HBT Financial, Inc. Announces Third Quarter 2020 Financial Results

October 26, 2020

Third Quarter Highlights

Net income of $10.6 million, or $0.38 per diluted share; return on average assets (ROAA) of 1.20%; return on average stockholders' equity (ROAE) of 11.83%; and return on average tangible common equity (ROATCE)⁽¹⁾ of 12.80%
Adjusted net income⁽¹⁾ of $10.8 million; or $0.39 per diluted share, adjusted ROAA⁽¹⁾ of 1.22%; adjusted ROAE⁽¹⁾ of 12.04%; and adjusted ROATCE⁽¹⁾ of 13.03%

(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.

BLOOMINGTON, Ill., Oct. 26, 2020 (GLOBE NEWSWIRE) -- HBT Financial, Inc. (NASDAQ: HBT) (the “Company” or “HBT Financial”), the holding company for Heartland Bank and Trust Company and State Bank of Lincoln, today reported net income of $10.6 million, or $0.38 diluted earnings per share, for the third quarter of 2020. This compares to net income of $7.4 million, or $0.27 diluted earnings per share, for the second quarter of 2020, and net income of $17.4 million, or $0.97 diluted earnings per share, for the third quarter of 2019.

Fred L. Drake, Chairman and Chief Executive Officer of HBT Financial, said, “We delivered solid results in the third quarter despite the challenges presented by the low interest rate environment and economic uncertainty. Our banks have long prioritized safety and soundness, disciplined growth, and consistent through-the-cycle profitability, and I am pleased to see this focus maintained as we completed our first year as a public company earlier this month. While we remain conservative in building our loan loss reserves to address possible credit deterioration as the pandemic continues, we are encouraged by the stability we are seeing in asset quality, which reflects the strength of our borrowers and our conservative approach to credit. Our nonperforming loans are down from a year ago and our annualized net charge-offs through the first nine months of 2020 amounted to just 0.04% of average loans. In addition, our COVID-19 loan modifications declined by 82% to $36 million, or just 1.6% of our total loans, at the end of the third quarter. With ample liquidity and capital levels, strong asset quality, and a stable deposit base, we are well positioned to continue supporting our customers and communities through this crisis while generating solid results for our shareholders.”

C Corp Equivalent Net Income

Prior to October 11, 2019, the Company operated as an S Corporation for U.S. federal and state income tax purposes. Effective October 11, 2019, the Company voluntarily revoked its S Corporation status and became a taxable entity (C Corporation). As such, any periods prior to October 11, 2019 only reflect state replacement taxes. To facilitate comparison, the Company reports its C Corp equivalent financial results, which do not reflect the additional shares issued in the initial public offering (the “IPO”) for periods prior to the IPO.

The Company reported C Corp equivalent net income of $13.1 million, or $0.73 diluted earnings per share, for the third quarter of 2019.

Adjusted Net Income

In addition to reporting C Corp equivalent results, the Company believes adjusted net income and adjusted earnings per share, which adjust for the additional C Corp equivalent tax expense for periods prior to October 11, 2019, net earnings (losses) from closed or sold operations, charges related to termination of certain employee benefit plans, realized gains (losses) on sales of securities, and mortgage servicing rights (“MSR”) fair value adjustments, provide investors with additional insight into its operational performance. The Company reported adjusted net income of $10.8 million, or $0.39 adjusted diluted earnings per share, for the third quarter of 2020. This compares to adjusted net income of $8.2 million, or $0.30 adjusted diluted earnings per share, for the second quarter of 2020, and adjusted net income of $14.3 million, or $0.80 adjusted diluted earnings per share, for the third quarter of 2019 (see "Reconciliation of Non-GAAP Financial Measures" tables).

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2020 was $28.9 million, nearly unchanged from the second quarter of 2020 as growth in average interest-earning assets was largely offset by lower yields on loans and securities.

Relative to the third quarter of 2019, net interest income decreased $4.3 million, or 12.9%. The decline was primarily attributable to lower yields on average interest-earning assets.

Net interest margin for the third quarter of 2020 was 3.39% compared to 3.51% for the second quarter of 2020. The decrease was primarily attributable to the decline in the average yield on earning assets, partially due to the addition of lower yielding Paycheck Protection Program (PPP) loans. The contribution of acquired loan discount accretion to net interest margin remained low at 2 basis points during the third quarter of 2020 compared to less than 1 basis point during the second quarter of 2020.

