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DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
DOCUMENT AND ENTITY INFORMATION - shares	Mar. 31, 2020	Apr. 30, 2020
DOCUMENT AND ENTITY INFORMATION
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	HBT Financial, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,457,306
Entity Central Index Key	0000775215
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
ASSETS
Cash and due from banks	$ 34,782	$ 22,112
Interest-bearing deposits with banks	230,654	261,859
Cash and cash equivalents	265,436	283,971
Interest-bearing time deposits with banks		248
Debt securities available-for-sale, at fair value	615,565	592,404
Debt securities held-to-maturity (fair value of $83,564 in 2020 and $90,529 in 2019)	79,741	88,477
Equity securities	4,759	4,389
Restricted stock, at cost	2,425	2,425
Loans held for sale	4,805	4,531
Loans, net of allowance for loan losses of $26,087 in 2020 and $22,299 in 2019	2,106,865	2,141,527
Bank premises and equipment, net	54,135	53,987
Bank premises held for sale	121	121
Foreclosed assets	4,469	5,099
Goodwill	23,620	23,620
Core deposit intangible assets, net	3,713	4,030
Mortgage servicing rights, at fair value	6,347	8,518
Investments in unconsolidated subsidiaries	1,165	1,165
Accrued interest receivable	12,096	13,951
Other assets	27,847	16,640
Total assets	3,213,109	3,245,103
Deposits:
Noninterest-bearing	676,341	689,116
Interest-bearing	2,053,962	2,087,739
Total deposits	2,730,303	2,776,855
Securities sold under agreements to repurchase	40,811	44,433
Subordinated debentures	37,599	37,583
Other liabilities	64,583	53,314
Total liabilities	2,873,296	2,912,185
COMMITMENTS AND CONTINGENCIES (Notes 7 and 17)
Stockholders' Equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued or outstanding
Common stock, $0.01 par value; 125,000,000 shares authorized; 27,457,306 shares issued and outstanding	275	275
Surplus	190,591	190,524
Retained earnings	136,378	134,287
Accumulated other comprehensive income	12,569	7,832
Total stockholders’ equity	339,813	332,918
Total liabilities and stockholders’ equity	$ 3,213,109	$ 3,245,103

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Stockholders' Equity
Debt securities held-to-maturity	$ 83,564	$ 90,529
Allowance for loan losses	$ 26,087	$ 22,299
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares issued	27,457,306	27,457,306
Common stock, shares outstanding	27,457,306	27,457,306

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Loans, including fees:
Taxable	$ 26,941	$ 30,063
Federally tax exempt	674	710
Securities:
Taxable	3,334	3,922
Federally tax exempt	1,028	1,552
Interest-bearing deposits in bank	729	687
Other interest and dividend income	14	15
Total interest and dividend income	32,720	36,949
INTEREST EXPENSE
Deposits	1,595	1,983
Securities sold under agreements to repurchase	20	14
Borrowings		3
Subordinated debentures	443	497
Total interest expense	2,058	2,497
Net interest income	30,662	34,452
PROVISION FOR LOAN LOSSES	4,355	776
Net interest income after provision for loan losses	26,307	33,676
NONINTEREST INCOME
Mortgage servicing	724	729
Mortgage servicing rights fair value adjustment	(2,171)	(1,002)
Gains on sale of mortgage loans	536	525
Gains (losses) on securities	(52)	79
Gains (losses) on foreclosed assets	35	(17)
Gains (losses) on other assets	(3)	905
Other noninterest income	743	797
Total noninterest income	5,252	7,487
NONINTEREST EXPENSE
Salaries	12,754	12,522
Employee benefits	2,434	1,244
Occupancy of bank premises	1,828	1,837
Furniture and equipment	603	789
Data processing	1,586	1,162
Marketing and customer relations	1,044	933
Amortization of intangible assets	317	376
FDIC insurance	36	219
Loan collection and servicing	348	742
Foreclosed assets	89	164
Other noninterest expense	2,268	2,224
Total noninterest expense	23,307	22,212
INCOME BEFORE INCOME TAX EXPENSE	8,252	18,951
INCOME TAX EXPENSE	2,031	215
NET INCOME	$ 6,221	$ 18,736
EARNINGS PER SHARE - BASIC	$ 0.23	$ 1.04
EARNINGS PER SHARE - DILUTED	$ 0.23	$ 1.04
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING	27,457,306	18,027,512
Card income
NONINTEREST INCOME
Revenue	$ 1,792	$ 1,832
Service charges on deposit accounts
NONINTEREST INCOME
Revenue	1,834	1,763
Wealth management fees
NONINTEREST INCOME
Revenue	$ 1,814	1,747
Title insurance activity
NONINTEREST INCOME
Revenue		$ 129

CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares
UNAUDITED PRO FORMA C CORP EQUIVALENT INFORMATION (Note 1)
Historical income before income tax expense	$ 18,951
Pro forma C Corp equivalent income tax expense	215
NET INCOME	$ 18,736
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC \| $ / shares	$ 1.04
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED \| $ / shares	$ 1.04
Pro Forma
UNAUDITED PRO FORMA C CORP EQUIVALENT INFORMATION (Note 1)
Historical income before income tax expense	$ 18,951
Pro forma C Corp equivalent income tax expense	4,915
NET INCOME	$ 14,036
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC \| $ / shares	$ 0.78
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED \| $ / shares	$ 0.78

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET INCOME	$ 6,221	$ 18,736
OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on debt securities available-for-sale	7,602	5,656
Reclassification adjustment for accretion of net unrealized gain on debt securities transferred to held-to-maturity	(9)	(82)
Unrealized losses on derivative instruments	(970)	(244)
Reclassification adjustment for net settlements on derivative instruments	2	(30)
Total other comprehensive income (loss), before tax	6,625	5,300
Income tax expense	1,888
Total other comprehensive income (loss)	4,737	5,300
TOTAL COMPREHENSIVE INCOME	$ 10,958	$ 24,036

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands	Voting Common Stock	Series A Nonvoting Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance at Dec. 31, 2018	$ 3	$ 178	$ 32,288	$ 315,234	$ (4,288)	$ (3,019)	$ 340,396
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				18,736			18,736
Other comprehensive income					5,300		5,300
Cash dividends				(35,839)			(35,839)
Balance at Mar. 31, 2019	3	$ 178	32,288	298,131	1,012	$ (3,019)	328,593
Balance at Dec. 31, 2019	275		190,524	134,287	7,832		332,918
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				6,221			6,221
Other comprehensive income					4,737		4,737
Stock-based compensation			67				67
Cash dividends				(4,130)			(4,130)
Balance at Mar. 31, 2020	$ 275		$ 190,591	$ 136,378	$ 12,569		$ 339,813

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stock Transactions, Parenthetical Disclosures [Abstract]
Cash dividends	$ 0.15	$ 1.99

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 6,221	$ 18,736
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	690	703
Provision for loan losses	4,355	776
Net amortization of debt securities	790	932
Amortization of unrealized gain on dedesignated cash flow hedge	(32)
Deferred income tax benefit	(678)
Stock-based compensation	67
Net accretion of discount and deferred loan fees on loans	(922)	(1,699)
Net unrealized loss (gain) on equity securities	52	(79)
Net loss (gain) on sales of bank premises and equipment	3	(30)
Net gain on sales of bank premises held for sale		(79)
Net gain on sales of foreclosed assets	(75)	(89)
Write-down of foreclosed assets	47	125
Amortization of intangibles	317	376
Decrease in mortgage servicing rights	2,171	1,002
Amortization of subordinated debt purchase accounting adjustment	16	16
Mortgage loans originated for sale	(32,156)	(21,780)
Proceeds from sale of mortgage loans	32,418	22,609
Net gain on sale of mortgage loans	(536)	(525)
Gain on sale of First Community Title Services, Inc.		(498)
Decrease in accrued interest receivable	1,855	44
Decrease in other assets	887	437
Increase in other liabilities	(2,971)	(1,302)
Net cash provided by operating activities	12,519	19,675
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in interest-bearing time deposits with banks	248
Proceeds from paydowns, maturities, and calls of debt securities	48,305	41,784
Purchase of securities	(56,349)	(34,149)
Net decrease (increase) in loans	31,210	(38,777)
Purchases of bank premises and equipment	(841)	(298)
Proceeds from sales of bank premises and equipment		176
Proceeds from sales of bank premises held for sale		620
Proceeds from sales of foreclosed assets	677	511
Cash received from sale of First Community Title Services, Inc.		114
Net cash provided by (used in) investing activities	23,250	(30,019)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in deposits	(46,552)	25,473
Net decrease in repurchase agreements	(3,622)	(5,667)
Cash dividends paid	(4,130)	(35,839)
Net cash used in financing activities	(54,304)	(16,033)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(18,535)	(26,377)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	283,971	186,879
CASH AND CASH EQUIVALENTS AT END OF PERIOD	265,436	160,502
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	2,166	2,182
Cash paid for income taxes	985	880
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES
Transfers of loans to foreclosed assets	$ 19	1,408
Sales of foreclosed assets through loan origination		$ 269

ACCOUNTING POLICIES	3 Months Ended
ACCOUNTING POLICIES	Mar. 31, 2020
ACCOUNTING POLICIES
ACCOUNTING POLICIES	NOTE 1 – ACCOUNTING POLICIES Basis of Presentation HBT Financial, Inc. (the Company) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (Heartland Bank) and State Bank of Lincoln. Heartland Bank and State Bank of Lincoln are collectively referred to as “the Banks”. 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. The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with generally accepted accounting principles (GAAP) interim reporting requirements. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 27, 2020. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year. The Company qualifies as an "emerging growth company" as defined by the Jumpstart Our Business Startups Act (JOBS Act). Under the JOBS Act, emerging growth companies may also elect to delay adoption of new or revised accounting standards until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards and, therefore, the Company will not be subject to certain new or revised accounting standards as other public companies. Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and income taxes. Income Taxes Through October 10, 2019, the Company, with the consent of its then current stockholders, elected to be taxed under sections of federal and state income tax law as an "S Corporation" which provides that, in lieu of Company income taxes, except for state replacement taxes, the stockholders separately account for their pro rata shares of the Company’s items of income, deductions, losses and credits. As a result of this election, no income taxes, other than state replacement taxes, have been recognized in the accompanying consolidated financial statements. No provision has been made for any amounts which may be advanced or paid as dividends to the stockholders to assist them in paying their personal taxes on the income from the Company. 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 an effective state replacement tax rate. The Company files consolidated federal and state income tax returns. The Company is no longer subject to federal or state income tax examinations for years prior to 2016. Unaudited Pro Forma Income Statement Information The unaudited pro forma C Corp equivalent income tax expense information gives effect to the income tax expense had the Company been a C Corporation during the three months ended March 31, 2019. The unaudited pro forma C Corp equivalent net income information, therefore, includes an adjustment for income tax expense as if the Company had been a C Corporation during the three months ended March 31, 2019. The unaudited pro forma basic and diluted earnings per share information is computed using the unaudited pro forma C Corp equivalent net income and weighted average shares of common stock outstanding. There were no dilutive instruments outstanding during 2019, therefore, the unaudited pro forma C Corp equivalent basic and diluted earnings per share amounts are the same. Segment Reporting The Company’s operations consist of one reportable segment called community banking. While the Company’s management monitors both bank subsidiaries’ operations and profitability separately, these subsidiaries have been aggregated into one reportable segment due to the similarities in products and services, customer base, operations, profitability measures, and economic characteristics. Goodwill Goodwill represents the excess of the original cost over the fair value of assets acquired and liabilities assumed. Goodwill is not amortized but instead is subject to an annual impairment evaluation. The Company has selected December 31 as the date to perform the annual impairment test, and at December 31, 2019, the Company’s evaluation of goodwill indicated that goodwill was not impaired. Due to the economic weakness resulting from the COVID-19 pandemic, the Company completed an evaluation of goodwill as of March 31, 2020 which indicated that goodwill was not impaired as of March 31, 2020. Further goodwill impairment evaluations, which may result in goodwill impairment, may be necessary if events or circumstance changes would more likely than not reduce the fair value of a reporting unit below its carrying amount. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or stockholders’ equity. Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential of recognition or disclosure through the date the financial statements were issued. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016‑13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016‑13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016‑13 amends the accounting for credit losses on debt securities available-for-sale and purchased financial assets with credit deterioration. ASU 2016‑13 is effective for years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for years beginning after December 31, 2018, including interim periods within those years. The Company is currently evaluating the effect that this standard will have on the consolidated results of operations and financial position. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the ASU, a company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. This standard is not expected to have a material impact on the Company’s consolidated results of operations or financial position.

SECURITIES

3 Months Ended

Mar. 31, 2020

SECURITIES

SECURITIES

NOTE 2 – SECURITIES

The carrying balances of the securities were as follows:


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Debt securities available-for-sale	$	615,565	$	592,404
Debt securities held-to-maturity		79,741		88,477
Equity securities:
Readily determinable fair value		3,207		3,241
No readily determinable fair value		1,552		1,148
Total securities	$	700,065	$	685,270

The Company has elected to measure the equity securities with no readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer. During the three months ended March 31, 2020 and 2019, there were no adjustments to the carrying balance of equity securities with no readily determinable fair value based on an observable price change of an identical investment. As of March 31, 2020 and December 31, 2019, the carrying balance of equity securities with no readily determinable fair value reflect cumulative downward adjustments based on observable price changes of $165,000. There have been no impairments or upward adjustments based on observable price changes to equity securities with no readily determinable fair value.

The amortized cost and fair values of debt securities, with gross unrealized gains and losses, are as follows:


March 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	48,983	$	2,192	$	—	$	51,175
Municipal		164,853		3,577		(185)		168,245
Mortgage-backed:
Agency residential		184,507		5,015		(904)		188,618
Agency commercial		128,583		4,050		(116)		132,517
Corporate		73,140		1,928		(58)		75,010
Total available-for-sale		600,066		16,762		(1,263)		615,565
Held-to-maturity:
Municipal		32,780		1,198		—		33,978
Mortgage-backed:
Agency residential		17,989		471		(16)		18,444
Agency commercial		28,972		2,173		(3)		31,142
Total held-to-maturity		79,741		3,842		(19)		83,564
Total debt securities	$	679,807	$	20,604	$	(1,282)	$	699,129


December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	49,113	$	529	$	(27)	$	49,615
Municipal		131,241		2,503		(6)		133,738
Mortgage-backed:
Agency residential		198,184		2,780		(286)		200,678
Agency commercial		133,730		1,516		(292)		134,954
Corporate		72,239		1,180		—		73,419
Total available-for-sale		584,507		8,508		(611)		592,404
Held-to-maturity:
Municipal		45,239		1,340		—		46,579
Mortgage-backed:
Agency residential		19,072		161		(170)		19,063
Agency commercial		24,166		775		(54)		24,887
Total held-to-maturity		88,477		2,276		(224)		90,529
Total debt securities	$	672,984	$	10,784	$	(835)	$	682,933

As of March 31, 2020 and December 31, 2019, the Banks had debt securities with a carrying value of $286,716,000 and $284,895,000, respectively, which were pledged to secure public and trust deposits, securities sold under agreements to repurchase, and for other purposes required or permitted by law.

The Company has no direct exposure to the State of Illinois, but approximately 42% of the obligations of local municipalities portfolio consists of debt securities issued by municipalities located in Illinois as of March 31, 2020. Approximately 87% of such debt securities were general obligation issues as of March 31, 2020.

The amortized cost and fair value of debt securities by contractual maturity, as of March 31, 2020, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Due in 1 year or less	$	47,084	$	47,237	$	750	$	755
Due after 1 year through 5 years		93,864		95,997		17,243		17,745
Due after 5 years through 10 years		120,398		124,689		13,896		14,551
Due after 10 years		25,630		26,507		891		927

Mortgage-backed:
Agency residential		184,507		188,618		17,989		18,444
Agency commercial		128,583		132,517		28,972		31,142
Total	$	600,066	$	615,565	$	79,741	$	83,564

There were no sales of securities were as follows during the three months ended March 31, 2020 and 2019. Gains (losses) on securities were as follows during the three months ended March 31:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Net realized gains (losses) on sales	$	—	$	—
Net unrealized gains (losses) on equities:
Readily determinable fair value		(52)		79
No readily determinable fair value		—		—
Gains (losses) on securities	$	(52)	$	79

The following tables present gross unrealized losses and fair value of debt securities, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position, as of March 31, 2020 and December 31, 2019:


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
March 31, 2020	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Available-for-sale:	(dollars in thousands)
Municipal	$	(185)	$	5,049	$	—	$	—	$	(185)	$	5,049
Mortgage-backed:
Agency residential		(648)		34,061		(256)		8,442		(904)		42,503
Agency commercial		—		—		(116)		14,322		(116)		14,322
Corporate		(58)		6,942		—		—		(58)		6,942
Total available-for-sale		(891)		46,052		(372)		22,764		(1,263)		68,816
Held-to-maturity:
Mortgage-backed:
Agency residential		—		—		(16)		1,549		(16)		1,549
Agency commercial		—		—		(3)		534		(3)		534
Total held-to-maturity		—		—		(19)		2,083		(19)		2,083
Total debt securities	$	(891)	$	46,052	$	(391)	$	24,847	$	(1,282)	$	70,899


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
December 31, 2019	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	(26)	$	18,865	$	(1)	$	1,998	$	(27)	$	20,863
Municipal		(6)		894		—		—		(6)		894
Mortgage-backed:
Agency residential		(108)		25,563		(178)		27,296		(286)		52,859
Agency commercial		(100)		20,056		(192)		15,704		(292)		35,760
Total available-for-sale	$	(240)	$	65,378	$	(371)	$	44,998	$	(611)	$	110,376
Held-to-maturity:
Mortgage-backed:
Agency residential	$	(30)	$	2,516	$	(140)	$	9,002	$	(170)	$	11,518
Agency commercial		(47)		7,016		(7)		599		(54)		7,615
Total held-to-maturity		(77)		9,532		(147)		9,601		(224)		19,133
Total debt securities	$	(317)	$	74,910	$	(518)	$	54,599	$	(835)	$	129,509

As of March 31, 2020, there were 17 debt securities in an unrealized loss position for a period of twelve months or more, and 53 debt securities in an unrealized loss position for a period of less than twelve months. These unrealized losses are primarily a result of fluctuations in market interest rates. In analyzing an issuer’s financial condition, management considers whether the debt securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. Management believes that all declines in value of these debt securities are deemed to be temporary.

