0001558370-22-007620 | 10-Q | XBRL Viewer

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SECURITIES - Amortized cost and Fair values of securities with maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Amortized Cost
Amortized Cost	$ 972,817	$ 938,360
Fair Value
Fair Value	933,922	942,168
Amortized Cost
Debt securities held-to-maturity	438,054	336,185
Fair Value
Fair Value	416,603	336,027
Mortgage-backed: Agency residential
Amortized Cost
Amortized Cost	244,721	178,236
Fair Value
Fair Value	237,528	179,466
Amortized Cost
Debt securities held-to-maturity	27,100	20,555
Fair Value
Fair Value	26,160	20,649
Mortgage-backed: Agency commercial
Amortized Cost
Amortized Cost	156,806	164,875
Fair Value
Fair Value	149,311	164,061
Amortized Cost
Debt securities held-to-maturity	313,296	287,615
Fair Value
Fair Value	293,157	$ 286,563
Available-for-sale
Amortized Cost
Due in 1 year or less	26,200
Due after 1 year through 5 years	191,896
Due after 5 years through 10 years	268,930
Due after 10 years	84,264
Amortized Cost	972,817
Fair Value
Due in 1 year or less	26,286
Due after 1 year through 5 years	187,331
Due after 5 years through 10 years	253,700
Due after 10 years	79,766
Fair Value	933,922
Available-for-sale \| Mortgage-backed: Agency residential
Amortized Cost
Amortized Cost	244,721
Fair Value
Fair Value	237,528
Available-for-sale \| Mortgage-backed: Agency commercial
Amortized Cost
Amortized Cost	156,806
Fair Value
Fair Value	149,311
Held-to-maturity
Amortized Cost
Due in 1 year or less	2,136
Due after 1 year through 5 years	14,726
Due after 5 years through 10 years	54,808
Due after 10 years	25,988
Debt securities held-to-maturity	438,054
Fair Value
Due in 1 year or less	2,161
Due after 1 year through 5 years	14,663
Due after 5 years through 10 years	54,474
Due after 10 years	25,988
Fair Value	416,603
Held-to-maturity \| Mortgage-backed: Agency residential
Amortized Cost
Debt securities held-to-maturity	27,100
Fair Value
Fair Value	26,160
Held-to-maturity \| Mortgage-backed: Agency commercial
Amortized Cost
Debt securities held-to-maturity	313,296
Fair Value
Fair Value	$ 293,157

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 14 – COMMITMENTS AND CONTINGENCIES

Financial Instruments

The Bank is 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 Bank’s 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 Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Such commitments and conditional obligations were as follows:


	Contractual Amount
	March 31, 2022		December 31, 2021

		(dollars in thousands)
Commitments to extend credit	$	602,158	$	609,947
Standby letters of credit		13,669		12,960

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 Bank evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary, by the Bank 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 Bank 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 Bank secures 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.

ACQUISITIONS - Assets Acquired and Liabilities (Details) - USD ($) $ in Thousands	Oct. 01, 2021	Mar. 31, 2022	Dec. 31, 2021
Consideration paid:
Goodwill		$ 29,322	$ 29,322
NXT Bancorporation, Inc
Assets acquired:
Cash and cash equivalents	$ 5,862
Interest-bearing time deposits with banks	739
Debt securities	18,295
Equity securities with readily determinable fair value	43
Restricted stock	796
Loans	194,576
Bank owned life insurance	7,352
Bank premises and equipment	3,667
Core deposit intangible assets	199
Mortgage servicing rights	370
Accrued interest receivable	886
Other assets	1,340
Total assets acquired	234,125
Liabilities assumed:
Deposits	181,586
Securities sold under agreements to repurchase	4,080
FHLB advances	12,625
Other liabilities	1,633
Total liabilities assumed	199,924
Net assets acquired	34,201
Consideration paid:
Cash	10,633
Common stock	29,270
Business Combination, Consideration Transferred, Total	39,903
Goodwill	5,702
Business Combination, Acquired Receivables [Abstract]
Fair Value	194,576
Gross contractual amounts receivable	196,104
Estimate of contractual cash flows not expected to be collected	1,045
Deteriorated credit quality loans	$ 0

LOAN SERVICING - Mortgage Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Beginning balance	$ 7,994
Ending balance	9,723		$ 7,994
Mortgage Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Beginning balance	7,994	$ 5,934	5,934
Acquired	171	397
Attributable to payments and principal reductions	(307)	(467)
Attributable to changes in valuation inputs and assumptions	1,865	1,765
Total fair value adjustment	1,558	1,298
Ending balance	9,723	$ 7,629	7,994
Mortgage loans serviced for others	$ 1,020,000		$ 1,040,000

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2022

FAIR VALUE OF FINANCIAL INSTRUMENTS

Summary of assets measured at fair value on a recurring basis


March 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	162,637	$	—	$	—	$	162,637
U.S. government agency		—		50,017		—		50,017
Municipal		—		275,564		—		275,564
Mortgage-backed:
Agency residential		—		237,528		—		237,528
Agency commercial		—		149,311		—		149,311
Corporate		—		58,865		—		58,865
Equity securities with readily determinable fair values		3,256		—		—		3,256
Mortgage servicing rights		—		—		9,723		9,723
Derivative financial assets		—		3,946		—		3,946
Derivative financial liabilities		—		3,936		—		3,936


December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	108,976	$	—	$	—	$	108,976
U.S. government agency		—		128,105		—		128,105
Municipal		—		297,077		—		297,077
Mortgage-backed:
Agency residential		—		179,466		—		179,466
Agency commercial		—		164,061		—		164,061
Corporate		—		64,483		—		64,483
Equity securities with readily determinable fair values		3,443		—		—		3,443
Mortgage servicing rights		—		—		7,994		7,994
Derivative financial assets		—		8,697		—		8,697
Derivative financial liabilities		—		9,377		—		9,377

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, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	9,723	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 83.4% (8.6%)
				Discount rate	9.0% to 11.0% (9.0%)

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	7,994	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 88.9% (11.7%)
				Discount rate	9.0% to 11.0% (9.0%)

Summary of assets measured at fair value on a nonrecurring basis


March 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Loans held for sale	$	—	$	1,777	$	—	$	1,777
Collateral-dependent impaired loans		—		—		19,242		19,242
Bank premises held for sale		—		—		1,081		1,081
Foreclosed assets		—		—		3,043		3,043


December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Loans held for sale	$	—	$	4,942	$	—	$	4,942
Collateral-dependent impaired loans		—		—		22,423		22,423
Bank premises held for sale		—		—		1,452		1,452
Foreclosed assets		—		—		3,278		3,278

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, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	19,242	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		1,081	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,043	Appraisal	Appraisal adjustments	7% (7%)

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	22,423	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		1,452	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,278	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, 2022				December 31, 2021
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value

			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	358,979	$	358,979	$	409,268	$	409,268
Debt securities held-to-maturity	Level 2		438,054		416,603		336,185		336,027
Restricted stock	Level 3		2,739		2,739		2,739		2,739
Loans, net	Level 3		2,463,277		2,476,472		2,475,753		2,494,686
Investments in unconsolidated subsidiaries	Level 3		1,165		1,165		1,165		1,165
Accrued interest receivable	Level 2		13,527		13,527		14,901		14,901

Financial liabilities:
Time deposits	Level 3		295,169		291,367		328,208		327,779
Securities sold under agreements to repurchase	Level 2		50,834		50,834		61,256		61,256
Subordinated notes	Level 3		39,336		40,546		39,316		41,602
Junior subordinated debentures	Level 3		37,731		33,683		37,714		33,640
Accrued interest payable	Level 2		560		560		1,043		1,043

SECURITIES - Sale and Gain (loss) on securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Sales of securities available-for-sale
Proceeds from sales	$ 0	$ 0
Net unrealized gains (losses) on equity securities:
Readily determinable fair value	(187)	40
Gains (losses) on securities	$ (187)	$ 40

DEPOSITS

3 Months Ended

Mar. 31, 2022

DEPOSITS

DEPOSITS

NOTE 7 – DEPOSITS

The Company’s deposits are summarized below:


	March 31, 2022		December 31, 2021

	(dollars in thousands)
Noninterest-bearing deposits	$	1,069,231	$	1,087,659
Interest-bearing deposits:
Interest-bearing demand		1,167,058		1,105,949
Money market		597,464		583,198
Savings		687,147		633,171
Time		295,169		328,208
Total interest-bearing deposits		2,746,838		2,650,526
Total deposits	$	3,816,069	$	3,738,185

Money market deposits include $4.2 million and $4.2 million of brokered deposits as of March 31, 2022 and December 31, 2021, respectively. Money market deposits also include $7.7 million and $6.9 million of reciprocal transaction deposits as of March 31, 2022 and December 31, 2021, respectively. Time deposits include $1.2 million and $0.9 million of reciprocal time deposits as of March 31, 2022, and December 31, 2021, respectively.

The aggregate amounts of time deposits in denominations of $250 thousand or more amounted to $35.0 million and $59.5 million as of March 31, 2022 and December 31, 2021, respectively. The aggregate amounts of time deposits in denominations of $100 thousand or more amounted to $104.7 million and $133.1 million as of March 31, 2022 and December 31, 2021, respectively.

The components of interest expense on deposits are as follows:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Interest-bearing demand	$	142	$	117
Money market		121		89
Savings		50		41
Time		256		397
Total interest expense on deposits	$	569	$	644

EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2022

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 10 – EARNINGS PER SHARE

The Company has granted certain 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 method and reflects the potential dilution from the Company’s outstanding restricted stock units and performance restricted stock units.

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


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Numerator:
Net income	$	13,604	$	15,245
Earnings allocated to participating securities		(17)		(31)
Numerator for earnings per share - basic and diluted	$	13,587	$	15,214

Denominator:
Weighted average common shares outstanding		28,986,593		27,430,912
Dilutive effect of outstanding restricted stock units		43,646		2,489
Weighted average common shares outstanding, including all dilutive potential shares		29,030,239		27,433,401

Earnings per share - Basic	$	0.47	$	0.55
Earnings per share - Diluted	$	0.47	$	0.55

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2022

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents 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, 2022
Balance, December 31, 2021	$	5,736	$	(3,514)	$	(751)	$	1,471
Transfer from available-for-sale to held-to-maturity		7,664		(7,664)		—		—
Other comprehensive income (loss) before reclassifications		(53,422)		—		594		(52,828)
Reclassifications		—		181		96		277
Other comprehensive income (loss), before tax		(53,422)		181		690		(52,551)
Income tax expense (benefit)		(15,228)		51		197		(14,980)
Other comprehensive income (loss), after tax		(38,194)		130		493		(37,571)
Balance, March 31, 2022	$	(24,794)	$	(11,048)	$	(258)	$	(36,100)

Three Months Ended March 31, 2021
Balance, December 31, 2020	$	19,578	$	(118)	$	(1,307)	$	18,153
Transfer from available-for-sale to held-to-maturity		3,890		(3,890)		—		—
Other comprehensive income (loss) before reclassifications		(23,074)		—		219		(22,855)
Reclassifications		—		32		99		131
Other comprehensive income (loss), before tax		(23,074)		32		318		(22,724)
Income tax expense (benefit)		(6,577)		9		91		(6,477)
Other comprehensive income (loss), after tax		(16,497)		23		227		(16,247)
Balance, March 31, 2021	$	6,971	$	(3,985)	$	(1,080)	$	1,906

Reclassifications 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.

Reclassifications 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.

Reclassifications 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 8 for additional information.

STOCK-BASED COMPENSATION PLANS (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) installment item $ / shares	Mar. 31, 2021 USD ($) $ / shares	Dec. 31, 2021 USD ($)	Oct. 09, 2019 shares
STOCK-BASED COMPENSATION PLANS
Total stock-based compensation expense	$ 878	$ 259
Accelerated stock-based compensation expense	$ 600
Number of shares participant is entitled to receive \| item	1
Restricted Stock Units
STOCK-BASED COMPENSATION PLANS
Total stock-based compensation expense	$ 608	114
Fair value of units granted	900	700
Intrinsic value of restricted stock units	$ 700	$ 300
Granted (in dollars per unit) \| $ / shares	$ 19.11	$ 15.53
Unrecognized compensation cost related to non-vested stock-based compensation agreements	$ 1,600
Weighted average remaining service period	2 years 1 month 6 days
Performance Shares
STOCK-BASED COMPENSATION PLANS
Total stock-based compensation expense	$ 293	$ 15
Granted (in dollars per unit) \| $ / shares	$ 19.14	$ 15.53
Unrecognized compensation cost related to non-vested stock-based compensation agreements	$ 700
Weighted average remaining service period	1 year 10 months 24 days
Performance Shares \| Key employees
STOCK-BASED COMPENSATION PLANS
Fair value of units granted	$ 500	$ 400
Performance Shares \| Minimum
STOCK-BASED COMPENSATION PLANS
Percentage of the number of units granted that may be earned	0.00%
Performance Shares \| Maximum
STOCK-BASED COMPENSATION PLANS
Percentage of the number of units granted that may be earned	150.00%
Total awards classified as equity
STOCK-BASED COMPENSATION PLANS
Total stock-based compensation expense	$ 901	129
Stock Appreciation Rights
STOCK-BASED COMPENSATION PLANS
Total stock-based compensation expense	(23)	$ 130
Unrecognized compensation cost related to non-vested stock-based compensation agreements	$ 46
Number of installments \| installment	4
Stock appreciation rights plan liability recorded for the outstanding units	$ 400		$ 500
Stock appreciation rights plan liability recorded for the previously exercised units	$ 500		$ 800
Number of installments in which the liability recorded for previously exercised units will be paid \| installment	2
Omnibus Incentive Plan
STOCK-BASED COMPENSATION PLANS
Authorized number of shares \| shares				1,820,000

FAIR VALUE OF FINANCIAL INSTRUMENTS - Nonrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
FAIR VALUE OF FINANCIAL INSTRUMENTS
Loans held for sale	$ 1,777	$ 4,942
Collateral-dependent impaired loans	19,242	22,423
Bank premises held for sale	1,081	1,452
Foreclosed assets	3,043	3,278
Level 2
FAIR VALUE OF FINANCIAL INSTRUMENTS
Loans held for sale	1,777	4,942
Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Collateral-dependent impaired loans	19,242	22,423
Bank premises held for sale	1,081	1,452
Foreclosed assets	$ 3,043	$ 3,278

REGULATORY MATTERS (Tables)

3 Months Ended

Mar. 31, 2022

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, 2022	Amount		Ratio		Amount		Ratio		Amount		Ratio

		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	488,974	16.86	%	$	231,959	8.00	%		N/A	N/A
Heartland Bank and Trust Company		462,254	15.95			231,789	8.00		$	289,736	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	425,130	14.66	%	$	173,969	6.00	%		N/A	N/A
Heartland Bank and Trust Company		437,746	15.11			173,842	6.00		$	231,789	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	388,564	13.40	%	$	130,477	4.50	%		N/A	N/A
Heartland Bank and Trust Company		437,746	15.11			130,381	4.50		$	188,329	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	425,130	9.83	%	$	172,907	4.00	%		N/A	N/A
Heartland Bank and Trust Company		437,746	10.13			172,789	4.00		$	215,987	5.00	%


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2021	Amount		Ratio		Amount		Ratio		Amount		Ratio

		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	479,320	16.88	%	$	227,115	8.00	%		N/A	N/A
Heartland Bank and Trust Company		452,162	15.94			226,950	8.00		$	283,688	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	416,068	14.66	%	$	170,336	6.00	%		N/A	N/A
Heartland Bank and Trust Company		428,226	15.09			170,213	6.00		$	226,950	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	379,519	13.37	%	$	127,752	4.50	%		N/A	N/A
Heartland Bank and Trust Company		428,226	15.09			127,659	4.50		$	184,397	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	416,068	9.84	%	$	169,171	4.00	%		N/A	N/A
Heartland Bank and Trust Company		428,226	10.13			169,070	4.00		$	211,337	5.00	%

LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2022

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Summary of Loans


	March 31, 2022		December 31, 2021

	(dollars in thousands)
Commercial and industrial	$	291,909	$	286,946
Agricultural and farmland		232,528		247,796
Commercial real estate - owner occupied		237,000		234,544
Commercial real estate - non-owner occupied		687,617		684,023
Multi-family		243,447		263,911
Construction and land development		320,030		298,048
One-to-four family residential		327,791		327,837
Municipal, consumer, and other		147,463		156,584
Loans, before allowance for loan losses		2,487,785		2,499,689
Allowance for loan losses		(24,508)		(23,936)
Loans, net of allowance for loan losses	$	2,463,277	$	2,475,753

Paycheck Protection Program (PPP) loans (included above)
Commercial and industrial	$	16,184	$	28,404
Agricultural and farmland		392		913
Municipal, consumer, and other		—		171
Total PPP loans	$	16,576	$	29,488

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, 2022	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2021	$	2,440	$	845	$	1,840	$	8,145	$	1,263	$	4,914	$	1,311	$	3,178	$	23,936
Provision for loan losses		(653)		(3)		(429)		(1,396)		91		(421)		120		2,107		(584)
Charge-offs		(5)		—		—		—		—		—		(2)		(127)		(134)
Recoveries		709		—		100		265		—		—		154		62		1,290
Balance, March 31, 2022	$	2,491	$	842	$	1,511	$	7,014	$	1,354	$	4,493	$	1,583	$	5,220	$	24,508

