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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number: 001-39085

HBT Financial, Inc.

(Exact name of registrant as specified in its charter)

Delaware

37-1117216

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

401 North Hershey Rd

Bloomington, Illinois 61704

(888) 897-2276

(Address of principal executive offices,
including zip code)

(Registrant’s telephone number,
including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

HBT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of April 27, 2021, there were 27,366,459 shares outstanding of the registrant’s common stock, $0.01 par value.

 

Table of Contents

TABLE OF CONTENTS
HBT Financial, Inc.

    

Page

PART I. FINANCIAL INFORMATION

3

Item 1.

Consolidated Financial Statements

3

Consolidated Balance Sheets

3

Consolidated Statements of Income

4

Consolidated Statements of Comprehensive Income

5

Consolidated Statement of Changes in Stockholders’ Equity

6

Consolidated Statements of Cash Flows

7

Notes to Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

47

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

80

Item 4.

Controls and Procedures

81

PART II. OTHER INFORMATION

82

Item 1.

Legal Proceedings

82

Item 1A.

Risk Factors

82

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

82

Item 3.

Defaults Upon Senior Securities

82

Item 4.

Mine Safety Disclosures

83

Item 5.

Other Information

83

Item 6.

Exhibits

83

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this quarterly report are forward-looking statements. Forward-looking statements may include statements relating to our plans, strategies and expectations, the economic impact of the COVID-19 pandemic and our future financial results, near-term loan growth, net interest margin, mortgage banking profits, wealth management fees, expenses, asset quality, capital levels, continued earnings and liquidity. Forward looking statements are generally identifiable by use of the words "believe," "may," "will," "should," "could," "expect," "estimate," "intend," "anticipate," "project," "plan" or similar expressions. Forward looking statements are frequently based on assumptions that may or may not materialize and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or prospects include, but are not limited to:

our asset quality and any loan charge-offs;
the composition of our loan portfolio;
time and effort necessary to resolve nonperforming assets and the loans modified or deferred as a result of the impact of the COVID-19 pandemic;
the length and severity of the COVID-19 pandemic, and the effects of the COVID-19 pandemic, including the impact of the pandemic on our operations and the operations of our customers and the communities that we serve;
environmental liability associated with our lending activities;
the effects of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin, our investments, and our loan originations, and our modeling estimates relating to interest rate changes;
changes in and uncertainty related to benchmark interest rates used to price our loans, including the expected elimination of LIBOR;
our access to sources of liquidity and capital to address our liquidity needs;
our inability to receive dividends from the Bank, pay dividends to our common stockholders or satisfy obligations as they become due;
the effects of problems encountered by other financial institutions;
our ability to achieve organic loan and deposit growth and the composition of such growth;
our ability to attract and retain skilled employees or changes in our management personnel;
any failure or interruption of our information and communications systems;
our ability to identify and address cybersecurity risks;
the effects of the failure of any component of our business infrastructure provided by a third party;
our ability to keep pace with technological changes;
our ability to successfully develop and commercialize new or enhanced products and services;
current and future business, economic and market conditions in the United States generally or in Illinois in particular;
the geographic concentration of our operations in the State of Illinois;
our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business;
our ability to attract and retain customer deposits;
our ability to maintain the Bank’s reputation;
severe weather, natural disasters, pandemics, acts of war or terrorism or other external events;
possible impairment of our goodwill and other intangible assets;
the impact of, and changes in applicable laws, regulations and accounting standards and policies;
our prior status as an S Corp;
possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations;
the effectiveness of our risk management and internal disclosure controls and procedures;
market perceptions associated with certain aspects of our business;
our ability to meet our obligations as a public company, including our obligations under Section 404 of Sarbanes-Oxley; damage to our reputation from any of the factors described above; and

1

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the factors discussed in “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations" or elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made.