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

3 Months Ended

Mar. 31, 2020

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

NOTE 3 – LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Major categories of loans are summarized as follows:


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Commercial and industrial	$	299,266	$	307,175
Agricultural and farmland		228,701		207,776
Commercial real estate - owner occupied		229,608		231,162
Commercial real estate - non-owner occupied		540,515		579,757
Multi-family		177,172		179,073
Construction and land development		232,311		224,887
One-to-four family residential		313,925		313,580
Municipal, consumer, and other		111,454		120,416
Loans, before allowance for loan losses		2,132,952		2,163,826
Allowance for loan losses		(26,087)		(22,299)
Loans, net of allowance for loan losses	$	2,106,865	$	2,141,527

The following tables detail activity in the allowance for loan losses for the three months ended March 31:


					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
Three Months Ended March 31, 2020	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2019	$	4,441	$	2,766	$	1,779	$	3,663	$	1,024	$	2,977	$	2,540	$	3,109	$	22,299
Provision for loan losses		538		254		(97)		820		450		237		777		1,376		4,355
Charge-offs		(809)		(27)		—		(56)		—		(1)		(104)		(224)		(1,221)
Recoveries		54		—		440		5		—		10		71		74		654
Balance, March 31, 2020	$	4,224	$	2,993	$	2,122	$	4,432	$	1,474	$	3,223	$	3,284	$	4,335	$	26,087

					Commercial		Commercial
	Commercial		Agricultural		Real Estate		Real Estate								Consumer
	and		and		Owner		Non-owner				Construction		Residential		and
Three Months Ended March 31, 2019	Industrial		Farmland		Occupied		Occupied		Multi-Family		and Land		Real Estate		Other		Total
Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2018	$	3,748	$	2,650	$	2,506	$	2,644	$	912	$	4,176	$	2,782	$	1,091	$	20,509
Provision for loan losses		222		598		(107)		74		60		(290)		211		8		776
Charge-offs		(256)		—		(65)		—		—		—		(37)		(175)		(533)
Recoveries		48		—		19		4		—		11		111		68		261
Balance, March 31, 2019	$	3,762	$	3,248	$	2,353	$	2,722	$	972	$	3,897	$	3,067	$	992	$	21,013

The following tables present the recorded investments in loans and the allowance for loan losses by category as of March 31, 2020 and December 31, 2019:


					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
March 31, 2020	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	287,998	$	214,328	$	210,206	$	522,305	$	175,874	$	225,768	$	292,250	$	97,603	$	2,026,332
Individually evaluated for impairment		9,122		13,303		11,171		3,367		—		3,120		11,394		13,762		65,239
Acquired with deteriorated credit quality		2,146		1,070		8,231		14,843		1,298		3,423		10,281		89		41,381
Total	$	299,266	$	228,701	$	229,608	$	540,515	$	177,172	$	232,311	$	313,925	$	111,454	$	2,132,952

Allowance for loan losses:
Collectively evaluated for impairment	$	2,260	$	2,832	$	1,618	$	4,354	$	1,467	$	2,771	$	2,524	$	899	$	18,725
Individually evaluated for impairment		1,859		90		261		68		—		323		719		3,435		6,755
Acquired with deteriorated credit quality		105		71		243		10		7		129		41		1		607
Total	$	4,224	$	2,993	$	2,122	$	4,432	$	1,474	$	3,223	$	3,284	$	4,335	$	26,087

					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
December 31, 2019	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	294,006	$	192,722	$	211,744	$	561,277	$	176,273	$	217,708	$	291,624	$	106,448	$	2,051,802
Individually evaluated for impairment		10,733		13,966		10,927		3,398		1,324		3,782		11,349		13,872		69,351
Acquired with deteriorated credit quality		2,436		1,088		8,491		15,082		1,476		3,397		10,607		96		42,673
Total	$	307,175	$	207,776	$	231,162	$	579,757	$	179,073	$	224,887	$	313,580	$	120,416	$	2,163,826

Allowance for loan losses:
Collectively evaluated for impairment	$	1,926	$	2,576	$	1,486	$	3,591	$	1,019	$	2,283	$	1,684	$	931	$	15,496
Individually evaluated for impairment		2,170		105		270		70		—		567		822		2,176		6,180
Acquired with deteriorated credit quality		345		85		23		2		5		127		34		2		623
Total	$	4,441	$	2,766	$	1,779	$	3,663	$	1,024	$	2,977	$	2,540	$	3,109	$	22,299

The following tables present loans individually evaluated for impairment by category of loans as of March 31, 2020 and December 31, 2019:


	Unpaid
	Principal		Recorded		Related
March 31, 2020	Balance		Investment		Allowance
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	3,458	$	3,458	$	1,859
Agricultural and farmland		569		565		90
Commercial real estate - owner occupied		824		824		261
Commercial real estate - non-owner occupied		98		98		68
Multi-family		—		—		—
Construction and land development		3,014		3,014		323
One-to-four family residential		3,184		3,171		719
Municipal, consumer, and other		12,441		12,414		3,435
Total	$	23,588	$	23,544	$	6,755

With no related allowance:
Commercial and industrial	$	5,665	$	5,664	$	—
Agricultural and farmland		12,753		12,738		—
Commercial real estate - owner occupied		10,348		10,347		—
Commercial real estate - non-owner occupied		3,263		3,269		—
Multi-family		—		—		—
Construction and land development		107		106		—
One-to-four family residential		8,257		8,223		—
Municipal, consumer, and other		1,361		1,348		—
Total	$	41,754	$	41,695	$	—

Total
Commercial and industrial	$	9,123	$	9,122	$	1,859
Agricultural and farmland		13,322		13,303		90
Commercial real estate - owner occupied		11,172		11,171		261
Commercial real estate - non-owner occupied		3,361		3,367		68
Multi-family		—		—		—
Construction and land development		3,121		3,120		323
One-to-four family residential		11,441		11,394		719
Municipal, consumer, and other		13,802		13,762		3,435
Total	$	65,342	$	65,239	$	6,755


	Unpaid
	Principal		Recorded		Related
December 31, 2019	Balance		Investment		Allowance
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	4,292	$	4,292	$	2,170
Agricultural and farmland		590		590		105
Commercial real estate - owner occupied		830		830		270
Commercial real estate - non-owner occupied		99		99		70
Multi-family		—		—		—
Construction and land development		3,679		3,679		567
One-to-four family residential		3,401		3,390		822
Municipal, consumer, and other		9,138		9,111		2,176
Total	$	22,029	$	21,991	$	6,180

With no related allowance:
Commercial and industrial	$	6,438	$	6,441	$	—
Agricultural and farmland		13,369		13,376		—
Commercial real estate - owner occupied		10,089		10,097		—
Commercial real estate - non-owner occupied		3,297		3,299		—
Multi-family		1,328		1,324		—
Construction and land development		104		103		—
One-to-four family residential		7,986		7,959		—
Municipal, consumer, and other		4,775		4,761		—
Total	$	47,386	$	47,360	$	—

Total
Commercial and industrial	$	10,730	$	10,733	$	2,170
Agricultural and farmland		13,959		13,966		105
Commercial real estate - owner occupied		10,919		10,927		270
Commercial real estate - non-owner occupied		3,396		3,398		70
Multi-family		1,328		1,324		—
Construction and land development		3,783		3,782		567
One-to-four family residential		11,387		11,349		822
Municipal, consumer, and other		13,913		13,872		2,176
Total	$	69,415	$	69,351	$	6,180

The following table presents the average recorded investment and interest income recognized for loans individually evaluated for impairment by category of loans during the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020				2019
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	3,486	$	49	$	3,122	$	35
Agricultural and farmland		573		4		1,733		20
Commercial real estate - owner occupied		828		11		6,450		69
Commercial real estate - non-owner occupied		99		2		103		2
Multi-family		—		—		1,359		18
Construction and land development		3,064		41		2,892		44
One-to-four family residential		3,261		27		3,034		22
Municipal, consumer, and other		12,487		83		241		2
Total	$	23,798	$	217	$	18,934	$	212

With no related allowance:
Commercial and industrial	$	5,941	$	58	$	11,251	$	93
Agricultural and farmland		12,520		161		9,562		101
Commercial real estate - owner occupied		10,432		131		13,024		133
Commercial real estate - non-owner occupied		3,340		41		8,242		87
Multi-family		—		—		—		—
Construction and land development		324		4		123		1
One-to-four family residential		8,344		62		9,641		69
Municipal, consumer, and other		1,370		56		146		1
Total	$	42,271	$	513	$	51,989	$	485

Total
Commercial and industrial	$	9,427	$	107	$	14,373	$	128
Agricultural and farmland		13,093		165		11,295		121
Commercial real estate - owner occupied		11,260		142		19,474		202
Commercial real estate - non-owner occupied		3,439		43		8,345		89
Multi-family		—		—		1,359		18
Construction and land development		3,388		45		3,015		45
One-to-four family residential		11,605		89		12,675		91
Municipal, consumer, and other		13,857		139		387		3
Total	$	66,069	$	730	$	70,923	$	697

The following tables present the recorded investment in loans by category based on current payment and accrual status as of March 31, 2020 and December 31, 2019:


	Accruing Interest
			30 - 89 Days		90+ Days				Total
March 31, 2020	Current		Past Due		Past Due		Nonaccrual		Loans
	(dollars in thousands)
Commercial and industrial	$	295,114	$	244	$	—	$	3,908	$	299,266
Agricultural and farmland		222,877		—		—		5,824		228,701
Commercial real estate - owner occupied		227,160		1,642		—		806		229,608
Commercial real estate - non-owner occupied		539,807		485		—		223		540,515
Multi-family		177,172		—		—		—		177,172
Construction and land development		232,142		—		—		169		232,311
One-to-four family residential		307,003		2,416		264		4,242		313,925
Municipal, consumer, and other		111,040		214		—		200		111,454
Total	$	2,112,315	$	5,001	$	264	$	15,372	$	2,132,952


	Accruing Interest
			30 - 89 Days		90+ Days				Total
December 31, 2019	Current		Past Due		Past Due		Nonaccrual		Loans
	(dollars in thousands)
Commercial and industrial	$	301,975	$	558	$	—	$	4,642	$	307,175
Agricultural and farmland		201,519		—		—		6,257		207,776
Commercial real estate - owner occupied		228,218		941		—		2,003		231,162
Commercial real estate - non-owner occupied		579,626		131		—		—		579,757
Multi-family		177,696		—		—		1,377		179,073
Construction and land development		224,716		140		—		31		224,887
One-to-four family residential		307,712		1,329		75		4,464		313,580
Municipal, consumer, and other		119,898		247		26		245		120,416
Total	$	2,141,360	$	3,346	$	101	$	19,019	$	2,163,826

The following tables present total loans by category based on their assigned risk ratings determined by management as of March 31, 2020 and December 31, 2019:


March 31, 2020	Pass		Watch		Substandard		Doubtful		Total
	(dollars in thousands)
Commercial and industrial	$	262,646	$	25,831	$	10,789	$	—	$	299,266
Agricultural and farmland		202,195		12,409		14,097		—		228,701
Commercial real estate - owner occupied		197,131		20,884		11,593		—		229,608
Commercial real estate - non-owner occupied		490,549		48,008		1,958		—		540,515
Multi-family		175,824		1,348		—		—		177,172
Construction and land development		225,022		3,765		3,524		—		232,311
One-to-four family residential		289,942		11,406		12,577		—		313,925
Municipal, consumer, and other		97,404		293		13,757		—		111,454
Total	$	1,940,713	$	123,944	$	68,295	$	—	$	2,132,952


December 31, 2019	Pass		Watch		Substandard		Doubtful		Total
	(dollars in thousands)
Commercial and industrial	$	267,645	$	27,114	$	12,416	$	—	$	307,175
Agricultural and farmland		180,735		12,267		14,774		—		207,776
Commercial real estate - owner occupied		198,710		21,745		10,707		—		231,162
Commercial real estate - non-owner occupied		531,694		46,092		1,971		—		579,757
Multi-family		175,807		1,771		1,495		—		179,073
Construction and land development		217,120		3,582		4,185		—		224,887
One-to-four family residential		287,036		13,546		12,998		—		313,580
Municipal, consumer, and other		106,063		479		13,874		—		120,416
Total	$	1,964,810	$	126,596	$	72,420	$	—	$	2,163,826

There were no troubled debt restructurings during the three months ended March 31, 2020. The following tables present the financial effect of troubled debt restructurings for the three months ended March 31, 2019:


						Charge-offs
		Recorded Investment				and Specific
Three Months Ended March 31, 2019	Number	Pre-Modification		Post-Modification		Reserves
	(dollars in thousands)
Agricultural and farmland	1	$	285	$	285	$	30
Total	1	$	285	$	285	$	30

During the three months ended March 31, 2019, all troubled debt restructurings were the result of a payment concession.

Of the troubled debt restructurings entered into during the last 12 months, there were none which had subsequent payment defaults during the three months ended March 31, 2020 and $672,000 which had subsequent payment defaults during the three months ended March 31, 2019. For purposes of this disclosure, the Company considers “default” to mean 90 days or more past due as to interest or principal or were on nonaccrual status subsequent to restructuring.

As of March 31, 2020 and December 31, 2019, the Company had $8,805,000 and $9,315,000 of troubled debt restructurings, respectively. Restructured loans are evaluated for impairment quarterly as part of the Company’s determination of the allowance for loan losses. There were no material commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings.

Changes in the accretable yield for loans acquired with deteriorated credit quality were as follows for the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	1,662	$	2,101
Reclassification from non-accretable difference		8		136
Accretion income		(160)		(527)
Ending balance	$	1,510	$	1,710

LOAN SERVICING

3 Months Ended

Mar. 31, 2020

LOAN SERVICING

LOAN SERVICING

NOTE 4 – LOAN SERVICING

Mortgage loans serviced for others, not included in the accompanying consolidated balance sheets, amounted to $1,127,059,000 and $1,152,535,000 as of March 31, 2020 and December 31, 2019, respectively. Activity in mortgage servicing rights is as follows for the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	8,518	$	10,918
Capitalized servicing rights		214		160
Fair value adjustment:
Attributable to payments and principal reductions		(403)		(306)
Attributable to changes in valuation inputs and assumptions		(1,982)		(856)
Total fair value adjustment		(2,385)		(1,162)
Ending balance	$	6,347	$	9,916

FORECLOSED ASSETS

3 Months Ended

Mar. 31, 2020

FORECLOSED ASSETS

FORECLOSED ASSETS

NOTE 5 – FORECLOSED ASSETS

Foreclosed assets activity is as follows for the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	5,099	$	9,559
Transfers from loans		19		1,408
Proceeds from sales		(677)		(511)
Sales through loan origination		—		(269)
Net gain (loss) on sales		75		89
Direct write-downs		(47)		(125)
Ending balance	$	4,469	$	10,151

Gains (losses) on foreclosed assets includes the following for the three months ended March 31, 2020 and 2019.


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Direct write-downs	$	(47)	$	(125)
Net gain (loss) on sales		75		89
Guarantee reimbursements		7		19
Gains (losses) on foreclosed assets	$	35	$	(17)

The carrying value of foreclosed one-to-four family residential real estate property as of March 31, 2020 and December 31, 2019, was $980,000 and $1,037,000, respectively. As of March 31, 2020, there were 8 one-to-four family residential real estate loans in the process of foreclosure totaling approximately $564,000. As of December 31, 2019, there were 10 residential real estate loans in the process of foreclosure totaling approximately $588,000.

DEPOSITS

3 Months Ended

Mar. 31, 2020

DEPOSITS

DEPOSITS

NOTE 6 – DEPOSITS

The Company’s deposits are summarized below:


	March 31, 2020		December 31, 2019
	(dollars in thousands)
Noninterest-bearing deposits	$	676,341	$	689,116
Interest-bearing deposits:
Interest-bearing demand		810,074		814,639
Money market		472,532		477,765
Savings		444,137		438,927
Time		327,219		356,408
Total interest-bearing deposits		2,053,962		2,087,739
Total deposits	$	2,730,303	$	2,776,855

Money market deposits include $24,510,000 and $14,309,000 of reciprocal transaction deposits as of March 31, 2020 and December 31, 2019, respectively. Time deposits include $3,679,000 and $3,538,000 of reciprocal time deposits as of March 31, 2020 and December 31, 2019, respectively.

The aggregate amounts of time deposits in denominations of $250,000 or more amounted to $28,060,000 and $44,754,000 as of March 31, 2020 and December 31, 2019, respectively. The aggregate amounts of time deposits in denominations of $100,000 or more amounted to $110,055,000 and $130,293,000 as of March 31, 2020 and December 31, 2019, respectively.

The components of interest expense on deposits for the three months ended March 31, 2020 and 2019 are as follows:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Interest-bearing demand	$	251	$	417
Money market		394		370
Savings		70		68
Time		880		1,128
Total interest expense on deposits	$	1,595	$	1,983

BORROWINGS	3 Months Ended
BORROWINGS	Mar. 31, 2020
BORROWINGS
BORROWINGS	NOTE 7 – BORROWINGS There were no Federal Home Loan Bank of Chicago (FHLB) borrowings outstanding as of March 31, 2020 and December 31, 2019. Available borrowings from the FHLB are secured by FHLB stock held by the Company and pledged security in the form of qualifying loans. The total amount of loans pledged as of March 31, 2020 and December 31, 2019 was $534,220,000 and $548,229,000, respectively. As of March 31, 2020 and December 31, 2019, loans pledged also served as collateral for credit exposure of approximately $355,000 associated with the Banks’ participation in the FHLB’s Mortgage Partnership Finance Program. The Banks also have available a line of credit from the FHLB with available borrowings based on the collateral pledged. There was no outstanding balance under the line of credit as of March 31, 2020 and December 31, 2019. The line, when drawn upon, is due on demand and bears interest at a variable rate. State Bank of Lincoln also has available a line of credit from the Federal Reserve Bank of Chicago (FRB) with available borrowings based on the collateral pledged. As of March 31, 2020 and December 31, 2019, the carrying value of debt securities pledged amounted to $531,000 and $515,000, respectively. There was no outstanding balance under the line of credit as of March 31, 2020 and December 31, 2019. The line, when drawn upon, is due on demand and bears interest at a variable rate.

SUBORDINATED DEBENTURES

3 Months Ended

Mar. 31, 2020

SUBORDINATED DEBENTURES

SUBORDINATED DEBENTURES

NOTE 8 – SUBORDINATED DEBENTURES

Five subsidiary business trusts of the Company have issued floating rate capital securities (“capital securities”) which are guaranteed by the Company.

The Company owns all of the outstanding stock of the five subsidiary business trusts. The trusts used the proceeds from the issuance of their capital securities to buy floating rate junior subordinated deferrable interest debentures (“debentures”) issued by the Company. These debentures are the only assets of the trusts and the interest payments from the debentures finance the distributions paid on the capital securities. The debentures are unsecured and rank junior and subordinate in the right of payment to all senior debt of the Company.

The trusts are not consolidated in the Company’s financial statements.

The carrying value of subordinated debentures are summarized as follows:


	March 31, 2020		December 31, 2019
	(dollars in thousands)
Heartland Bancorp, Inc. Capital Trust B	$	10,310	$	10,310
Heartland Bancorp, Inc. Capital Trust C		10,310		10,310
Heartland Bancorp, Inc. Capital Trust D		5,155		5,155
FFBI Capital Trust I		7,217		7,217
National Bancorp Statutory Trust I		4,607		4,591
Total	$	37,599	$	37,583

The National Bancorp Statutory Trust I debenture was assumed through a business combination and has a contractual obligation of $5,773,000.