					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate								Consumer
	and		and		Owner		Non-owner				Construction		Residential		and
Three Months Ended March 31, 2021	Industrial		Farmland		Occupied		Occupied		Multi-Family		and Land		Real Estate		Other		Total

Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2020	$	3,929	$	793	$	3,141	$	11,251	$	1,957	$	4,232	$	1,801	$	4,734	$	31,838
Provision for loan losses		(1,802)		72		(426)		72		133		(316)		(198)		(940)		(3,405)
Charge-offs		—		—		—		—		—		—		(72)		(123)		(195)
Recoveries		293		—		—		7		—		90		42		89		521
Balance, March 31, 2021	$	2,420	$	865	$	2,715	$	11,330	$	2,090	$	4,006	$	1,573	$	3,760	$	28,759


					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, 2022	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	270,193	$	231,551	$	218,324	$	645,060	$	242,249	$	316,799	$	312,978	$	134,474	$	2,371,628
Individually evaluated for impairment		21,579		234		13,384		30,196		—		2,010		9,046		12,960		89,409
Acquired with deteriorated credit quality		137		743		5,292		12,361		1,198		1,221		5,767		29		26,748
Total	$	291,909	$	232,528	$	237,000	$	687,617	$	243,447	$	320,030	$	327,791	$	147,463	$	2,487,785

Allowance for loan losses:
Collectively evaluated for impairment	$	2,328	$	842	$	1,261	$	4,190	$	1,351	$	4,488	$	1,423	$	1,316	$	17,199
Individually evaluated for impairment		163		—		221		2,821		—		—		157		3,903		7,265
Acquired with deteriorated credit quality		—		—		29		3		3		5		3		1		44
Total	$	2,491	$	842	$	1,511	$	7,014	$	1,354	$	4,493	$	1,583	$	5,220	$	24,508

					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, 2021	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	272,064	$	247,021	$	216,794	$	641,555	$	262,701	$	293,548	$	314,807	$	143,510	$	2,392,000
Individually evaluated for impairment		14,744		12		12,332		29,575		—		2,018		6,897		13,041		78,619
Acquired with deteriorated credit quality		138		763		5,418		12,893		1,210		2,482		6,133		33		29,070
Total	$	286,946	$	247,796	$	234,544	$	684,023	$	263,911	$	298,048	$	327,837	$	156,584	$	2,499,689

Allowance for loan losses:
Collectively evaluated for impairment	$	2,253	$	845	$	1,480	$	5,138	$	1,259	$	4,895	$	1,099	$	1,302	$	18,271
Individually evaluated for impairment		187		—		327		2,999		—		—		210		1,875		5,598
Acquired with deteriorated credit quality		—		—		33		8		4		19		2		1		67
Total	$	2,440	$	845	$	1,840	$	8,145	$	1,263	$	4,914	$	1,311	$	3,178	$	23,936

Schedule of loans individually evaluated for impairment by category

The following tables present loans individually evaluated for impairment by category of loans:


	Unpaid
	Principal		Recorded		Related
March 31, 2022	Balance		Investment		Allowance

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	282	$	282	$	163
Agricultural and farmland		—		—		—
Commercial real estate - owner occupied		2,416		2,416		221
Commercial real estate - non-owner occupied		14,736		14,720		2,821
Multi-family		—		—		—
Construction and land development		—		—		—
One-to-four family residential		678		634		157
Municipal, consumer, and other		8,478		8,455		3,903
Total	$	26,590	$	26,507	$	7,265

With no related allowance:
Commercial and industrial	$	21,339	$	21,297	$	—
Agricultural and farmland		234		234		—
Commercial real estate - owner occupied		11,186		10,968		—
Commercial real estate - non-owner occupied		15,550		15,476		—
Multi-family		—		—		—
Construction and land development		2,110		2,010		—
One-to-four family residential		9,711		8,412		—
Municipal, consumer, and other		4,564		4,505		—
Total	$	64,694	$	62,902	$	—

Total loans individually evaluated for impairment:
Commercial and industrial	$	21,621	$	21,579	$	163
Agricultural and farmland		234		234		—
Commercial real estate - owner occupied		13,602		13,384		221
Commercial real estate - non-owner occupied		30,286		30,196		2,821
Multi-family		—		—		—
Construction and land development		2,110		2,010		—
One-to-four family residential		10,389		9,046		157
Municipal, consumer, and other		13,042		12,960		3,903
Total	$	91,284	$	89,409	$	7,265


	Unpaid
	Principal		Recorded		Related
December 31, 2021	Balance		Investment		Allowance

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	303	$	303	$	187
Agricultural and farmland		—		—		—
Commercial real estate - owner occupied		3,013		3,013		327
Commercial real estate - non-owner occupied		14,912		14,893		2,999
Multi-family		—		—		—
Construction and land development		—		—		—
One-to-four family residential		1,421		1,314		210
Municipal, consumer, and other		8,523		8,498		1,875
Total	$	28,172	$	28,021	$	5,598

With no related allowance:
Commercial and industrial	$	14,452	$	14,441	$	—
Agricultural and farmland		12		12		—
Commercial real estate - owner occupied		9,534		9,319		—
Commercial real estate - non-owner occupied		14,755		14,682		—
Multi-family		—		—		—
Construction and land development		2,112		2,018		—
One-to-four family residential		7,129		5,583		—
Municipal, consumer, and other		4,603		4,543		—
Total	$	52,597	$	50,598	$	—

Total loans individually evaluated for impairment:
Commercial and industrial	$	14,755	$	14,744	$	187
Agricultural and farmland		12		12		—
Commercial real estate - owner occupied		12,547		12,332		327
Commercial real estate - non-owner occupied		29,667		29,575		2,999
Multi-family		—		—		—
Construction and land development		2,112		2,018		—
One-to-four family residential		8,550		6,897		210
Municipal, consumer, and other		13,126		13,041		1,875
Total	$	80,769	$	78,619	$	5,598

The following table presents the average recorded investment and interest income recognized for loans individually evaluated for impairment by category of loans:


	Three Months Ended March 31,
	2022				2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	292	$	4	$	2,266	$	31
Agricultural and farmland		—		—		168		2
Commercial real estate - owner occupied		2,425		33		3,244		41
Commercial real estate - non-owner occupied		14,854		186		20,361		208
Multi-family		—		—		—		—
Construction and land development		—		—		2,248		27
One-to-four family residential		647		5		2,644		23
Municipal, consumer, and other		8,509		39		8,802		40
Total	$	26,727	$	267	$	39,733	$	372

With no related allowance:
Commercial and industrial	$	19,498	$	200	$	1,068	$	14
Agricultural and farmland		236		—		383		6
Commercial real estate - owner occupied		11,028		106		9,600		122
Commercial real estate - non-owner occupied		15,495		198		5,665		68
Multi-family		—		—		876		10
Construction and land development		2,016		22		1,764		26
One-to-four family residential		8,728		57		6,981		49
Municipal, consumer, and other		4,544		21		4,746		22
Total	$	61,545	$	604	$	31,083	$	317

Total loans individually evaluated for impairment:
Commercial and industrial	$	19,790	$	204	$	3,334	$	45
Agricultural and farmland		236		—		551		8
Commercial real estate - owner occupied		13,453		139		12,844		163
Commercial real estate - non-owner occupied		30,349		384		26,026		276
Multi-family		—		—		876		10
Construction and land development		2,016		22		4,012		53
One-to-four family residential		9,375		62		9,625		72
Municipal, consumer, and other		13,053		60		13,548		62
Total	$	88,272	$	871	$	70,816	$	689

Schedule of recorded investment on past due basis


	Accruing Interest
			30 - 89 Days		90+ Days				Total
March 31, 2022	Current		Past Due		Past Due		Nonaccrual		Loans

	(dollars in thousands)
Commercial and industrial	$	291,812	$	4	$	—	$	93	$	291,909
Agricultural and farmland		232,528		—		—		—		232,528
Commercial real estate - owner occupied		236,898		102		—		—		237,000
Commercial real estate - non-owner occupied		687,446		—		—		171		687,617
Multi-family		243,447		—		—		—		243,447
Construction and land development		319,432		80		—		518		320,030
One-to-four family residential		325,648		484		25		1,634		327,791
Municipal, consumer, and other		147,292		118		8		45		147,463
Total	$	2,484,503	$	788	$	33	$	2,461	$	2,487,785


	Accruing Interest
			30 - 89 Days		90+ Days				Total
December 31, 2021	Current		Past Due		Past Due		Nonaccrual		Loans

	(dollars in thousands)
Commercial and industrial	$	286,563	$	9	$	—	$	374	$	286,946
Agricultural and farmland		247,772		24		—		—		247,796
Commercial real estate - owner occupied		234,441		103		—		—		234,544
Commercial real estate - non-owner occupied		683,029		823		—		171		684,023
Multi-family		263,911		—		—		—		263,911
Construction and land development		297,465		64		—		519		298,048
One-to-four family residential		325,780		383		32		1,642		327,837
Municipal, consumer, and other		156,297		214		16		57		156,584
Total	$	2,495,258	$	1,620	$	48	$	2,763	$	2,499,689

Schedule of loans by category risk ratings


March 31, 2022	Pass		Pass-Watch		Substandard		Doubtful		Total

	(dollars in thousands)
Commercial and industrial	$	265,441	$	4,889	$	21,579	$	—	$	291,909
Agricultural and farmland		212,526		19,112		890		—		232,528
Commercial real estate - owner occupied		199,248		25,096		12,656		—		237,000
Commercial real estate - non-owner occupied		631,602		22,977		33,038		—		687,617
Multi-family		238,491		4,956		—		—		243,447
Construction and land development		293,294		24,726		2,010		—		320,030
One-to-four family residential		311,074		6,932		9,785		—		327,791
Municipal, consumer, and other		134,300		203		12,960		—		147,463
Total	$	2,285,976	$	108,891	$	92,918	$	—	$	2,487,785


December 31, 2021	Pass		Pass-Watch		Substandard		Doubtful		Total

	(dollars in thousands)
Commercial and industrial	$	267,088	$	5,114	$	14,744	$	—	$	286,946
Agricultural and farmland		221,898		25,213		685		—		247,796
Commercial real estate - owner occupied		198,862		24,098		11,584		—		234,544
Commercial real estate - non-owner occupied		619,212		32,372		32,439		—		684,023
Multi-family		241,362		22,549		—		—		263,911
Construction and land development		268,556		27,474		2,018		—		298,048
One-to-four family residential		308,951		11,221		7,665		—		327,837
Municipal, consumer, and other		143,299		244		13,041		—		156,584
Total	$	2,269,228	$	148,285	$	82,176	$	—	$	2,499,689

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


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	413	$	1,397
Reclassification from non-accretable difference		117		74
Accretion income		(46)		(133)
Ending balance	$	484	$	1,338

FORECLOSED ASSETS - Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
FORECLOSED ASSETS
Beginning balance	$ 3,278	$ 4,168
Transfers from loans	19	671
Proceeds from sales	(294)	(15)
Net gain (loss) on sales	105	(3)
Direct write-downs	(65)	(73)
Ending balance	$ 3,043	$ 4,748

DERIVATIVE FINANCIAL INSTRUMENTS - Interest rate contracts designated as cash flow hedges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flow hedge \| Subordinated debentures interest expense
DERIVATIVE FINANCIAL INSTRUMENTS
Amounts of gross gain (loss) reclassified from accumulated other comprehensive income (loss)	$ (96)	$ (99)

EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2022

EARNINGS PER SHARE

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


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Numerator:
Net income	$	13,604	$	15,245
Earnings allocated to participating securities		(17)		(31)
Numerator for earnings per share - basic and diluted	$	13,587	$	15,214

Denominator:
Weighted average common shares outstanding		28,986,593		27,430,912
Dilutive effect of outstanding restricted stock units		43,646		2,489
Weighted average common shares outstanding, including all dilutive potential shares		29,030,239		27,433,401

Earnings per share - Basic	$	0.47	$	0.55
Earnings per share - Diluted	$	0.47	$	0.55

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Stockholders' Equity
Debt securities held-to-maturity	$ 416,603	$ 336,027
Allowance for loan losses	$ 24,508	$ 23,936
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	29,308,491	29,276,547
Common stock, shares outstanding	28,967,943	28,986,061
Treasury stock ,shares	340,548	290,486

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
DERIVATIVE FINANCIAL INSTRUMENTS
Cash pledged	$ 0.2	$ 0.8
Securities pledged	$ 1.1	$ 7.5

SECURITIES - Equity securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Equity Securities - Readily determinable fair value
Equity Securities, Readily determinable fair value, cost	$ 3,142	$ 3,142
Equity Securities, Readily determinable fair value, Cumulative Net Unrealized Gains (Losses)	114	301
Equity securities, Readily determinable fair value, Carrying Value	3,256	3,443
Equity Securities - No readily determinable fair value
Equity Securities, No readily determinable fair value, cost	2,092	2,092
Equity Securities, No readily determinable fair value, Cumulative Net Unrealized Gains (Losses)	(165)	(165)
Equity securities: No readily determinable fair value, Carrying Value	1,927	1,927
Upward adjustment on equity securities with no readily determinable fair value	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Balance at Dec. 31, 2020	$ 275	$ 190,875	$ 154,614	$ 18,153		$ 363,917
Balance (in shares) at Dec. 31, 2020	27,457,306
Increase (Decrease) in Stockholders' Equity [Roll Forward]
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 (in shares)	20,225
Repurchase of common stock					$ (1,514)	(1,514)
Repurchase of common stock (in shares)	(95,462)
Cash dividends and dividend equivalents			(4,124)			(4,124)
Balance at Mar. 31, 2021	$ 275	191,004	165,735	1,906	(1,514)	357,406
Balance (in shares) at Mar. 31, 2021	27,382,069
Balance at Dec. 31, 2021	$ 293	220,891	194,132	1,471	(4,906)	411,881
Balance (in shares) at Dec. 31, 2021	28,986,061
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income			13,604			13,604
Other comprehensive loss				(37,571)		(37,571)
Stock-based compensation		901				901
Issuance of common stock upon vesting of restricted stock units, net of tax withholdings		(57)				(57)
Issuance of common stock upon vesting of restricted stock units (in shares)	31,944
Repurchase of common stock					(943)	(943)
Repurchase of common stock (in shares)	(50,062)
Cash dividends and dividend equivalents			(4,660)			(4,660)
Balance at Mar. 31, 2022	$ 293	$ 221,735	$ 203,076	$ (36,100)	$ (5,849)	$ 383,155
Balance (in shares) at Mar. 31, 2022	28,967,943

SECURITIES (Tables)

3 Months Ended

Mar. 31, 2022

SECURITIES

Summary of carrying balances of securities


	March 31,		December 31,
	2022		2021

	(dollars in thousands)
Debt securities available-for-sale	$	933,922	$	942,168
Debt securities held-to-maturity		438,054		336,185
Equity securities with readily determinable fair value		3,256		3,443
Equity securities with no readily determinable fair value		1,927		1,927
Total securities	$	1,377,159	$	1,283,723

Schedule of gains (losses) on securities


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Net realized gains (losses) on sales	$	—	$	—
Net unrealized gains (losses) on equity securities:
Readily determinable fair value		(187)		40
No readily determinable fair value		—		—
Gains (losses) on securities	$	(187)	$	40

Schedule of certain debt securities from the available-for-sale category to the held-to-maturity category


	March 31, 2022				June 30, 2021				March 31, 2021
	Amortized				Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value

	(dollars in thousands)
U.S. government agency	$	78,841	$	71,048	$	—	$	—	$	7,593	$	7,323
Mortgage-backed:
Agency residential		8,175		7,651		—		—		8,776		8,536
Agency commercial		27,834		25,432		99,271		99,275		118,792		113,861
Total	$	114,850	$	104,131	$	99,271	$	99,275	$	135,161	$	129,720

Schedule of amortized cost and fair values of securities available-for-sale, with gross unrealized gains and losses


March 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	169,966	$	—	$	(7,329)	$	162,637
U.S. government agency		51,182		16		(1,181)		50,017
Municipal		290,714		603		(15,753)		275,564
Mortgage-backed:
Agency residential		244,721		604		(7,797)		237,528
Agency commercial		156,806		124		(7,619)		149,311
Corporate		59,428		657		(1,220)		58,865
Total available-for-sale		972,817		2,004		(40,899)		933,922
Held-to-maturity:
U.S. government agency		83,407		—		(722)		82,685
Municipal		14,251		350		—		14,601
Mortgage-backed:
Agency residential		27,100		7		(947)		26,160
Agency commercial		313,296		254		(20,393)		293,157
Total held-to-maturity		438,054		611		(22,062)		416,603
Total debt securities	$	1,410,871	$	2,615	$	(62,961)	$	1,350,525


December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	109,002	$	328	$	(354)	$	108,976
U.S. government agency		129,269		1,303		(2,467)		128,105
Municipal		293,837		6,144		(2,904)		297,077
Mortgage-backed:
Agency residential		178,236		2,149		(919)		179,466
Agency commercial		164,875		1,234		(2,048)		164,061
Corporate		63,141		1,638		(296)		64,483
Total available-for-sale		938,360		12,796		(8,988)		942,168
Held-to-maturity:
U.S. government agency		12,349		42		(51)		12,340
Municipal		15,666		809		—		16,475
Mortgage-backed:
Agency residential		20,555		196		(102)		20,649
Agency commercial		287,615		1,749		(2,801)		286,563
Total held-to-maturity		336,185		2,796		(2,954)		336,027
Total debt securities	$	1,274,545	$	15,592	$	(11,942)	$	1,278,195