Relative to the third quarter of 2019, net interest margin decreased from 4.27%. The decrease was due primarily to the decline in the average yield on earning assets. The contribution of acquired loan discount accretion to net interest margin was 4 basis points during the third quarter of 2019.

Noninterest Income

Noninterest income for the third quarter of 2020 was $10.1 million, an increase of 24.7% from $8.1 million for the second quarter of 2020. The increase was primarily attributable to a $1.0 million increase in gains on sale of mortgage loans attributable to a strong mortgage refinancing environment and a $0.4 million increase in service charges on deposit accounts. Third quarter 2020 results included a negative $0.3 million mortgage servicing rights (“MSR”) fair value adjustment compared to a negative $0.5 million fair value adjustment in the second quarter of 2020.

Relative to the third quarter of 2019, noninterest income increased 32.6% from $7.6 million. The increase was primarily attributable to higher gains on sale of mortgage loans and a less negative MSR fair value adjustment. Partially offsetting these increases was a $0.6 million decline in service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the third quarter of 2020 was $22.5 million, a decrease of 4.3% from $23.5 million for the second quarter of 2020. The decrease was primarily attributable to lower employee benefits expense as second quarter of 2020 results included a $0.6 million charge related to the termination of the supplemental executive retirement plan (SERP) that was paid out in June 2020.

Relative to the third quarter of 2019, noninterest expense increased 0.8% from $22.3 million. Lower employee benefits expense, due to the termination and liquidation of the SERP, was more than offset by increases in salaries, FDIC insurance, and other noninterest expenses. Higher salaries expense was driven by increases in mortgage lender commissions and overtime for mortgage support personnel, as a result of increased residential mortgage origination volume.

Loan Portfolio

Total loans outstanding, before allowance for loan losses, were $2.28 billion at September 30, 2020, compared with $2.28 billion at June 30, 2020 and $2.17 billion at September 30, 2019. The $3.8 million increase in loans from June 30, 2020 was primarily attributable to an $18.1 million increase in construction and land development loans and a $13.0 million increase in multi-family loans being largely offset by a $19.0 million reduction in commercial and industrial loans, a $3.5 million decline in agricultural and farmland loans and a $3.2 million reduction in commercial real estate - owner occupied loans. The $71.1 million decrease in total loans outstanding, net of PPP loans from September 30, 2019 was primarily due to a $65.7 million reduction in participation loan balances.

Deposits

Total deposits were $3.02 billion at September 30, 2020 and at June 30, 2020, compared with $2.70 billion at September 30, 2019. Increases in interest-bearing demand and savings balances were substantially offset by declines in noninterest-bearing, money market and time deposit balances in the third quarter.

Asset Quality

Nonperforming loans totaled $15.2 million, or 0.67% of total loans, at September 30, 2020, compared with $14.0 million, or 0.61% of total loans, at June 30, 2020, and $19.1 million, or 0.88% of total loans, at September 30, 2019. The increase in nonperforming loans from the end of the prior quarter was primarily attributable to the movement of one $4.1 million loan to nonaccrual partially offset by reductions from the pay-off or pay-down on three relationships combined with a charge-down of one relationship.

The Company recorded a provision for loan losses of $2.2 million for the third quarter of 2020, which was primarily due to adjustments to qualitative factors to reflect changes in the economic environment.

Net charge-offs for the third quarter of 2020 were $0.2 million, or 0.04% of average loans on an annualized basis compared to net recoveries of $63 thousand, or 0.01% of average loans on an annualized basis, for the second quarter of 2020, and net charge-offs of $0.5 million, or 0.08% of average loans on an annualized basis, for the third quarter of 2019.

The Company’s allowance for loan losses was 1.39% of total loans and 208.14% of nonperforming loans at September 30, 2020, compared with 1.31% of total loans and 213.04% of nonperforming loans at June 30, 2020.

Capital

At September 30, 2020, the Company exceeded all regulatory capital requirements under Basel III and was considered to be “well-capitalized,” as summarized in the following table:


			Well Capitalized
	September 30,		Regulatory
	2020		Requirements
Total capital to risk-weighted assets	16.81	%	10.00	%
Tier 1 capital to risk-weighted assets	13.98	%	8.00	%
Common equity tier 1 capital ratio	12.52	%	6.50	%
Tier 1 leverage ratio	10.04	%	5.00	%
Total stockholders' equity to total assets	10.05	%	N/A
Tangible common equity to tangible assets ⁽¹⁾	9.36	%	N/A

(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.

