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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 June 30, 2021

☐ 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 July 27, 2021, there were 27,345,758 shares outstanding of the registrant’s common stock, $0.01 par value.

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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	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	89
Item 4.	Controls and Procedures	90
PART II. OTHER INFORMATION		91
Item 1.	Legal Proceedings	91
Item 1A.	Risk Factors	91
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	91
Item 3.	Defaults Upon Senior Securities	91
Item 4.	Mine Safety Disclosures	92
Item 5.	Other Information	92
Item 6.	Exhibits	92

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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

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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.

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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)
	June 30,		December 31,
	2021		2020
ASSETS
Cash and due from banks	$	47,861	$	24,912
Interest-bearing deposits with banks		497,742		287,539
Cash and cash equivalents		545,603		312,451

Debt securities available-for-sale, at fair value		836,267		922,869
Debt securities held-to-maturity (fair value of $314,924 in 2021 and $72,441 in 2020)		309,132		68,395
Equity securities with readily determinable fair value		3,338		3,292
Equity securities with no readily determinable fair value		1,552		1,552
Restricted stock, at cost		2,739		2,498
Loans held for sale		5,951		14,713
Loans, net of allowance for loan losses of $26,507 in 2021 and $31,838 in 2020		2,125,612		2,215,168
Bank premises and equipment, net		51,900		52,904
Bank premises held for sale		121		121
Foreclosed assets		7,757		4,168
Goodwill		23,620		23,620
Core deposit intangible assets, net		2,251		2,798
Mortgage servicing rights, at fair value		7,319		5,934
Investments in unconsolidated subsidiaries		1,165		1,165
Accrued interest receivable		12,785		14,255
Other assets		16,565		20,664
Total assets	$	3,953,677	$	3,666,567

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	1,011,481	$	882,939
Interest-bearing		2,413,153		2,247,595
Total deposits		3,424,634		3,130,534

Securities sold under agreements to repurchase		46,756		45,736
Subordinated notes		39,277		39,238
Junior subordinated debentures issued to capital trusts		37,681		37,648
Other liabilities		32,135		49,494
Total liabilities		3,580,483		3,302,650

COMMITMENTS AND CONTINGENCIES (Notes 8 and 19)

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 27,355,053 in 2021 and 27,457,306 in 2020		275		275
Surplus		191,185		190,875
Retained earnings		175,328		154,614
Accumulated other comprehensive income		8,386		18,153
Treasury stock at cost, 122,478 shares in 2021		(1,980)		—
Total stockholders’ equity		373,194		363,917
Total liabilities and stockholders’ equity	$	3,953,677	$	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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

INTEREST AND DIVIDEND INCOME	(dollars in thousands, except per share data)
Loans, including fees:
Taxable	$	25,278	$	25,337	$	50,412	$	52,278
Federally tax exempt		540		532		1,150		1,206
Securities:
Taxable		4,058		3,172		7,691		6,506
Federally tax exempt		1,144		1,227		2,280		2,255
Interest-bearing deposits in bank		115		79		195		808
Other interest and dividend income		12		14		25		28
Total interest and dividend income		31,147		30,361		61,753		63,081

INTEREST EXPENSE
Deposits		613		1,042		1,257		2,637
Securities sold under agreements to repurchase		8		11		15		31
Borrowings		—		1		1		1
Subordinated notes		469		—		939		—
Junior subordinated debentures issued to capital trusts		357		399		712		842
Total interest expense		1,447		1,453		2,924		3,511
Net interest income		29,700		28,908		58,829		59,570
PROVISION FOR LOAN LOSSES		(2,162)		3,573		(5,567)		7,928
Net interest income after provision for loan losses		31,862		25,335		64,396		51,642

NONINTEREST INCOME
Card income		2,449		1,998		4,707		3,790
Service charges on deposit accounts		1,390		1,133		2,687		2,967
Wealth management fees		2,005		1,507		3,977		3,321
Mortgage servicing		711		727		1,396		1,451
Mortgage servicing rights fair value adjustment		(310)		(508)		1,385		(2,679)
Gains on sale of mortgage loans		1,562		2,135		3,662		2,671
Gains (losses) on securities		6		57		46		5
Gains (losses) on foreclosed assets		216		58		140		93
Gains (losses) on other assets		(48)		(69)		(47)		(72)
Other noninterest income		793		1,022		1,629		1,765
Total noninterest income		8,774		8,060		19,582		13,312