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	$	26,200	$	26,286	$	2,136	$	2,161
Due after 1 year through 5 years		191,896		187,331		14,726		14,663
Due after 5 years through 10 years		268,930		253,700		54,808		54,474
Due after 10 years		84,264		79,766		25,988		25,988

Mortgage-backed:
Agency residential		244,721		237,528		27,100		26,160
Agency commercial		156,806		149,311		313,296		293,157
Total	$	972,817	$	933,922	$	438,054	$	416,603

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, 2022	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	(7,329)	$	162,637	$	—	$	—	$	(7,329)	$	162,637
U.S. government agency		(1,181)		42,715		—		—		(1,181)		42,715
Municipal		(9,031)		157,069		(6,722)		53,718		(15,753)		210,787
Mortgage-backed:
Agency residential		(7,647)		191,824		(150)		3,931		(7,797)		195,755
Agency commercial		(5,579)		108,665		(2,040)		24,031		(7,619)		132,696
Corporate		(450)		14,550		(770)		4,190		(1,220)		18,740
Total available-for-sale		(31,217)		677,460		(9,682)		85,870		(40,899)		763,330
Held-to-maturity:
U.S. government agency		(722)		11,636		—		—		(722)		11,636
Mortgage-backed:
Agency residential		(947)		17,789		—		—		(947)		17,789
Agency commercial		(20,148)		255,033		(245)		2,363		(20,393)		257,396
Total held-to-maturity		(21,817)		284,458		(245)		2,363		(22,062)		286,821
Total debt securities	$	(53,034)	$	961,918	$	(9,927)	$	88,233	$	(62,961)	$	1,050,151


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
December 31, 2021	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	(354)	$	68,410	$	—	$	—	$	(354)	$	68,410
U.S. government agency		(2,183)		80,219		(284)		5,578		(2,467)		85,797
Municipal		(2,018)		89,424		(886)		17,327		(2,904)		106,751
Mortgage-backed:
Agency residential		(851)		91,703		(68)		4,305		(919)		96,008
Agency commercial		(1,921)		113,111		(127)		6,443		(2,048)		119,554
Corporate		(7)		2,737		(289)		4,671		(296)		7,408
Total available-for-sale		(7,334)		445,604		(1,654)		38,324		(8,988)		483,928
Held-to-maturity:
U.S. government agency		(51)		4,949		—		—		(51)		4,949
Mortgage-backed:
Agency residential		(102)		14,932		—		—		(102)		14,932
Agency commercial		(2,673)		174,428		(128)		2,776		(2,801)		177,204
Total held-to-maturity		(2,826)		194,309		(128)		2,776		(2,954)		197,085
Total debt securities	$	(10,160)	$	639,913	$	(1,782)	$	41,100	$	(11,942)	$	681,013

Schedule of equity securities with initial cost and carrying values of equity securities, with cumulative net unrealized gains and losses


	Readily		No Readily
	Determinable		Determinable
March 31, 2022	Fair Value		Fair Value

	(dollars in thousands)
Initial cost	$	3,142	$	2,092
Cumulative net unrealized gains (losses)		114		(165)
Carrying value	$	3,256	$	1,927


	Readily		No Readily
	Determinable		Determinable
December 31, 2021	Fair Value		Fair Value

	(dollars in thousands)
Initial cost	$	3,142	$	2,092
Cumulative net unrealized gains (losses)		301		(165)
Carrying value	$	3,443	$	1,927

LOAN SERVICING (Tables)

3 Months Ended

Mar. 31, 2022

LOAN SERVICING

Schedule of activity in mortgage servicing rights


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	7,994	$	5,934
Capitalized servicing rights		171		397
Fair value adjustment:
Attributable to payments and principal reductions		(307)		(467)
Attributable to changes in valuation inputs and assumptions		1,865		1,765
Total fair value adjustment		1,558		1,298
Ending balance	$	9,723	$	7,629

LOAN SERVICING

3 Months Ended

Mar. 31, 2022

LOAN SERVICING

LOAN SERVICING

NOTE 5 – LOAN SERVICING

Mortgage loans serviced for others, which are not included in the accompanying consolidated balance sheets, amounted to $1.02 billion and $1.04 billion as of March 31, 2022 and December 31, 2021, respectively. Activity in mortgage servicing rights is as follows:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	7,994	$	5,934
Capitalized servicing rights		171		397
Fair value adjustment:
Attributable to payments and principal reductions		(307)		(467)
Attributable to changes in valuation inputs and assumptions		1,865		1,765
Total fair value adjustment		1,558		1,298
Ending balance	$	9,723	$	7,629

- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

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+ Details

SECURITIES - Amortized cost and Fair values of held-to-maturity securities transferred from available-for-sale securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021
Held-to-maturity
Debt securities held-to-maturity	$ 438,054	$ 336,185
Fair Value	416,603	336,027
U.S. government agency
Held-to-maturity
Debt securities held-to-maturity	83,407	12,349
Fair Value	82,685	12,340
Mortgage-backed: Agency residential
Held-to-maturity
Debt securities held-to-maturity	27,100	20,555
Fair Value	26,160	20,649
Mortgage-backed: Agency commercial
Held-to-maturity
Debt securities held-to-maturity	313,296	287,615
Fair Value	293,157	$ 286,563
Debt Securities Transferred
Held-to-maturity
Debt securities held-to-maturity	114,850		$ 99,271	$ 135,161
Fair Value	104,131		99,275	129,720
Debt Securities Transferred \| U.S. government agency
Held-to-maturity
Debt securities held-to-maturity	78,841			7,593
Fair Value	71,048			7,323
Debt Securities Transferred \| Mortgage-backed: Agency residential
Held-to-maturity
Debt securities held-to-maturity	8,175			8,776
Fair Value	7,651			8,536
Debt Securities Transferred \| Mortgage-backed: Agency commercial
Held-to-maturity
Debt securities held-to-maturity	27,834		99,271	118,792
Fair Value	$ 25,432		$ 99,275	$ 113,861

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Cash and due from banks	$ 30,761	$ 23,387
Interest-bearing deposits with banks	328,218	385,881
Cash and cash equivalents	358,979	409,268
Interest-bearing time deposits with banks	487	490
Debt securities available-for-sale, at fair value	933,922	942,168
Debt securities held-to-maturity (fair value of $416,603 in 2022 and $336,027 in 2021)	438,054	336,185
Equity securities with readily determinable fair value	3,256	3,443
Equity securities with no readily determinable fair value	1,927	1,927
Restricted stock, at cost	2,739	2,739
Loans held for sale	1,777	4,942
Loans, before allowance for loan losses	2,487,785	2,499,689
Allowance for loan losses	(24,508)	(23,936)
Loans, net of allowance for loan losses	2,463,277	2,475,753
Bank owned life insurance	7,433	7,393
Bank premises and equipment, net	52,005	52,483
Bank premises held for sale	1,081	1,452
Foreclosed assets	3,043	3,278
Goodwill	29,322	29,322
Core deposit intangible assets, net	1,698	1,943
Mortgage servicing rights, at fair value	9,723	7,994
Investments in unconsolidated subsidiaries	1,165	1,165
Accrued interest receivable	13,527	14,901
Other assets	25,550	17,408
Total assets	4,348,965	4,314,254
Deposits:
Noninterest-bearing	1,069,231	1,087,659
Interest-bearing	2,746,838	2,650,526
Total deposits	3,816,069	3,738,185
Securities sold under agreements to repurchase	50,834	61,256
Subordinated notes	39,336	39,316
Junior subordinated debentures issued to capital trusts	37,731	37,714
Other liabilities	21,840	25,902
Total liabilities	3,965,810	3,902,373
COMMITMENTS AND CONTINGENCIES (Note 14)
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 29,308,491 at 2022 and 29,276,547 at 2021; shares outstanding of 28,967,943 at 2022 and 28,986,061 at 2021	293	293
Surplus	221,735	220,891
Retained earnings	203,076	194,132
Accumulated other comprehensive income (loss)	(36,100)	1,471
Treasury stock at cost, 340,548 shares at 2022 and 290,486 at 2021	(5,849)	(4,906)
Total stockholders' equity	383,155	411,881
Total liabilities and stockholders' equity	$ 4,348,965	$ 4,314,254

DEPOSITS - Interest expense on Deposits (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
DEPOSITS
Interest-bearing demand	$ 142	$ 117
Money market	121	89
Savings	50	41
Time	256	397
Total interest expense on deposits	$ 569	$ 644

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2022

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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, 2022
Balance, December 31, 2021	$	5,736	$	(3,514)	$	(751)	$	1,471
Transfer from available-for-sale to held-to-maturity		7,664		(7,664)		—		—
Other comprehensive income (loss) before reclassifications		(53,422)		—		594		(52,828)
Reclassifications		—		181		96		277
Other comprehensive income (loss), before tax		(53,422)		181		690		(52,551)
Income tax expense (benefit)		(15,228)		51		197		(14,980)
Other comprehensive income (loss), after tax		(38,194)		130		493		(37,571)
Balance, March 31, 2022	$	(24,794)	$	(11,048)	$	(258)	$	(36,100)

Three Months Ended March 31, 2021
Balance, December 31, 2020	$	19,578	$	(118)	$	(1,307)	$	18,153
Transfer from available-for-sale to held-to-maturity		3,890		(3,890)		—		—
Other comprehensive income (loss) before reclassifications		(23,074)		—		219		(22,855)
Reclassifications		—		32		99		131
Other comprehensive income (loss), before tax		(23,074)		32		318		(22,724)
Income tax expense (benefit)		(6,577)		9		91		(6,477)
Other comprehensive income (loss), after tax		(16,497)		23		227		(16,247)
Balance, March 31, 2021	$	6,971	$	(3,985)	$	(1,080)	$	1,906

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Past Due Status (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accruing Interest
Accruing Interest	$ 2,484,503	$ 2,495,258
Nonaccrual	2,461	2,763
Total	2,487,785	2,499,689
30 - 89 Days Past Due
Accruing Interest
Accruing Interest	788	1,620
90+ Days Past Due
Accruing Interest
Accruing Interest	33	48
Commercial and industrial
Accruing Interest
Accruing Interest	291,812	286,563
Nonaccrual	93	374
Total	291,909	286,946
Commercial and industrial \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest	4	9
Agricultural and farmland
Accruing Interest
Accruing Interest	232,528	247,772
Total	232,528	247,796
Agricultural and farmland \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest		24
Commercial real estate - owner occupied
Accruing Interest
Accruing Interest	236,898	234,441
Total	237,000	234,544
Commercial real estate - owner occupied \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest	102	103
Commercial real estate - non-owner occupied
Accruing Interest
Accruing Interest	687,446	683,029
Nonaccrual	171	171
Total	687,617	684,023
Commercial real estate - non-owner occupied \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest		823
Multi-family
Accruing Interest
Accruing Interest	243,447	263,911
Total	243,447	263,911
Construction and land development
Accruing Interest
Accruing Interest	319,432	297,465
Nonaccrual	518	519
Total	320,030	298,048
Construction and land development \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest	80	64
One-to-four family residential
Accruing Interest
Accruing Interest	325,648	325,780
Nonaccrual	1,634	1,642
Total	327,791	327,837
One-to-four family residential \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest	484	383
One-to-four family residential \| 90+ Days Past Due
Accruing Interest
Accruing Interest	25	32
Municipal, consumer, and other
Accruing Interest
Accruing Interest	147,292	156,297
Nonaccrual	45	57
Total	147,463	156,584
Municipal, consumer, and other \| 30 - 89 Days Past Due
Accruing Interest
Accruing Interest	118	214
Municipal, consumer, and other \| 90+ Days Past Due
Accruing Interest
Accruing Interest	$ 8	$ 16

STOCK-BASED COMPENSATION PLANS - Summary of assumptions used (Details) - Stock Appreciation Rights	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.37%	1.40%
Expected volatility	35.83%	35.52%
Expected life (in years)	7 years 4 months 24 days	7 years 8 months 12 days
Expected dividend yield	3.52%	3.20%

REGULATORY MATTERS

3 Months Ended

Mar. 31, 2022

REGULATORY MATTERS

REGULATORY MATTERS

NOTE 12 – REGULATORY MATTERS

The Company (on a consolidated basis) and the Bank 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 consolidated financial statements of the Company and the Bank. Additionally, the ability of the Company to pay dividends to its stockholders is dependent upon the ability of the Bank to pay dividends to the Company.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank 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 regulators about components, risk weightings, and other factors. As allowed under the regulations, the Company and the Bank elected to exclude accumulated other comprehensive income, including unrealized gains and losses on debt securities, in the computation of regulatory capital. Prompt corrective action provisions are not applicable to bank holding companies.

Additionally, the Company and the Bank must maintain a “capital conservation buffer” to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. As of March 31, 2022 and December 31, 2021, the capital conservation buffer was 2.5%of risk-weighted assets.

As of March 31, 2022, the Company and the Bank each met all capital adequacy requirements to which they were subject.

The actual and required capital amounts and ratios of the Company (on a consolidated basis) and the Bank are as follows:


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2022	Amount		Ratio		Amount		Ratio		Amount		Ratio

		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	488,974	16.86	%	$	231,959	8.00	%		N/A	N/A
Heartland Bank and Trust Company		462,254	15.95			231,789	8.00		$	289,736	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	425,130	14.66	%	$	173,969	6.00	%		N/A	N/A
Heartland Bank and Trust Company		437,746	15.11			173,842	6.00		$	231,789	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	388,564	13.40	%	$	130,477	4.50	%		N/A	N/A
Heartland Bank and Trust Company		437,746	15.11			130,381	4.50		$	188,329	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	425,130	9.83	%	$	172,907	4.00	%		N/A	N/A
Heartland Bank and Trust Company		437,746	10.13			172,789	4.00		$	215,987	5.00	%


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2021	Amount		Ratio		Amount		Ratio		Amount		Ratio

		(dollars in thousands)
Total Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	479,320	16.88	%	$	227,115	8.00	%		N/A	N/A
Heartland Bank and Trust Company		452,162	15.94			226,950	8.00		$	283,688	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	416,068	14.66	%	$	170,336	6.00	%		N/A	N/A
Heartland Bank and Trust Company		428,226	15.09			170,213	6.00		$	226,950	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated HBT Financial, Inc.	$	379,519	13.37	%	$	127,752	4.50	%		N/A	N/A
Heartland Bank and Trust Company		428,226	15.09			127,659	4.50		$	184,397	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated HBT Financial, Inc.	$	416,068	9.84	%	$	169,171	4.00	%		N/A	N/A
Heartland Bank and Trust Company		428,226	10.13			169,070	4.00		$	211,337	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 + Details

ACQUISITIONS

3 Months Ended

Mar. 31, 2022

ACQUISITIONS

ACQUISITIONS

NOTE 2 – ACQUISITIONS

NXT Bancorporation, Inc.

On October 1, 2021, HBT Financial acquired 100% of the issued and outstanding common stock of NXT Bancorporation, Inc. (“NXT”), the holding company for NXT Bank, pursuant to an Agreement and Plan of Merger dated June 7, 2021. Under the Agreement and Plan of Merger, NXT merged with and into HBT Financial, with HBT Financial as the surviving entity, on October 1, 2021. Additionally, NXT Bank was merged with and into Heartland Bank, with Heartland Bank as the surviving entity, in December 2021.

At the effective time of the merger, each share of NXT was converted into the right to receive 67.6783 shares of HBT Financial common stock, cash in lieu of fractional shares, and $400 in cash. There were 1,799,016 shares of HBT Financial common stock issued at the effective time of the acquisition with an aggregate market value of $29.3 million, based on the closing stock price of $16.27 on October 1, 2021. This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the date of acquisition. Goodwill of $5.7 million was recorded in the acquisition, which reflects expected synergies from combining the operations of HBT Financial and NXT, and is nondeductible for tax purposes.

The acquisition of NXT provides an opportunity to utilize Heartland Bank’s existing excess liquidity to replace NXT Bank’s higher-cost funding. Additionally, Heartland Bank’s broader range of products and services, as well as a greater ability to meet larger borrowing needs, provides an opportunity to expand NXT Bank customer relationships.

The fair value of the assets acquired and liabilities assumed from NXT on the acquisition date were as follows (dollars in thousands):


	Fair Value
Assets acquired:
Cash and cash equivalents	$	5,862
Interest-bearing time deposits with banks		739
Debt securities		18,295
Equity securities with readily determinable fair value		43
Restricted stock		796
Loans		194,576
Bank owned life insurance		7,352
Bank premises and equipment		3,667
Core deposit intangible assets		199
Mortgage servicing rights		370
Accrued interest receivable		886
Other assets		1,340
Total assets acquired		234,125

Liabilities assumed:
Deposits		181,586
Securities sold under agreements to repurchase		4,080
FHLB advances		12,625
Other liabilities		1,633
Total liabilities assumed		199,924
Net assets acquired	$	34,201

Consideration paid:
Cash	$	10,633
Common stock		29,270
Total consideration paid	$	39,903

Goodwill	$	5,702

The following table presents the acquired non-impaired loans as of the acquisition date (dollars in thousands):


Fair Value	$	194,576
Gross contractual amounts receivable		196,104
Estimate of contractual cash flows not expected to be collected		1,045

There were no loans acquired with deteriorated credit quality from NXT.