Subordinated Note Issuance

To further enhance the Company’s strong capital and liquidity positions, HBT Financial successfully completed a private placement of $40.0 million 4.50% Fixed-to-Floating Rate Subordinated Notes due 2030 during the quarter. This issuance of subordinated notes, which qualify as Tier 2 regulatory capital, contributed to an increase in HBT Financial’s total risk based capital ratio, which was 16.81% at September 30, 2020, compared to 15.13% at June 30, 2020, while also significantly bolstering the cash reserves held at the holding company.

Annualization Factor

The method used to calculate annualization factors for interim period ratios has changed from financial information previously presented. The annualization factor is now calculated using the number of days in the year divided by the number of days in the interim period. Previously, annualization factors were calculated as 4 divided by the number of quarters in the interim period, or an annualization factor of 4 for a quarterly period. The change was applied retrospectively to all periods presented and did not have a material impact on the annualized interim ratios.

About HBT Financial, Inc.

HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company and State Bank of Lincoln. The banks provide a comprehensive suite of business, commercial, wealth management, and retail banking products and services to individuals, businesses and municipal entities throughout Central and Northeastern Illinois through 63 branches. As of September 30, 2020, HBT had total assets of $3.5 billion, total loans of $2.3 billion, and total deposits of $3.0 billion. HBT is a longstanding Central Illinois company, with banking roots that can be traced back 100 years.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with GAAP. These non-GAAP financial measures include net interest income (tax-equivalent basis), net interest margin (tax-equivalent basis), originated loans and acquired loans and any ratios derived therefrom, efficiency ratio (tax-equivalent basis), tangible common equity to tangible assets, tangible book value per share, adjusted net income, adjusted return on average assets, adjusted return on average stockholders' equity, and adjusted return on average tangible common equity. Our management uses these non-GAAP financial measures, together with the related GAAP financial measures, in its analysis of our performance and in making business decisions. Management believes that it is a standard practice in the banking industry to present these non-GAAP financial measures, and accordingly believes that providing these measures may be useful for peer comparison purposes. These disclosures should not be viewed as substitutes for the results determined to be in accordance with GAAP; nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures in the "Reconciliation of Non-GAAP Financial Measures" tables.

Forward-Looking Statements

Readers should note that in addition to the historical information contained herein, this press release includes "forward-looking statements" within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including but not limited to statements about the Company’s plans, objectives, future performance, goals, future earnings levels, and future loan growth. These statements are subject to many risks and uncertainties, that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: the severity, magnitude and duration of the COVID-19 pandemic; the direct and indirect impacts of the COVID-19 pandemic and governmental responses to the pandemic on our operations and our customers’ businesses; the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect our capital levels and earnings, impair the ability of our borrowers to repay outstanding loans, impair collateral values and further increase our allowance for credit losses; our asset quality and any loan charge-offs; changes in interest rates and general economic, business and political conditions in the United States generally or in Illinois in particular, including in the financial markets; changes in business plans as circumstances warrant; risks relating to acquisitions; and other risks detailed from time to time in filings made by the Company with the Securities and Exchange Commission. Readers should note that the forward-looking statements included in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe" or "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

CONTACT:
Matthew Keating
HBTIR@hbtbank.com
(310) 622-8230

HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Statements of Income


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019

INTEREST AND DIVIDEND INCOME	(dollars in thousands, except per share amounts)
Loans, including fees:
Taxable	$	25,118		$	25,337		$	29,308		$	77,396		$	89,257
Federally tax exempt		542			532			684			1,748			2,130
Securities:
Taxable		3,266			3,172			3,572			9,772			11,295
Federally tax exempt		1,233			1,227			1,395			3,488			4,459
Interest-bearing deposits in bank		65			79			662			873			1,948
Other interest and dividend income		14			14			15			42			46
Total interest and dividend income		30,238			30,361			35,636			93,319			109,135

INTEREST EXPENSE
Deposits		843			1,042			2,000			3,480			6,094
Securities sold under agreements to repurchase		9			11			17			40			48
Borrowings		1			1			—			2			7
Subordinated notes		147			—			—			147			—
Junior subordinated debentures issued to capital trusts		367			399			478			1,209			1,462
Total interest expense		1,367			1,453			2,495			4,878			7,611
Net interest income		28,871			28,908			33,141			88,441			101,524
PROVISION FOR LOAN LOSSES		2,174			3,573			684			10,102			3,266
Net interest income after provision for loan losses		26,697			25,335			32,457			78,339			98,258