2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

HBT FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

    

(Unaudited)

   

March 31, 

December 31, 

2021

2020

ASSETS

Cash and due from banks

$

22,976

$

24,912

Interest-bearing deposits with banks

406,760

287,539

Cash and cash equivalents

429,736

312,451

Debt securities available-for-sale, at fair value

856,835

922,869

Debt securities held-to-maturity (fair value of $195,608 in 2021 and $72,441 in 2020)

192,994

68,395

Equity securities with readily determinable fair value

3,332

3,292

Equity securities with no readily determinable fair value

1,552

1,552

Restricted stock, at cost

2,498

2,498

Loans held for sale

12,882

14,713

Loans, net of allowance for loan losses of $28,759 in 2021 and $31,838 in 2020

2,241,946

2,215,168

Bank premises and equipment, net

52,548

52,904

Bank premises held for sale

121

121

Foreclosed assets

4,748

4,168

Goodwill

23,620

23,620

Core deposit intangible assets, net

2,509

2,798

Mortgage servicing rights, at fair value

7,629

5,934

Investments in unconsolidated subsidiaries

1,165

1,165

Accrued interest receivable

12,718

14,255

Other assets

18,781

20,664

Total assets

$

3,865,614

$

3,666,567

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Deposits:

Noninterest-bearing

$

968,991

$

882,939

Interest-bearing

2,386,975

2,247,595

Total deposits

3,355,966

3,130,534

Securities sold under agreements to repurchase

41,976

45,736

Subordinated notes

39,257

39,238

Junior subordinated debentures issued to capital trusts

37,665

37,648

Other liabilities

33,344

49,494

Total liabilities

3,508,208

3,302,650

COMMITMENTS AND CONTINGENCIES (Notes 7 and 18)

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; shares issued of 27,477,531 in 2021 and 27,457,306 in 2020; shares outstanding of 27,382,069 in 2021 and 27,457,306 in 2020

275

275

Surplus

191,004

190,875

Retained earnings

165,735

154,614

Accumulated other comprehensive income

1,906

18,153

Treasury stock at cost, 95,462 shares in 2021

(1,514)

Total stockholders’ equity

357,406

363,917

Total liabilities and stockholders’ equity

$

3,865,614

$

3,666,567

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended March 31, 

    

2021

    

2020

INTEREST AND DIVIDEND INCOME

(dollars in thousands, except per share data)

Loans, including fees:

Taxable

$

25,134

$

26,941

Federally tax exempt

610

674

Securities:

Taxable

3,633

3,334

Federally tax exempt

1,136

1,028

Interest-bearing deposits in bank

80

729

Other interest and dividend income

13

14

Total interest and dividend income

30,606

32,720

INTEREST EXPENSE

Deposits

644

1,595

Securities sold under agreements to repurchase

7

20

Borrowings

1

Subordinated notes

470

Junior subordinated debentures issued to capital trusts

355

443

Total interest expense

1,477

2,058

Net interest income

29,129

30,662

PROVISION FOR LOAN LOSSES

(3,405)

4,355

Net interest income after provision for loan losses

32,534

26,307

NONINTEREST INCOME

Card income

2,258

1,792

Service charges on deposit accounts

1,297

1,834

Wealth management fees

1,972

1,814

Mortgage servicing

685

724

Mortgage servicing rights fair value adjustment

1,695

(2,171)

Gains on sale of mortgage loans

2,100

536

Gains (losses) on securities

40

(52)

Gains (losses) on foreclosed assets

(76)

35

Gains (losses) on other assets

1

(3)

Other noninterest income

836

743

Total noninterest income

10,808

5,252

NONINTEREST EXPENSE

Salaries

12,596

12,754

Employee benefits

1,722

2,434

Occupancy of bank premises

1,938

1,828

Furniture and equipment

623

603

Data processing

1,688

1,586

Marketing and customer relations

565

1,044

Amortization of intangible assets

289

317

FDIC insurance

240

36

Loan collection and servicing

365

348

Foreclosed assets

143

89

Other noninterest expense

2,375

2,268

Total noninterest expense

22,544

23,307

INCOME BEFORE INCOME TAX EXPENSE

20,798

8,252

INCOME TAX EXPENSE

5,553

2,031

NET INCOME

$

15,245

$

6,221

EARNINGS PER SHARE - BASIC

$

0.55

$

0.23

EARNINGS PER SHARE - DILUTED

$

0.55

$

0.23

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING

27,430,912

27,457,306

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended March 31, 

2021

    

2020

(dollars in thousands)

NET INCOME

$

15,245

$

6,221

OTHER COMPREHENSIVE (LOSS) INCOME

Unrealized (losses) gains on debt securities available-for-sale

(23,074)