The following table provides the pro forma information for the results of operations for the three months ended March 31, 2021, as if the acquisition had occurred on January 1, 2020. The pro forma results combine the historical results of NXT into HBT Financial’s consolidated statements of income, including the impact of certain acquisition accounting adjustments, which include loan discount accretion, intangible assets amortization, deposit premium amortization, and borrowing premium amortization. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2020. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, provision for loan losses, expense efficiencies or asset dispositions. The acquisition-related expenses that have been recognized are included in net income in the following table.


	Pro Forma
	Three Months Ended
(dollars in thousands, except per share data)	March 31, 2021
Total revenues (net interest income and noninterest income)	$	42,543
Net income		15,970
Earnings per share - basic		0.55
Earnings per share - diluted		0.55

ACQUISITIONS - Schedule of pro forma (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares
Business Acquisition, Pro Forma Information [Abstract]
Total revenues (net interest income and noninterest income) \| $	$ 42,543
Net income \| $	$ 15,970
Earnings per share - basic \| $ / shares	$ 0.55
Earnings per share - diluted \| $ / shares	$ 0.55

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

3 Months Ended

Mar. 31, 2022

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

LOANS AND THE ALLOWANCE FOR LOAN LOSSES

NOTE 4 – LOANS AND THE ALLOWANCE FOR LOAN LOSSES

Major categories of loans are summarized as follows:


	March 31, 2022		December 31, 2021

	(dollars in thousands)
Commercial and industrial	$	291,909	$	286,946
Agricultural and farmland		232,528		247,796
Commercial real estate - owner occupied		237,000		234,544
Commercial real estate - non-owner occupied		687,617		684,023
Multi-family		243,447		263,911
Construction and land development		320,030		298,048
One-to-four family residential		327,791		327,837
Municipal, consumer, and other		147,463		156,584
Loans, before allowance for loan losses		2,487,785		2,499,689
Allowance for loan losses		(24,508)		(23,936)
Loans, net of allowance for loan losses	$	2,463,277	$	2,475,753

Paycheck Protection Program (PPP) loans (included above)
Commercial and industrial	$	16,184	$	28,404
Agricultural and farmland		392		913
Municipal, consumer, and other		—		171
Total PPP loans	$	16,576	$	29,488

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, 2022	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2021	$	2,440	$	845	$	1,840	$	8,145	$	1,263	$	4,914	$	1,311	$	3,178	$	23,936
Provision for loan losses		(653)		(3)		(429)		(1,396)		91		(421)		120		2,107		(584)
Charge-offs		(5)		—		—		—		—		—		(2)		(127)		(134)
Recoveries		709		—		100		265		—		—		154		62		1,290
Balance, March 31, 2022	$	2,491	$	842	$	1,511	$	7,014	$	1,354	$	4,493	$	1,583	$	5,220	$	24,508

					Commercial		Commercial								Municipal,
	Commercial		Agricultural		Real Estate		Real Estate								Consumer
	and		and		Owner		Non-owner				Construction		Residential		and
Three Months Ended March 31, 2021	Industrial		Farmland		Occupied		Occupied		Multi-Family		and Land		Real Estate		Other		Total

Allowance for loan losses:	(dollars in thousands)
Balance, December 31, 2020	$	3,929	$	793	$	3,141	$	11,251	$	1,957	$	4,232	$	1,801	$	4,734	$	31,838
Provision for loan losses		(1,802)		72		(426)		72		133		(316)		(198)		(940)		(3,405)
Charge-offs		—		—		—		—		—		—		(72)		(123)		(195)
Recoveries		293		—		—		7		—		90		42		89		521
Balance, March 31, 2021	$	2,420	$	865	$	2,715	$	11,330	$	2,090	$	4,006	$	1,573	$	3,760	$	28,759

The following tables present the recorded investments in loans and the allowance for loan losses by category:


					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, 2022	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	270,193	$	231,551	$	218,324	$	645,060	$	242,249	$	316,799	$	312,978	$	134,474	$	2,371,628
Individually evaluated for impairment		21,579		234		13,384		30,196		—		2,010		9,046		12,960		89,409
Acquired with deteriorated credit quality		137		743		5,292		12,361		1,198		1,221		5,767		29		26,748
Total	$	291,909	$	232,528	$	237,000	$	687,617	$	243,447	$	320,030	$	327,791	$	147,463	$	2,487,785

Allowance for loan losses:
Collectively evaluated for impairment	$	2,328	$	842	$	1,261	$	4,190	$	1,351	$	4,488	$	1,423	$	1,316	$	17,199
Individually evaluated for impairment		163		—		221		2,821		—		—		157		3,903		7,265
Acquired with deteriorated credit quality		—		—		29		3		3		5		3		1		44
Total	$	2,491	$	842	$	1,511	$	7,014	$	1,354	$	4,493	$	1,583	$	5,220	$	24,508

					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, 2021	Industrial		Farmland		Occupied		Occupied		Multi-Family		Development		Residential		Other		Total

Loan balances:	(dollars in thousands)
Collectively evaluated for impairment	$	272,064	$	247,021	$	216,794	$	641,555	$	262,701	$	293,548	$	314,807	$	143,510	$	2,392,000
Individually evaluated for impairment		14,744		12		12,332		29,575		—		2,018		6,897		13,041		78,619
Acquired with deteriorated credit quality		138		763		5,418		12,893		1,210		2,482		6,133		33		29,070
Total	$	286,946	$	247,796	$	234,544	$	684,023	$	263,911	$	298,048	$	327,837	$	156,584	$	2,499,689

Allowance for loan losses:
Collectively evaluated for impairment	$	2,253	$	845	$	1,480	$	5,138	$	1,259	$	4,895	$	1,099	$	1,302	$	18,271
Individually evaluated for impairment		187		—		327		2,999		—		—		210		1,875		5,598
Acquired with deteriorated credit quality		—		—		33		8		4		19		2		1		67
Total	$	2,440	$	845	$	1,840	$	8,145	$	1,263	$	4,914	$	1,311	$	3,178	$	23,936

The following tables present loans individually evaluated for impairment by category of loans:


	Unpaid
	Principal		Recorded		Related
March 31, 2022	Balance		Investment		Allowance

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	282	$	282	$	163
Agricultural and farmland		—		—		—
Commercial real estate - owner occupied		2,416		2,416		221
Commercial real estate - non-owner occupied		14,736		14,720		2,821
Multi-family		—		—		—
Construction and land development		—		—		—
One-to-four family residential		678		634		157
Municipal, consumer, and other		8,478		8,455		3,903
Total	$	26,590	$	26,507	$	7,265

With no related allowance:
Commercial and industrial	$	21,339	$	21,297	$	—
Agricultural and farmland		234		234		—
Commercial real estate - owner occupied		11,186		10,968		—
Commercial real estate - non-owner occupied		15,550		15,476		—
Multi-family		—		—		—
Construction and land development		2,110		2,010		—
One-to-four family residential		9,711		8,412		—
Municipal, consumer, and other		4,564		4,505		—
Total	$	64,694	$	62,902	$	—

Total loans individually evaluated for impairment:
Commercial and industrial	$	21,621	$	21,579	$	163
Agricultural and farmland		234		234		—
Commercial real estate - owner occupied		13,602		13,384		221
Commercial real estate - non-owner occupied		30,286		30,196		2,821
Multi-family		—		—		—
Construction and land development		2,110		2,010		—
One-to-four family residential		10,389		9,046		157
Municipal, consumer, and other		13,042		12,960		3,903
Total	$	91,284	$	89,409	$	7,265


	Unpaid
	Principal		Recorded		Related
December 31, 2021	Balance		Investment		Allowance

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	303	$	303	$	187
Agricultural and farmland		—		—		—
Commercial real estate - owner occupied		3,013		3,013		327
Commercial real estate - non-owner occupied		14,912		14,893		2,999
Multi-family		—		—		—
Construction and land development		—		—		—
One-to-four family residential		1,421		1,314		210
Municipal, consumer, and other		8,523		8,498		1,875
Total	$	28,172	$	28,021	$	5,598

With no related allowance:
Commercial and industrial	$	14,452	$	14,441	$	—
Agricultural and farmland		12		12		—
Commercial real estate - owner occupied		9,534		9,319		—
Commercial real estate - non-owner occupied		14,755		14,682		—
Multi-family		—		—		—
Construction and land development		2,112		2,018		—
One-to-four family residential		7,129		5,583		—
Municipal, consumer, and other		4,603		4,543		—
Total	$	52,597	$	50,598	$	—

Total loans individually evaluated for impairment:
Commercial and industrial	$	14,755	$	14,744	$	187
Agricultural and farmland		12		12		—
Commercial real estate - owner occupied		12,547		12,332		327
Commercial real estate - non-owner occupied		29,667		29,575		2,999
Multi-family		—		—		—
Construction and land development		2,112		2,018		—
One-to-four family residential		8,550		6,897		210
Municipal, consumer, and other		13,126		13,041		1,875
Total	$	80,769	$	78,619	$	5,598

The following table presents the average recorded investment and interest income recognized for loans individually evaluated for impairment by category of loans:


	Three Months Ended March 31,
	2022				2021
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized

With an allowance recorded:	(dollars in thousands)
Commercial and industrial	$	292	$	4	$	2,266	$	31
Agricultural and farmland		—		—		168		2
Commercial real estate - owner occupied		2,425		33		3,244		41
Commercial real estate - non-owner occupied		14,854		186		20,361		208
Multi-family		—		—		—		—
Construction and land development		—		—		2,248		27
One-to-four family residential		647		5		2,644		23
Municipal, consumer, and other		8,509		39		8,802		40
Total	$	26,727	$	267	$	39,733	$	372

With no related allowance:
Commercial and industrial	$	19,498	$	200	$	1,068	$	14
Agricultural and farmland		236		—		383		6
Commercial real estate - owner occupied		11,028		106		9,600		122
Commercial real estate - non-owner occupied		15,495		198		5,665		68
Multi-family		—		—		876		10
Construction and land development		2,016		22		1,764		26
One-to-four family residential		8,728		57		6,981		49
Municipal, consumer, and other		4,544		21		4,746		22
Total	$	61,545	$	604	$	31,083	$	317

Total loans individually evaluated for impairment:
Commercial and industrial	$	19,790	$	204	$	3,334	$	45
Agricultural and farmland		236		—		551		8
Commercial real estate - owner occupied		13,453		139		12,844		163
Commercial real estate - non-owner occupied		30,349		384		26,026		276
Multi-family		—		—		876		10
Construction and land development		2,016		22		4,012		53
One-to-four family residential		9,375		62		9,625		72
Municipal, consumer, and other		13,053		60		13,548		62
Total	$	88,272	$	871	$	70,816	$	689

The following tables present the recorded investment in loans by category based on current payment and accrual status:


	Accruing Interest
			30 - 89 Days		90+ Days				Total
March 31, 2022	Current		Past Due		Past Due		Nonaccrual		Loans

	(dollars in thousands)
Commercial and industrial	$	291,812	$	4	$	—	$	93	$	291,909
Agricultural and farmland		232,528		—		—		—		232,528
Commercial real estate - owner occupied		236,898		102		—		—		237,000
Commercial real estate - non-owner occupied		687,446		—		—		171		687,617
Multi-family		243,447		—		—		—		243,447
Construction and land development		319,432		80		—		518		320,030
One-to-four family residential		325,648		484		25		1,634		327,791
Municipal, consumer, and other		147,292		118		8		45		147,463
Total	$	2,484,503	$	788	$	33	$	2,461	$	2,487,785


	Accruing Interest
			30 - 89 Days		90+ Days				Total
December 31, 2021	Current		Past Due		Past Due		Nonaccrual		Loans

	(dollars in thousands)
Commercial and industrial	$	286,563	$	9	$	—	$	374	$	286,946
Agricultural and farmland		247,772		24		—		—		247,796
Commercial real estate - owner occupied		234,441		103		—		—		234,544
Commercial real estate - non-owner occupied		683,029		823		—		171		684,023
Multi-family		263,911		—		—		—		263,911
Construction and land development		297,465		64		—		519		298,048
One-to-four family residential		325,780		383		32		1,642		327,837
Municipal, consumer, and other		156,297		214		16		57		156,584
Total	$	2,495,258	$	1,620	$	48	$	2,763	$	2,499,689

The following tables present total loans by category based on their assigned risk ratings determined by management:


March 31, 2022	Pass		Pass-Watch		Substandard		Doubtful		Total

	(dollars in thousands)
Commercial and industrial	$	265,441	$	4,889	$	21,579	$	—	$	291,909
Agricultural and farmland		212,526		19,112		890		—		232,528
Commercial real estate - owner occupied		199,248		25,096		12,656		—		237,000
Commercial real estate - non-owner occupied		631,602		22,977		33,038		—		687,617
Multi-family		238,491		4,956		—		—		243,447
Construction and land development		293,294		24,726		2,010		—		320,030
One-to-four family residential		311,074		6,932		9,785		—		327,791
Municipal, consumer, and other		134,300		203		12,960		—		147,463
Total	$	2,285,976	$	108,891	$	92,918	$	—	$	2,487,785


December 31, 2021	Pass		Pass-Watch		Substandard		Doubtful		Total

	(dollars in thousands)
Commercial and industrial	$	267,088	$	5,114	$	14,744	$	—	$	286,946
Agricultural and farmland		221,898		25,213		685		—		247,796
Commercial real estate - owner occupied		198,862		24,098		11,584		—		234,544
Commercial real estate - non-owner occupied		619,212		32,372		32,439		—		684,023
Multi-family		241,362		22,549		—		—		263,911
Construction and land development		268,556		27,474		2,018		—		298,048
One-to-four family residential		308,951		11,221		7,665		—		327,837
Municipal, consumer, and other		143,299		244		13,041		—		156,584
Total	$	2,269,228	$	148,285	$	82,176	$	—	$	2,499,689

There were no troubled debt restructurings during the three months ended March 31, 2022 or 2021.

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, 2022 or 2021. 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, 2022 and December 31, 2021, the Company had $3.4 million and $3.5 million 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 loans whose terms have been modified in troubled debt restructurings.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), along with a joint statement issued by banking regulatory agencies, provided that short-term loan payment modifications made prior to December 31, 2021 to borrowers experiencing financial hardship due to the COVID-19 pandemic generally do not need to be accounted for as a troubled debt restructuring. As of March 31, 2022 and December 31, 2021, the Company had loans that were granted a payment modification due to a COVID-19 related financial hardship and had not returned to regular payments were $0.2 million and $0.2 million, respectively. Substantially all modifications were in the form of a three-month interest-only period or a one-month payment deferral. Some borrowers have received more than one loan payment modification.

As of March 31, 2022 and December 31, 2021, the Company pledged loans totaling $576.0 million and $567.0 million, respectively, to the Federal Home Loan Bank of Chicago (“FHLB”) to secure available FHLB advance borrowing capacity.

