 the Company. 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									Year Ended
	December 31,			September 30,			December 31,			December 31,
	2020			2020			2019			2020			2019
	(dollars in thousands, except per share amounts)
EARNINGS AND PER SHARE INFORMATION
Net income	$	12,642		$	10,563		$	16,087		$	36,845		$	66,865
Earnings per share - Basic		0.46			0.38			0.61			1.34			3.33
Earnings per share - Diluted		0.46			0.38			0.61			1.34			3.33
C Corp equivalent net income (1)		N/A			N/A		$	15,088			N/A		$	53,372
C Corp equivalent earnings per share - Basic (1)		N/A			N/A			0.58			N/A			2.66
C Corp equivalent earnings per share - Diluted (1)		N/A			N/A			0.58			N/A			2.66
Book value per share	$	13.25		$	12.94		$	12.12
Ending number shares of common stock outstanding		27,457,306			27,457,306			27,457,306
Weighted average shares of common stock outstanding		27,457,306			27,457,306			26,211,282			27,457,306			20,090,270
SUMMARY RATIOS
Net interest margin *		3.31	%		3.39	%		4.09	%		3.54	%		4.31	%
Efficiency ratio		55.54			56.98			50.72			59.66			53.80
Loan to deposit ratio		71.78			75.57			77.92
Return on average assets *		1.38	%		1.20	%		1.96	%		1.07	%		2.07	%
Return on average stockholders' equity *		14.00			11.83			19.24			10.51			19.58
C Corp equivalent return on average assets * (1)		N/A			N/A			1.84	%		N/A			1.65	%
C Corp equivalent return on average stockholders' equity * (1)		N/A			N/A			18.04			N/A			15.63
NON-GAAP FINANCIAL MEASURES
Adjusted net income (2)	$	12,382		$	10,755		$	14,417		$	39,734		$	57,427
Adjusted earnings per share - Basic (2)		0.45			0.39			0.55			1.44			2.86
Adjusted earnings per share - Diluted (2)		0.45			0.39			0.55			1.44			2.86
Tangible book value per share (2)	$	12.29		$	11.97		$	11.12
Net interest margin (tax equivalent basis) * (2)		3.36	%		3.45	%		4.16	%		3.60	%		4.38	%
Efficiency ratio (tax equivalent basis) (2)		54.86			56.27			50.10			58.91			53.06
Adjusted return on average assets * (2)		1.36	%		1.22	%		1.75	%		1.15	%		1.78	%
Adjusted return on average stockholders' equity * (2)		13.71			12.04			17.24			11.33			16.81
Return on average tangible common equity * (2)		15.12	%		12.80	%		21.00	%		11.38	%		21.35	%
C Corp equivalent return on average tangible common equity * (1) (2)		N/A			N/A			19.69			N/A			17.04
Adjusted return on average tangible common equity * (2)		14.81			13.03			18.82			12.28			18.34

*	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												Year Ended
	December 31,				September 30,				December 31,				December 31,
	2020				2020				2019				2020				2019
	(dollars in thousands)
Net income	$	12,642			$	10,563			$	16,087			$	36,845			$	66,865
C Corp equivalent adjustment (2)		—				—				(999	)			—				(13,493	)
C Corp equivalent net income (2)		12,642				10,563				15,088				36,845				53,372
Adjustments:
Net earnings (losses) from closed or sold operations, including gains on sale (1)		—				—				(9	)			—				524
Charges related to termination of certain employee benefit plans		—				—				365				(1,457	)			(3,796	)
Mortgage servicing rights fair value adjustment		363				(268	)			582				(2,584	)			(2,400	)
Total adjustments		363				(268	)			938				(4,041	)			(5,672	)
Tax effect of adjustments		(103	)			76				(267	)			1,152				1,617
Less adjustments after tax effect		260				(192	)			671				(2,889	)			(4,055	)
Adjusted net income	$	12,382			$	10,755			$	14,417			$	39,734			$	57,427
Average assets	$	3,633,587			$	3,512,691			$	3,261,273			$	3,447,500			$	3,233,386
Return on average assets *		1.38		%		1.20		%		1.96		%		1.07				2.07		%
C Corp equivalent return on average assets * (2)		N/A				N/A				1.84				N/A				1.65
Adjusted return on average assets *		1.36				1.22				1.75				1.15				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											Year Ended
	December 31,				September 30,				December 31,			December 31,
	2020				2020				2019			2020				2019
	(dollars in thousands, except per share amounts)
Numerator:
Net income	$	12,642			$	10,563			$	16,087		$	36,845			$	66,865
Earnings allocated to unvested restricted stock units (1)		(31	)			(28	)			—			(93	)			—
Numerator for earnings per share - basic and diluted	$	12,611			$	10,535			$	16,087		$	36,752			$	66,865
C Corp equivalent net income (3)		N/A				N/A			$	15,088			N/A			$	53,372
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			$	15,088			N/A			$	53,372
Adjusted net income	$	12,382			$	10,755			$	14,417		$	39,734			$	57,427
Earnings allocated to unvested restricted stock units (1)		(32	)			(28	)			—			(101	)			—
Numerator for adjusted earnings per share - basic and diluted	$	12,350			$	10,727			$	14,417		$	39,633			$	57,427
Denominator:
Weighted average common shares outstanding		27,457,306				27,457,306				26,211,282			27,457,306				20,090,270
Dilutive effect of outstanding restricted stock units (2)		—				—				—			—				—
Weighted average common shares outstanding, including all dilutive potential shares		27,457,306				27,457,306				26,211,282			27,457,306				20,090,270
Earnings per share - Basic	$	0.46			$	0.38			$	0.61		$	1.34			$	3.33
Earnings per share - Diluted	$	0.46			$	0.38			$	0.61		$	1.34			$	3.33
C Corp equivalent earnings per share - Basic (3)		N/A				N/A			$	0.58			N/A			$	2.66
C Corp equivalent earnings per share - Diluted (3)		N/A				N/A			$	0.58			N/A			$	2.66
Adjusted earnings per share - Basic	$	0.45			$	0.39			$	0.55		$	1.44			$	2.86
Adjusted earnings per share - Diluted	$	0.45			$	0.39			$	0.55		$	1.44			$	2.86