7,602

Reclassification adjustment for amortization (accretion) of net unrealized gain (loss) on debt securities transferred to held-to-maturity

32

(9)

Unrealized gains (losses) on derivative instruments

219

(970)

Reclassification adjustment for net settlements on derivative instruments

99

2

Total other comprehensive (loss) income, before tax

(22,724)

6,625

Income tax (benefit) expense

(6,477)

1,888

Total other comprehensive (loss) income

(16,247)

4,737

TOTAL COMPREHENSIVE (LOSS) INCOME

$

(1,002)

$

10,958

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

Accumulated

Other

Total

Common Stock

Retained

Comprehensive

Treasury

Stockholders’

    

Shares

    

Amount

    

Surplus

    

Earnings

    

Income (Loss)

    

Stock

    

Equity

(dollars in thousands, except per share data)

Balance, December 31, 2020

27,457,306

$

275

$

190,875

$

154,614

$

18,153

$

$

363,917

Net income

15,245

15,245

Other comprehensive loss

(16,247)

(16,247)

Stock-based compensation

129

129

Issuance of common stock upon vesting of restricted stock units

20,225

Repurchase of common stock

(95,462)

(1,514)

(1,514)

Cash dividends and dividend equivalents ($0.15 per share)

(4,124)

(4,124)

Balance, March 31, 2021

27,382,069

$

275

$

191,004

$

165,735

$

1,906

$

(1,514)

$

357,406

Balance, December 31, 2019

27,457,306

$

275

$

190,524

$

134,287

$

7,832

$

$

332,918

Net income

6,221

6,221

Other comprehensive income

4,737

4,737

Stock-based compensation

67

67

Cash dividends and dividend equivalents ($0.15 per share)

(4,130)

(4,130)

Balance, March 31, 2020

27,457,306

$

275

$

190,591

$

136,378

$

12,569

$

$

339,813

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 

    

2021

    

2020

(dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

15,245

$

6,221

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense

774

690

Provision for loan losses

(3,405)

4,355

Net amortization of debt securities

1,732

790

Amortization of unrealized gain on dedesignated cash flow hedge

(32)

Deferred income tax expense (benefit)

685

(678)

Stock-based compensation

129

67

Net accretion of discount and deferred loan fees on loans

(2,562)

(922)

Net unrealized (gain) loss on equity securities

(40)

52

Net loss on sales of bank premises and equipment

3

Net loss (gain) on sales of foreclosed assets

3

(75)

Write-down of foreclosed assets

73

47

Amortization of intangibles

289

317

(Increase) decrease in mortgage servicing rights

(1,695)

2,171

Amortization of discount and issuance costs on subordinated notes and debentures

36

16

Mortgage loans originated for sale

(71,835)

(32,156)

Proceeds from sale of mortgage loans

75,766

32,418

Net gain on sale of mortgage loans

(2,100)

(536)

Decrease in accrued interest receivable

1,537

1,855

Decrease in other assets

875

887

Decrease in other liabilities

(9,032)

(2,971)

Net cash provided by operating activities

6,475

12,519

CASH FLOWS FROM INVESTING ACTIVITIES

Net change in interest-bearing time deposits with banks

248

Proceeds from paydowns, maturities, and calls of debt securities

59,641

48,305

Purchase of securities

(142,980)

(56,349)

Net (increase) decrease in loans

(21,482)

31,210

Purchases of bank premises and equipment

(418)

(841)

Proceeds from sales of foreclosed assets

15

677

Net cash (used in) provided by investing activities

(105,224)

23,250

CASH FLOWS FROM FINANCING ACTIVITIES

Net increase (decrease) in deposits

225,432

(46,552)

Net decrease in repurchase agreements

(3,760)

(3,622)

Repurchase of common stock

(1,514)

Cash dividends and dividend equivalents paid

(4,124)

(4,130)

Net cash provided by (used in) financing activities

216,034

(54,304)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

117,285

(18,535)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

312,451

283,971

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

429,736

$

265,436

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

Three Months Ended March 31, 

    

2021

    

2020

(dollars in thousands)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest

$

2,077

$

2,166

Cash paid for income taxes

$

$

985

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES

Transfers of loans to foreclosed assets

$

671

$

19

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 (the Bank or Heartland Bank). The Bank provides a comprehensive suite of business, commercial, wealth management and retail banking products and services to individuals, businesses, and municipal entities throughout Central and Northeastern Illinois.