Changes in the accretable yield for loans acquired with deteriorated credit quality were as follows:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	413	$	1,397
Reclassification from non-accretable difference		117		74
Accretion income		(46)		(133)
Ending balance	$	484	$	1,338

FORECLOSED ASSETS - Additional Information (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
FORECLOSED ASSETS
Carrying value of foreclosed asset	$ 3,043	$ 3,278	$ 4,748	$ 4,168
One-to-four family residential real estate property
FORECLOSED ASSETS
Carrying value of foreclosed asset	$ 0	$ 200
Number of loans in the process of foreclosure \| loan	1	4
Loan amount in the process of foreclosure	$ 18	$ 100

SECURITIES - Investments in a Continuous Unrealized Loss Position (Details) $ in Thousands	Mar. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Available-for-sale: Unrealized Loss
Less than 12 Months	$ (31,217)	$ (7,334)
12 Months or More	(9,682)	(1,654)
Total Unrealized Loss of Available-for-sale securities	(40,899)	(8,988)
Held-to-maturity: Unrealized Loss
Less than 12 Months	(21,817)	(2,826)
12 Months or More	(245)	(128)
Total Unrealized Loss of Held-to-maturity securities	(22,062)	(2,954)
Available-for-sale: Fair Value
Less than 12 Months	677,460	445,604
12 Months or More	85,870	38,324
Total Fair Value Available-for-sale securities	763,330	483,928
Held-to-maturity: Fair value
Less than 12 Months	284,458	194,309
12 Months or More	2,363	2,776
Total Fair Value Held-to-maturity securities	286,821	197,085
Total: Unrealized Losses
Less Than 12 Months	(53,034)	(10,160)
12 Months or More	(9,927)	(1,782)
Total Unrealized Losses	(62,961)	(11,942)
Total: Fair Value
Less than 12 Months	961,918	639,913
12 Months or More	88,233	41,100
Total Fair Value	$ 1,050,151	681,013
Number of securities in an unrealized loss position for a period of twelve months or more \| item	75
Number of securities in an unrealized loss position for a period of less than twelve months \| item	465
U.S. Treasury
Available-for-sale: Unrealized Loss
Less than 12 Months	$ (7,329)	(354)
Total Unrealized Loss of Available-for-sale securities	(7,329)	(354)
Available-for-sale: Fair Value
Less than 12 Months	162,637	68,410
Total Fair Value Available-for-sale securities	162,637	68,410
U.S. government agency
Available-for-sale: Unrealized Loss
Less than 12 Months	(1,181)	(2,183)
12 Months or More		(284)
Total Unrealized Loss of Available-for-sale securities	(1,181)	(2,467)
Held-to-maturity: Unrealized Loss
Less than 12 Months	(722)	(51)
Total Unrealized Loss of Held-to-maturity securities	(722)	(51)
Available-for-sale: Fair Value
Less than 12 Months	42,715	80,219
12 Months or More		5,578
Total Fair Value Available-for-sale securities	42,715	85,797
Held-to-maturity: Fair value
Less than 12 Months	11,636	4,949
Total Fair Value Held-to-maturity securities	11,636	4,949
Municipal securities
Available-for-sale: Unrealized Loss
Less than 12 Months	(9,031)	(2,018)
12 Months or More	(6,722)	(886)
Total Unrealized Loss of Available-for-sale securities	(15,753)	(2,904)
Available-for-sale: Fair Value
Less than 12 Months	157,069	89,424
12 Months or More	53,718	17,327
Total Fair Value Available-for-sale securities	210,787	106,751
Mortgage-backed: Agency residential
Available-for-sale: Unrealized Loss
Less than 12 Months	(7,647)	(851)
12 Months or More	(150)	(68)
Total Unrealized Loss of Available-for-sale securities	(7,797)	(919)
Held-to-maturity: Unrealized Loss
Less than 12 Months	(947)	(102)
Total Unrealized Loss of Held-to-maturity securities	(947)	(102)
Available-for-sale: Fair Value
Less than 12 Months	191,824	91,703
12 Months or More	3,931	4,305
Total Fair Value Available-for-sale securities	195,755	96,008
Held-to-maturity: Fair value
Less than 12 Months	17,789	14,932
Total Fair Value Held-to-maturity securities	17,789	14,932
Mortgage-backed: Agency commercial
Available-for-sale: Unrealized Loss
Less than 12 Months	(5,579)	(1,921)
12 Months or More	(2,040)	(127)
Total Unrealized Loss of Available-for-sale securities	(7,619)	(2,048)
Held-to-maturity: Unrealized Loss
Less than 12 Months	(20,148)	(2,673)
12 Months or More	(245)	(128)
Total Unrealized Loss of Held-to-maturity securities	(20,393)	(2,801)
Available-for-sale: Fair Value
Less than 12 Months	108,665	113,111
12 Months or More	24,031	6,443
Total Fair Value Available-for-sale securities	132,696	119,554
Held-to-maturity: Fair value
Less than 12 Months	255,033	174,428
12 Months or More	2,363	2,776
Total Fair Value Held-to-maturity securities	257,396	177,204
Corporate
Available-for-sale: Unrealized Loss
Less than 12 Months	(450)	(7)
12 Months or More	(770)	(289)
Total Unrealized Loss of Available-for-sale securities	(1,220)	(296)
Available-for-sale: Fair Value
Less than 12 Months	14,550	2,737
12 Months or More	4,190	4,671
Total Fair Value Available-for-sale securities	$ 18,740	$ 7,408

ACCOUNTING POLICIES (Policies)	3 Months Ended
ACCOUNTING POLICIES (Policies)	Mar. 31, 2022
ACCOUNTING POLICIES
Basis of Consolidation	Basis of Presentation HBT Financial, Inc. (“HBT Financial” or the “Company”) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (“Heartland Bank” or the “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 and Eastern Iowa. Additionally, the Company is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory agencies. The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with accounting principles generally accepted in the United States of America (“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 SEC. 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 for the year ended December 31, 2021, filed with the SEC on March 11, 2022. 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 may remain an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, which is December 31, 2024, (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues, (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or (4) the date on which the Company has, during the previous three year period, issued, publicly or privately, more than $1.0 billion in non-convertible debt securities. 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.
Use of Estimates	Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with GAAP. 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 fair value of assets acquired and liabilities assumed in business combinations.
Segment Reporting	Segment Reporting The Company’s operations consist of one reportable segment. The Company’s chief operating decision maker evaluates the operations of the Company using consolidated information for purposes of allocating resources and assessing performance.
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 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 has formed an implementation team to assess the impact that ASU 2016-13 will have on the Company’s consolidated financial statements. For the majority of loans evaluated on a pooled basis, the Company anticipates using a discounted cash flow method which considers instrument level cash flows adjusted for, among other factors, prepayment speeds, probability of default, and loss given default. The Company also anticipates using regression analysis of historical internal and peer data to determine which variables are best suited to be economic variables utilized when modeling lifetime probability of default and loss given default. The ultimate impact to the Company’s financial condition and results of operations of ASU 2016-13, at both adoption and each subsequent reporting period, is highly dependent on credit quality, macroeconomic forecasts and conditions, the composition of our loan and securities portfolios, along with other management judgments. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under ASU 2017-04, 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. ASU 2020-04 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.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock Transactions, Parenthetical Disclosures [Abstract]
Cash dividends	$ 0.16	$ 0.15

FORECLOSED ASSETS

3 Months Ended

Mar. 31, 2022

FORECLOSED ASSETS

FORECLOSED ASSETS

NOTE 6 – FORECLOSED ASSETS

Foreclosed assets activity is as follows:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	3,278	$	4,168
Transfers from loans		19		671
Proceeds from sales		(294)		(15)
Net gain (loss) on sales		105		(3)
Direct write-downs		(65)		(73)
Ending balance	$	3,043	$	4,748

Gains (losses) on foreclosed assets includes the following:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Direct write-downs	$	(65)	$	(73)
Net gain (loss) on sales		105		(3)
Gains (losses) on foreclosed assets	$	40	$	(76)

There were no foreclosed one-to-four family residential real estate properties held as of March 31, 2022. The carrying value of foreclosed one-to-four family residential real estate properties held as of December 31, 2021 was $0.2 million. As of March 31, 2022, there was 1 one-to-four family residential real estate loan in the process of foreclosure totaling $18 thousand. As of December 31, 2021, there were 4 one-to-four family residential real estate loans in the process of foreclosure totaling $0.1 million.

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Summary (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	$ 23,936	$ 31,838
Provision for loan losses	(584)	(3,405)
Charge-offs	(134)	(195)
Recoveries	1,290	521
Allowance for loan losses at end of period	24,508	28,759
Commercial and industrial
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	2,440	3,929
Provision for loan losses	(653)	(1,802)
Charge-offs	(5)
Recoveries	709	293
Allowance for loan losses at end of period	2,491	2,420
Agricultural and farmland
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	845	793
Provision for loan losses	(3)	72
Allowance for loan losses at end of period	842	865
Commercial real estate - owner occupied
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	1,840	3,141
Provision for loan losses	(429)	(426)
Recoveries	100
Allowance for loan losses at end of period	1,511	2,715
Commercial real estate - non-owner occupied
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	8,145	11,251
Provision for loan losses	(1,396)	72
Recoveries	265	7
Allowance for loan losses at end of period	7,014	11,330
Multi-family
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	1,263	1,957
Provision for loan losses	91	133
Allowance for loan losses at end of period	1,354	2,090
Construction and land development
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	4,914	4,232
Provision for loan losses	(421)	(316)
Recoveries		90
Allowance for loan losses at end of period	4,493	4,006
One-to-four family residential
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	1,311	1,801
Provision for loan losses	120	(198)
Charge-offs	(2)	(72)
Recoveries	154	42
Allowance for loan losses at end of period	1,583	1,573
Municipal, consumer, and other
Activity in the allowance for loan losses
Allowance for loan losses at beginning of period	3,178	4,734
Provision for loan losses	2,107	(940)
Charge-offs	(127)	(123)
Recoveries	62	89
Allowance for loan losses at end of period	$ 5,220	$ 3,760

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Assigned Risk Ratings (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	$ 2,487,785	$ 2,499,689
Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	2,285,976	2,269,228
Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	108,891	148,285
Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	92,918	82,176
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	291,909	286,946
Commercial and industrial \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	265,441	267,088
Commercial and industrial \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	4,889	5,114
Commercial and industrial \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	21,579	14,744
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	232,528	247,796
Agricultural and farmland \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	212,526	221,898
Agricultural and farmland \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	19,112	25,213
Agricultural and farmland \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	890	685
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	237,000	234,544
Commercial real estate - owner occupied \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	199,248	198,862
Commercial real estate - owner occupied \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	25,096	24,098
Commercial real estate - owner occupied \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	12,656	11,584
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	687,617	684,023
Commercial real estate - non-owner occupied \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	631,602	619,212
Commercial real estate - non-owner occupied \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	22,977	32,372
Commercial real estate - non-owner occupied \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	33,038	32,439
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	243,447	263,911
Multi-family \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	238,491	241,362
Multi-family \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	4,956	22,549
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	320,030	298,048
Construction and land development \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	293,294	268,556
Construction and land development \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	24,726	27,474
Construction and land development \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	2,010	2,018
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	327,791	327,837
One-to-four family residential \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	311,074	308,951
One-to-four family residential \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	6,932	11,221
One-to-four family residential \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	9,785	7,665
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	147,463	156,584
Municipal, consumer, and other \| Pass
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	134,300	143,299
Municipal, consumer, and other \| Pass-Watch
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	203	244
Municipal, consumer, and other \| Substandard
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	$ 12,960	$ 13,041

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net income	$ 13,604	$ 15,245
Earnings allocated to participating securities	(17)	(31)
Numerator for earnings per share - basic	$ 13,587	$ 15,214
Denominator:
Weighted average common shares outstanding	28,986,593	27,430,912
Dilutive effect of outstanding restricted stock units	43,646	2,489
Weighted average common shares outstanding, including all dilutive potential shares	29,030,239	27,433,401
Earnings per share - Basic	$ 0.47	$ 0.55
Earnings per share - Diluted	$ 0.47	$ 0.55

FAIR VALUE OF FINANCIAL INSTRUMENTS - Recurring basis (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
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
Transfer of liabilities in to level 3	0	0
Transfer of liabilities out of level 3	0	$ 0
Debt securities available-for-sale, at fair value	933,922		$ 942,168
Equity securities	3,256		3,443
Fair value	9,723		7,994
U.S. Treasury
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	162,637		108,976
U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	50,017		128,105
Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	275,564		297,077
Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	237,528		179,466
Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	149,311		164,061
Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	58,865		64,483
Recurring
FAIR VALUE OF FINANCIAL INSTRUMENTS
Equity securities	3,256		3,443
Fair value	9,723		7,994
Derivative financial assets fair value	3,946		8,697
Derivative financial liabilities fair value	3,936		9,377
Recurring \| U.S. Treasury
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	162,637		108,976
Recurring \| U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	50,017		128,105
Recurring \| Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	275,564		297,077
Recurring \| Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	237,528		179,466
Recurring \| Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	149,311		164,061
Recurring \| Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	58,865		64,483
Recurring \| Level 1
FAIR VALUE OF FINANCIAL INSTRUMENTS
Equity securities	3,256		3,443
Recurring \| Level 1 \| U.S. Treasury
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	162,637		108,976
Recurring \| Level 2
FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivative financial assets fair value	3,946		8,697
Derivative financial liabilities fair value	3,936		9,377
Recurring \| Level 2 \| U.S. government agency
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	50,017		128,105
Recurring \| Level 2 \| Municipal securities
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	275,564		297,077
Recurring \| Level 2 \| Mortgage-backed: Agency residential
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	237,528		179,466
Recurring \| Level 2 \| Mortgage-backed: Agency commercial
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	149,311		164,061
Recurring \| Level 2 \| Corporate
FAIR VALUE OF FINANCIAL INSTRUMENTS
Debt securities available-for-sale, at fair value	58,865		64,483
Recurring \| Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 9,723		$ 7,994

DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2022

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 8 – 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 may utilize 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, net of tax, is 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, 2022				December 31, 2021
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value

	(dollars in thousands)
Fair value recorded in other assets	$	7,000	$	20	$	—	$	—
Fair value recorded in other liabilities		10,000		(10)		17,000		(680)

As of March 31, 2022, the interest rate swap agreements designated as cash flow hedges had contractual maturities between 2024 and 2025. As of March 31, 2022 and December 31, 2021, the Company had cash pledged and held on deposit at counterparties of $0.2 million and $0.8 million, respectively.

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 (loss) to income	other comprehensive income (loss)
	Three Months Ended
	March 31,
	2022		2021

Designated as cash flow hedges:	(dollars in thousands)
Junior subordinated debentures interest expense		(96)		(99)

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 work 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, 2022				December 31, 2021
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value

	(dollars in thousands)
Fair value recorded in other assets:
Interest rate swaps with a commercial borrower counterparty	$	77,730	$	2,848	$	112,041	$	8,622
Interest rate swaps with a financial institution counterparty		37,007		1,078		3,880		75
Total fair value recorded in other assets	$	114,737	$	3,926	$	115,921	$	8,697

Fair value recorded in other liabilities:
Interest rate swaps with a commercial borrower counterparty	$	37,007	$	(1,078)	$	3,880	$	(75)
Interest rate swaps with a financial institution counterparty		77,730		(2,848)		112,041		(8,622)
Total fair value recorded in other liabilities	$	114,737	$	(3,926)	$	115,921	$	(8,697)

As of March 31, 2022, the interest rate swap agreements not designated as hedging instruments had contractual maturities between 2022 and 2042. As of March 31, 2022 and December 31, 2021, the carrying value of debt securities pledged and held in safekeeping at a financial institution counterparty were $1.1 million and $7.5 million, respectively.

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,
	2022		2021

Not designated as hedging instruments:	(dollars in thousands)
Gross gains	$	5,413	$	7,564
Gross losses		(5,413)		(7,564)
Net gains (losses)	$	—	$	—

DERIVATIVE FINANCIAL INSTRUMENTS - Interest rate contracts not designated as hedging instruments (Details) - Not designated - Interest rate swap - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
DERIVATIVE FINANCIAL INSTRUMENTS
Gross gains	$ 5,413	$ 7,564
Gross losses	(5,413)	$ (7,564)
Other assets
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount	114,737		$ 115,921
Derivative financial assets fair value	3,926		8,697
Other assets \| Commercial Borrower
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount	77,730		112,041
Derivative financial assets fair value	2,848		8,622
Other assets \| Financial Institutions Borrower
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative asset notional amount	37,007		3,880
Derivative financial assets fair value	1,078		75
Other liabilities
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount	114,737		115,921
Derivative financial liabilities fair value	(3,926)		(8,697)
Other liabilities \| Commercial Borrower
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount	37,007		3,880
Derivative financial liabilities fair value	1,078		(75)
Other liabilities \| Financial Institutions Borrower
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative liability notional amount	77,730		112,041
Derivative financial liabilities fair value	$ (2,848)		$ (8,622)

SECURITIES

3 Months Ended

Mar. 31, 2022

SECURITIES

SECURITIES

NOTE 3 – SECURITIES

The carrying balances of the securities were as follows:


	March 31,		December 31,
	2022		2021

	(dollars in thousands)
Debt securities available-for-sale	$	933,922	$	942,168
Debt securities held-to-maturity		438,054		336,185
Equity securities with readily determinable fair value		3,256		3,443
Equity securities with no readily determinable fair value		1,927		1,927
Total securities	$	1,377,159	$	1,283,723

There were no sales of securities during the three months ended March 31, 2022 and 2021. Gains (losses) on securities were as follows during the three months ended March 31:


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Net realized gains (losses) on sales	$	—	$	—
Net unrealized gains (losses) on equity securities:
Readily determinable fair value		(187)		40
No readily determinable fair value		—		—
Gains (losses) on securities	$	(187)	$	40

On March 31, 2022, June 30, 2021, and 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:


	March 31, 2022				June 30, 2021				March 31, 2021
	Amortized				Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value

	(dollars in thousands)
U.S. government agency	$	78,841	$	71,048	$	—	$	—	$	7,593	$	7,323
Mortgage-backed:
Agency residential		8,175		7,651		—		—		8,776		8,536
Agency commercial		27,834		25,432		99,271		99,275		118,792		113,861
Total	$	114,850	$	104,131	$	99,271	$	99,275	$	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.

Debt Securities

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


March 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	169,966	$	—	$	(7,329)	$	162,637
U.S. government agency		51,182		16		(1,181)		50,017
Municipal		290,714		603		(15,753)		275,564
Mortgage-backed:
Agency residential		244,721		604		(7,797)		237,528
Agency commercial		156,806		124		(7,619)		149,311
Corporate		59,428		657		(1,220)		58,865
Total available-for-sale		972,817		2,004		(40,899)		933,922
Held-to-maturity:
U.S. government agency		83,407		—		(722)		82,685
Municipal		14,251		350		—		14,601
Mortgage-backed:
Agency residential		27,100		7		(947)		26,160
Agency commercial		313,296		254		(20,393)		293,157
Total held-to-maturity		438,054		611		(22,062)		416,603
Total debt securities	$	1,410,871	$	2,615	$	(62,961)	$	1,350,525


December 31, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	109,002	$	328	$	(354)	$	108,976
U.S. government agency		129,269		1,303		(2,467)		128,105
Municipal		293,837		6,144		(2,904)		297,077
Mortgage-backed:
Agency residential		178,236		2,149		(919)		179,466
Agency commercial		164,875		1,234		(2,048)		164,061
Corporate		63,141		1,638		(296)		64,483
Total available-for-sale		938,360		12,796		(8,988)		942,168
Held-to-maturity:
U.S. government agency		12,349		42		(51)		12,340
Municipal		15,666		809		—		16,475
Mortgage-backed:
Agency residential		20,555		196		(102)		20,649
Agency commercial		287,615		1,749		(2,801)		286,563
Total held-to-maturity		336,185		2,796		(2,954)		336,027
Total debt securities	$	1,274,545	$	15,592	$	(11,942)	$	1,278,195

As of March 31, 2022 and December 31, 2021, the Bank had debt securities with a carrying value of $304.9 million and $353.3 million, respectively, which were pledged to secure public 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 46% of the municipal portfolio consists of debt securities issued by municipalities located in Illinois as of March 31, 2022. Approximately 94% of such debt securities were general obligation issues as of March 31, 2022.