(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 December 31, 2020 and September 30, 2020 and during the year ended December 31, 2020. There were no restricted stock units outstanding during the three months and year ended December 31, 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									Year Ended
	December 31,			September 30,			December 31,			December 31,
	2020			2020			2019			2020			2019
	(dollars in thousands)
Net interest income (tax equivalent basis)
Net interest income	$	29,164		$	28,871		$	32,276		$	117,605		$	133,800
Tax-equivalent adjustment (1)		502			495			534			1,943			2,309
Net interest income (tax equivalent basis) (1)	$	29,666		$	29,366		$	32,810		$	119,548		$	136,109
Net interest margin (tax equivalent basis)
Net interest margin *		3.31	%		3.39	%		4.09	%		3.54	%		4.31	%
Tax-equivalent adjustment * (1)		0.05			0.06			0.07			0.06			0.07
Net interest margin (tax equivalent basis) * (1)		3.36	%		3.45	%		4.16	%		3.60	%		4.38	%
Average interest-earning assets	$	3,508,128		$	3,385,466		$	3,131,078		$	3,318,764		$	3,105,863

*	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									Year Ended
	December 31,			September 30,			December 31,			December 31,
	2020			2020			2019			2020			2019
	(dollars in thousands)
Efficiency ratio (tax equivalent basis)
Total noninterest expense	$	22,665		$	22,485		$	21,950		$	91,956		$	91,026
Less: amortization of intangible assets		305			305			336			1,232			1,423
Adjusted noninterest expense	$	22,360		$	22,180		$	21,614		$	90,724		$	89,603
Net interest income	$	29,164		$	28,871		$	32,276		$	117,605		$	133,800
Total noninterest income		11,092			10,052			10,336			34,456			32,751
Operating revenue		40,256			38,923			42,612			152,061			166,551
Tax-equivalent adjustment (1)		502			495			534			1,943			2,309
Operating revenue (tax equivalent basis) (1)	$	40,758		$	39,418		$	43,146		$	154,004		$	168,860
Efficiency ratio		55.54	%		56.98	%		50.72	%		59.66	%		53.80	%
Efficiency ratio (tax equivalent basis) (1)		54.86			56.27			50.10			58.91			53.06

(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

	December 31,			September 30,			December 31,
	2020			2020			2019
	(dollars in thousands)
Tangible Common Equity
Total stockholders' equity	$	363,917		$	355,294		$	332,918
Less: Goodwill		23,620			23,620			23,620
Less: Core deposit intangible assets, net		2,798			3,103			4,030
Tangible common equity	$	337,499		$	328,571		$	305,268
Tangible assets
Total assets	$	3,666,567		$	3,535,223		$	3,245,103
Less: Goodwill		23,620			23,620			23,620
Less: Core deposit intangible assets, net		2,798			3,103			4,030
Tangible assets	$	3,640,149		$	3,508,500		$	3,217,453
Total stockholders' equity to total assets		9.93	%		10.05	%		10.26	%
Tangible common equity to tangible assets		9.27			9.36			9.49
Ending number shares of common stock outstanding		27,457,306			27,457,306			27,457,306
Book value per share	$	13.25		$	12.94		$	12.12
Tangible book value per share		12.29			11.97			11.12

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

	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,
	2020			2020			2019			2020			2019
	(dollars in thousands)
Average Tangible Common Equity
Total stockholders' equity	$	359,312		$	355,296		$	331,784		$	350,703		$	341,544
Less: Goodwill		23,620			23,620			23,620			23,620			23,620
Less: Core deposit intangible assets, net		2,979			3,284			4,224			3,436			4,748
Average tangible common equity	$	332,713		$	328,392		$	303,940		$	323,647		$	313,176
Net income	$	12,642		$	10,563		$	16,087		$	36,845		$	66,865
C Corp equivalent net income (1)		N/A			N/A			15,088			N/A			53,372
Adjusted net income		12,382			10,755			14,417			39,734			57,427
Return on average stockholders' equity *		14.00	%		11.83	%		19.24	%		10.51	%		19.58	%
C Corp equivalent return on average stockholders' equity * (1)		N/A			N/A			18.04			N/A			15.63
Adjusted return on average stockholders' equity *		13.71			12.04			17.24			11.33			16.81
Return on average tangible common equity *		15.12	%		12.80	%		21.00	%		11.38	%		21.35	%
C Corp equivalent return on average tangible common equity * (1)		N/A			N/A			19.69			N/A			17.04
Adjusted return on average tangible common equity *		14.81			13.03			18.82			12.28			18.34

*	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.