NONINTEREST INCOME
Card income		2,146			1,998			1,985			5,936			5,813
Service charges on deposit accounts		1,493			1,133			2,111			4,460			5,805
Wealth management fees		1,646			1,507			1,676			4,967			4,916
Mortgage servicing		724			727			795			2,175			2,342
Mortgage servicing rights fair value adjustment		(268	)		(508	)		(860	)		(2,947	)		(2,982	)
Gains on sale of mortgage loans		3,184			2,135			992			5,855			2,177
Gains (losses) on securities		(2	)		57			(73	)		3			42
Gains (losses) on foreclosed assets		27			58			(20	)		120			132
Gains (losses) on other assets		1			(69	)		(29	)		(71	)		1,244
Title insurance activity		—			—			—			—			167
Other noninterest income		1,101			1,022			1,005			2,866			2,759
Total noninterest income		10,052			8,060			7,582			23,364			22,415

NONINTEREST EXPENSE
Salaries		12,595			12,674			12,303			38,023			36,422
Employee benefits		1,666			2,455			2,253			6,555			8,220
Occupancy of bank premises		1,609			1,642			1,785			5,079			5,260
Furniture and equipment		679			609			545			1,891			2,050
Data processing		1,583			1,672			1,471			4,841			4,023
Marketing and customer relations		690			817			801			2,551			2,837
Amortization of intangible assets		305			305			335			927			1,087
FDIC insurance		222			218			8			476			435
Loan collection and servicing		450			494			547			1,292			1,901
Foreclosed assets		226			88			196			403			525
Other noninterest expense		2,460			2,525			2,059			7,253			6,316
Total noninterest expense		22,485			23,499			22,303			69,291			69,076
INCOME BEFORE INCOME TAX EXPENSE		14,264			9,896			17,736			32,412			51,597
INCOME TAX EXPENSE		3,701			2,477			299			8,209			819
NET INCOME	$	10,563		$	7,419		$	17,437		$	24,203		$	50,778

EARNINGS PER SHARE - BASIC	$	0.38		$	0.27		$	0.97		$	0.88		$	2.82
EARNINGS PER SHARE - DILUTED	$	0.38		$	0.27		$	0.97		$	0.88		$	2.82
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING		27,457,306			27,457,306			18,027,512			27,457,306			18,027,512

PRO FORMA C CORP EQUIVALENT INFORMATION
Historical income before income tax expense							$	17,736					$	51,597
Pro forma C Corp equivalent income tax expense								4,614						13,313
Pro forma C Corp equivalent net income							$	13,122					$	38,284

PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - BASIC							$	0.73					$	2.12
PRO FORMA C CORP EQUIVALENT EARNINGS PER SHARE - DILUTED							$	0.73					$	2.12

HBT Financial, Inc.
Consolidated Financial Summary
Consolidated Balance Sheets


	September 30,			June 30,			September 30,
	2020			2020			2019

	(dollars in thousands)
ASSETS
Cash and due from banks	$	22,347		$	21,789		$	19,969
Interest-bearing deposits with banks		214,377			292,576			134,972
Cash and cash equivalents		236,724			314,365			154,941

Interest-bearing time deposits with banks		—			—			248
Debt securities available-for-sale, at fair value		814,798			701,353			618,120
Debt securities held-to-maturity		74,510			73,823			99,861
Equity securities		4,814			4,815			4,436
Restricted stock, at cost		2,498			2,498			2,425
Loans held for sale		23,723			25,934			7,608

Loans, before allowance for loan losses		2,279,639			2,275,795			2,171,014
Allowance for loan losses		(31,654	)		(29,723	)		(22,761	)
Loans, net of allowance for loan losses		2,247,985			2,246,072			2,148,253

Bank premises and equipment, net		53,271			53,883			54,105
Bank premises held for sale		121			121			121
Foreclosed assets		3,857			4,450			6,574
Goodwill		23,620			23,620			23,620
Core deposit intangible assets, net		3,103			3,408			4,366
Mortgage servicing rights, at fair value		5,571			5,839			7,936
Investments in unconsolidated subsidiaries		1,165			1,165			1,165
Accrued interest receivable		13,820			12,661			14,816
Other assets		25,643			27,405			18,018
Total assets	$	3,535,223		$	3,501,412		$	3,166,613

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-bearing	$	850,306		$	856,030		$	649,316
Interest-bearing		2,166,355			2,159,083			2,054,742
Total deposits		3,016,661			3,015,113			2,704,058

Securities sold under agreements to repurchase		45,438			51,354			32,267
Subordinated notes		39,218			—			—
Junior subordinated debentures issued to capital trusts		37,632			37,616			37,566
Other liabilities		40,980			49,489			43,786
Total liabilities		3,179,929			3,153,572			2,817,677