The amortized cost and fair value of debt securities by contractual maturity, as of March 31, 2022, 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	$	26,200	$	26,286	$	2,136	$	2,161
Due after 1 year through 5 years		191,896		187,331		14,726		14,663
Due after 5 years through 10 years		268,930		253,700		54,808		54,474
Due after 10 years		84,264		79,766		25,988		25,988

Mortgage-backed:
Agency residential		244,721		237,528		27,100		26,160
Agency commercial		156,806		149,311		313,296		293,157
Total	$	972,817	$	933,922	$	438,054	$	416,603

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, 2022 and December 31, 2021:


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
March 31, 2022	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	(7,329)	$	162,637	$	—	$	—	$	(7,329)	$	162,637
U.S. government agency		(1,181)		42,715		—		—		(1,181)		42,715
Municipal		(9,031)		157,069		(6,722)		53,718		(15,753)		210,787
Mortgage-backed:
Agency residential		(7,647)		191,824		(150)		3,931		(7,797)		195,755
Agency commercial		(5,579)		108,665		(2,040)		24,031		(7,619)		132,696
Corporate		(450)		14,550		(770)		4,190		(1,220)		18,740
Total available-for-sale		(31,217)		677,460		(9,682)		85,870		(40,899)		763,330
Held-to-maturity:
U.S. government agency		(722)		11,636		—		—		(722)		11,636
Mortgage-backed:
Agency residential		(947)		17,789		—		—		(947)		17,789
Agency commercial		(20,148)		255,033		(245)		2,363		(20,393)		257,396
Total held-to-maturity		(21,817)		284,458		(245)		2,363		(22,062)		286,821
Total debt securities	$	(53,034)	$	961,918	$	(9,927)	$	88,233	$	(62,961)	$	1,050,151


	Investments in a Continuous Unrealized Loss Position
	Less than 12 Months				12 Months or More				Total
December 31, 2021	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value

Available-for-sale:	(dollars in thousands)
U.S. Treasury	$	(354)	$	68,410	$	—	$	—	$	(354)	$	68,410
U.S. government agency		(2,183)		80,219		(284)		5,578		(2,467)		85,797
Municipal		(2,018)		89,424		(886)		17,327		(2,904)		106,751
Mortgage-backed:
Agency residential		(851)		91,703		(68)		4,305		(919)		96,008
Agency commercial		(1,921)		113,111		(127)		6,443		(2,048)		119,554
Corporate		(7)		2,737		(289)		4,671		(296)		7,408
Total available-for-sale		(7,334)		445,604		(1,654)		38,324		(8,988)		483,928
Held-to-maturity:
U.S. government agency		(51)		4,949		—		—		(51)		4,949
Mortgage-backed:
Agency residential		(102)		14,932		—		—		(102)		14,932
Agency commercial		(2,673)		174,428		(128)		2,776		(2,801)		177,204
Total held-to-maturity		(2,826)		194,309		(128)		2,776		(2,954)		197,085
Total debt securities	$	(10,160)	$	639,913	$	(1,782)	$	41,100	$	(11,942)	$	681,013

As of March 31, 2022, there were 75 debt securities in an unrealized loss position for a period of twelve months or more, and 465 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.

Equity Securities

Equity securities with readily determinable fair values are measured at fair value with changes in fair value recognized in gains (losses) on securities on the consolidated statements of income.

The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer.

The initial cost and carrying values of equity securities, with cumulative net unrealized gains and losses are as follows:


	Readily		No Readily
	Determinable		Determinable
March 31, 2022	Fair Value		Fair Value

	(dollars in thousands)
Initial cost	$	3,142	$	2,092
Cumulative net unrealized gains (losses)		114		(165)
Carrying value	$	3,256	$	1,927


	Readily		No Readily
	Determinable		Determinable
December 31, 2021	Fair Value		Fair Value

	(dollars in thousands)
Initial cost	$	3,142	$	2,092
Cumulative net unrealized gains (losses)		301		(165)
Carrying value	$	3,443	$	1,927

As of March 31, 2022 and December 31, 2021, the cumulative net unrealized losses on equity securities with no readily determinable fair value reflect downward adjustments based on observable price changes of an identical investment. There have been no impairments or upward adjustments based on observable price changes to equity securities with no readily determinable fair value.

FAIR VALUE OF FINANCIAL INSTRUMENTS - Mortgage Servicing Rights (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 9,723	$ 7,994
Recurring
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	9,723	7,994
Recurring \| Level 3
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 9,723	$ 7,994
Valuation Technique	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Recurring \| Level 3 \| Constant pre-payment rates (CPR)
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value	$ 9,723	$ 7,994
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	83.4	88.9
Recurring \| Level 3 \| Constant pre-payment rates (CPR) \| Weighted average
FAIR VALUE OF FINANCIAL INSTRUMENTS
Measurement input	8.6	11.7
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

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Categories of loans (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	$ 2,487,785	$ 2,499,689
Allowance for loan losses	(24,508)	(23,936)	$ (28,759)	$ (31,838)
Loans, net of allowance for loan losses	2,463,277	2,475,753
Paycheck Protection Program (PPP) Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	16,576	29,488
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	291,909	286,946
Allowance for loan losses	(2,491)	(2,440)	(2,420)	(3,929)
Commercial and industrial \| Paycheck Protection Program (PPP) Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	16,184	28,404
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	232,528	247,796
Allowance for loan losses	(842)	(845)	(865)	(793)
Agricultural and farmland \| Paycheck Protection Program (PPP) Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	392	913
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	237,000	234,544
Allowance for loan losses	(1,511)	(1,840)	(2,715)	(3,141)
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	687,617	684,023
Allowance for loan losses	(7,014)	(8,145)	(11,330)	(11,251)
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	243,447	263,911
Allowance for loan losses	(1,354)	(1,263)	(2,090)	(1,957)
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	320,030	298,048
Allowance for loan losses	(4,493)	(4,914)	(4,006)	(4,232)
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	327,791	327,837
Allowance for loan losses	(1,583)	(1,311)	(1,573)	(1,801)
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses	147,463	156,584
Allowance for loan losses	$ (5,220)	(3,178)	$ (3,760)	$ (4,734)
Municipal, consumer, and other \| Paycheck Protection Program (PPP) Loans
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, before allowance for loan losses		$ 171

REGULATORY MATTERS (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
REGULATORY MATTERS
Total Capital (to Risk Weighted Assets), Actual Amount	$ 462,254	$ 452,162
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	231,789	226,950
Total Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	289,736	283,688
Tier 1 Capital (to Risk Weighted Assets), Actual Amount	437,746	428,226
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	173,842	170,213
Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	231,789	226,950
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount	437,746	428,226
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	130,381	127,659
Common Equity Tier 1 Capital (to Risk Weighted Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	188,329	184,397
Tier 1 Capital (to Average Assets), Actual Amount	437,746	428,226
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount	172,789	169,070
Tier 1 Capital (to Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 215,987	$ 211,337
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	15.95	15.94
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)	15.11	15.09
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)	15.11%	15.09%
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)	10.13	10.13
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	$ 488,974	$ 479,320
Total Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	231,959	227,115
Tier 1 Capital (to Risk Weighted Assets), Actual Amount	425,130	416,068
Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	173,969	170,336
Common Equity Tier 1 Capital (to Risk Weighted Assets), Actual Amount	388,564	379,519
Common Equity Tier 1 Capital (to Risk Weighted Assets), For Capital Adequacy Purposes Amount	130,477	127,752
Tier 1 Capital (to Average Assets), Actual Amount	425,130	416,068
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Amount	$ 172,907	$ 169,171
Total Capital (to Risk Weighted Assets), Actual Ratio (as a percent)	16.86	16.88
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)	14.66	14.66
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)	13.40%	13.37%
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)	9.83	9.84
Tier 1 Capital (to Average Assets), For Capital Adequacy Purposes Ratio (as a percent)	4.00	4.00

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, 2022	Dec. 31, 2021
Available-for-sale
Amortized Cost	$ 972,817	$ 938,360
Gross Unrealized Gains	2,004	12,796
Gross Unrealized Losses	(40,899)	(8,988)
Fair Value	933,922	942,168
Held-to-maturity
Amortized Cost	438,054	336,185
Gross Unrealized Gains	611	2,796
Gross Unrealized Losses	(22,062)	(2,954)
Fair Value	416,603	336,027
Total Amortized Cost	1,410,871	1,274,545
Total Gross Unrealized Gains	2,615	15,592
Total Gross Unrealized Losses	(62,961)	(11,942)
Total Fair Value	1,350,525	1,278,195
U.S. Treasury
Available-for-sale
Amortized Cost	169,966	109,002
Gross Unrealized Gains		328
Gross Unrealized Losses	(7,329)	(354)
Fair Value	162,637	108,976
U.S. government agency
Available-for-sale
Amortized Cost	51,182	129,269
Gross Unrealized Gains	16	1,303
Gross Unrealized Losses	(1,181)	(2,467)
Fair Value	50,017	128,105
Held-to-maturity
Amortized Cost	83,407	12,349
Gross Unrealized Gains		42
Gross Unrealized Losses	(722)	(51)
Fair Value	82,685	12,340
Municipal securities
Available-for-sale
Amortized Cost	290,714	293,837
Gross Unrealized Gains	603	6,144
Gross Unrealized Losses	(15,753)	(2,904)
Fair Value	275,564	297,077
Held-to-maturity
Amortized Cost	14,251	15,666
Gross Unrealized Gains	350	809
Fair Value	14,601	16,475
Mortgage-backed: Agency residential
Available-for-sale
Amortized Cost	244,721	178,236
Gross Unrealized Gains	604	2,149
Gross Unrealized Losses	(7,797)	(919)
Fair Value	237,528	179,466
Held-to-maturity
Amortized Cost	27,100	20,555
Gross Unrealized Gains	7	196
Gross Unrealized Losses	(947)	(102)
Fair Value	26,160	20,649
Mortgage-backed: Agency commercial
Available-for-sale
Amortized Cost	156,806	164,875
Gross Unrealized Gains	124	1,234
Gross Unrealized Losses	(7,619)	(2,048)
Fair Value	149,311	164,061
Held-to-maturity
Amortized Cost	313,296	287,615
Gross Unrealized Gains	254	1,749
Gross Unrealized Losses	(20,393)	(2,801)
Fair Value	293,157	286,563
Corporate
Available-for-sale
Amortized Cost	59,428	63,141
Gross Unrealized Gains	657	1,638
Gross Unrealized Losses	(1,220)	(296)
Fair Value	$ 58,865	$ 64,483

ACQUISITIONS (Tables)

3 Months Ended

Mar. 31, 2022

ACQUISITIONS

Schedule of recognized identified assets acquired and liabilities assumed

The fair value of the assets acquired and liabilities assumed from NXT on the acquisition date were as follows (dollars in thousands):


	Fair Value
Assets acquired:
Cash and cash equivalents	$	5,862
Interest-bearing time deposits with banks		739
Debt securities		18,295
Equity securities with readily determinable fair value		43
Restricted stock		796
Loans		194,576
Bank owned life insurance		7,352
Bank premises and equipment		3,667
Core deposit intangible assets		199
Mortgage servicing rights		370
Accrued interest receivable		886
Other assets		1,340
Total assets acquired		234,125

Liabilities assumed:
Deposits		181,586
Securities sold under agreements to repurchase		4,080
FHLB advances		12,625
Other liabilities		1,633
Total liabilities assumed		199,924
Net assets acquired	$	34,201

Consideration paid:
Cash	$	10,633
Common stock		29,270
Total consideration paid	$	39,903

Goodwill	$	5,702

The following table presents the acquired non-impaired loans as of the acquisition date (dollars in thousands):


Fair Value	$	194,576
Gross contractual amounts receivable		196,104
Estimate of contractual cash flows not expected to be collected		1,045

Business acquisition, pro forma information


	Pro Forma
	Three Months Ended
(dollars in thousands, except per share data)	March 31, 2021
Total revenues (net interest income and noninterest income)	$	42,543
Net income		15,970
Earnings per share - basic		0.55
Earnings per share - diluted		0.55

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Accretable Yield For Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Changes in accretable yield for loans acquired with deteriorated credit quality
Beginning balance	$ 413	$ 1,397
Reclassification from non-accretable difference	117	74
Accretion income	(46)	(133)
Ending balance	$ 484	$ 1,338

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance	$ 411,881	$ 363,917
Other comprehensive (loss) income, before tax	(52,551)	(22,724)
Income tax expense (benefit)	(14,980)	(6,477)
Other comprehensive (loss) income, after tax	(37,571)	(16,247)
Balance	383,155	357,406
Accumulated Other Comprehensive Income (Loss)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance	1,471	18,153
Other comprehensive (loss) income before reclassifications	(52,828)	(22,855)
Reclassifications	277	131
Other comprehensive (loss) income, before tax	(52,551)	(22,724)
Income tax expense (benefit)	(14,980)	(6,477)
Other comprehensive (loss) income, after tax	(37,571)	(16,247)
Balance	(36,100)	1,906
Unrealized gains (losses) on available-for-sale securities
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance	5,736	19,578
Transfer from available-for-sale to held-to-maturity	7,664	3,890
Other comprehensive (loss) income before reclassifications	(53,422)	(23,074)
Other comprehensive (loss) income, before tax	(53,422)	(23,074)
Income tax expense (benefit)	(15,228)	(6,577)
Other comprehensive (loss) income, after tax	(38,194)	(16,497)
Balance	(24,794)	6,971
Unrealized gains (losses) on held-to-maturity securities
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance	(3,514)	(118)
Transfer from available-for-sale to held-to-maturity	(7,664)	(3,890)
Reclassifications	181	32
Other comprehensive (loss) income, before tax	181	32
Income tax expense (benefit)	51	9
Other comprehensive (loss) income, after tax	130	23
Balance	(11,048)	(3,985)
Derivatives
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance	(751)	(1,307)
Other comprehensive (loss) income before reclassifications	594	219
Reclassifications	96	99
Other comprehensive (loss) income, before tax	690	318
Income tax expense (benefit)	197	91
Other comprehensive (loss) income, after tax	493	227
Balance	$ (258)	$ (1,080)

STOCK-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2022

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

NOTE 11 – 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):


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Restricted stock units	$	608	$	114
Performance restricted stock units		293		15
Total awards classified as equity		901		129
Stock appreciation rights		(23)		130
Total stock-based compensation expense	$	878	$	259

In February 2022, all outstanding restricted stock unit and performance restricted stock unit agreements were modified to address treatment upon retirement. In the event of retirement, if the retirement eligibility requirements are met, then 100% of unvested restricted stock units and performance restricted stock units will continue to vest in accordance with the originally established vesting schedule. The retirement modification resulted in the acceleration of $0.6 million of expense, although total compensation costs related to the modified agreements remained the same.

Restricted Stock Units

A restricted stock unit grants a participant the right to receive one share of the Company’s 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 service period for the entire award. Dividend equivalents on restricted stock units, which are either accrued until vested or paid at the same time as dividends on common stock, are classified as dividends charged to retained earnings.

During the three months ended March 31, 2022 and 2021, the total grant date fair value of the restricted stock units granted was $0.9 million and $0.7 million, respectively, based on the grant date closing prices. The total intrinsic value of restricted stock that vested during the three months ended March 31, 2022 and 2021 was $0.7 million and $0.3 million, respectively.

The following is a summary of restricted stock unit activity:


	Three Months Ended March 31,
	2022			2021
		Weighted			Weighted
		Average			Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	109,244	$	17.27	71,000	$	18.98
Granted	46,312		19.11	46,347		15.53
Vested	(34,925)		17.26	(20,225)		18.86
Forfeited	—		—	—		—
Ending balance	120,631	$	17.98	97,122	$	17.36

As of March 31, 2022, unrecognized compensation cost related to the non-vested restricted stock units was $1.6 million. This cost is expected to be recognized over the weighted average remaining service period of 2.1 years.

Performance Restricted Stock Units

A performance restricted stock unit is similar to a restricted stock unit, except that the number of shares of the Company’s common stock awarded is based on a performance condition and the completion of the requisite service period. The number of shares of the Company’s common stock that may be earned ranges from 0% to 150% of the number of performance restricted stock units granted. Performance restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and an assessment of the probable outcome of the performance condition. Compensation cost is recognized on a straight-line basis over the service period of the entire award. Changes in the performance condition probability assessment result in cumulative catch-up adjustments to the compensation cost recognized. Dividend equivalents on performance restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings.

During the three months ended March 31, 2022 and 2021, the total fair value of the performance restricted stock units granted was $0.5 million and $0.4 million, respectively, based on the grant date closing prices and an assessment of the probable outcome of the performance condition on the grant date.