The interest rates on the subordinated debentures are variable, reset quarterly, and are equal to the three-month LIBOR, as determined on the LIBOR Determination Date immediately preceding each Distribution Payment Date specific to each subordinated debenture, plus a fixed percentage. The interest rates and maturities of the subordinated debentures are summarized as follows:


				Interest Rate at
	Variable			March 31,		December 31,		Maturity
	Interest Rate			2020		2019		Date
Heartland Bancorp, Inc. Capital Trust B	LIBOR plus	2.75	%	4.58	%	4.74	%	April 6, 2034
Heartland Bancorp, Inc. Capital Trust C	LIBOR plus	1.53		2.27		3.42		June 15, 2037
Heartland Bancorp, Inc. Capital Trust D	LIBOR plus	1.35		2.09		3.24		September 15, 2037
FFBI Capital Trust I	LIBOR plus	2.80		4.63		4.79		April 6, 2034
National Bancorp Statutory Trust I	LIBOR plus	2.90		3.64		4.79		December 31, 2037

The distribution rate payable on the debentures is cumulative and payable quarterly in arrears. The Company has the right, subject to events in default, to defer payments of interest on the debentures at any time by extending the interest payment period for a period not exceeding 10 quarterly periods with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures. The capital securities are subject to mandatory redemption upon payment of the debentures and carry an interest rate identical to that of the related debenture. The debentures maturity dates may be shortened if certain conditions are met, or at any time within 90 days following the occurrence and continuation of certain changes in either tax treatment or the capital treatment of the debentures or the capital securities. If the debentures are redeemed before they mature, the redemption price will be the principal amount plus any accrued but unpaid interest. The Company has the right to terminate each Capital Trust and cause the debentures to be distributed to the holders of the capital securities in liquidation of such trusts.

Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of March 31, 2020 and December 31, 2019, 100% of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005.

DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 9 – DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are negotiated contracts entered into by two issuing counterparties containing specific agreement terms, including the underlying instrument, amount, exercise price, and maturities. The derivatives accounting guidance requires that the Company recognize all derivative financial instruments as either assets or liabilities at fair value in the consolidated balance sheets. The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position.

Interest Rate Swaps Designated as Cash Flow Hedges

The Company designated certain interest rate swap agreements as cash flow hedges on variable-rate borrowings. For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on interest rate swaps designated as cash flow hedging instruments are reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings.

The interest rate swap agreements designated as cash flow hedges are summarized as follows:

March 31, 2020

December 31, 2019

Notional

Fair

Notional

Fair

Amount

Value

Amount

Value

Designated as cash flow hedges:

(dollars in thousands)

Fair value recorded in other liabilities

17,000

(1,612)

17,000

(676)

As of March 31, 2020, the interest rate swap agreements designated as cash flow hedges had contractual maturities between 2024 and 2025. As of March 31, 2020 and December 31, 2019, the Company had cash pledged of $1,630,000 and $710,000, respectively, held on deposit at counterparties.

During the three months ended March 31, 2019, the Company had an interest rate swap contract with a notional amount of $10,000,000 designated as a cash flow hedge on variable-rate loans. Beginning April 1, 2019, this hedging relationship was no longer considered highly effective, and the Company discontinued hedge accounting. In accordance with hedge accounting guidance, the net unrealized gain associated with the discontinued hedging relationship, recorded within accumulated other comprehensive income, will be reclassified into earnings through April 7, 2020, the period the hedged forecasted transactions affect earnings. On June 25, 2019, the Company cancelled the interest rate swap agreement and received $174,000 to settle the financial instrument. As of March 31, 2020, the remaining unrealized gain recognized as a component of accumulated other comprehensive income was $29,000.

For the three months ended March 31, 2020 and 2019, the effect of interest rate swap agreements designated as cash flow hedges on the consolidated statements of income are summarized as follows:


Location of gross gain (loss) reclassified	Amounts of gross gain (loss)
from accumulated other	reclassified from accumulated
comprehensive income to income	other comprehensive income
	Three Months Ended
	March 31,
	2020		2019
Designated as cash flow hedges:	(dollars in thousands)
Taxable loan interest income	$	32	$	30
Subordinated debentures interest expense		(34)		—
Total	$	(2)	$	30

Interest Rate Swaps Not Designated as Hedging Instruments

The Company may offer interest rate swap agreements to its commercial borrowers in connection with their risk management needs. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party financial institution. While these interest rate swap agreements generally worked together as an economic interest rate hedge, the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.

The interest rate swap agreements not designated as hedging instruments are summarized as follows:


	March 31, 2020				December 31, 2019
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Not designated as hedging instruments:	(dollars in thousands)
Fair value recorded in other assets:
Interest rate swaps with commercial borrower counterparties	$	137,216	$	21,946	$	114,140	$	8,532
Interest rate swaps with financial institution counterparty		—		—		24,216		110
Total fair value recorded in other assets	$	137,216	$	21,946	$	138,356	$	8,642

Fair value recorded in other liabilities:
Interest rate swaps with commercial borrower counterparties	$	—	$	—	$	24,216	$	(110)
Interest rate swaps with financial institution counterparty		137,216		(21,946)		114,140		(8,532)
Total fair value recorded in other liabilities	$	137,216	$	(21,946)	$	138,356	$	(8,642)

As of March 31, 2020, the interest rate swap agreements not designated as hedging instruments had contractual maturities between 2022 and 2042. As of March 31, 2020 and December 31, 2019, the Company had $10,618,000 and $8,713,000, respectively, of debt securities pledged and held in safekeeping at the financial institution counterparty.

For the three months ended March 31, 2020 and 2019, the effect of interest rate contracts not designated as hedging instruments recognized in other noninterest income on the consolidated statements of income are summarized as follows:


	Three Months Ended
	March 31,
	2020		2019
Not designated as hedging instruments:	(dollars in thousands)
Gross gains	$	13,571	$	1,169
Gross losses		(13,571)		(1,169)
Net gains (losses)	$	—	$	—

ACCUMULATED OTHER COMPREHENSIVE INCOME

3 Months Ended

Mar. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the activity and accumulated balances for components of other comprehensive income (loss) for the three months ended March 31, 2020 and 2019:


	Unrealized Gains (Losses)
	on Debt Securities
	Available-for-Sale		Held-to-Maturity		Derivatives		Total
	(dollars in thousands)
Three Months Ended March 31, 2020
Balance, December 31, 2019	$	8,659	$	(131)	$	(696)	$	7,832
Other comprehensive income (loss) before reclassifications		7,602		—		(970)		6,632
Reclassifications		—		(9)		2		(7)
Other comprehensive income (loss), before tax		7,602		(9)		(968)		6,625
Income tax expense (benefit)		2,166		(2)		(276)		1,888
Other comprehensive income (loss), after tax		5,436		(7)		(692)		4,737
Balance, March 31, 2020	$	14,095	$	(138)	$	(1,388)	$	12,569

Three Months Ended March 31, 2019
Balance, December 31, 2018	$	(4,561)	$	122	$	151	$	(4,288)
Other comprehensive income (loss) before reclassifications		5,656		—		(244)		5,412
Reclassifications		—		(82)		(30)		(112)
Other comprehensive loss		5,656		(82)		(274)		5,300
Balance, March 31, 2019	$	1,095	$	40	$	(123)	$	1,012

The amounts reclassified from accumulated other comprehensive income (loss) for unrealized gains (losses) on debt securities available-for-sale are included in gain (loss) on securities in the accompanying consolidated statements of income.

The amounts reclassified from accumulated other comprehensive income (loss) for unrealized gains on debt securities held-to-maturity are included in securities interest income in the accompanying consolidated statements of income.

The amounts reclassified from accumulated other comprehensive income (loss) for the fair value of derivative financial instruments represent net interest payments received or made on derivatives designated as cash flow hedges. See Note 9 for additional information.

INCOME TAXES

3 Months Ended

Mar. 31, 2020

INCOME TAXES

INCOME TAXES

NOTE 11 – INCOME TAXES

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 will only reflect an effective state replacement tax rate. The consolidated statements of income present unaudited pro forma C Corp equivalent information for the three months ended March 31, 2019.

Allocation of income tax expense between current and deferred portions for the three months ended March 31 is as follows:


	Three Months Ended
	March 31,
	2020		2019
	(dollars in thousands)
Current
Federal	$	1,721	$	—
State		988		215
Total current		2,709		215

Deferred
Federal		(457)		—
State		(221)		—
Total deferred		(678)		—
Income tax expense	$	2,031	$	215

Income tax expense differs from the statutory federal rate for the three months ended March 31 due to the following:


	Three Months Ended March 31,
	2020				2019
	Amount		Percentage		Amount		Percentage
	(dollars in thousands)
Federal income tax, at statutory rate	$	1,733	21.0	%	$	—	—	%
Increase (decrease) resulting from:
Federally tax exempt interest income		(357)	(4.3)			—	—
State taxes, net of federal benefit		631	7.6			215	1.1
Other		24	0.3			—	—
Income tax expense	$	2,031	24.6	%	$	215	1.1	%

The components of the net deferred tax asset as of March 31, 2020 and December 31, 2019 are as follows:


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Deferred tax assets
Allowance for loan losses	$	7,378	$	6,309
Compensation related		5,482		5,859
Nonaccrual interest		631		858
Foreclosed assets		74		574
Goodwill		482		531
Other		1,460		1,282
Total deferred tax assets		15,507		15,413

Deferred tax liabilities
Fixed asset depreciation		4,146		4,201
Mortgage servicing rights		1,809		2,428
Other purchase accounting adjustments		1,327		1,356
Intangible assets		773		841
Prepaid assets		425		504
Net unrealized gain on debt securities available-for-sale		4,418		2,251
Other		413		426
Total deferred tax liabilities		13,311		12,007
Net deferred tax asset	$	2,196		3,406

EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2020

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 12 – EARNINGS PER SHARE

ASC 260, Earnings Per Share, requires unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. 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.

Diluted earnings per share is computed using the treasury stock and reflects the potential dilution that could occur if the Company’s outstanding restricted stock units were vested. At March 31, 2020, 14,880 restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents. There were no restricted stock units outstanding during the three months ended March 31, 2019.

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Numerator:
Net income	$	6,221	$	18,736
Earnings allocated to unvested restricted stock units		(15)		—
Numerator for earnings per share - basic and diluted	$	6,206	$	18,736

Denominator:
Weighted average common shares outstanding		27,457,306		18,027,512
Dilutive effect of outstanding restricted stock units		—		—
Weighted average common shares outstanding, including all dilutive potential shares		27,457,306		18,027,512

Earnings per share - Basic	$	0.23	$	1.04
Earnings per share - Diluted	$	0.23	$	1.04

DEFERRED COMPENSATION	3 Months Ended
DEFERRED COMPENSATION	Mar. 31, 2020
EMPLOYEE BENEFIT PLANS
DEFERRED COMPENSATION	NOTE 13 – DEFERRED COMPENSATION The Company maintained a supplemental executive retirement plan (the SERP) for certain key executive officers. The SERP benefit payments were scheduled to be paid in equal monthly installments over 30 years. In June 2019, the Company approved termination of the SERP agreements, and each participant will receive a lump sum payment equal to the present value of any remaining installment payments, payable in June 2020. As of March 31, 2020 and December 31, 2019, the deferred compensation liability for the SERP was $13,589,000 and $12,789,000, respectively. During the three months ended March 31, 2020 and 2019, the Company recognized deferred compensation expense for the SERP of $970,000 and $125,000, respectively.

STOCK-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2020

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

NOTE 14 – STOCK-BASED COMPENSATION PLANS

The Company has adopted the HBT Financial, Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. The maximum number of shares of common stock available for issuance under the Omnibus Incentive Plan is 1,820,000 shares.

The following is a summary of stock-based compensation expense (benefit) during the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Restricted stock units	$	67	$	—
Stock appreciation rights		(335)		(115)
Total stock-based compensation expense (benefit)	$	(268)	$	(115)

Restricted Stock Units

A restricted stock unit grants a participant the right to receive one share of common stock, following the completion of the requisite service period. Restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and is recognized on a straight-line basis over the vesting period for the entire award. Non-forfeitable dividend equivalents are paid on non-vested restricted stock units and are classified as dividends charged to retained earnings. If restricted stock units are subsequently forfeited, the non-forfeitable dividends related to the forfeited restricted stock units are reclassified to compensation cost in the period the forfeiture occurs.

On January 28, 2020, the Company granted 70,400 restricted stock units to certain key employees which vest in four equal annual installments beginning on February 1, 2021. On January 28, 2020, the Company also granted 2,750 restricted stock units to non-employee directors which vest on February 1, 2021. The total fair value of the restricted stock units granted was $1,392,000, based on the grant date closing price of $19.03 per share.

The following is a summary of outstanding restricted stock unit activity during the three months ended March 31, 2020 and 2019:


	Three Months Ended March 31,
	2020			2019
		Weighted			Weighted
	Restricted	Average		Restricted	Average
	Stock Units	Grant Date		Stock Units	Grant Date
	Outstanding	Fair Value		Outstanding	Fair Value
Beginning balance	—	$	—	—	$	—
Granted	73,150		19.03	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	73,150	$	19.03	—	$	—

A further summary of outstanding restricted stock units as of March 31, 2020, is as follows:


		Weighted Average
		Remaining
Range of Grant Date Fair Values	Outstanding	Contractual Term
$ 19.03	73,150	3.7	years

As of March 31, 2020, unrecognized compensation cost related to non-vested restricted stock units was $1,325,000.

Stock Appreciation Rights

A stock appreciation right grants a participant the right to receive an amount of cash, the value of which equals the appreciation in the Company’s stock price between the grant date and the exercise date. Stock appreciation rights units are classified as liabilities. Prior to becoming a public entity, the liability was based on the intrinsic value of the stock appreciation rights, calculated using the grant date assigned value and an independent appraisal of the Company’s stock price that was subject to approval by the Board of Directors. Since becoming a public entity on October 11, 2019, the liability was based on an option-pricing model used to estimate the fair value of the stock appreciation rights. Compensation cost for unvested stock appreciation rights is recognized on a straight line basis over the vesting period of the entire award. The unvested stock appreciation rights vest in four equal annual installments beginning on the first anniversary of the grant date.

The following is a summary of outstanding stock appreciation rights activity during the three months ended March 31, 2020 and 2019, is as follows:


	Three Months Ended March 31,
	2020			2019
	Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value
Beginning balance	110,160	$	16.32	91,800	$	5.73
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	—		—	—		—
Ending balance	110,160	$	16.32	91,800	$	5.73

A further summary of outstanding stock appreciation rights as of March 31, 2020, is as follows:


			Weighted Average
			Remaining
Range of Grant Date Assigned Values	Outstanding	Exercisable	Contractual Term
$ 16.32	110,160	79,560	9.4	years

As of March 31, 2020, unrecognized compensation cost related to non-vested stock appreciation rights was $23,000.

As of March 31, 2020 and December 31, 2019, the liability recorded for outstanding stock appreciation rights was $74,000 and $409,000, respectively. As of March 31, 2020 and December 31, 2019, the Company used an option pricing model to value the stock appreciation rights, using the assumptions in the following table. Expected volatility is derived from the historical volatility of the Company’s stock price and a selected peer group of industry-related companies.


	March 31,			December 31,
	2020			2019
Risk-free interest rate		0.67	%		1.90	%
Expected volatility		32.47	%		28.83	%
Expected life (in years)		9.4			9.7
Expected dividend yield		5.70	%		3.16	%

As of March 31, 2020, the liability recorded for previously exercised stock appreciation rights was $1,206,000, which will be paid in four remaining equal annual installments. As of December 31, 2019, the liability recorded for previously exercised units was $1,512,000.

REGULATORY MATTERS

3 Months Ended

Mar. 31, 2020

REGULATORY MATTERS

REGULATORY MATTERS

NOTE 15 – REGULATORY MATTERS

The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. As allowed under the Basel III rules, the Banks and Company elected to exclude accumulated other comprehensive income, including unrealized gains and losses on debt securities, in the computation of regulatory capital.

The ability of the Company to pay dividends to its stockholders is dependent upon the ability of the Banks to pay dividends to the Company. The Banks are subject to certain statutory and regulatory restrictions on the amount it may pay in dividends. Under the Basel III regulations, a capital conservation buffer calculation will phase in over five years which limits allowable bank dividends if regulatory capital ratios fall below specific thresholds. As of March 31, 2020 and December 31, 2019, the capital conservation buffer was 2.5%.

HBT Financial, Inc. (on a consolidated basis) and the Banks are each subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by the regulators that, if undertaken, could have a direct material effect on the financial statements of HBT Financial, Inc. and the Banks. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, HBT Financial, Inc. (on a consolidated basis) and the Banks must meet specific capital guidelines that involve quantitative measures of the assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Management believes, as of March 31, 2020 and December 31, 2019, that HBT Financial, Inc. and the Banks each met all capital adequacy requirements to which they are subject.

The actual and required capital amounts and ratios of HBT Financial, Inc. (on a consolidated basis) and the Banks are as follows:


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2020	Amount		Ratio		Amount		Ratio		Amount		Ratio
		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	363,205	15.03	%	$	193,326	8.00	%		N/A	N/A
Heartland Bank		322,026	14.54			177,196	8.00		$	221,495	10.00	%
State Bank of Lincoln		35,356	17.74			15,944	8.00			19,930	10.00

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	337,118	13.95	%	$	144,995	6.00	%		N/A	N/A
Heartland Bank		298,547	13.48			132,897	6.00		$	177,196	8.00	%
State Bank of Lincoln		32,863	16.49			11,958	6.00			15,944	8.00

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	300,684	12.44	%	$	108,746	4.50	%		N/A	N/A
Heartland Bank		298,547	13.48			99,673	4.50		$	143,972	6.50	%
State Bank of Lincoln		32,863	16.49			8,969	4.50			12,955	6.50

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	337,118	10.70	%	$	125,991	4.00	%		N/A	N/A
Heartland Bank		298,547	10.55			113,149	4.00		$	141,436	5.00	%
State Bank of Lincoln		32,863	10.32			12,735	4.00			15,919	5.00


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio
		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	356,994	14.54	%	$	196,358	8.00	%		N/A	N/A
Heartland Bank		315,516	14.02			180,071	8.00		$	225,088	10.00	%
State Bank of Lincoln		35,390	17.58			16,104	8.00			20,130	10.00

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	334,695	13.64	%	$	147,268	6.00	%		N/A	N/A
Heartland Bank		295,385	13.12			135,053	6.00		$	180,071	8.00	%
State Bank of Lincoln		33,222	16.50			12,078	6.00			16,104	8.00

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	298,277	12.15	%	$	110,451	4.50	%		N/A	N/A
Heartland Bank		295,385	13.12			101,290	4.50		$	146,307	6.50	%
State Bank of Lincoln		33,222	16.50			9,058	4.50			13,084	6.50

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	334,695	10.38	%	$	129,027	4.00	%		N/A	N/A
Heartland Bank		295,385	10.25			115,281	4.00		$	144,102	5.00	%
State Bank of Lincoln		33,222	9.82			13,531	4.00			16,914	5.00

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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+ Details

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2020

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 16 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Recurring Basis

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Additional information on fair value measurements are summarized in Note 1 to the Company’s annual consolidated financial statements included in the Annual Report on Form 10-K filed with the SEC on March 27, 2020. There were no transfers between levels during the three months ended March 31, 2020 and 2019. The Company’s policy for determining transfers between levels occurs at the end of the reporting period when circumstances in the underlying valuation criteria change and result in transfer between levels.

The following tables present the balances of the assets measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019:


March 31, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. government agency	$	—	$	51,175	$	—	$	51,175
Municipal		—		168,245		—		168,245
Mortgage-backed:
Agency residential		—		188,618		—		188,618
Agency commercial		—		132,517		—		132,517
Corporate		—		75,010		—		75,010
Equity securities with readily determinable fair values		3,207		—		—		3,207
Mortgage servicing rights		—		—		6,347		6,347
Derivative financial assets		—		21,946		—		21,946
Derivative financial liabilities		—		23,558		—		23,558


December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. government agency	$	—	$	49,615	$	—	$	49,615
Municipal		—		133,738		—		133,738
Mortgage-backed:
Agency residential		—		200,678		—		200,678
Agency commercial		—		134,954		—		134,954
Corporate		—		73,419		—		73,419
Equity securities with readily determinable fair values		3,241		—		—		3,241
Mortgage servicing rights		—		—		8,518		8,518
Derivative financial assets		—		8,642		—		8,642
Derivative financial liabilities		—		9,318		—		9,318

The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. There were no changes to the valuation techniques from December 31, 2019 to March 31, 2020.