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 12, 2021.

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). The JOBS Act permits emerging growth companies an extended transition period for complying with new or revised accounting standards affecting public companies. The Company has elected to use the extended transition period until the Company is no longer an emerging growth company or until the Company chooses to affirmatively and irrevocably opt out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.

Merger of State Bank of Lincoln into Heartland Bank

On October 20, 2020, Heartland Bank and State Bank of Lincoln, both wholly-owned bank subsidiaries of the Company on that date, entered into a Bank Merger Agreement providing for the merger of State Bank of Lincoln into Heartland Bank. The merger was consummated on December 31, 2020, resulting in Heartland Bank being our sole bank subsidiary, with the branch locations in Lincoln, Illinois operating as “State Bank of Lincoln, a division of Heartland Bank and Trust Company.”

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, goodwill, and income taxes.

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HBT FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Segment Reporting

The Company’s operations consist of one reportable segment called community banking.

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 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.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. In January 2021, the FASB also issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope which refined the scope for certain optional expedients and exceptions for contract modifications and hedge accounting to apply to derivative contracts and certain hedging relationships affected by the discounting transition. Entities may apply the provisions as of the beginning of the reporting period when the election is made and are available until December 31, 2022. The Company is currently evaluating the effect that this standard will have on the consolidated results of operations and financial position.

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HBT FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 2 – SECURITIES

The carrying balances of the securities were as follows:

March 31, 

December 31, 

2021

    

2020

(dollars in thousands)

Debt securities available-for-sale

$

856,835

$

922,869

Debt securities held-to-maturity

192,994

68,395

Equity securities with readily determinable fair value

3,332

3,292

Equity securities with no readily determinable fair value

1,552

1,552

Total securities

$

1,054,713

$

996,108

There were no sales of securities during the three months ended March 31, 2021 and 2020. Gains (losses) on securities were as follows during the three months ended March 31:

Three Months Ended March 31, 

2021

    

2020

(dollars in thousands)

Net realized gains (losses) on sales

$

$

Net unrealized gains (losses) on equity securities:

Readily determinable fair value

40

(52)

No readily determinable fair value

Gains (losses) on securities

$

40

$

(52)

On March 31, 2021, the Company transferred certain debt securities from the available-for-sale category to the held-to-maturity category in order to better reflect the revised intentions of the Company due to possible market value volatility, resulting from a potential rise in interest rates. The following is a summary of the amortized cost and fair value of securities transferred to the held-to-maturity category:

Amortized

Cost

    

Fair Value

(dollars in thousands)

U.S. government agency

$

7,593

$

7,323

Mortgage-backed:

Agency residential

8,776

8,536

Agency commercial

118,792

113,861

Total

$

135,161

$

129,720

The debt securities were transferred between categories at fair value, with the transfer date fair value becoming the new amortized cost for each security transferred. The unrealized gain (loss), net of tax, at the date of transfer remains a component of accumulated other comprehensive income, but will be amortized over the remaining life of the debt securities as an adjustment of yield in a manner consistent with amortization of any premium or discount. As a result, the amortization of an unrealized gain (loss) reported in accumulated other comprehensive income will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held-to-maturity debt security.

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HBT FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Debt Securities

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

March 31, 2021

    

Amortized
Cost

    

Gross
Unrealized
Gains

    

Gross
Unrealized
Losses

    

Fair Value

Available-for-sale:

(dollars in thousands)

U.S. government agency

$

129,494

$

1,785

$

(3,341)

$

127,938

Municipal

280,212

6,479

(4,358)

282,333

Mortgage-backed:

Agency residential

164,942

4,366

(204)

169,104

Agency commercial

208,692

2,861

(3,556)

207,997

Corporate

67,959

1,950

(446)

69,463

Total available-for-sale

851,299

17,441

(11,905)

856,835

Held-to-maturity:

U.S. government agency

7,323

7,323

Municipal

21,067

1,188

22,255

Mortgage-backed:

Agency residential

20,335

388

20,723

Agency commercial

144,269

1,323

(285)

145,307

Total held-to-maturity

192,994

2,899

(285)

195,608

Total debt securities

$

1,044,293

$

20,340

$

(12,190)

$

1,052,443