The following is a summary of performance restricted stock unit activity:


	Three months ended March 31,
	2022			2021
		Weighted			Weighted
	Performance	Average		Performance	Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	38,344	$	15.72	—	$	—
Granted	23,723		19.14	28,697		15.53
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	62,067	$	17.02	28,697	$	15.53

As of March 31, 2022, unrecognized compensation cost related to non-vested performance restricted stock units was $0.7 million, based on the current assessment of the probable outcome of the performance conditions. This cost is expected to be recognized over the weighted average remaining service period of 1.9 years.

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 are classified as liabilities. The liability is based on an option-pricing model used to estimate the fair value of the stock appreciation rights. Compensation cost for non-vested stock appreciation rights is recognized on a straight line basis over the service period of the entire award. The non-vested stock appreciation rights vest in four equal annual installments beginning on the first anniversary of the grant date.

The following is a summary of stock appreciation rights activity:


	Three Months Ended March 31,
	2022			2021
	Stock Appreciation Rights	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights	Weighted Average Grant Date Assigned Value
Beginning balance	97,920	$	16.32	105,570	$	16.32
Granted	—		—	—		—
Exercised	(6,120)		16.32	—		—
Expired	—		—	(1,530)		16.32
Forfeited	—		—	—		—
Ending balance	91,800	$	16.32	104,040	$	16.32

A further summary of stock appreciation rights as of March 31, 2022, is as follows:


			Weighted Average
	Stock Appreciation Rights		Remaining
Grant Date Assigned Values	Outstanding	Exercisable	Contractual Term
$ 16.32	91,800	79,560	7.0	years

As of March 31, 2022, unrecognized compensation cost related to non-vested stock appreciation rights was $46 thousand.

As of March 31, 2022 and December 31, 2021, the liability recorded for outstanding stock appreciation rights was $0.4 million and $0.5 million, respectively. 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, 2022			December 31, 2021
Risk-free interest rate		2.37	%		1.40	%
Expected volatility		35.83	%		35.52	%
Expected life (in years)		7.4			7.7
Expected dividend yield		3.52	%		3.20	%

As of March 31, 2022, the liability recorded for previously exercised stock appreciation rights was $0.5 million, which will be paid in two remaining annual installments. As of December 31, 2021, the liability recorded for previously exercised stock appreciation rights was $0.8 million.

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2022

DERIVATIVE FINANCIAL INSTRUMENTS

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


	March 31, 2022				December 31, 2021
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value

	(dollars in thousands)
Fair value recorded in other assets	$	7,000	$	20	$	—	$	—
Fair value recorded in other liabilities		10,000		(10)		17,000		(680)

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 (loss) to income	other comprehensive income (loss)
	Three Months Ended
	March 31,
	2022		2021

Designated as cash flow hedges:	(dollars in thousands)
Junior subordinated debentures interest expense		(96)		(99)

Summary of interest rate swap agreements not designated as hedging instruments


	March 31, 2022				December 31, 2021
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value

	(dollars in thousands)
Fair value recorded in other assets:
Interest rate swaps with a commercial borrower counterparty	$	77,730	$	2,848	$	112,041	$	8,622
Interest rate swaps with a financial institution counterparty		37,007		1,078		3,880		75
Total fair value recorded in other assets	$	114,737	$	3,926	$	115,921	$	8,697

Fair value recorded in other liabilities:
Interest rate swaps with a commercial borrower counterparty	$	37,007	$	(1,078)	$	3,880	$	(75)
Interest rate swaps with a financial institution counterparty		77,730		(2,848)		112,041		(8,622)
Total fair value recorded in other liabilities	$	114,737	$	(3,926)	$	115,921	$	(8,697)

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


	Three Months Ended
	March 31,
	2022		2021

Not designated as hedging instruments:	(dollars in thousands)
Gross gains	$	5,413	$	7,564
Gross losses		(5,413)		(7,564)
Net gains (losses)	$	—	$	—

SECURITIES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
SECURITIES - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
SECURITIES
Carrying value of securities pledged to secure public and trust deposits	$ 304.9	$ 353.3
Illinois
SECURITIES
Percentage of obligations of local municipalities	46.00%
Percentage of general obligations in local municipalities	94.00%

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Recorded investments in loans and the allowance for loan losses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	$ 2,371,628	$ 2,392,000
Individually evaluated for impairment, Loans	89,409	78,619
Total	2,487,785	2,499,689
Collectively evaluated for impairment, Allowance for loan losses	17,199	18,271
Individually evaluated for impairment, Allowance for loan losses	7,265	5,598
Total investments in loans	24,508	23,936	$ 28,759	$ 31,838
Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	26,748	29,070
Individually evaluated for impairment, Allowance for loan losses	44	67
Commercial and industrial
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	270,193	272,064
Individually evaluated for impairment, Loans	21,579	14,744
Total	291,909	286,946
Collectively evaluated for impairment, Allowance for loan losses	2,328	2,253
Individually evaluated for impairment, Allowance for loan losses	163	187
Total investments in loans	2,491	2,440	2,420	3,929
Commercial and industrial \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	137	138
Agricultural and farmland
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	231,551	247,021
Individually evaluated for impairment, Loans	234	12
Total	232,528	247,796
Collectively evaluated for impairment, Allowance for loan losses	842	845
Total investments in loans	842	845	865	793
Agricultural and farmland \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	743	763
Commercial real estate - owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	218,324	216,794
Individually evaluated for impairment, Loans	13,384	12,332
Total	237,000	234,544
Collectively evaluated for impairment, Allowance for loan losses	1,261	1,480
Individually evaluated for impairment, Allowance for loan losses	221	327
Total investments in loans	1,511	1,840	2,715	3,141
Commercial real estate - owner occupied \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	5,292	5,418
Individually evaluated for impairment, Allowance for loan losses	29	33
Commercial real estate - non-owner occupied
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	645,060	641,555
Individually evaluated for impairment, Loans	30,196	29,575
Total	687,617	684,023
Collectively evaluated for impairment, Allowance for loan losses	4,190	5,138
Individually evaluated for impairment, Allowance for loan losses	2,821	2,999
Total investments in loans	7,014	8,145	11,330	11,251
Commercial real estate - non-owner occupied \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	12,361	12,893
Individually evaluated for impairment, Allowance for loan losses	3	8
Multi-family
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	242,249	262,701
Total	243,447	263,911
Collectively evaluated for impairment, Allowance for loan losses	1,351	1,259
Total investments in loans	1,354	1,263	2,090	1,957
Multi-family \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,198	1,210
Individually evaluated for impairment, Allowance for loan losses	3	4
Construction and land development
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	316,799	293,548
Individually evaluated for impairment, Loans	2,010	2,018
Total	320,030	298,048
Collectively evaluated for impairment, Allowance for loan losses	4,488	4,895
Total investments in loans	4,493	4,914	4,006	4,232
Construction and land development \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	1,221	2,482
Individually evaluated for impairment, Allowance for loan losses	5	19
One-to-four family residential
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	312,978	314,807
Individually evaluated for impairment, Loans	9,046	6,897
Total	327,791	327,837
Collectively evaluated for impairment, Allowance for loan losses	1,423	1,099
Individually evaluated for impairment, Allowance for loan losses	157	210
Total investments in loans	1,583	1,311	1,573	1,801
One-to-four family residential \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	5,767	6,133
Individually evaluated for impairment, Allowance for loan losses	3	2
Municipal, consumer, and other
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Collectively evaluated for impairment, Loans	134,474	143,510
Individually evaluated for impairment, Loans	12,960	13,041
Total	147,463	156,584
Collectively evaluated for impairment, Allowance for loan losses	1,316	1,302
Individually evaluated for impairment, Allowance for loan losses	3,903	1,875
Total investments in loans	5,220	3,178	$ 3,760	$ 4,734
Municipal, consumer, and other \| Loans acquired with deteriorated credit quality
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Total	29	33
Individually evaluated for impairment, Allowance for loan losses	$ 1	$ 1

DEPOSITS - Interest bearing Deposits - Narrative (Detail) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
DEPOSITS
Brokered deposits	$ 4.2	$ 4.2
Reciprocal transaction deposits, Money market deposits	7.7	6.9
Reciprocal transaction deposits, Time deposits	1.2	0.9
Time deposits in denominations of $250,000 or more	35.0	59.5
Time deposits in denominations of $100,000 or more	$ 104.7	$ 133.1

FAIR VALUE OF FINANCIAL INSTRUMENTS - Unobservable inputs used in nonrecurring measurements (Details) - Nonrecurring - Level 3 $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
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	$ 19,242	$ 22,423
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	$ 1,081	$ 1,452
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	$ 3,043	$ 3,278
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, 2022	Dec. 31, 2021
Financial assets:
Debt securities held-to-maturity	$ 416,603	$ 336,027
Level 1 \| Carrying Amount
Financial assets:
Cash and cash equivalents	358,979	409,268
Level 1 \| Estimated Fair Value
Financial assets:
Cash and cash equivalents	358,979	409,268
Level 2 \| Carrying Amount
Financial assets:
Debt securities held-to-maturity	438,054	336,185
Accrued interest receivable	13,527	14,901
Financial liabilities:
Securities sold under agreements to repurchase	50,834	61,256
Accrued interest payable	560	1,043
Level 2 \| Estimated Fair Value
Financial assets:
Debt securities held-to-maturity	416,603	336,027
Accrued interest receivable	13,527	14,901
Financial liabilities:
Securities sold under agreements to repurchase	50,834	61,256
Accrued interest payable	560	1,043
Level 3 \| Carrying Amount
Financial assets:
Restricted stock	2,739	2,739
Loans, net	2,463,277	2,475,753
Investments in unconsolidated subsidiaries	1,165	1,165
Financial liabilities:
Time deposits	295,169	328,208
Level 3 \| Estimated Fair Value
Financial assets:
Restricted stock	2,739	2,739
Loans, net	2,476,472	2,494,686
Investments in unconsolidated subsidiaries	1,165	1,165
Financial liabilities:
Time deposits	291,367	327,779
Subordinated Notes \| Level 3 \| Carrying Amount
Financial liabilities:
Subordinated debt	39,336	39,316
Subordinated Notes \| Level 3 \| Estimated Fair Value
Financial liabilities:
Subordinated debt	40,546	41,602
Junior Subordinated Debentures Issued \| Level 3 \| Carrying Amount
Financial liabilities:
Subordinated debt	37,731	37,714
Junior Subordinated Debentures Issued \| Level 3 \| Estimated Fair Value
Financial liabilities:
Subordinated debt	$ 33,683	$ 33,640

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Financial Effect of Troubled Debt Restructurings (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans with payment modifications due to COVID-19	$ 200		$ 200
Troubled debt restructurings	3,400		3,500
Troubled debt restructuring subsequent payment defaults during the three months	0	$ 0
Loans, net of allowance for loan losses	2,463,277		2,475,753
Pledged assets
LOANS AND THE ALLOWANCE FOR LOAN LOSSES
Loans, net of allowance for loan losses	$ 576,000		$ 567,000

ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2022

ACCOUNTING POLICIES

ACCOUNTING POLICIES

NOTE 1 – ACCOUNTING POLICIES

Basis of Presentation

HBT Financial, Inc. (“HBT Financial” or the “Company”) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (“Heartland Bank” or the “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 and Eastern Iowa. Additionally, the Company is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory agencies.

The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with accounting principles generally accepted in the United States of America (“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 SEC. 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 for the year ended December 31, 2021, filed with the SEC on March 11, 2022.

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 may remain an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the completion of our initial public offering, which is December 31, 2024, (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues, (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or (4) the date on which the Company has, during the previous three year period, issued, publicly or privately, more than $1.0 billion in non-convertible debt securities. 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.

Use of Estimates

The accompanying consolidated financial statements have been prepared in conformity with GAAP. 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 fair value of assets acquired and liabilities assumed in business combinations.

Segment Reporting

The Company’s operations consist of one reportable segment. The Company’s chief operating decision maker evaluates the operations of the Company using consolidated information for purposes of allocating resources and assessing performance.

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 has formed an implementation team to assess the impact that ASU 2016-13 will have on the Company’s consolidated financial statements. For the majority of loans evaluated on a pooled basis, the Company anticipates using a discounted cash flow method which considers instrument level cash flows adjusted for, among other factors, prepayment speeds, probability of default, and loss given default. The Company also anticipates using regression analysis of historical internal and peer data to determine which variables are best suited to be economic variables utilized when modeling lifetime probability of default and loss given default.

The ultimate impact to the Company’s financial condition and results of operations of ASU 2016-13, at both adoption and each subsequent reporting period, is highly dependent on credit quality, macroeconomic forecasts and conditions, the composition of our loan and securities portfolios, along with other management judgments.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under ASU 2017-04, 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. ASU 2020-04 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.

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Loans, including fees:
Taxable	$ 26,806	$ 25,134
Federally tax exempt	662	610
Securities:
Taxable	4,649	3,633
Federally tax exempt	1,040	1,136
Interest-bearing deposits in bank	159	80
Other interest and dividend income	19	13
Total interest and dividend income	33,335	30,606
INTEREST EXPENSE
Deposits	569	644
Securities sold under agreements to repurchase	9	7
Borrowings	1	1
Subordinated notes	470	470
Junior subordinated debentures issued to capital trusts	358	355
Total interest expense	1,407	1,477
Net interest income	31,928	29,129
PROVISION FOR LOAN LOSSES	(584)	(3,405)
Net interest income after provision for loan losses	32,512	32,534
NONINTEREST INCOME
Mortgage servicing	658	685
Mortgage servicing rights fair value adjustment	1,729	1,695
Gains on sale of mortgage loans	587	2,100
Gains (losses) on securities	(187)	40
Gains (losses) on foreclosed assets	40	(76)
Gains (losses) on other assets	193	1
Income on bank owned life insurance	40
Other noninterest income	638	836
Total noninterest income	10,043	10,808
NONINTEREST EXPENSE
Salaries	12,992	12,596
Employee benefits	2,499	1,722
Occupancy of bank premises	2,060	1,938
Furniture and equipment	552	623
Data processing	1,653	1,688
Marketing and customer relations	851	565
Amortization of intangible assets	245	289
FDIC insurance	288	240
Loan collection and servicing	157	365
Foreclosed assets	132	143
Other noninterest expense	2,728	2,375
Total noninterest expense	24,157	22,544
INCOME BEFORE INCOME TAX EXPENSE	18,398	20,798
INCOME TAX EXPENSE	4,794	5,553
NET INCOME	$ 13,604	$ 15,245
EARNINGS PER SHARE - BASIC	$ 0.47	$ 0.55
EARNINGS PER SHARE - DILUTED	$ 0.47	$ 0.55
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING	28,986,593	27,430,912
Card income
NONINTEREST INCOME
Revenue	$ 2,404	$ 2,258
Service charges on deposit accounts
NONINTEREST INCOME
Revenue	1,652	1,297
Wealth management fees
NONINTEREST INCOME
Revenue	$ 2,289	$ 1,972

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2022

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 13 – 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 is 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 11, 2022. There were no transfers between levels during the three months ended March 31, 2022 and 2021. 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:


March 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	162,637	$	—	$	—	$	162,637
U.S. government agency		—		50,017		—		50,017
Municipal		—		275,564		—		275,564
Mortgage-backed:
Agency residential		—		237,528		—		237,528
Agency commercial		—		149,311		—		149,311
Corporate		—		58,865		—		58,865
Equity securities with readily determinable fair values		3,256		—		—		3,256
Mortgage servicing rights		—		—		9,723		9,723
Derivative financial assets		—		3,946		—		3,946
Derivative financial liabilities		—		3,936		—		3,936


December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	108,976	$	—	$	—	$	108,976
U.S. government agency		—		128,105		—		128,105
Municipal		—		297,077		—		297,077
Mortgage-backed:
Agency residential		—		179,466		—		179,466
Agency commercial		—		164,061		—		164,061
Corporate		—		64,483		—		64,483
Equity securities with readily determinable fair values		3,443		—		—		3,443
Mortgage servicing rights		—		—		7,994		7,994
Derivative financial assets		—		8,697		—		8,697
Derivative financial liabilities		—		9,377		—		9,377

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, 2021 to March 31, 2022.

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 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 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 as Level 3. 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, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	9,723	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 83.4% (8.6%)
				Discount rate	9.0% to 11.0% (9.0%)

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	7,994	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 88.9% (11.7%)
				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:


March 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Loans held for sale	$	—	$	1,777	$	—	$	1,777
Collateral-dependent impaired loans		—		—		19,242		19,242
Bank premises held for sale		—		—		1,081		1,081
Foreclosed assets		—		—		3,043		3,043


December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value

		(dollars in thousands)
Loans held for sale	$	—	$	4,942	$	—	$	4,942
Collateral-dependent impaired loans		—		—		22,423		22,423
Bank premises held for sale		—		—		1,452		1,452
Foreclosed assets		—		—		3,278		3,278

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 with respect to 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 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, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	19,242	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		1,081	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,043	Appraisal	Appraisal adjustments	7% (7%)

December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	22,423	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		1,452	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,278	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.