Investment Securities

When available, the Company uses quoted market prices to determine the fair value of securities; such items are classified in Level 1 of the fair value hierarchy. For the Company’s securities where quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, cannot be obtained or cannot be corroborated, a security is generally classified as Level 3. The change in fair value of debt securities available-for-sale is recorded through an adjustment to the consolidated statement of comprehensive income. The change in fair value of equity securities with readily determinable fair values is recorded through an adjustment to the consolidated statement of income.

Derivative Financial Instruments

Interest rate swap agreements are carried at fair value as determined by dealer valuation models. Based on the inputs used, the derivative financial instruments subjected to recurring fair value adjustments are classified as Level 2. For derivative financial instruments designated as a hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of comprehensive income. For derivative financial instruments not designated as a hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of income.

Mortgage Servicing Rights

The Company has elected to record its mortgage servicing rights at fair value. Mortgage servicing rights do not trade in an active market with readily observable prices. Accordingly, the Company determines the fair value of mortgage servicing rights by estimating the fair value of the future cash flows associated with the mortgage loans being serviced as calculated by an independent third party. Key economic assumptions used in measuring the fair value of mortgage servicing rights include, but are not limited to, prepayment speeds and discount rates. Due to the nature of the valuation inputs, mortgage servicing rights are classified in Level 3 of the fair value hierarchy. The change in fair value is recorded through an adjustment to the consolidated statement of income.

The following tables present additional information about the unobservable inputs used in the fair value measurement of the mortgage servicing rights (dollars in thousands):


March 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	6,347	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 59.1% (15.7%)
				Discount rate	9.0% to 11.0% (9.0%)

December 31, 2019	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	8,518	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 68.5% (12.3%)
				Discount rate	9.0% to 11.0% (9.0%)

Nonrecurring Basis

Certain assets are measured at fair value on a nonrecurring basis. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as there is evidence of impairment or a change in the amount of previously recognized impairment.

The following tables present the balances of the assets measured at fair value on a nonrecurring basis as of March 31, 2020 and December 31, 2019:


March 31, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	4,805	$	—	$	4,805
Collateral-dependent impaired loans		—		—		16,789		16,789
Bank premises held for sale		—		—		121		121
Foreclosed assets		—		—		4,469		4,469


December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	4,531	$	—	$	4,531
Collateral-dependent impaired loans		—		—		15,811		15,811
Bank premises held for sale		—		—		121		121
Foreclosed assets		—		—		5,099		5,099

Loans Held for Sale

Mortgage loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically, these quotes include a premium on the sale and thus these quotes indicate fair value of the held for sale loans is greater than cost.

Collateral-Dependent Impaired Loans

In accordance with the provisions of the loan impairment guidance, impairment was measured for loans which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. The fair value of collateral-dependent impaired loans is estimated based on the fair value of the underlying collateral supporting the loan. Collateral-dependent impaired loans require classification in the fair value hierarchy. Impaired loans include loans acquired with deteriorated credit quality. Collateral values are estimated using Level 3 inputs based on customized discounting criteria.

Bank Premises Held for Sale

Bank premises held for sale are recorded at the lower of cost or fair value, less estimated selling costs, at the date classified as held for sale. Values are estimated using Level 3 inputs based on appraisals and customized discounting criteria. The carrying value of bank premises held for sale is not re-measured to fair value on a recurring basis but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs.

Foreclosed Assets

Foreclosed assets are recorded at fair value based on property appraisals, less estimated selling costs, at the date of the transfer. Subsequent to the transfer, foreclosed assets are carried at the lower of cost or fair value, less estimated selling costs. Values are estimated using Level 3 inputs based on appraisals and customized discounting criteria. The carrying value of foreclosed assets is not re-measured to fair value on a recurring basis but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs.

Collateral-Dependent Impaired Loans, Bank Premises Held for Sale, and Foreclosed Assets

The estimated fair value of collateral-dependent impaired loans, bank premises held for sale, and foreclosed assets is based on the appraised fair value of the collateral, less estimated costs to sell. Collateral-dependent impaired loans, bank premises held for sale, and foreclosed assets are classified within Level 3 of the fair value hierarchy.

The Company considers the appraisal or a similar evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals or a similar evaluation of the collateral underlying collateral-dependent loans and foreclosed assets are obtained at the time a loan is first considered impaired or a loan is transferred to foreclosed assets. Appraisals or a similar evaluation of bank premises held for sale are obtained when first classified as held for sale. Appraisals or similar evaluations are obtained subsequently as deemed necessary by management but at least annually on foreclosed assets and bank premises held for sale. Appraisals are reviewed for accuracy and consistency by management. Appraisals are performed by individuals selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated costs to sell. These discounts and estimates are developed by management by comparison to historical results.

The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands).


March 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	16,789	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		121	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		4,469	Appraisal	Appraisal adjustments	7% (7%)

December 31, 2019	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	15,811	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		121	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		5,099	Appraisal	Appraisal adjustments	7% (7%)

Other Fair Value Methods

The following methods and assumptions were used by the Company in estimating fair value disclosures of its other financial instruments. There were no changes in the methods and significant assumptions used to estimate the fair value of these financial instruments.

Cash and Cash Equivalents

The carrying amounts of these financial instruments approximate their fair values.

Interest-bearing Time Deposits with Banks

The carrying values of interest-bearing time deposits with banks approximate their fair values.

Restricted Stock

The carrying amount of FHLB stock approximates fair value based on the redemption provisions of the FHLB.

Loans

The fair value estimation process for the loan portfolio uses an exit price concept and reflects discounts the Company believes are consistent with discounts in the market place. Fair values are estimated for portfolios of loans with similar characteristics. Loans are segregated by type such as commercial and industrial, agricultural and farmland, commercial real estate - owner occupied, commercial real estate - non-owner occupied, multi-family, construction and land development, one-to-four family residential, and municipal, consumer, and other. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar maturities. The fair value analysis also includes other assumptions to estimate fair value, intended to approximate those a market participant would use in an orderly transaction, with adjustments for discount rates, interest rates, liquidity, and credit spreads, as appropriate.

Investments in Unconsolidated Subsidiaries

The fair values of the Company’s investments in unconsolidated subsidiaries are presumed to approximate carrying amounts.

Time Deposits

Fair values of certificates of deposit with stated maturities have been estimated using the present value of estimated future cash flows discounted at rates currently offered for similar instruments. Time deposits also include public funds time deposits.

Securities Sold Under Agreements to Repurchase

The fair values of repurchase agreements with variable interest rates are presumed to approximate their recorded carrying amounts.

Subordinated Debentures

The fair values of subordinated debentures are estimated using discounted cash flow analyses based on rates observed on recent debt issuances by other financial institutions.

Accrued Interest

The carrying amounts of accrued interest approximate fair value.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair values have been estimated using data which management considered the best available and estimation methodologies deemed suitable for the pertinent category of financial instrument.

The following table provides summary information on the carrying amounts and estimated fair values of the Company’s financial instruments as of March 31, 2020 and December 31, 2019:


	Fair Value	March 31, 2020				December 31, 2019
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value
			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	265,436	$	265,436	$	283,971	$	283,971
Interest-bearing time deposits with banks	Level 1		—		—		248		248
Debt securities held-to-maturity	Level 2		79,741		83,564		88,477		90,529
Restricted stock	Level 3		2,425		2,425		2,425		2,425
Loans, net	Level 3		2,106,865		2,134,424		2,141,527		2,181,103
Investments in unconsolidated subsidiaries	Level 3		1,165		1,165		1,165		1,165
Accrued interest receivable	Level 2		12,096		12,096		13,951		13,951

Financial liabilities:
Time deposits	Level 3		327,219		328,587		356,408		355,340
Securities sold under agreements to repurchase	Level 2		40,811		40,811		44,433		44,433
Subordinated debentures	Level 3		37,599		31,431		37,583		31,959
Accrued interest payable	Level 2		1,024		1,024		1,132		1,132

The Company estimated the fair value of lending related commitments as described in Note 17 to be immaterial based on limited interest rate exposure due to their variable nature, short-term commitment periods and termination clauses provided in the agreements.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Financial Instruments

The Banks are party to credit-related financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Banks’ exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Banks use the same credit policies in making commitments and conditional obligations as they do for on-balance sheet instruments.

Such commitments and conditional obligations were as follows as of March 31, 2020 and December 31, 2019:


	Contractual Amount
	March 31,		December 31,
	2020		2019
		(dollars in thousands)
Commitments to extend credit	$	502,244	$	542,705
Standby letters of credit		9,474		8,991

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Banks evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, by the Banks upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies, but may include real estate, accounts receivable, inventory, property, plant, and equipment, and income-producing properties.

Standby letters of credit are conditional commitments issued by the Banks to guarantee the performance of a customer to a third party. Those standby letters of credit are primarily issued to support extensions of credit. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. The Banks secure the standby letters of credit with the same collateral used to secure the related loan.

Legal Contingencies

Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Company’s consolidated financial statements.

ACCOUNTING POLICIES (Policies)	3 Months Ended
ACCOUNTING POLICIES (Policies)	Mar. 31, 2020
ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation HBT Financial, Inc. (the Company) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (Heartland Bank) and State Bank of Lincoln. Heartland Bank and State Bank of Lincoln are collectively referred to as “the Banks”. 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. The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with generally accepted accounting principles (GAAP) interim reporting requirements. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 27, 2020. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year. The Company qualifies as an "emerging growth company" as defined by the Jumpstart Our Business Startups Act (JOBS Act). Under the JOBS Act, emerging growth companies may also elect to delay adoption of new or revised accounting standards until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards and, therefore, the Company will not be subject to certain new or revised accounting standards as other public companies.
Use of Estimates	Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses and income taxes.
Income Taxes	Income Taxes Through October 10, 2019, the Company, with the consent of its then current stockholders, elected to be taxed under sections of federal and state income tax law as an "S Corporation" which provides that, in lieu of Company income taxes, except for state replacement taxes, the stockholders separately account for their pro rata shares of the Company’s items of income, deductions, losses and credits. As a result of this election, no income taxes, other than state replacement taxes, have been recognized in the accompanying consolidated financial statements. No provision has been made for any amounts which may be advanced or paid as dividends to the stockholders to assist them in paying their personal taxes on the income from the Company. 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 an effective state replacement tax rate. The Company files consolidated federal and state income tax returns. The Company is no longer subject to federal or state income tax examinations for years prior to 2016.
Unaudited Pro Forma Income Statement Information	Unaudited Pro Forma Income Statement Information The unaudited pro forma C Corp equivalent income tax expense information gives effect to the income tax expense had the Company been a C Corporation during the three months ended March 31, 2019. The unaudited pro forma C Corp equivalent net income information, therefore, includes an adjustment for income tax expense as if the Company had been a C Corporation during the three months ended March 31, 2019. The unaudited pro forma basic and diluted earnings per share information is computed using the unaudited pro forma C Corp equivalent net income and weighted average shares of common stock outstanding. There were no dilutive instruments outstanding during 2019, therefore, the unaudited pro forma C Corp equivalent basic and diluted earnings per share amounts are the same.
Segment Reporting	Segment Reporting The Company’s operations consist of one reportable segment called community banking. While the Company’s management monitors both bank subsidiaries’ operations and profitability separately, these subsidiaries have been aggregated into one reportable segment due to the similarities in products and services, customer base, operations, profitability measures, and economic characteristics.
Goodwill	Goodwill Goodwill represents the excess of the original cost over the fair value of assets acquired and liabilities assumed. Goodwill is not amortized but instead is subject to an annual impairment evaluation. The Company has selected December 31 as the date to perform the annual impairment test, and at December 31, 2019, the Company’s evaluation of goodwill indicated that goodwill was not impaired. Due to the economic weakness resulting from the COVID-19 pandemic, the Company completed an evaluation of goodwill as of March 31, 2020 which indicated that goodwill was not impaired as of March 31, 2020. Further goodwill impairment evaluations, which may result in goodwill impairment, may be necessary if events or circumstance changes would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Reclassifications	Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or stockholders’ equity.
Subsequent Events	Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential of recognition or disclosure through the date the financial statements were issued.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016‑13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016‑13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016‑13 amends the accounting for credit losses on debt securities available-for-sale and purchased financial assets with credit deterioration. ASU 2016‑13 is effective for years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for years beginning after December 31, 2018, including interim periods within those years. The Company is currently evaluating the effect that this standard will have on the consolidated results of operations and financial position. In January 2017, the FASB issued ASU 2017‑04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the ASU, a company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. This standard is not expected to have a material impact on the Company’s consolidated results of operations or financial position.

SECURITIES (Tables)

3 Months Ended

Mar. 31, 2020

SECURITIES

Summary of carrying balances of securities


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Debt securities available-for-sale	$	615,565	$	592,404
Debt securities held-to-maturity		79,741		88,477
Equity securities:
Readily determinable fair value		3,207		3,241
No readily determinable fair value		1,552		1,148
Total securities	$	700,065	$	685,270

Schedule of amortized cost and fair values of debt securities, with gross unrealized gains and losses.


March 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	48,983	$	2,192	$	—	$	51,175
Municipal		164,853		3,577		(185)		168,245
Mortgage-backed:
Agency residential		184,507		5,015		(904)		188,618
Agency commercial		128,583		4,050		(116)		132,517
Corporate		73,140		1,928		(58)		75,010
Total available-for-sale		600,066		16,762		(1,263)		615,565
Held-to-maturity:
Municipal		32,780		1,198		—		33,978
Mortgage-backed:
Agency residential		17,989		471		(16)		18,444
Agency commercial		28,972		2,173		(3)		31,142
Total held-to-maturity		79,741		3,842		(19)		83,564
Total debt securities	$	679,807	$	20,604	$	(1,282)	$	699,129


December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	49,113	$	529	$	(27)	$	49,615
Municipal		131,241		2,503		(6)		133,738
Mortgage-backed:
Agency residential		198,184		2,780		(286)		200,678
Agency commercial		133,730		1,516		(292)		134,954
Corporate		72,239		1,180		—		73,419
Total available-for-sale		584,507		8,508		(611)		592,404
Held-to-maturity:
Municipal		45,239		1,340		—		46,579
Mortgage-backed:
Agency residential		19,072		161		(170)		19,063
Agency commercial		24,166		775		(54)		24,887
Total held-to-maturity		88,477		2,276		(224)		90,529
Total debt securities	$	672,984	$	10,784	$	(835)	$	682,933

Schedule of amortized cost and fair value of securities by contractual maturity


	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(dollars in thousands)
Due in 1 year or less	$	47,084	$	47,237	$	750	$	755
Due after 1 year through 5 years		93,864		95,997		17,243		17,745
Due after 5 years through 10 years		120,398		124,689		13,896		14,551
Due after 10 years		25,630		26,507		891		927

Mortgage-backed:
Agency residential		184,507		188,618		17,989		18,444
Agency commercial		128,583		132,517		28,972		31,142
Total	$	600,066	$	615,565	$	79,741	$	83,564

Schedule of gains (losses) on securities


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Net realized gains (losses) on sales	$	—	$	—
Net unrealized gains (losses) on equities:
Readily determinable fair value		(52)		79
No readily determinable fair value		—		—
Gains (losses) on securities	$	(52)	$	79

Schedule of gross unrealized losses and fair value of investments


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
March 31, 2020	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Available-for-sale:	(dollars in thousands)
Municipal	$	(185)	$	5,049	$	—	$	—	$	(185)	$	5,049
Mortgage-backed:
Agency residential		(648)		34,061		(256)		8,442		(904)		42,503
Agency commercial		—		—		(116)		14,322		(116)		14,322
Corporate		(58)		6,942		—		—		(58)		6,942
Total available-for-sale		(891)		46,052		(372)		22,764		(1,263)		68,816
Held-to-maturity:
Mortgage-backed:
Agency residential		—		—		(16)		1,549		(16)		1,549
Agency commercial		—		—		(3)		534		(3)		534
Total held-to-maturity		—		—		(19)		2,083		(19)		2,083
Total debt securities	$	(891)	$	46,052	$	(391)	$	24,847	$	(1,282)	$	70,899


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
December 31, 2019	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
Available-for-sale:	(dollars in thousands)
U.S. government agency	$	(26)	$	18,865	$	(1)	$	1,998	$	(27)	$	20,863
Municipal		(6)		894		—		—		(6)		894
Mortgage-backed:
Agency residential		(108)		25,563		(178)		27,296		(286)		52,859
Agency commercial		(100)		20,056		(192)		15,704		(292)		35,760
Total available-for-sale	$	(240)	$	65,378	$	(371)	$	44,998	$	(611)	$	110,376
Held-to-maturity:
Mortgage-backed:
Agency residential	$	(30)	$	2,516	$	(140)	$	9,002	$	(170)	$	11,518
Agency commercial		(47)		7,016		(7)		599		(54)		7,615
Total held-to-maturity		(77)		9,532		(147)		9,601		(224)		19,133
Total debt securities	$	(317)	$	74,910	$	(518)	$	54,599	$	(835)	$	129,509

LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2020

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Summary of Loans


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Commercial and industrial	$	299,266	$	307,175
Agricultural and farmland		228,701		207,776
Commercial real estate - owner occupied		229,608		231,162
Commercial real estate - non-owner occupied		540,515		579,757
Multi-family		177,172		179,073
Construction and land development		232,311		224,887
One-to-four family residential		313,925		313,580
Municipal, consumer, and other		111,454		120,416
Loans, before allowance for loan losses		2,132,952		2,163,826
Allowance for loan losses		(26,087)		(22,299)
Loans, net of allowance for loan losses	$	2,106,865	$	2,141,527

Schedule of activity in allowance for loan losses


					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
Three Months Ended March 31, 2020	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2019	$	4,441	$	2,766	$	1,779	$	3,663	$	1,024	$	2,977	$	2,540	$	3,109	$	22,299
Provision for loan losses		538		254		(97)		820		450		237		777		1,376		4,355
Charge-offs		(809)		(27)		—		(56)		—		(1)		(104)		(224)		(1,221)
Recoveries		54		—		440		5		—		10		71		74		654
Balance, March 31, 2020	$	4,224	$	2,993	$	2,122	$	4,432	$	1,474	$	3,223	$	3,284	$	4,335	$	26,087

					Commercial		Commercial
	Commercial		Agricultural		Real Estate		Real Estate								Consumer
	and		and		Owner		Non-owner				Construction		Residential		and
Three Months Ended March 31, 2019	Industrial		Farmland		Occupied		Occupied		Multi-Family		and Land		Real Estate		Other		Total
Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2018	$	3,748	$	2,650	$	2,506	$	2,644	$	912	$	4,176	$	2,782	$	1,091	$	20,509
Provision for loan losses		222		598		(107)		74		60		(290)		211		8		776
Charge-offs		(256)		—		(65)		—		—		—		(37)		(175)		(533)
Recoveries		48		—		19		4		—		11		111		68		261
Balance, March 31, 2019	$	3,762	$	3,248	$	2,353	$	2,722	$	972	$	3,897	$	3,067	$	992	$	21,013