NONINTEREST EXPENSE
Salaries		12,275		12,674		24,871		25,428
Employee benefits		1,455		2,455		3,177		4,889
Occupancy of bank premises		1,463		1,642		3,401		3,470
Furniture and equipment		603		609		1,226		1,212
Data processing		1,721		1,672		3,409		3,258
Marketing and customer relations		843		817		1,408		1,861
Amortization of intangible assets		258		305		547		622
FDIC insurance		244		218		484		254
Loan collection and servicing		333		494		698		842
Foreclosed assets		319		88		462		177
Other noninterest expense		2,640		2,525		5,015		4,793
Total noninterest expense		22,154		23,499		44,698		46,806
INCOME BEFORE INCOME TAX EXPENSE		18,482		9,896		39,280		18,148
INCOME TAX EXPENSE		4,765		2,477		10,318		4,508
NET INCOME	$	13,717	$	7,419	$	28,962	$	13,640

EARNINGS PER SHARE - BASIC	$	0.50	$	0.27	$	1.06	$	0.50
EARNINGS PER SHARE - DILUTED	$	0.50	$	0.27	$	1.05	$	0.50
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING		27,362,579		27,457,306		27,396,557		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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

	(dollars in thousands)
NET INCOME	$	13,717	$	7,419	$	28,962	$	13,640

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized gains (losses) on debt securities available-for-sale		8,800		6,590		(14,274)		14,192
Reclassification adjustment for amortization (accretion) of net unrealized gain (loss) on debt securities transferred to held-to-maturity		199		6		231		(3)
Unrealized (losses) gains on derivative instruments		(38)		(133)		181		(1,103)
Reclassification adjustment for net settlements on derivative instruments		102		39		201		41
Total other comprehensive income (loss), before tax		9,063		6,502		(13,661)		13,127
Income tax expense (benefit)		2,583		1,860		(3,894)		3,748
Total other comprehensive income (loss)		6,480		4,642		(9,767)		9,379
TOTAL COMPREHENSIVE INCOME	$	20,197	$	12,061	$	19,195	$	23,019

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
	Common Stock							Other				Total
	Shares					Retained		Comprehensive		Treasury		Stockholders’
	Outstanding	Amount		Surplus		Earnings		Income (Loss)		Stock		Equity

	(dollars in thousands, except per share data)
Balance, March 31, 2021	27,382,069	$	275	$	191,004	$	165,735	$	1,906	$	(1,514)	$	357,406
Net income	—		—		—		13,717		—		—		13,717
Other comprehensive income	—		—		—		—		6,480		—		6,480
Stock-based compensation	—		—		181		—		—		—		181
Repurchase of common stock	(27,016)		—		—		—		—		(466)		(466)
Cash dividends and dividend equivalents ($0.15 per share)	—		—		—		(4,124)		—		—		(4,124)
Balance, June 30, 2021	27,355,053	$	275	$	191,185	$	175,328	$	8,386	$	(1,980)	$	373,194

Balance, March 31, 2020	27,457,306	$	275	$	190,591	$	136,378	$	12,569	$	—	$	339,813
Net income	—		—		—		7,419		—		—		7,419
Other comprehensive income	—		—		—		—		4,642		—		4,642
Stock-based compensation	—		—		96		—		—		—		96
Cash dividends and dividend equivalents ($0.15 per share)	—		—		—		(4,130)		—		—		(4,130)
Balance, June 30, 2020	27,457,306	$	275	$	190,687	$	139,667	$	17,211	$	—	$	347,840

See accompanying Notes to Consolidated Financial Statements (Unaudited)

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HBT FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

(Unaudited)


								Accumulated
	Common Stock							Other				Total
	Shares					Retained		Comprehensive		Treasury		Stockholders’
	Outstanding	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	—		—		—		28,962		—		—		28,962
Other comprehensive loss	—		—		—		—		(9,767)		—		(9,767)
Stock-based compensation	—		—		310		—		—		—		310
Issuance of common stock upon vesting of restricted stock units	20,225		—		—		—		—		—		—
Repurchase of common stock	(122,478)		—		—		—		—		(1,980)		(1,980)
Cash dividends and dividend equivalents ($0.30 per share)	—		—		—		(8,248)		—		—		(8,248)
Balance, June 30, 2021	27,355,053	$	275	$	191,185	$	175,328	$	8,386	$	(1,980)	$	373,194

Balance, December 31, 2019	27,457,306	$