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 marketplace. 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 Notes

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

Junior 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:


	Fair Value	March 31, 2022				December 31, 2021
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value

			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	358,979	$	358,979	$	409,268	$	409,268
Debt securities held-to-maturity	Level 2		438,054		416,603		336,185		336,027
Restricted stock	Level 3		2,739		2,739		2,739		2,739
Loans, net	Level 3		2,463,277		2,476,472		2,475,753		2,494,686
Investments in unconsolidated subsidiaries	Level 3		1,165		1,165		1,165		1,165
Accrued interest receivable	Level 2		13,527		13,527		14,901		14,901

Financial liabilities:
Time deposits	Level 3		295,169		291,367		328,208		327,779
Securities sold under agreements to repurchase	Level 2		50,834		50,834		61,256		61,256
Subordinated notes	Level 3		39,336		40,546		39,316		41,602
Junior subordinated debentures	Level 3		37,731		33,683		37,714		33,640
Accrued interest payable	Level 2		560		560		1,043		1,043

The Company estimated the fair value of lending related commitments as described in Note 14 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

STOCK-BASED COMPENSATION PLANS (Tables)

3 Months Ended

Mar. 31, 2022

STOCK-BASED COMPENSATION PLANS

Summary of stock-based compensation expense


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Restricted stock units	$	608	$	114
Performance restricted stock units		293		15
Total awards classified as equity		901		129
Stock appreciation rights		(23)		130
Total stock-based compensation expense	$	878	$	259

Schedule of the summary of outstanding restricted stock units


	Three Months Ended March 31,
	2022			2021
		Weighted			Weighted
		Average			Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	109,244	$	17.27	71,000	$	18.98
Granted	46,312		19.11	46,347		15.53
Vested	(34,925)		17.26	(20,225)		18.86
Forfeited	—		—	—		—
Ending balance	120,631	$	17.98	97,122	$	17.36

Schedule of the status of stock appreciation rights and changes


	Three Months Ended March 31,
	2022			2021
	Stock Appreciation Rights	Weighted Average Grant Date Assigned Value		Stock Appreciation Rights	Weighted Average Grant Date Assigned Value
Beginning balance	97,920	$	16.32	105,570	$	16.32
Granted	—		—	—		—
Exercised	(6,120)		16.32	—		—
Expired	—		—	(1,530)		16.32
Forfeited	—		—	—		—
Ending balance	91,800	$	16.32	104,040	$	16.32

A further summary of stock appreciation rights as of March 31, 2022, is as follows:


			Weighted Average
	Stock Appreciation Rights		Remaining
Grant Date Assigned Values	Outstanding	Exercisable	Contractual Term
$ 16.32	91,800	79,560	7.0	years

Schedule of assumptions used in valuing stock appreciation rights


	March 31, 2022			December 31, 2021
Risk-free interest rate		2.37	%		1.40	%
Expected volatility		35.83	%		35.52	%
Expected life (in years)		7.4			7.7
Expected dividend yield		3.52	%		3.20	%

Performance Shares

STOCK-BASED COMPENSATION PLANS

Schedule of the summary of outstanding restricted stock units


	Three months ended March 31,
	2022			2021
		Weighted			Weighted
	Performance	Average		Performance	Average
	Restricted	Grant Date		Restricted	Grant Date
	Stock Units	Fair Value		Stock Units	Fair Value
Beginning balance	38,344	$	15.72	—	$	—
Granted	23,723		19.14	28,697		15.53
Vested	—		—	—		—
Forfeited	—		—	—		—
Ending balance	62,067	$	17.02	28,697	$	15.53

ACCOUNTING POLICIES (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) segment $ / shares shares	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares
ACCOUNTING POLICIES
Loans with payment modifications due to COVID-19	$ 200		$ 200
Branch buildings classified as held for sale	$ 1,081		$ 1,452
Number of segments \| segment	1
Income tax benefit	$ 4,794	$ 5,553
Common stock, shares authorized \| shares	125,000,000		125,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.01		$ 0.01
Preferred stock, shares authorized \| shares	25,000,000		25,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.01		$ 0.01

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Standby letters of credit
COMMITMENTS AND CONTINGENCIES
Financial instruments off-balance sheet credit risks	$ 13,669	$ 12,960
Commitments to extend credit
COMMITMENTS AND CONTINGENCIES
Financial instruments off-balance sheet credit risks	$ 602,158	$ 609,947

SECURITIES - Carrying balances of securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
SECURITIES
Debt securities available-for-sale	$ 933,922	$ 942,168
Debt securities held-to-maturity	438,054	336,185
Equity securities with readily determinable fair value	3,256	3,443
Equity securities with no readily determinable fair value	1,927	1,927
Total securities	$ 1,377,159	$ 1,283,723

STOCK-BASED COMPENSATION PLANS - Summary (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restricted Stock Units
Stock-based compensation plans
Outstanding (in units)	109,244	71,000
Granted (in units)	46,312	46,347
Exercised (in units)	(34,925)	(20,225)
Outstanding (in units)	120,631	97,122
Weighted Average Grant Date Assigned Value
Outstanding (in dollars per unit)	$ 17.27	$ 18.98
Granted (in dollars per unit)	19.11	15.53
Exercised (in dollars per unit)	17.26	18.86
Outstanding (in dollars per unit)	$ 17.98	$ 17.36
Performance Shares
Stock-based compensation plans
Outstanding (in units)	38,344
Granted (in units)	23,723	28,697
Outstanding (in units)	62,067	28,697
Weighted Average Grant Date Assigned Value
Outstanding (in dollars per unit)	$ 15.72
Granted (in dollars per unit)	19.14	$ 15.53
Outstanding (in dollars per unit)	$ 17.02	$ 15.53
Stock Appreciation Rights
Stock-based compensation plans
Outstanding (in units)	97,920	105,570
Granted (in units)
Exercised (in units)	(6,120)
Expired (in units)		(1,530)
Outstanding (in units)	91,800	104,040
Exercisable (in shares)	79,560
Weighted Average Grant Date Assigned Value
Outstanding (in dollars per unit)	$ 16.32	$ 16.32
Exercised (in dollars per unit)	16.32
Expired (in dollars per unit)		(16.32)
Outstanding (in dollars per unit)	$ 16.32	$ 16.32
Weighted average remaining contractual term	7 years

LOANS AND THE ALLOWANCE FOR LOAN LOSSES - Individually evaluated for impairment by category of loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Unpaid Principal Balance
With an allowance recorded	$ 26,590		$ 28,172
With no related allowance	64,694		52,597
Total loans individually evaluated for impairment	91,284		80,769
Recorded Investment
With an allowance recorded	26,507		28,021
With no related allowance	62,902		50,598
Total loans individually evaluated for impairment	89,409		78,619
Related Allowance	7,265		5,598
Average Recorded Investment
With an allowance recorded	26,727	$ 39,733
With no related allowance	61,545	31,083
Total loans individually evaluated for impairment	88,272	70,816
Interest Income Recognized
With an allowance recorded	267	372
With no related allowance	604	317
Total loans individually evaluated for impairment	871	689
Commercial and industrial
Unpaid Principal Balance
With an allowance recorded	282		303
With no related allowance	21,339		14,452
Total loans individually evaluated for impairment	21,621		14,755
Recorded Investment
With an allowance recorded	282		303
With no related allowance	21,297		14,441
Total loans individually evaluated for impairment	21,579		14,744
Related Allowance	163		187
Average Recorded Investment
With an allowance recorded	292	2,266
With no related allowance	19,498	1,068
Total loans individually evaluated for impairment	19,790	3,334
Interest Income Recognized
With an allowance recorded	4	31
With no related allowance	200	14
Total loans individually evaluated for impairment	204	45
Agricultural and farmland
Unpaid Principal Balance
With no related allowance	234		12
Total loans individually evaluated for impairment	234		12
Recorded Investment
With no related allowance	234		12
Total loans individually evaluated for impairment	234		12
Average Recorded Investment
With an allowance recorded		168
With no related allowance	236	383
Total loans individually evaluated for impairment	236	551
Interest Income Recognized
With an allowance recorded		2
With no related allowance		6
Total loans individually evaluated for impairment		8
Commercial real estate - owner occupied
Unpaid Principal Balance
With an allowance recorded	2,416		3,013
With no related allowance	11,186		9,534
Total loans individually evaluated for impairment	13,602		12,547
Recorded Investment
With an allowance recorded	2,416		3,013
With no related allowance	10,968		9,319
Total loans individually evaluated for impairment	13,384		12,332
Related Allowance	221		327
Average Recorded Investment
With an allowance recorded	2,425	3,244
With no related allowance	11,028	9,600
Total loans individually evaluated for impairment	13,453	12,844
Interest Income Recognized
With an allowance recorded	33	41
With no related allowance	106	122
Total loans individually evaluated for impairment	139	163
Commercial real estate - non-owner occupied
Unpaid Principal Balance
With an allowance recorded	14,736		14,912
With no related allowance	15,550		14,755
Total loans individually evaluated for impairment	30,286		29,667
Recorded Investment
With an allowance recorded	14,720		14,893
With no related allowance	15,476		14,682
Total loans individually evaluated for impairment	30,196		29,575
Related Allowance	2,821		2,999
Average Recorded Investment
With an allowance recorded	14,854	20,361
With no related allowance	15,495	5,665
Total loans individually evaluated for impairment	30,349	26,026
Interest Income Recognized
With an allowance recorded	186	208
With no related allowance	198	68
Total loans individually evaluated for impairment	384	276
Multi-family
Average Recorded Investment
With no related allowance		876
Total loans individually evaluated for impairment		876
Interest Income Recognized
With no related allowance		10
Total loans individually evaluated for impairment		10
Construction and land development
Unpaid Principal Balance
With no related allowance	2,110		2,112
Total loans individually evaluated for impairment	2,110		2,112
Recorded Investment
With no related allowance	2,010		2,018
Total loans individually evaluated for impairment	2,010		2,018
Average Recorded Investment
With an allowance recorded		2,248
With no related allowance	2,016	1,764
Total loans individually evaluated for impairment	2,016	4,012
Interest Income Recognized
With an allowance recorded		27
With no related allowance	22	26
Total loans individually evaluated for impairment	22	53
One-to-four family residential
Unpaid Principal Balance
With an allowance recorded	678		1,421
With no related allowance	9,711		7,129
Total loans individually evaluated for impairment	10,389		8,550
Recorded Investment
With an allowance recorded	634		1,314
With no related allowance	8,412		5,583
Total loans individually evaluated for impairment	9,046		6,897
Related Allowance	157		210
Average Recorded Investment
With an allowance recorded	647	2,644
With no related allowance	8,728	6,981
Total loans individually evaluated for impairment	9,375	9,625
Interest Income Recognized
With an allowance recorded	5	23
With no related allowance	57	49
Total loans individually evaluated for impairment	62	72
Municipal, consumer, and other
Unpaid Principal Balance
With an allowance recorded	8,478		8,523
With no related allowance	4,564		4,603
Total loans individually evaluated for impairment	13,042		13,126
Recorded Investment
With an allowance recorded	8,455		8,498
With no related allowance	4,505		4,543
Total loans individually evaluated for impairment	12,960		13,041
Related Allowance	3,903		$ 1,875
Average Recorded Investment
With an allowance recorded	8,509	8,802
With no related allowance	4,544	4,746
Total loans individually evaluated for impairment	13,053	13,548
Interest Income Recognized
With an allowance recorded	39	40
With no related allowance	21	22
Total loans individually evaluated for impairment	$ 60	$ 62

DERIVATIVE FINANCIAL INSTRUMENTS - Derivative instrument assets and liabilities (Details) - Designated - Interest rate swap - Cash flow hedge - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Other assets
DERIVATIVE FINANCIAL INSTRUMENTS
Fair value recorded in other assets	$ 20
Derivative asset notional amount	7,000
Other liabilities
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial liability fair value	(10)	$ (680)
Derivative financial liability notional amount	$ 10,000	$ 17,000

ACQUISITIONS (Details) - USD ($) $ / shares in Units, $ in Thousands	Oct. 01, 2021	Mar. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill		$ 29,322	$ 29,322
NXT Bancorporation, Inc
Business Acquisition [Line Items]
Percentage of voting interests acquired	100.00%
Stock consideration per share	67.6783
Cash consideration per share	$ 400
Share Price	$ 16.27
Goodwill	$ 5,702
Cash consideration	10,633
Market value of shares issued as part of consideration	$ 29,270
Stock consideration (number of shares)	1,799,016
Business Combination, Consideration Transferred	$ 39,903

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 13,604	$ 15,245
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	763	774
Provision for loan losses	(584)	(3,405)
Net amortization of debt securities	1,763	1,732
Deferred income tax expense	566	685
Stock-based compensation	901	129
Net accretion of discount and deferred loan fees on loans	(1,608)	(2,562)
Net unrealized loss (gain) on equity securities	187	(40)
Net loss on disposals of bank premises and equipment	4
Net gain on sales of bank premises held for sale	(197)
Net gain on sales of foreclosed assets	(105)	3
Write-down of foreclosed assets	65	73
Amortization of intangibles	245	289
Increase in mortgage servicing rights	(1,729)	(1,695)
Amortization of discount and issuance costs on subordinated notes and debentures	37	36
Mortgage loans originated for sale	(20,440)	(71,835)
Proceeds from sale of mortgage loans	24,192	75,766
Net gain on sale of mortgage loans	(587)	(2,100)
Increase in cash surrender value of bank owned life insurance	(40)
Decrease in accrued interest receivable	1,374	1,537
Decrease in other assets	1,521	875
Decrease (increase) in other liabilities	1,379	(9,032)
Net cash provided by operating activities	21,311	6,475
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in interest-bearing time deposits with banks	3
Proceeds from paydowns, maturities, and calls of debt securities	41,117	59,641
Purchase of securities	(189,744)	(142,980)
Net decrease (increase) in loans	14,649	(21,482)
Purchases of bank premises and equipment	(289)	(418)
Proceeds from sales of bank premises held for sale	568
Proceeds from sales of foreclosed assets	294	15
Net cash used in investing activities	(133,402)	(105,224)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits	77,884	225,432
Net increase (decrease) in repurchase agreements	(10,422)	(3,760)
Taxes paid related to the vesting of restricted stock units	(57)
Repurchase of common stock	(943)	(1,514)
Cash dividends and dividend equivalents paid	(4,660)	(4,124)
Net cash used in financing activities	61,802	216,034
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(50,289)	117,285
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	409,268	312,451
CASH AND CASH EQUIVALENTS AT END OF PERIOD	358,979	429,736
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	1,890	2,077
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES
Transfers of loans to foreclosed assets	$ 19	$ 671

FORECLOSED ASSETS - Gains (losses) on Foreclosed Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
FORECLOSED ASSETS
Direct write-downs	$ (65)	$ (73)
Net gain (loss) on sales	105	(3)
Gains (losses) on foreclosed assets	$ 40	$ (76)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
NET INCOME	$ 13,604	$ 15,245
OTHER COMPREHENSIVE LOSS
Unrealized losses on debt securities available-for-sale	(53,422)	(23,074)
Reclassification adjustment for amortization of net unrealized losses on debt securities transferred to held-to-maturity	181	32
Unrealized gains on derivative instruments	594	219
Reclassification adjustment for net settlements on derivative instruments	96	99
Total other comprehensive loss, before tax	(52,551)	(22,724)
Income tax benefit	(14,980)	(6,477)
Total other comprehensive loss	(37,571)	(16,247)
TOTAL COMPREHENSIVE LOSS	$ (23,967)	$ (1,002)

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2022

COMMITMENTS AND CONTINGENCIES

Schedule of commitments and conditional obligations


	Contractual Amount
	March 31, 2022		December 31, 2021

		(dollars in thousands)
Commitments to extend credit	$	602,158	$	609,947
Standby letters of credit		13,669		12,960

DEPOSITS - Interest bearing Deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
DEPOSITS
Noninterest-bearing deposits	$ 1,069,231	$ 1,087,659
Interest-bearing demand	1,167,058	1,105,949
Money market	597,464	583,198
Savings	687,147	633,171
Time	295,169	328,208
Total interest-bearing deposits	2,746,838	2,650,526
Total deposits	$ 3,816,069	$ 3,738,185

DEPOSITS (Tables)

3 Months Ended

Mar. 31, 2022

DEPOSITS

Schedule of Company's interest-bearing deposits


	March 31, 2022		December 31, 2021

	(dollars in thousands)
Noninterest-bearing deposits	$	1,069,231	$	1,087,659
Interest-bearing deposits:
Interest-bearing demand		1,167,058		1,105,949
Money market		597,464		583,198
Savings		687,147		633,171
Time		295,169		328,208
Total interest-bearing deposits		2,746,838		2,650,526
Total deposits	$	3,816,069	$	3,738,185

Schedule of interest expense on deposits


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Interest-bearing demand	$	142	$	117
Money market		121		89
Savings		50		41
Time		256		397
Total interest expense on deposits	$	569	$	644

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)

+ Details

FORECLOSED ASSETS (Tables)

3 Months Ended

Mar. 31, 2022

FORECLOSED ASSETS

Schedule of foreclosed assets activity


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Beginning balance	$	3,278	$	4,168
Transfers from loans		19		671
Proceeds from sales		(294)		(15)
Net gain (loss) on sales		105		(3)
Direct write-downs		(65)		(73)
Ending balance	$	3,043	$	4,748

Schedule of gains (losses) on foreclosed assets


	Three Months Ended March 31,
	2022		2021

	(dollars in thousands)
Direct write-downs	$	(65)	$	(73)
Net gain (loss) on sales		105		(3)
Gains (losses) on foreclosed assets	$	40	$	(76)