					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
March 31, 2020	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	287,998	$	214,328	$	210,206	$	522,305	$	175,874	$	225,768	$	292,250	$	97,603	$	2,026,332
Individually evaluated for impairment		9,122		13,303		11,171		3,367		—		3,120		11,394		13,762		65,239
Acquired with deteriorated credit quality		2,146		1,070		8,231		14,843		1,298		3,423		10,281		89		41,381
Total	$	299,266	$	228,701	$	229,608	$	540,515	$	177,172	$	232,311	$	313,925	$	111,454	$	2,132,952

Allowance for loan losses:
Collectively evaluated for impairment	$	2,260	$	2,832	$	1,618	$	4,354	$	1,467	$	2,771	$	2,524	$	899	$	18,725
Individually evaluated for impairment		1,859		90		261		68		—		323		719		3,435		6,755
Acquired with deteriorated credit quality		105		71		243		10		7		129		41		1		607
Total	$	4,224	$	2,993	$	2,122	$	4,432	$	1,474	$	3,223	$	3,284	$	4,335	$	26,087

					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate				Construction		One-to-four		Consumer,
	and		and		Owner		Non-owner				and Land		Family		and
December 31, 2019	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total
Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	294,006	$	192,722	$	211,744	$	561,277	$	176,273	$	217,708	$	291,624	$	106,448	$	2,051,802
Individually evaluated for impairment		10,733		13,966		10,927		3,398		1,324		3,782		11,349		13,872		69,351
Acquired with deteriorated credit quality		2,436		1,088		8,491		15,082		1,476		3,397		10,607		96		42,673
Total	$	307,175	$	207,776	$	231,162	$	579,757	$	179,073	$	224,887	$	313,580	$	120,416	$	2,163,826

Allowance for loan losses:
Collectively evaluated for impairment	$	1,926	$	2,576	$	1,486	$	3,591	$	1,019	$	2,283	$	1,684	$	931	$	15,496
Individually evaluated for impairment		2,170		105		270		70		—		567		822		2,176		6,180
Acquired with deteriorated credit quality		345		85		23		2		5		127		34		2		623
Total	$	4,441	$	2,766	$	1,779	$	3,663	$	1,024	$	2,977	$	2,540	$	3,109	$	22,299

Schedule of loans individually evaluated for impairment by category

The following tables present loans individually evaluated for impairment by category of loans as of March 31, 2020 and December 31, 2019:


	Unpaid
	Principal		Recorded		Related
March 31, 2020	Balance		Investment		Allowance
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	3,458	$	3,458	$	1,859
Agricultural and farmland		569		565		90
Commercial real estate - owner occupied		824		824		261
Commercial real estate - non-owner occupied		98		98		68
Multi-family		—		—		—
Construction and land development		3,014		3,014		323
One-to-four family residential		3,184		3,171		719
Municipal, consumer, and other		12,441		12,414		3,435
Total	$	23,588	$	23,544	$	6,755

With no related allowance:
Commercial and industrial	$	5,665	$	5,664	$	—
Agricultural and farmland		12,753		12,738		—
Commercial real estate - owner occupied		10,348		10,347		—
Commercial real estate - non-owner occupied		3,263		3,269		—
Multi-family		—		—		—
Construction and land development		107		106		—
One-to-four family residential		8,257		8,223		—
Municipal, consumer, and other		1,361		1,348		—
Total	$	41,754	$	41,695	$	—

Total
Commercial and industrial	$	9,123	$	9,122	$	1,859
Agricultural and farmland		13,322		13,303		90
Commercial real estate - owner occupied		11,172		11,171		261
Commercial real estate - non-owner occupied		3,361		3,367		68
Multi-family		—		—		—
Construction and land development		3,121		3,120		323
One-to-four family residential		11,441		11,394		719
Municipal, consumer, and other		13,802		13,762		3,435
Total	$	65,342	$	65,239	$	6,755


	Unpaid
	Principal		Recorded		Related
December 31, 2019	Balance		Investment		Allowance
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	4,292	$	4,292	$	2,170
Agricultural and farmland		590		590		105
Commercial real estate - owner occupied		830		830		270
Commercial real estate - non-owner occupied		99		99		70
Multi-family		—		—		—
Construction and land development		3,679		3,679		567
One-to-four family residential		3,401		3,390		822
Municipal, consumer, and other		9,138		9,111		2,176
Total	$	22,029	$	21,991	$	6,180

With no related allowance:
Commercial and industrial	$	6,438	$	6,441	$	—
Agricultural and farmland		13,369		13,376		—
Commercial real estate - owner occupied		10,089		10,097		—
Commercial real estate - non-owner occupied		3,297		3,299		—
Multi-family		1,328		1,324		—
Construction and land development		104		103		—
One-to-four family residential		7,986		7,959		—
Municipal, consumer, and other		4,775		4,761		—
Total	$	47,386	$	47,360	$	—

Total
Commercial and industrial	$	10,730	$	10,733	$	2,170
Agricultural and farmland		13,959		13,966		105
Commercial real estate - owner occupied		10,919		10,927		270
Commercial real estate - non-owner occupied		3,396		3,398		70
Multi-family		1,328		1,324		—
Construction and land development		3,783		3,782		567
One-to-four family residential		11,387		11,349		822
Municipal, consumer, and other		13,913		13,872		2,176
Total	$	69,415	$	69,351	$	6,180


	Three Months Ended March 31,
	2020				2019
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	3,486	$	49	$	3,122	$	35
Agricultural and farmland		573		4		1,733		20
Commercial real estate - owner occupied		828		11		6,450		69
Commercial real estate - non-owner occupied		99		2		103		2
Multi-family		—		—		1,359		18
Construction and land development		3,064		41		2,892		44
One-to-four family residential		3,261		27		3,034		22
Municipal, consumer, and other		12,487		83		241		2
Total	$	23,798	$	217	$	18,934	$	212

With no related allowance:
Commercial and industrial	$	5,941	$	58	$	11,251	$	93
Agricultural and farmland		12,520		161		9,562		101
Commercial real estate - owner occupied		10,432		131		13,024		133
Commercial real estate - non-owner occupied		3,340		41		8,242		87
Multi-family		—		—		—		—
Construction and land development		324		4		123		1
One-to-four family residential		8,344		62		9,641		69
Municipal, consumer, and other		1,370		56		146		1
Total	$	42,271	$	513	$	51,989	$	485

Total
Commercial and industrial	$	9,427	$	107	$	14,373	$	128
Agricultural and farmland		13,093		165		11,295		121
Commercial real estate - owner occupied		11,260		142		19,474		202
Commercial real estate - non-owner occupied		3,439		43		8,345		89
Multi-family		—		—		1,359		18
Construction and land development		3,388		45		3,015		45
One-to-four family residential		11,605		89		12,675		91
Municipal, consumer, and other		13,857		139		387		3
Total	$	66,069	$	730	$	70,923	$	697

Schedule of recorded investment on past due basis


	Accruing Interest
			30 - 89 Days		90+ Days				Total
March 31, 2020	Current		Past Due		Past Due		Nonaccrual		Loans
	(dollars in thousands)
Commercial and industrial	$	295,114	$	244	$	—	$	3,908	$	299,266
Agricultural and farmland		222,877		—		—		5,824		228,701
Commercial real estate - owner occupied		227,160		1,642		—		806		229,608
Commercial real estate - non-owner occupied		539,807		485		—		223		540,515
Multi-family		177,172		—		—		—		177,172
Construction and land development		232,142		—		—		169		232,311
One-to-four family residential		307,003		2,416		264		4,242		313,925
Municipal, consumer, and other		111,040		214		—		200		111,454
Total	$	2,112,315	$	5,001	$	264	$	15,372	$	2,132,952


	Accruing Interest
			30 - 89 Days		90+ Days				Total
December 31, 2019	Current		Past Due		Past Due		Nonaccrual		Loans
	(dollars in thousands)
Commercial and industrial	$	301,975	$	558	$	—	$	4,642	$	307,175
Agricultural and farmland		201,519		—		—		6,257		207,776
Commercial real estate - owner occupied		228,218		941		—		2,003		231,162
Commercial real estate - non-owner occupied		579,626		131		—		—		579,757
Multi-family		177,696		—		—		1,377		179,073
Construction and land development		224,716		140		—		31		224,887
One-to-four family residential		307,712		1,329		75		4,464		313,580
Municipal, consumer, and other		119,898		247		26		245		120,416
Total	$	2,141,360	$	3,346	$	101	$	19,019	$	2,163,826

Schedule of loans by category risk ratings


March 31, 2020	Pass		Watch		Substandard		Doubtful		Total
	(dollars in thousands)
Commercial and industrial	$	262,646	$	25,831	$	10,789	$	—	$	299,266
Agricultural and farmland		202,195		12,409		14,097		—		228,701
Commercial real estate - owner occupied		197,131		20,884		11,593		—		229,608
Commercial real estate - non-owner occupied		490,549		48,008		1,958		—		540,515
Multi-family		175,824		1,348		—		—		177,172
Construction and land development		225,022		3,765		3,524		—		232,311
One-to-four family residential		289,942		11,406		12,577		—		313,925
Municipal, consumer, and other		97,404		293		13,757		—		111,454
Total	$	1,940,713	$	123,944	$	68,295	$	—	$	2,132,952


December 31, 2019	Pass		Watch		Substandard		Doubtful		Total
	(dollars in thousands)
Commercial and industrial	$	267,645	$	27,114	$	12,416	$	—	$	307,175
Agricultural and farmland		180,735		12,267		14,774		—		207,776
Commercial real estate - owner occupied		198,710		21,745		10,707		—		231,162
Commercial real estate - non-owner occupied		531,694		46,092		1,971		—		579,757
Multi-family		175,807		1,771		1,495		—		179,073
Construction and land development		217,120		3,582		4,185		—		224,887
One-to-four family residential		287,036		13,546		12,998		—		313,580
Municipal, consumer, and other		106,063		479		13,874		—		120,416
Total	$	1,964,810	$	126,596	$	72,420	$	—	$	2,163,826

Schedule of financial effect of troubled debt restructurings


						Charge-offs
		Recorded Investment				and Specific
Three Months Ended March 31, 2019	Number	Pre-Modification		Post-Modification		Reserves
	(dollars in thousands)
Agricultural and farmland	1	$	285	$	285	$	30
Total	1	$	285	$	285	$	30

Schedule of changes in the accretable yield for loans acquired with deteriorated credit quality


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	1,662	$	2,101
Reclassification from non-accretable difference		8		136
Accretion income		(160)		(527)
Ending balance	$	1,510	$	1,710

LOAN SERVICING (Tables)

3 Months Ended

Mar. 31, 2020

LOAN SERVICING

Schedule of activity in mortgage servicing rights


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	8,518	$	10,918
Capitalized servicing rights		214		160
Fair value adjustment:
Attributable to payments and principal reductions		(403)		(306)
Attributable to changes in valuation inputs and assumptions		(1,982)		(856)
Total fair value adjustment		(2,385)		(1,162)
Ending balance	$	6,347	$	9,916

FORECLOSED ASSETS (Tables)

3 Months Ended

Mar. 31, 2020

FORECLOSED ASSETS

Schedule of foreclosed assets activity


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Beginning balance	$	5,099	$	9,559
Transfers from loans		19		1,408
Proceeds from sales		(677)		(511)
Sales through loan origination		—		(269)
Net gain (loss) on sales		75		89
Direct write-downs		(47)		(125)
Ending balance	$	4,469	$	10,151

Schedule of gains (losses) on foreclosed assets


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Direct write-downs	$	(47)	$	(125)
Net gain (loss) on sales		75		89
Guarantee reimbursements		7		19
Gains (losses) on foreclosed assets	$	35	$	(17)

DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2020

DEPOSITS

Schedule of Company’s interest-bearing deposits


	March 31, 2020		December 31, 2019
	(dollars in thousands)
Noninterest-bearing deposits	$	676,341	$	689,116
Interest-bearing deposits:
Interest-bearing demand		810,074		814,639
Money market		472,532		477,765
Savings		444,137		438,927
Time		327,219		356,408
Total interest-bearing deposits		2,053,962		2,087,739
Total deposits	$	2,730,303	$	2,776,855

Schedule of interest expense on deposits


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Interest-bearing demand	$	251	$	417
Money market		394		370
Savings		70		68
Time		880		1,128
Total interest expense on deposits	$	1,595	$	1,983

SUBORDINATED DEBENTURES (Tables)

3 Months Ended

Mar. 31, 2020

SUBORDINATED DEBENTURES

Schedule of carrying value of subordinated debentures


	March 31, 2020		December 31, 2019
	(dollars in thousands)
Heartland Bancorp, Inc. Capital Trust B	$	10,310	$	10,310
Heartland Bancorp, Inc. Capital Trust C		10,310		10,310
Heartland Bancorp, Inc. Capital Trust D		5,155		5,155
FFBI Capital Trust I		7,217		7,217
National Bancorp Statutory Trust I		4,607		4,591
Total	$	37,599	$	37,583

Schedule of interest rates and maturities of the subordinated debentures


				Interest Rate at
	Variable			March 31,		December 31,		Maturity
	Interest Rate			2020		2019		Date
Heartland Bancorp, Inc. Capital Trust B	LIBOR plus	2.75	%	4.58	%	4.74	%	April 6, 2034
Heartland Bancorp, Inc. Capital Trust C	LIBOR plus	1.53		2.27		3.42		June 15, 2037
Heartland Bancorp, Inc. Capital Trust D	LIBOR plus	1.35		2.09		3.24		September 15, 2037
FFBI Capital Trust I	LIBOR plus	2.80		4.63		4.79		April 6, 2034
National Bancorp Statutory Trust I	LIBOR plus	2.90		3.64		4.79		December 31, 2037

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2020

DERIVATIVE FINANCIAL INSTRUMENTS

Summary of fair values of Company’s derivative instrument assets and liabilities related to interest rate swap contracts

March 31, 2020

December 31, 2019

Notional

Fair

Notional

Fair

Amount

Value

Amount

Value

Designated as cash flow hedges:

(dollars in thousands)

Fair value recorded in other liabilities

17,000

(1,612)

17,000

(676)

Schedule of the effect of interest rate contracts designated as cash flow hedges on the consolidated statements of income


Location of gross gain (loss) reclassified	Amounts of gross gain (loss)
from accumulated other	reclassified from accumulated
comprehensive income to income	other comprehensive income
	Three Months Ended
	March 31,
	2020		2019
Designated as cash flow hedges:	(dollars in thousands)
Taxable loan interest income	$	32	$	30
Subordinated debentures interest expense		(34)		—
Total	$	(2)	$	30

Summary of interest rate swap agreements not designated as hedging instruments


	March 31, 2020				December 31, 2019
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Not designated as hedging instruments:	(dollars in thousands)
Fair value recorded in other assets:
Interest rate swaps with commercial borrower counterparties	$	137,216	$	21,946	$	114,140	$	8,532
Interest rate swaps with financial institution counterparty		—		—		24,216		110
Total fair value recorded in other assets	$	137,216	$	21,946	$	138,356	$	8,642

Fair value recorded in other liabilities:
Interest rate swaps with commercial borrower counterparties	$	—	$	—	$	24,216	$	(110)
Interest rate swaps with financial institution counterparty		137,216		(21,946)		114,140		(8,532)
Total fair value recorded in other liabilities	$	137,216	$	(21,946)	$	138,356	$	(8,642)

Summary of the effect of interest rate contracts not designated as hedging instruments recognized in other noninterest income


	Three Months Ended
	March 31,
	2020		2019
Not designated as hedging instruments:	(dollars in thousands)
Gross gains	$	13,571	$	1,169
Gross losses		(13,571)		(1,169)
Net gains (losses)	$	—	$	—

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

3 Months Ended

Mar. 31, 2020

ACCUMULATED OTHER COMPREHENSIVE INCOME

Schedule of the activity and accumulated balances for components of other comprehensive income (loss)


	Unrealized Gains (Losses)
	on Debt Securities
	Available-for-Sale		Held-to-Maturity		Derivatives		Total
	(dollars in thousands)
Three Months Ended March 31, 2020
Balance, December 31, 2019	$	8,659	$	(131)	$	(696)	$	7,832
Other comprehensive income (loss) before reclassifications		7,602		—		(970)		6,632
Reclassifications		—		(9)		2		(7)
Other comprehensive income (loss), before tax		7,602		(9)		(968)		6,625
Income tax expense (benefit)		2,166		(2)		(276)		1,888
Other comprehensive income (loss), after tax		5,436		(7)		(692)		4,737
Balance, March 31, 2020	$	14,095	$	(138)	$	(1,388)	$	12,569

Three Months Ended March 31, 2019
Balance, December 31, 2018	$	(4,561)	$	122	$	151	$	(4,288)
Other comprehensive income (loss) before reclassifications		5,656		—		(244)		5,412
Reclassifications		—		(82)		(30)		(112)
Other comprehensive loss		5,656		(82)		(274)		5,300
Balance, March 31, 2019	$	1,095	$	40	$	(123)	$	1,012

INCOME TAXES (Tables)

3 Months Ended

Mar. 31, 2020

INCOME TAXES

Schedule of allocation of federal and state income taxes between current and deferred portions


	Three Months Ended
	March 31,
	2020		2019
	(dollars in thousands)
Current
Federal	$	1,721	$	—
State		988		215
Total current		2,709		215

Deferred
Federal		(457)		—
State		(221)		—
Total deferred		(678)		—
Income tax expense	$	2,031	$	215

Schedule of effective income tax rate reconciliation


	Three Months Ended March 31,
	2020				2019
	Amount		Percentage		Amount		Percentage
	(dollars in thousands)
Federal income tax, at statutory rate	$	1,733	21.0	%	$	—	—	%
Increase (decrease) resulting from:
Federally tax exempt interest income		(357)	(4.3)			—	—
State taxes, net of federal benefit		631	7.6			215	1.1
Other		24	0.3			—	—
Income tax expense	$	2,031	24.6	%	$	215	1.1	%

Schedule of components of the net deferred tax asset


	March 31,		December 31,
	2020		2019
	(dollars in thousands)
Deferred tax assets
Allowance for loan losses	$	7,378	$	6,309
Compensation related		5,482		5,859
Nonaccrual interest		631		858
Foreclosed assets		74		574
Goodwill		482		531
Other		1,460		1,282
Total deferred tax assets		15,507		15,413

Deferred tax liabilities
Fixed asset depreciation		4,146		4,201
Mortgage servicing rights		1,809		2,428
Other purchase accounting adjustments		1,327		1,356
Intangible assets		773		841
Prepaid assets		425		504
Net unrealized gain on debt securities available-for-sale		4,418		2,251
Other		413		426
Total deferred tax liabilities		13,311		12,007
Net deferred tax asset	$	2,196		3,406

EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2020

EARNINGS PER SHARE

Schedule of reconciliations of the numerators and denominators used to compute basic and diluted earnings


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Numerator:
Net income	$	6,221	$	18,736
Earnings allocated to unvested restricted stock units		(15)		—
Numerator for earnings per share - basic and diluted	$	6,206	$	18,736

Denominator:
Weighted average common shares outstanding		27,457,306		18,027,512
Dilutive effect of outstanding restricted stock units		—		—
Weighted average common shares outstanding, including all dilutive potential shares		27,457,306		18,027,512

Earnings per share - Basic	$	0.23	$	1.04
Earnings per share - Diluted	$	0.23	$	1.04

STOCK-BASED COMPENSATION PLANS (Tables)

3 Months Ended

Mar. 31, 2020

STOCK-BASED COMPENSATION PLANS

Summary of stock-based compensation expense


	Three Months Ended March 31,
	2020		2019
	(dollars in thousands)
Restricted stock units	$	67	$	—
Stock appreciation rights		(335)		(115)
Total stock-based compensation expense (benefit)	$	(268)	$	(115)

Schedule of the summary of outstanding restricted stock units


	Three Months Ended March 31,
	2020			2019
		Weighted			Weighted
	Restricted	Average		Restricted	Average
	Stock Units	Grant Date		Stock Units	Grant Date
	Outstanding	Fair Value		Outstanding	Fair Value
Beginning balance	—	$	—	—	$	—
Granted	73,150		19.03	—		—
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	73,150	$	19.03	—	$	—

A further summary of outstanding restricted stock units as of March 31, 2020, is as follows:


		Weighted Average
		Remaining
Range of Grant Date Fair Values	Outstanding	Contractual Term
$ 19.03	73,150	3.7	years

Schedule of the status of stock appreciation rights and changes


	Three Months Ended March 31,
	2020			2019
	Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights Outstanding	Weighted Average Grant Date Assigned Value
Beginning balance	110,160	$	16.32	91,800	$	5.73
Granted	—		—	—		—
Exercised	—		—	—		—
Forfeited	—		—	—		—
Ending balance	110,160	$	16.32	91,800	$	5.73

A further summary of outstanding stock appreciation rights as of March 31, 2020, is as follows:


			Weighted Average
			Remaining
Range of Grant Date Assigned Values	Outstanding	Exercisable	Contractual Term
$ 16.32	110,160	79,560	9.4	years

Schedule of assumptions used in valuing stock appreciation rights


	March 31,			December 31,
	2020			2019
Risk-free interest rate		0.67	%		1.90	%
Expected volatility		32.47	%		28.83	%
Expected life (in years)		9.4			9.7
Expected dividend yield		5.70	%		3.16	%

REGULATORY MATTERS (Tables)

3 Months Ended

Mar. 31, 2020

REGULATORY MATTERS

Schedule of the Company's and the bank subsidiaries' actual and required capital amounts and ratios


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2020	Amount		Ratio		Amount		Ratio		Amount		Ratio
		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	363,205	15.03	%	$	193,326	8.00	%		N/A	N/A
Heartland Bank		322,026	14.54			177,196	8.00		$	221,495	10.00	%
State Bank of Lincoln		35,356	17.74			15,944	8.00			19,930	10.00

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	337,118	13.95	%	$	144,995	6.00	%		N/A	N/A
Heartland Bank		298,547	13.48			132,897	6.00		$	177,196	8.00	%
State Bank of Lincoln		32,863	16.49			11,958	6.00			15,944	8.00

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	300,684	12.44	%	$	108,746	4.50	%		N/A	N/A
Heartland Bank		298,547	13.48			99,673	4.50		$	143,972	6.50	%
State Bank of Lincoln		32,863	16.49			8,969	4.50			12,955	6.50

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	337,118	10.70	%	$	125,991	4.00	%		N/A	N/A
Heartland Bank		298,547	10.55			113,149	4.00		$	141,436	5.00	%
State Bank of Lincoln		32,863	10.32			12,735	4.00			15,919	5.00


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio
		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	356,994	14.54	%	$	196,358	8.00	%		N/A	N/A
Heartland Bank		315,516	14.02			180,071	8.00		$	225,088	10.00	%
State Bank of Lincoln		35,390	17.58			16,104	8.00			20,130	10.00

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	334,695	13.64	%	$	147,268	6.00	%		N/A	N/A
Heartland Bank		295,385	13.12			135,053	6.00		$	180,071	8.00	%
State Bank of Lincoln		33,222	16.50			12,078	6.00			16,104	8.00

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	298,277	12.15	%	$	110,451	4.50	%		N/A	N/A
Heartland Bank		295,385	13.12			101,290	4.50		$	146,307	6.50	%
State Bank of Lincoln		33,222	16.50			9,058	4.50			13,084	6.50

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	334,695	10.38	%	$	129,027	4.00	%		N/A	N/A
Heartland Bank		295,385	10.25			115,281	4.00		$	144,102	5.00	%
State Bank of Lincoln		33,222	9.82			13,531	4.00			16,914	5.00

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2020

FAIR VALUE OF FINANCIAL INSTRUMENTS

Summary of assets measured at fair value on a recurring basis


March 31, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. government agency	$	—	$	51,175	$	—	$	51,175
Municipal		—		168,245		—		168,245
Mortgage-backed:
Agency residential		—		188,618		—		188,618
Agency commercial		—		132,517		—		132,517
Corporate		—		75,010		—		75,010
Equity securities with readily determinable fair values		3,207		—		—		3,207
Mortgage servicing rights		—		—		6,347		6,347
Derivative financial assets		—		21,946		—		21,946
Derivative financial liabilities		—		23,558		—		23,558


December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. government agency	$	—	$	49,615	$	—	$	49,615
Municipal		—		133,738		—		133,738
Mortgage-backed:
Agency residential		—		200,678		—		200,678
Agency commercial		—		134,954		—		134,954
Corporate		—		73,419		—		73,419
Equity securities with readily determinable fair values		3,241		—		—		3,241
Mortgage servicing rights		—		—		8,518		8,518
Derivative financial assets		—		8,642		—		8,642
Derivative financial liabilities		—		9,318		—		9,318

Schedule of quantitative information about the unobservable inputs used in recurring Level 3 fair value measurements

The following tables present additional information about the unobservable inputs used in the fair value measurement of the mortgage servicing rights (dollars in thousands):


March 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	6,347	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 59.1% (15.7%)
				Discount rate	9.0% to 11.0% (9.0%)

December 31, 2019	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	8,518	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 68.5% (12.3%)
				Discount rate	9.0% to 11.0% (9.0%)

Summary of assets measured at fair value on a nonrecurring basis


March 31, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	4,805	$	—	$	4,805
Collateral-dependent impaired loans		—		—		16,789		16,789
Bank premises held for sale		—		—		121		121
Foreclosed assets		—		—		4,469		4,469


December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	4,531	$	—	$	4,531
Collateral-dependent impaired loans		—		—		15,811		15,811
Bank premises held for sale		—		—		121		121
Foreclosed assets		—		—		5,099		5,099

Schedule of quantitative information about the unobservable inputs used in non-recurring Level 3 fair value measurements

The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands).


March 31, 2020	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	16,789	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		121	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		4,469	Appraisal	Appraisal adjustments	7% (7%)

December 31, 2019	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	15,811	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		121	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		5,099	Appraisal	Appraisal adjustments	7% (7%)

Summary information on the carrying amounts and estimated fair values of the Company’s financial instruments


	Fair Value	March 31, 2020				December 31, 2019
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value
			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	265,436	$	265,436	$	283,971	$	283,971
Interest-bearing time deposits with banks	Level 1		—		—		248		248
Debt securities held-to-maturity	Level 2		79,741		83,564		88,477		90,529
Restricted stock	Level 3		2,425		2,425		2,425		2,425
Loans, net	Level 3		2,106,865		2,134,424		2,141,527		2,181,103
Investments in unconsolidated subsidiaries	Level 3		1,165		1,165		1,165		1,165
Accrued interest receivable	Level 2		12,096		12,096		13,951		13,951

Financial liabilities:
Time deposits	Level 3		327,219		328,587		356,408		355,340
Securities sold under agreements to repurchase	Level 2		40,811		40,811		44,433		44,433
Subordinated debentures	Level 3		37,599		31,431		37,583		31,959
Accrued interest payable	Level 2		1,024		1,024		1,132		1,132

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES

Schedule of commitments and conditional obligations


	Contractual Amount
	March 31,		December 31,
	2020		2019
		(dollars in thousands)
Commitments to extend credit	$	502,244	$	542,705
Standby letters of credit		9,474		8,991

ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended	12 Months Ended
ACCOUNTING POLICIES (Details) $ in Thousands	Mar. 31, 2020 USD ($) segment	Dec. 31, 2019 shares
ACCOUNTING POLICIES
Pro forma dilutive instruments \| shares		0
Provision for prepaid dividend \| $	$ 0
Number of segments \| segment	1

SECURITIES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
SECURITIES - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
SECURITIES
Adjustment to carrying value of equity securities with no readily determinable fair value	$ 0	$ 0
Carrying value of securities pledged to secure public and trust deposits	$ 286,716		$ 284,895
Illinois
SECURITIES
Percentage of obligations of local municipalities	42.00%
Percentage of general obligations in local municipalities	87.00%

SECURITIES - Carrying balances of securities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
SECURITIES
Debt securities available-for-sale, at fair value	$ 615,565	$ 592,404
Securities held-to-maturity	79,741	88,477
Equity securities: Readily determinable fair value	3,207	3,241
Equity securities: No readily determinable fair value	1,552	1,148
Total securities	700,065	$ 685,270
Downward adjustment on equity securities with no readily determinable fair value	165		$ 165
Impairment on equity securities with no readily determinable value	0		0
Upward adjustment on equity securities with no readily determinable fair value	$ 0		$ 0

SECURITIES - Amortized cost and Fair values of securities with gross unrealized gains and losses (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Available-for-sale
Amortized Cost	$ 600,066	$ 584,507
Gross Unrealized Gains	16,762	8,508
Gross Unrealized Losses	(1,263)	(611)
Fair Value	615,565	592,404
Held-to-maturity
Amortized Cost	79,741	88,477
Gross Unrealized Gains	3,842	2,276
Gross Unrealized Losses	(19)	(224)
Fair Value	83,564	90,529
Total Amortized Cost	679,807	672,984
Total Gross Unrealized Gains	20,604	10,784
Total Gross Unrealized Losses	(1,282)	(835)
Total Fair Value	699,129	682,933
U.S. government agency
Available-for-sale
Amortized Cost	48,983	49,113
Gross Unrealized Gains	2,192	529
Gross Unrealized Losses		(27)
Fair Value	51,175	49,615
Municipal securities
Available-for-sale
Amortized Cost	164,853	131,241
Gross Unrealized Gains	3,577	2,503
Gross Unrealized Losses	(185)	(6)
Fair Value	168,245	133,738
Held-to-maturity
Amortized Cost	32,780	45,239
Gross Unrealized Gains	1,198	1,340
Fair Value	33,978	46,579
Mortgage-backed: Agency residential
Available-for-sale
Amortized Cost	184,507	198,184
Gross Unrealized Gains	5,015	2,780
Gross Unrealized Losses	(904)	(286)
Fair Value	188,618	200,678
Held-to-maturity
Amortized Cost	17,989	19,072
Gross Unrealized Gains	471	161
Gross Unrealized Losses	(16)	(170)
Fair Value	18,444	19,063
Mortgage-backed: Agency commercial
Available-for-sale
Amortized Cost	128,583	133,730
Gross Unrealized Gains	4,050	1,516
Gross Unrealized Losses	(116)	(292)
Fair Value	132,517	134,954
Held-to-maturity
Amortized Cost	28,972	24,166
Gross Unrealized Gains	2,173	775
Gross Unrealized Losses	(3)	(54)
Fair Value	31,142	24,887
Corporate
Available-for-sale
Amortized Cost	73,140	72,239
Gross Unrealized Gains	1,928	1,180
Gross Unrealized Losses	(58)
Fair Value	$ 75,010	$ 73,419

SECURITIES - Amortized cost and Fair values of securities with maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Amortized Cost
Amortized Cost	$ 600,066	$ 584,507
Fair Value
Fair Value	615,565	592,404
Amortized Cost
Securities held-to-maturity	79,741	88,477
Fair Value
Fair Value	83,564	90,529
Mortgage-backed: Agency residential
Amortized Cost
Amortized Cost	184,507	198,184
Fair Value
Fair Value	188,618	200,678
Amortized Cost
Securities held-to-maturity	17,989	19,072
Fair Value
Fair Value	18,444	19,063
Mortgage-backed: Agency commercial
Amortized Cost
Amortized Cost	128,583	133,730
Fair Value
Fair Value	132,517	134,954
Amortized Cost
Securities held-to-maturity	28,972	24,166
Fair Value
Fair Value	31,142	$ 24,887
Available-for-sale
Amortized Cost
Due in 1 year or less	47,084
Due after 1 year through 5 years	93,864
Due after 5 years through 10 years	120,398
Due after 10 years	25,630
Amortized Cost	600,066
Fair Value
Due in 1 year or less	47,237
Due after 1 year through 5 years	95,997
Due after 5 years through 10 years	124,689
Due after 10 years	26,507
Fair Value	615,565
Available-for-sale \| Mortgage-backed: Agency residential
Amortized Cost
Amortized Cost	184,507
Fair Value
Fair Value	188,618
Available-for-sale \| Mortgage-backed: Agency commercial
Amortized Cost
Amortized Cost	128,583
Fair Value
Fair Value	132,517
Held-to-maturity
Amortized Cost
Due in 1 year or less	750
Due after 1 year through 5 years	17,243
Due after 5 years through 10 years	13,896
Due after 10 years	891
Securities held-to-maturity	79,741
Fair Value
Due in 1 year or less	755
Due after 1 year through 5 years	17,745
Due after 5 years through 10 years	14,551
Due after 10 years	927
Fair Value	83,564
Held-to-maturity \| Mortgage-backed: Agency residential
Amortized Cost
Securities held-to-maturity	17,989
Fair Value
Fair Value	18,444
Held-to-maturity \| Mortgage-backed: Agency commercial
Amortized Cost
Securities held-to-maturity	28,972
Fair Value
Fair Value	$ 31,142

SECURITIES - Sale and Gain (loss) on securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Net unrealized gains (losses) on equities:
Readily determinable fair value	$ (52)	$ 79
Gains (losses) on securities	$ (52)	$ 79

SECURITIES - Investments in a Continuous Unrealized Loss Position (Details) $ in Thousands	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
Available-for-sale: Unrealized Loss
Less than 12 Months	$ (891)	$ (240)
12 Months or More	(372)	(371)
Total Unrealized Loss of Available-for-sale securities	(1,263)	(611)
Held-to-maturity: Unrealized Loss
Less than 12 Months		(77)
12 Months or More	(19)	(147)
Total Unrealized Loss of Held-to-maturity securities	(19)	(224)
Available-for-sale: Fair Value
Less than 12 Months	46,052	65,378
12 Months or More	22,764	44,998
Total Fair Value Available-for-sale securities	68,816	110,376
Held-to-maturity: Fair value
Less than 12 Months		9,532
12 Months or More	2,083	9,601
Total Fair Value Held-to-maturity securities	2,083	19,133
Total: Unrealized Losses
Less Than 12 Months	(891)	(317)
12 Months or More	(391)	(518)
Total Unrealized Losses	(1,282)	(835)
Total: Fair Value
Less than 12 Months	46,052	74,910
12 Months or More	24,847	54,599
Total Fair Value	$ 70,899	129,509
Number of securities in an unrealized loss position for a period of twelve months or more \| item	17
Number of securities in an unrealized loss position for a period of less than twelve months \| item	53
U.S. government agency
Available-for-sale: Unrealized Loss
Less than 12 Months		(26)
12 Months or More		(1)
Total Unrealized Loss of Available-for-sale securities		(27)
Available-for-sale: Fair Value
Less than 12 Months		18,865
12 Months or More		1,998
Total Fair Value Available-for-sale securities		20,863
Municipal securities
Available-for-sale: Unrealized Loss
Less than 12 Months	$ (185)	(6)
Total Unrealized Loss of Available-for-sale securities	(185)	(6)
Available-for-sale: Fair Value
Less than 12 Months	5,049	894
Total Fair Value Available-for-sale securities	5,049	894
Mortgage-backed: Agency residential
Available-for-sale: Unrealized Loss
Less than 12 Months	(648)	(108)
12 Months or More	(256)	(178)
Total Unrealized Loss of Available-for-sale securities	(904)	(286)
Held-to-maturity: Unrealized Loss
Less than 12 Months		(30)
12 Months or More	(16)	(140)
Total Unrealized Loss of Held-to-maturity securities	(16)	(170)
Available-for-sale: Fair Value
Less than 12 Months	34,061	25,563
12 Months or More	8,442	27,296
Total Fair Value Available-for-sale securities	42,503	52,859
Held-to-maturity: Fair value
Less than 12 Months		2,516
12 Months or More	1,549	9,002
Total Fair Value Held-to-maturity securities	1,549	11,518
Mortgage-backed: Agency commercial
Available-for-sale: Unrealized Loss
Less than 12 Months		(100)
12 Months or More	(116)	(192)
Total Unrealized Loss of Available-for-sale securities	(116)	(292)
Held-to-maturity: Unrealized Loss
Less than 12 Months		(47)
12 Months or More	(3)	(7)
Total Unrealized Loss of Held-to-maturity securities	(3)	(54)
Available-for-sale: Fair Value
Less than 12 Months		20,056
12 Months or More	14,322	15,704
Total Fair Value Available-for-sale securities	14,322	35,760
Held-to-maturity: Fair value
Less than 12 Months		7,016
12 Months or More	534	599
Total Fair Value Held-to-maturity securities	534	$ 7,615
Corporate
Available-for-sale: Unrealized Loss
Less than 12 Months	(58)
Total Unrealized Loss of Available-for-sale securities	(58)
Available-for-sale: Fair Value
Less than 12 Months	6,942
Total Fair Value Available-for-sale securities	$ 6,942

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Categories of loans (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	$ 2,132,952	$ 2,163,826
Allowance for loan losses	(26,087)	(22,299)	$ (21,013)	$ (20,509)
Loans, net of allowance for loan losses	2,106,865	2,141,527
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	299,266	307,175
Allowance for loan losses	(4,224)	(4,441)	(3,762)	(3,748)
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	228,701	207,776
Allowance for loan losses	(2,993)	(2,766)	(3,248)	(2,650)
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	229,608	231,162
Allowance for loan losses	(2,122)	(1,779)	(2,353)	(2,506)
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	540,515	579,757
Allowance for loan losses	(4,432)	(3,663)	(2,722)	(2,644)
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	177,172	179,073
Allowance for loan losses	(1,474)	(1,024)	(972)	(912)
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	232,311	224,887
Allowance for loan losses	(3,223)	(2,977)	(3,897)	(4,176)
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	313,925	313,580
Allowance for loan losses	(3,284)	(2,540)	(3,067)	(2,782)
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	111,454	120,416
Allowance for loan losses	$ (4,335)	$ (3,109)	$ (992)	$ (1,091)

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Summary (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	$ 22,299	$ 20,509
Provision for loan losses	4,355	776
Charge-offs	(1,221)	(533)
Recoveries	654	261
Allowance for loan losses at end of period	26,087	21,013
Commercial and industrial
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	4,441	3,748
Provision for loan losses	538	222
Charge-offs	(809)	(256)
Recoveries	54	48
Allowance for loan losses at end of period	4,224	3,762
Agricultural and farmland
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	2,766	2,650
Provision for loan losses	254	598
Charge-offs	(27)
Allowance for loan losses at end of period	2,993	3,248
Commercial real estate - owner occupied
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	1,779	2,506
Provision for loan losses	(97)	(107)
Charge-offs		(65)
Recoveries	440	19
Allowance for loan losses at end of period	2,122	2,353
Commercial real estate - non-owner occupied
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	3,663	2,644
Provision for loan losses	820	74
Charge-offs	(56)
Recoveries	5	4
Allowance for loan losses at end of period	4,432	2,722
Multi-family
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	1,024	912
Provision for loan losses	450	60
Allowance for loan losses at end of period	1,474	972
Construction and land development
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	2,977	4,176
Provision for loan losses	237	(290)
Charge-offs	(1)
Recoveries	10	11
Allowance for loan losses at end of period	3,223	3,897
One-to-four family residential
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	2,540	2,782
Provision for loan losses	777	211
Charge-offs	(104)	(37)
Recoveries	71	111
Allowance for loan losses at end of period	3,284	3,067
Municipal, consumer, and other
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	3,109	1,091
Provision for loan losses	1,376	8
Charge-offs	(224)	(175)
Recoveries	74	68
Allowance for loan losses at end of period	$ 4,335	$ 992

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Recorded investments in loans and the allowance for loan losses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	$ 2,026,332	$ 2,051,802
Individually evaluated for impairment, Loans	65,239	69,351
Total	2,132,952	2,163,826
Collectively evaluated for impairment, Allowance for loan losses	18,725	15,496
Individually evaluated for impairment, Allowance for loan losses	6,755	6,180
Total investments in loans	26,087	22,299	$ 21,013	$ 20,509
Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	41,381	42,673
Individually evaluated for impairment, Allowance for loan losses	607	623
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	287,998	294,006
Individually evaluated for impairment, Loans	9,122	10,733
Total	299,266	307,175
Collectively evaluated for impairment, Allowance for loan losses	2,260	1,926
Individually evaluated for impairment, Allowance for loan losses	1,859	2,170
Total investments in loans	4,224	4,441	3,762	3,748
Commercial and industrial \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	2,146	2,436
Individually evaluated for impairment, Allowance for loan losses	105	345
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	214,328	192,722
Individually evaluated for impairment, Loans	13,303	13,966
Total	228,701	207,776
Collectively evaluated for impairment, Allowance for loan losses	2,832	2,576
Individually evaluated for impairment, Allowance for loan losses	90	105
Total investments in loans	2,993	2,766	3,248	2,650
Agricultural and farmland \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,070	1,088
Individually evaluated for impairment, Allowance for loan losses	71	85
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	210,206	211,744
Individually evaluated for impairment, Loans	11,171	10,927
Total	229,608	231,162
Collectively evaluated for impairment, Allowance for loan losses	1,618	1,486
Individually evaluated for impairment, Allowance for loan losses	261	270
Total investments in loans	2,122	1,779	2,353	2,506
Commercial real estate - owner occupied \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	8,231	8,491
Individually evaluated for impairment, Allowance for loan losses	243	23
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	522,305	561,277
Individually evaluated for impairment, Loans	3,367	3,398
Total	540,515	579,757
Collectively evaluated for impairment, Allowance for loan losses	4,354	3,591
Individually evaluated for impairment, Allowance for loan losses	68	70
Total investments in loans	4,432	3,663	2,722	2,644
Commercial real estate - non-owner occupied \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	14,843	15,082
Individually evaluated for impairment, Allowance for loan losses	10	2
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	175,874	176,273
Individually evaluated for impairment, Loans		1,324
Total	177,172	179,073
Collectively evaluated for impairment, Allowance for loan losses	1,467	1,019
Total investments in loans	1,474	1,024	972	912
Multi-family \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,298	1,476
Individually evaluated for impairment, Allowance for loan losses	7	5
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	225,768	217,708
Individually evaluated for impairment, Loans	3,120	3,782
Total	232,311	224,887
Collectively evaluated for impairment, Allowance for loan losses	2,771	2,283
Individually evaluated for impairment, Allowance for loan losses	323	567
Total investments in loans	3,223	2,977	3,897	4,176
Construction and land development \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	3,423	3,397
Individually evaluated for impairment, Allowance for loan losses	129	127
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	292,250	291,624
Individually evaluated for impairment, Loans	11,394	11,349
Total	313,925	313,580
Collectively evaluated for impairment, Allowance for loan losses	2,524	1,684
Individually evaluated for impairment, Allowance for loan losses	719	822
Total investments in loans	3,284	2,540	3,067	2,782
One-to-four family residential \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	10,281	10,607
Individually evaluated for impairment, Allowance for loan losses	41	34
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	97,603	106,448
Individually evaluated for impairment, Loans	13,762	13,872
Total	111,454	120,416
Collectively evaluated for impairment, Allowance for loan losses	899	931
Individually evaluated for impairment, Allowance for loan losses	3,435	2,176
Total investments in loans	4,335	3,109	$ 992	$ 1,091
Municipal, consumer, and other \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	89	96
Individually evaluated for impairment, Allowance for loan losses	$ 1	$ 2

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Individually evaluated for impairment by category of loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Unpaid Principal Balance
With an allowance recorded	$ 23,588		$ 22,029
With no related allowance	41,754		47,386
Total	65,342		69,415
Recorded Investment
With an allowance recorded	23,544		21,991
With no related allowance	41,695		47,360
Total	65,239		69,351
Related Allowance	6,755		6,180
Average Recorded Investment
With an allowance recorded	23,798	$ 18,934
With no related allowance	42,271	51,989
Total	66,069	70,923
Interest Income Recognized
With an allowance recorded	217	212
With no related allowance	513	485
Total	730	697
Commercial and industrial
Unpaid Principal Balance
With an allowance recorded	3,458		4,292
With no related allowance	5,665		6,438
Total	9,123		10,730
Recorded Investment
With an allowance recorded	3,458		4,292
With no related allowance	5,664		6,441
Total	9,122		10,733
Related Allowance	1,859		2,170
Average Recorded Investment
With an allowance recorded	3,486	3,122
With no related allowance	5,941	11,251
Total	9,427	14,373
Interest Income Recognized
With an allowance recorded	49	35
With no related allowance	58	93
Total	107	128
Agricultural and farmland
Unpaid Principal Balance
With an allowance recorded	569		590
With no related allowance	12,753		13,369
Total	13,322		13,959
Recorded Investment
With an allowance recorded	565		590
With no related allowance	12,738		13,376
Total	13,303		13,966
Related Allowance	90		105
Average Recorded Investment
With an allowance recorded	573	1,733
With no related allowance	12,520	9,562
Total	13,093	11,295
Interest Income Recognized
With an allowance recorded	4	20
With no related allowance	161	101
Total	165	121
Commercial real estate - owner occupied
Unpaid Principal Balance
With an allowance recorded	824		830
With no related allowance	10,348		10,089
Total	11,172		10,919
Recorded Investment
With an allowance recorded	824		830
With no related allowance	10,347		10,097
Total	11,171		10,927
Related Allowance	261		270
Average Recorded Investment
With an allowance recorded	828	6,450
With no related allowance	10,432	13,024
Total	11,260	19,474
Interest Income Recognized
With an allowance recorded	11	69
With no related allowance	131	133
Total	142	202
Commercial real estate - non-owner occupied
Unpaid Principal Balance
With an allowance recorded	98		99
With no related allowance	3,263		3,297
Total	3,361		3,396
Recorded Investment
With an allowance recorded	98		99
With no related allowance	3,269		3,299
Total	3,367		3,398
Related Allowance	68		70
Average Recorded Investment
With an allowance recorded	99	103
With no related allowance	3,340	8,242
Total	3,439	8,345
Interest Income Recognized
With an allowance recorded	2	2
With no related allowance	41	87
Total	43	89
Multi-family
Unpaid Principal Balance
With no related allowance			1,328
Total			1,328
Recorded Investment
With no related allowance			1,324
Total			1,324
Average Recorded Investment
With an allowance recorded		1,359
Total		1,359
Interest Income Recognized
With an allowance recorded		18
Total		18
Construction and land development
Unpaid Principal Balance
With an allowance recorded	3,014		3,679
With no related allowance	107		104
Total	3,121		3,783
Recorded Investment
With an allowance recorded	3,014		3,679
With no related allowance	106		103
Total	3,120		3,782
Related Allowance	323		567
Average Recorded Investment
With an allowance recorded	3,064	2,892
With no related allowance	324	123
Total	3,388	3,015
Interest Income Recognized
With an allowance recorded	41	44
With no related allowance	4	1
Total	45	45
One-to-four family residential
Unpaid Principal Balance
With an allowance recorded	3,184		3,401
With no related allowance	8,257		7,986
Total	11,441		11,387
Recorded Investment
With an allowance recorded	3,171		3,390
With no related allowance	8,223		7,959
Total	11,394		11,349
Related Allowance	719		822
Average Recorded Investment
With an allowance recorded	3,261	3,034
With no related allowance	8,344	9,641
Total	11,605	12,675
Interest Income Recognized
With an allowance recorded	27	22
With no related allowance	62	69
Total	89	91
Municipal, consumer, and other
Unpaid Principal Balance
With an allowance recorded	12,441		9,138
With no related allowance	1,361		4,775
Total	13,802		13,913
Recorded Investment
With an allowance recorded	12,414		9,111
With no related allowance	1,348		4,761
Total	13,762		13,872
Related Allowance	3,435		$ 2,176
Average Recorded Investment
With an allowance recorded	12,487	241
With no related allowance	1,370	146
Total	13,857	387
Interest Income Recognized
With an allowance recorded	83	2
With no related allowance	56	1
Total	$ 139	$ 3

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Past Due Status (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accruing Interest
Current	$ 2,112,315	$ 2,141,360
Nonaccrual	15,372	19,019
Total	2,132,952	2,163,826
30 - 89 Days Past Due
Accruing Interest
Past due	5,001	3,346
90+ Days Past Due
Accruing Interest
Past due	264	101
Commercial and industrial
Accruing Interest
Current	295,114	301,975
Nonaccrual	3,908	4,642
Total	299,266	307,175
Commercial and industrial \| 30 - 89 Days Past Due
Accruing Interest
Past due	244	558
Agricultural and farmland
Accruing Interest
Current	222,877	201,519
Nonaccrual	5,824	6,257
Total	228,701	207,776
Commercial real estate - owner occupied
Accruing Interest
Current	227,160	228,218
Nonaccrual	806	2,003
Total	229,608	231,162
Commercial real estate - owner occupied \| 30 - 89 Days Past Due
Accruing Interest
Past due	1,642	941
Commercial real estate - non-owner occupied
Accruing Interest
Current	539,807	579,626
Nonaccrual	223
Total	540,515	579,757
Commercial real estate - non-owner occupied \| 30 - 89 Days Past Due
Accruing Interest
Past due	485	131
Multi-family
Accruing Interest
Current	177,172	177,696
Nonaccrual		1,377
Total	177,172	179,073
Construction and land development
Accruing Interest
Current	232,142	224,716
Nonaccrual	169	31
Total	232,311	224,887
Construction and land development \| 30 - 89 Days Past Due
Accruing Interest
Past due		140
One-to-four family residential
Accruing Interest
Current	307,003	307,712
Nonaccrual	4,242	4,464
Total	313,925	313,580
One-to-four family residential \| 30 - 89 Days Past Due
Accruing Interest
Past due	2,416	1,329
One-to-four family residential \| 90+ Days Past Due
Accruing Interest
Past due	264	75
Municipal, consumer, and other
Accruing Interest
Current	111,040	119,898
Nonaccrual	200	245
Total	111,454	120,416
Municipal, consumer, and other \| 30 - 89 Days Past Due
Accruing Interest
Past due	$ 214	247
Municipal, consumer, and other \| 90+ Days Past Due
Accruing Interest
Past due		$ 26

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Assigned Risk Ratings (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	$ 2,132,952	$ 2,163,826
Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,940,713	1,964,810
Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	123,944	126,596
Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	68,295	72,420
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	299,266	307,175
Commercial and industrial \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	262,646	267,645
Commercial and industrial \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	25,831	27,114
Commercial and industrial \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	10,789	12,416
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	228,701	207,776
Agricultural and farmland \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	202,195	180,735
Agricultural and farmland \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	12,409	12,267
Agricultural and farmland \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	14,097	14,774
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	229,608	231,162
Commercial real estate - owner occupied \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	197,131	198,710
Commercial real estate - owner occupied \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	20,884	21,745
Commercial real estate - owner occupied \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	11,593	10,707
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	540,515	579,757
Commercial real estate - non-owner occupied \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	490,549	531,694
Commercial real estate - non-owner occupied \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	48,008	46,092
Commercial real estate - non-owner occupied \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,958	1,971
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	177,172	179,073
Multi-family \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	175,824	175,807
Multi-family \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,348	1,771
Multi-family \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total		1,495
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	232,311	224,887
Construction and land development \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	225,022	217,120
Construction and land development \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	3,765	3,582
Construction and land development \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	3,524	4,185
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	313,925	313,580
One-to-four family residential \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	289,942	287,036
One-to-four family residential \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	11,406	13,546
One-to-four family residential \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	12,577	12,998
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	111,454	120,416
Municipal, consumer, and other \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	97,404	106,063
Municipal, consumer, and other \| Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	293	479
Municipal, consumer, and other \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	$ 13,757	$ 13,874

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Financial Effect of Troubled Debt Restructurings (Details)	3 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($) loan	Dec. 31, 2019 USD ($)
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Number of Loans \| loan		1
Recorded Investment, Pre-Modification		$ 285,000
Recorded Investment, Post-Modification		285,000
Charge-offs and Specific Reserves		30,000
Troubled debt restructuring subsequent payment defaults within 12 months	$ 0	$ 672,000
Troubled debt restructurings	$ 8,805,000		$ 9,315,000
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Number of Loans \| loan		1
Recorded Investment, Pre-Modification		$ 285,000
Recorded Investment, Post-Modification		285,000
Charge-offs and Specific Reserves		$ 30,000

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Accretable Yield For Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Changes in accretable yield for loans acquired with deteriorated credit quality
Beginning balance	$ 1,662	$ 2,101
Reclassification from non-accretable difference	8	136
Accretion income	(160)	(527)
Ending balance	$ 1,510	$ 1,710

LOAN SERVICING - Mortgage Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Beginning balance	$ 8,518
Ending balance	6,347		$ 8,518
Mortgage Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Beginning balance	8,518	$ 10,918	10,918
Capitalized servicing rights	214	160
Attributable to payments and principal reductions	(403)	(306)
Attributable to changes in valuation inputs and assumptions	(1,982)	(856)
Fair value adjustment	2,385	1,162
Ending balance	6,347	$ 9,916	8,518
Mortgage loans serviced for others	$ 1,127,059		$ 1,152,535

FORECLOSED ASSETS - Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
FORECLOSED ASSETS
Beginning balance	$ 5,099	$ 9,559
Transfers from loans	19	1,408
Proceeds from sales	(677)	(511)
Sales through loan origination		(269)
Net gain (loss) on sales	75	89
Direct write-downs	(47)	(125)
Ending balance	$ 4,469	$ 10,151

FORECLOSED ASSETS - Gains (losses) on Foreclosed Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
FORECLOSED ASSETS
Direct write-downs	$ (47)	$ (125)
Net gain (loss) on sales	75	89
Guarantee reimbursements	7	19
Gains (losses) on foreclosed assets	$ 35	$ (17)

FORECLOSED ASSETS - Additional Information (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020 USD ($) loan	Dec. 31, 2019 USD ($) loan	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
FORECLOSED ASSETS
Carrying value of foreclosed asset	$ 4,469	$ 5,099	$ 10,151	$ 9,559
One-to-four family residential real estate property
FORECLOSED ASSETS
Carrying value of foreclosed asset	$ 980	$ 1,037
Number of loans in the process of foreclosure \| loan	8	10
Loan amount in the process of foreclosure	$ 564	$ 588

DEPOSITS - Interest bearing Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
DEPOSITS
Noninterest-bearing Deposit Liabilities	$ 676,341	$ 689,116
Interest-bearing demand	810,074	814,639
Money market	472,532	477,765
Savings	444,137	438,927
Deposits of executive officers, directors, significant shareholders	327,219	356,408
Total interest-bearing deposits	2,053,962	2,087,739
Total deposits	$ 2,730,303	$ 2,776,855

DEPOSITS - Interest bearing Deposits - Narrative (Detail) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
DEPOSITS
Reciprocal transaction deposits, Money market deposits	$ 24,510	$ 14,309
Reciprocal transaction deposits, Time deposits	3,679	3,538
Time deposits in denominations of $250,000 or more	28,060	44,754
Time deposits in denominations of $100,000 or more	110,055	130,293
Deposits of executive officers, directors, significant shareholders	$ 327,219	$ 356,408

DEPOSITS - Interest expense on Deposits (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
DEPOSITS
Interest-bearing demand	$ 251	$ 417
Money market	394	370
Savings	70	68
Time	880	1,128
Total interest expense on deposits	$ 1,595	$ 1,983

BORROWINGS (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
BORROWINGS
Borrowings	$ 0	$ 0
Loans pledged, served as collateral	534,220	548,229
Loans pledged in association with Mortgage Partnership Finance Program	355	355
FHLB Line of credit
BORROWINGS
Borrowings	0	0
FRB Line of credit
BORROWINGS
Borrowings	0	0
Loans pledged, served as collateral	$ 531	$ 515

SUBORDINATED DEBENTURES (Details) $ in Thousands	3 Months Ended
SUBORDINATED DEBENTURES (Details) $ in Thousands	Mar. 31, 2020 USD ($) subsidiary	Dec. 31, 2019 USD ($)
SUBORDINATED DEBENTURES
Number of subsidiary business trusts \| subsidiary	5
Subordinated debentures	$ 37,599	$ 37,583
Heartland Bancorp, Inc. Capital Trust B
SUBORDINATED DEBENTURES
Subordinated debentures	10,310	10,310
Heartland Bancorp, Inc. Capital Trust C
SUBORDINATED DEBENTURES
Subordinated debentures	10,310	10,310
Heartland Bancorp, Inc. Capital Trust D
SUBORDINATED DEBENTURES
Subordinated debentures	5,155	5,155
FFBI Capital Trust I
SUBORDINATED DEBENTURES
Subordinated debentures	7,217	7,217
National Bancorp Statutory Trust I
SUBORDINATED DEBENTURES
Subordinated debentures	$ 4,607	$ 4,591

SUBORDINATED DEBENTURES - Interest rate and maturities (Details)	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Heartland Bancorp, Inc. Capital Trust B
SUBORDINATED DEBENTURES
Interest Rate	4.58%	4.74%
Heartland Bancorp, Inc. Capital Trust B \| LIBOR
SUBORDINATED DEBENTURES
Spread on interest rate basis	2.75%
Heartland Bancorp, Inc. Capital Trust C
SUBORDINATED DEBENTURES
Interest Rate	2.27%	3.42%
Heartland Bancorp, Inc. Capital Trust C \| LIBOR
SUBORDINATED DEBENTURES
Spread on interest rate basis	1.53%
Heartland Bancorp, Inc. Capital Trust D
SUBORDINATED DEBENTURES
Interest Rate	2.09%	3.24%
Heartland Bancorp, Inc. Capital Trust D \| LIBOR
SUBORDINATED DEBENTURES
Spread on interest rate basis	1.35%
FFBI Capital Trust I
SUBORDINATED DEBENTURES
Interest Rate	4.63%	4.79%
FFBI Capital Trust I \| LIBOR
SUBORDINATED DEBENTURES
Spread on interest rate basis	2.80%
National Bancorp Statutory Trust I
SUBORDINATED DEBENTURES
Interest Rate	3.64%	4.79%
National Bancorp Statutory Trust I \| LIBOR
SUBORDINATED DEBENTURES
Spread on interest rate basis	2.90%

SUBORDINATED DEBENTURES - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) period
SUBORDINATED DEBENTURES
Maximum deferred interest period quarters \| period	10
Period shorten the maturity date from the event	90 days
Trust preferred securities qualified as Tier 1 capital	100.00%
National Bancorp Statutory Trust I
SUBORDINATED DEBENTURES
Contractual obligation \| $	$ 5,773

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($)		3 Months Ended
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($)	Jun. 25, 2019	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Cash pledged		$ 1,630,000	$ 710,000
Securities pledged		10,618,000	$ 8,713,000
Interest rate swap \| Cash flow hedge \| Variable-rate borrowings
DERIVATIVE FINANCIAL INSTRUMENTS
Notional amount				$ 10,000,000
Amount received	$ 174,000
Unrealized gain		$ 29,000

DERIVATIVE FINANCIAL INSTRUMENTS - Derivative instrument assets and liabilities (Details) - Designated - Interest rate swap - Cash flow hedge - Other liabilities. - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial liability fair value	$ (1,612)	$ (676)
Derivative financial liability notional amount	$ 17,000	$ 17,000

DERIVATIVE FINANCIAL INSTRUMENTS - Interest rate contracts designated as cash flow hedges (Details) - Cash flow hedge - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Amounts of gross gain (loss) reclassified from accumulated other comprehensive income	$ (2)	$ 30
Taxable loan interest income
DERIVATIVE FINANCIAL INSTRUMENTS
Amounts of gross gain (loss) reclassified from accumulated other comprehensive income	32	$ 30
Subordinated debentures interest expense
DERIVATIVE FINANCIAL INSTRUMENTS
Amounts of gross gain (loss) reclassified from accumulated other comprehensive income	$ (34)

DERIVATIVE FINANCIAL INSTRUMENTS - Interest rate contracts not designated as hedging instruments (Details) - Not designated - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
DERIVATIVE FINANCIAL INSTRUMENTS
Gross gains		$ 1,169
Gross losses		$ (1,169)
Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Gross gains	$ 13,571
Gross losses	(13,571)
Other assets. \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount	137,216		$ 138,356
Derivative financial assets fair value	21,946		8,642
Other assets. \| Commercial Borrower \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount	137,216		114,140
Derivative financial assets fair value	21,946		8,532
Other assets. \| Financial Institutions Borrower \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount			24,216
Derivative financial assets fair value			110
Other liabilities. \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount	137,216		138,356
Derivative financial liabilities fair value	(21,946)		(8,642)
Other liabilities. \| Commercial Borrower \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount			24,216
Derivative financial liabilities fair value			(110)
Other liabilities. \| Financial Institutions Borrower \| Interest rate swap
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount	137,216		114,140
Derivative financial liabilities fair value	$ (21,946)		$ (8,532)

ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance	$ 332,918	$ 340,396
Other comprehensive income (loss) before reclassifications	6,632	5,412
Reclassifications	(7)	(112)
Other comprehensive income (loss), before tax	6,625	5,300
Income tax expense (benefit)	1,888
Other comprehensive income (loss), after tax	4,737	5,300
Balance	339,813	328,593
Accumulated Other Comprehensive Income (Loss)
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance	7,832	(4,288)
Other comprehensive income (loss), after tax	4,737	5,300
Balance	12,569	1,012
Unrealized gains (losses) on debt securities available-for-sale
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance	8,659	(4,561)
Other comprehensive income (loss) before reclassifications	7,602	5,656
Other comprehensive income (loss), before tax	7,602
Income tax expense (benefit)	2,166
Other comprehensive income (loss), after tax	5,436	5,656
Balance	14,095	1,095
Unrealized gains (losses) on debt securities held-to-maturity
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance	(131)	122
Reclassifications	(9)	(82)
Other comprehensive income (loss), before tax	(9)
Income tax expense (benefit)	(2)
Other comprehensive income (loss), after tax	(7)	(82)
Balance	(138)	40
Derivatives
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance	(696)	151
Other comprehensive income (loss) before reclassifications	(970)	(244)
Reclassifications	2	(30)
Other comprehensive income (loss), before tax	(968)
Income tax expense (benefit)	(276)
Other comprehensive income (loss), after tax	(692)	(274)
Balance	$ (1,388)	$ (123)

INCOME TAXES - Allocation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Current
Federal	$ 1,721
State	988	$ 215
Total current	2,709	215
Deferred
Federal	(457)
State	(221)
Total deferred	(678)
Income tax expense	$ 2,031	$ 215

INCOME TAXES - Federal income tax (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Federal income tax expense:
Federal income tax, at statutory rate	$ 1,733
Federal income tax, at statutory rate (as a percent)	21.00%
Increase (decrease) resulting from:
Federally tax exempt interest income	$ (357)
Federally tax exempt interest income (as a percent)	(4.30%)
State taxes, net of federal benefit	$ 631	$ 215
State taxes, net of federal benefit (as a percent)	7.60%	1.10%
Other	$ 24
Other (as a percent)	0.30%
Income tax expense	$ 2,031	$ 215
Total (as a percent)	24.60%	1.10%

INCOME TAXES - Components of net deferred tax asset (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Deferred tax assets
Allowance for loan losses	$ 7,378	$ 6,309
Compensation related	5,482	5,859
Nonaccrual interest	631	858
Foreclosed assets	74	574
Goodwill	482	531
Other	1,460	1,282
Total deferred tax assets	15,507	15,413
Deferred tax liabilities
Fixed asset depreciation	4,146	4,201
Mortgage servicing rights	1,809	2,428
Other purchase accounting adjustments	1,327	1,356
Intangible assets	773	841
Prepaid assets	425	504
Net unrealized gain on debt securities available-for-sale	4,418	2,251
Other	413	426
Total deferred tax liabilities	13,311	12,007
Net deferred tax asset	$ 2,196	$ 3,406

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
EARNINGS PER SHARE
Antidilutive securities excluded from the computation of diluted earnings per share	14,880	0
Numerator:
Net income	$ 6,221	$ 18,736
Earnings allocated to unvested restricted stock units	(15)
Numerator for earnings per share - basic	6,206	18,736
Numerator for earnings per share - diluted	$ 6,206	$ 18,736
Denominator:
Weighted average common shares outstanding	27,457,306	18,027,512
Weighted average common shares outstanding, including all dilutive potential shares	27,457,306	18,027,512
EARNINGS PER SHARE - BASIC	$ 0.23	$ 1.04
EARNINGS PER SHARE - DILUTED	$ 0.23	$ 1.04

DEFERRED COMPENSATION (Details) - SERP - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
DEFERRED COMPENSATION
Deferred compensation liability	$ 13,589		$ 12,789
Deferred compensation expense	$ 970	$ 125
Period over which SERP benefit payments to be paid	30 years

STOCK-BASED COMPENSATION PLANS (Details) $ / shares in Units, $ in Thousands		3 Months Ended
	Jan. 28, 2020 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) item installment $ / shares shares	Mar. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares	Oct. 09, 2019 shares	Dec. 31, 2018 $ / shares
STOCK-BASED COMPENSATION PLANS
Number of shares participant is entitled to receive \| item		1
Total stock-based compensation expense (benefit)		$ (268)	$ (115)
Restricted Stock Units
STOCK-BASED COMPENSATION PLANS
Granted (in units) \| shares		73,150
Granted (in dollars per unit) \| $ / shares		$ 19.03
Total stock-based compensation expense (benefit)		$ 67
Unrecognized compensation cost related to non-vested stock-based compensation agreements		$ 1,325
Outstanding (in dollars per unit) \| $ / shares		$ 19.03
Restricted Stock Units \| Key employees
STOCK-BASED COMPENSATION PLANS
Shares granted \| shares	70,400
Vesting period	4 years
Restricted Stock Units \| Non employee directors
STOCK-BASED COMPENSATION PLANS
Shares granted \| shares	2,750
Granted (in dollars per unit) \| $ / shares	$ 19.03
Fair value of units granted	$ 1,392
Stock Appreciation Rights
STOCK-BASED COMPENSATION PLANS
Granted (in units) \| shares
Total stock-based compensation expense (benefit)		$ (335)	$ (115)
Unrecognized compensation cost related to non-vested stock-based compensation agreements		$ 23
Number of installments \| installment		4
Stock appreciation rights plan liability recorded for the outstanding units		$ 74		$ 409
Stock appreciation rights plan liability recorded for the previously exercised units		$ 1,206		$ 1,512
Number of equal annual instalments in which the liability recorded for previously exercised units will be paid \| installment		4
Outstanding (in dollars per unit) \| $ / shares		$ 16.32	$ 5.73	$ 16.32		$ 5.73
Omnibus Incentive Plan
STOCK-BASED COMPENSATION PLANS
Authorized number of shares \| shares					1,820,000

STOCK-BASED COMPENSATION PLANS - Summary (Details) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Restricted Stock Units
Stock Appreciation Rights
Granted (in units)	73,150
Outstanding (in units)	73,150
Weighted Average Grant Date Assigned Value
Granted (in dollars per unit)	$ 19.03
Outstanding (in dollars per unit)	$ 19.03
Weighted average remaining contractual term	3 years 8 months 12 days
Stock Appreciation Rights
Stock Appreciation Rights
Outstanding (in units)	110,160	91,800
Granted (in units)
Outstanding (in units)	110,160	91,800
Exercisable (in shares)	79,560
Weighted Average Grant Date Assigned Value
Outstanding (in dollars per unit)	$ 16.32	$ 5.73
Outstanding (in dollars per unit)	$ 16.32	$ 5.73
Weighted average remaining contractual term	9 years 4 months 24 days

STOCK-BASED COMPENSATION PLANS - Summary of assumptions used (Details) - Stock Appreciation Rights	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.67%	1.90%
Expected volatility	32.47%	28.83%
Expected life (in years)	9 years 4 months 24 days	9 years 8 months 12 days
Expected dividend yield	5.70%	3.16%

REGULATORY MATTERS (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
REGULATORY MATTERS
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	2.50%	2.50%
Heartland Bank
REGULATORY MATTERS
Total Capital (to Risk Weighted Assets), Actual Amount	$ 322,026	$ 315,516
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	177,196	180,071
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	221,495	225,088
Tier 1 Capital (to Risk Weighted Assets), Actual Amount	298,547	295,385
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	132,897	135,053
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	177,196	180,071
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount	298,547	295,385
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	99,673	101,290
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	143,972	146,307
Tier 1 Capital (to Average Assets), Actual Amount	298,547	295,385
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount	113,149	115,281
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 141,436	$ 144,102
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	14.54%	14.02%
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	8.00%	8.00%
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	10.00%	10.00%
Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	13.48%	13.12%
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	6.00%	6.00%
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	8.00%	8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	13.48%	13.12%
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.50%	4.50%
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to Average Assets), Actual Ratio (as a percent)	10.55%	10.25%
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.00%	4.00%
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	5.00%	5.00%
Lincoln Bank
REGULATORY MATTERS
Total Capital (to Risk Weighted Assets), Actual Amount	$ 35,356	$ 35,390
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	15,944	16,104
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	19,930	20,130
Tier 1 Capital (to Risk Weighted Assets), Actual Amount	32,863	33,222
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	11,958	12,078
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	15,944	16,104
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount	32,863	33,222
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	8,969	9,058
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	12,955	13,084
Tier 1 Capital (to Average Assets), Actual Amount	32,863	33,222
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount	12,735	13,531
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 15,919	$ 16,914
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	17.74%	17.58%
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	8.00%	8.00%
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	10.00%	10.00%
Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	16.49%	16.50%
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	6.00%	6.00%
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	8.00%	8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	16.49%	16.50%
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.50%	4.50%
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to Average Assets), Actual Ratio (as a percent)	10.32%	9.82%
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.00%	4.00%
Tier 1 Capital (to Average Assets), To Be well Capitalized Under Prompt Corrective Action Provisions Ratio (as a percent)	5.00%	5.00%
Consolidated HBT
REGULATORY MATTERS
Total Capital (to Risk Weighted Assets), Actual Amount	$ 363,205	$ 356,994
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	193,326	196,358
Tier 1 Capital (to Risk Weighted Assets), Actual Amount	337,118	334,695
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	144,995	147,268
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount	300,684	298,277
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	108,746	110,451
Tier 1 Capital (to Average Assets), Actual Amount	337,118	334,695
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount	$ 125,991	$ 129,027
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	15.03%	14.54%
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	8.00%	8.00%
Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	13.95%	13.64%
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	6.00%	6.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	12.44%	12.15%
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.50%	4.50%
Tier 1 Capital (to Average Assets), Actual Ratio (as a percent)	10.70%	10.38%
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.00%	4.00%

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring basis (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
FAIR VALUE OF FINANCIAL INSTRUMENTS
Transfer of assets from level 1 to level 2	$ 0	$ 0
Transfer of assets from level 2 to level 1	0	0
Transfer of assets in to level 3	0	0
Transfer of assets out of level 3	0	0
Transfer of liabilities from level 1 to level 2	0	0
Transfer of liabilities from level 2 to level 1	0	$ 0
Debt securities available-for-sale, at fair value	615,565		$ 592,404
Equity securities	3,207		3,241
Fair value	6,347		8,518
U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	51,175		49,615
Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	168,245		133,738
Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	188,618		200,678
Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	132,517		134,954
Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	75,010		73,419
Recurring
FAIR VALUE OF FINANCIAL INSTRUMENTS
Equity securities	3,207		3,241
Fair value	6,347		8,518
Derivative financial assets fair value	21,946		8,642
Derivative financial liabilities fair value	23,558		9,318
Recurring \| U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	51,175		49,615
Recurring \| Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	168,245		133,738
Recurring \| Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	188,618		200,678
Recurring \| Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	132,517		134,954
Recurring \| Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	75,010		73,419
Recurring \| Level 1
FAIR VALUE OF FINANCIAL INSTRUMENTS
Equity securities	3,207		3,241
Recurring \| Level 2
FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivative financial assets fair value	21,946		8,642
Derivative financial liabilities fair value	23,558		9,318
Recurring \| Level 2 \| U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	51,175		49,615
Recurring \| Level 2 \| Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	168,245		133,738
Recurring \| Level 2 \| Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	188,618		200,678
Recurring \| Level 2 \| Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	132,517		134,954
Recurring \| Level 2 \| Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	75,010		73,419
Recurring \| Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 6,347		$ 8,518

FAIR VALUE OF FINANCIAL INSTRUMENTS - Mortgage Servicing Rights (Details) $ in Thousands	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 6,347	$ 8,518
Recurring
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	6,347	8,518
Recurring \| Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 6,347	$ 8,518
Valuation Technique	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Recurring \| Level 3 \| Constant pre-payment rates (CPR)
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 6,347	$ 8,518
Recurring \| Level 3 \| Constant pre-payment rates (CPR) \| Minimum
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	7.0	7.0
Recurring \| Level 3 \| Constant pre-payment rates (CPR) \| Maximum
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	59.1	68.5
Recurring \| Level 3 \| Constant pre-payment rates (CPR) \| Weighted average
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	15.7	12.3
Recurring \| Level 3 \| Discount rate \| Minimum
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	9.0	9.0
Recurring \| Level 3 \| Discount rate \| Maximum
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	11.0	11.0
Recurring \| Level 3 \| Discount rate \| Weighted average
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	9.0	9.0

FAIR VALUE OF FINANCIAL INSTRUMENTS - Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
FAIR VALUE OF FINANCIAL INSTRUMENTS
Loans held for sale	$ 4,805	$ 4,531
Collateral-dependent impaired loans	16,789	15,811
Bank premises held for sale	121	121
Foreclosed assets	4,469	5,099
Level 2
FAIR VALUE OF FINANCIAL INSTRUMENTS
Loans held for sale	4,805	4,531
Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Collateral-dependent impaired loans	16,789	15,811
Bank premises held for sale	121	121
Foreclosed assets	$ 4,469	$ 5,099

FAIR VALUE OF FINANCIAL INSTRUMENTS - Unobservable inputs used in nonrecurring measurements (Details) - Nonrecurring - Level 3 $ in Thousands	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Collateral-dependent impaired loans
FAIR VALUE OF FINANCIAL INSTRUMENTS
Alternative Investment, Measurement Input [Extensible List]	hbt:AppraisalAdjustmentsMember	hbt:AppraisalAdjustmentsMember
Collateral-dependent impaired loans \| Appraisal of collateral
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value	$ 16,789	$ 15,811
Bank premises held for sale
FAIR VALUE OF FINANCIAL INSTRUMENTS
Alternative Investment, Measurement Input [Extensible List]	hbt:AppraisalAdjustmentsMember	hbt:AppraisalAdjustmentsMember
Bank premises held for sale \| Appraisal
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value	$ 121	$ 121
Measurement input	7	7
Bank premises held for sale \| Appraisal \| Weighted average
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	7	7
Foreclosed assets
FAIR VALUE OF FINANCIAL INSTRUMENTS
Alternative Investment, Measurement Input [Extensible List]	hbt:AppraisalAdjustmentsMember	hbt:AppraisalAdjustmentsMember
Foreclosed assets \| Appraisal
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value	$ 4,469	$ 5,099
Measurement input	7	7
Foreclosed assets \| Appraisal \| Weighted average
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	7	7

FAIR VALUE OF FINANCIAL INSTRUMENTS - Carrying amount and estimated fair value (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Financial assets:
Debt securities held-to-maturity	$ 83,564	$ 90,529
Level 1 \| Carrying Amount
Financial assets:
Cash and cash equivalents	265,436	283,971
Interest-bearing time deposits with banks		248
Level 1 \| Estimated Fair Value
Financial assets:
Cash and cash equivalents	265,436	283,971
Interest-bearing time deposits with banks		248
Level 2 \| Carrying Amount
Financial assets:
Debt securities held-to-maturity	79,741	88,477
Accrued interest receivable	12,096	13,951
Financial liabilities:
Securities sold under agreements to repurchase	40,811	44,433
Accrued interest payable	1,024	1,132
Level 2 \| Estimated Fair Value
Financial assets:
Debt securities held-to-maturity	83,564	90,529
Accrued interest receivable	12,096	13,951
Financial liabilities:
Securities sold under agreements to repurchase	40,811	44,433
Accrued interest payable	1,024	1,132
Level 3 \| Carrying Amount
Financial assets:
Restricted stock	2,425	2,425
Loans, net	2,106,865	2,141,527
Investments in unconsolidated subsidiaries	1,165	1,165
Financial liabilities:
Time deposits	327,219	356,408
Subordinated debentures	37,599	37,583
Level 3 \| Estimated Fair Value
Financial assets:
Restricted stock	2,425	2,425
Loans, net	2,134,424	2,181,103
Investments in unconsolidated subsidiaries	1,165	1,165
Financial liabilities:
Time deposits	328,587	355,340
Subordinated debentures	$ 31,431	$ 31,959

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Standby letters of credit
COMMITMENTS AND CONTINGENCIES
Financial instruments off-balance sheet credit risks	$ 9,474	$ 8,991
Commitments to extend credit
COMMITMENTS AND CONTINGENCIES
Financial instruments off-balance sheet credit risks	$ 502,244	$ 542,705