Stockholders' Equity
Common stock		275			275			181
Surplus		190,787			190,687			32,288
Retained earnings		146,101			139,667			311,055
Accumulated other comprehensive income		18,131			17,211			8,431
Less cost of treasury stock held		—			—			(3,019	)
Total stockholders’ equity		355,294			347,840			348,936
Total liabilities and stockholders’ equity	$	3,535,223		$	3,501,412		$	3,166,613

SHARE INFORMATION
Ending number shares of common stock outstanding		27,457,306			27,457,306			18,027,512

HBT Financial, Inc.
Consolidated Financial Summary


	September 30,		June 30,		September 30,
	2020		2020		2019

	(dollars in thousands)
LOANS
Commercial and industrial	$	389,231	$	408,230	$	340,650
Agricultural and farmland		235,597		239,101		205,041
Commercial real estate - owner occupied		225,345		228,506		239,805
Commercial real estate - non-owner occupied		532,454		535,339		552,262
Multi-family		199,441		186,440		191,646
Construction and land development		265,758		247,640		210,939
One-to-four family residential		308,365		308,133		321,947
Municipal, consumer, and other		123,448		122,406		108,724
Loans, before allowance for loan losses	$	2,279,639	$	2,275,795	$	2,171,014

PPP LOANS (included above)
Commercial and industrial	$	168,466	$	166,868	$	—
Agricultural and farmland		4,179		4,027		—
Municipal, consumer, and other		7,095		7,063		—
Total PPP Loans	$	179,740	$	177,958	$	—


	September 30,		June 30,		September 30,
	2020		2020		2019

	(dollars in thousands)
DEPOSITS
Noninterest-bearing	$	850,306	$	856,030	$	649,316
Interest-bearing demand		885,719		880,007		800,471
Money market		475,047		480,497		463,444
Savings		497,682		487,761		426,707
Time		307,907		310,818		364,120
Total deposits	$	3,016,661	$	3,015,113	$	2,704,058

HBT Financial, Inc.
Consolidated Financial Summary


	Three Months Ended
	September 30, 2020							June 30, 2020							September 30, 2019
	Average							Average							Average
	Balance			Interest		Yield/Cost *		Balance			Interest		Yield/Cost *		Balance			Interest		Yield/Cost *

	(dollars in thousands)
ASSETS
Loans	$	2,277,826		$	25,660	4.48	%	$	2,265,032		$	25,869	4.59	%	$	2,191,230		$	29,992	5.43	%
Securities		831,120			4,499	2.15			721,817			4,399	2.45			745,532			4,967	2.64
Deposits with banks		274,022			65	0.09			326,216			79	0.10			136,635			662	1.93
Other		2,498			14	2.29			2,496			14	2.21			2,425			15	2.35
Total interest-earning assets		3,385,466		$	30,238	3.55	%		3,315,561		$	30,361	3.68	%		3,075,822		$	35,636	4.60	%
Allowance for loan losses		(30,221	)						(26,125	)						(22,326	)
Noninterest-earning assets		157,446							163,713							149,146
Total assets	$	3,512,691						$	3,453,149						$	3,202,642

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand	$	888,941		$	123	0.05	%	$	860,131		$	162	0.08	%	$	812,526		$	347	0.17	%
Money market		479,314			96	0.08			477,441			118	0.10			468,139			497	0.42
Savings		493,278			37	0.03			474,609			50	0.04			428,447			70	0.06
Time		306,154			587	0.76			317,965			712	0.90			383,070			1,086	1.12
Total interest-bearing deposits		2,167,687			843	0.15			2,130,146			1,042	0.20			2,092,182			2,000	0.38
Securities sold under agreements to repurchase		51,686			9	0.06			53,867			11	0.08			35,757			17	0.18
Borrowings		1,196			1	0.47			2,582			1	0.03			33			—	2.40
Subordinated notes		11,976			147	4.87			—			—	—			—			—	—
Junior subordinated debentures issued to capital trusts		37,621			367	3.89			37,605			399	4.26			37,561			478	5.05
Total interest-bearing liabilities		2,270,166		$	1,367	0.24	%		2,224,200		$	1,453	0.26	%		2,165,533		$	2,495	0.46	%
Noninterest-bearing deposits		846,808							824,232							651,085
Noninterest-bearing liabilities		40,421							58,177							37,274
Total liabilities		3,157,395							3,106,609							2,853,892
Stockholders' Equity		355,296							346,540							348,750
Total liabilities and stockholders’ equity	$	3,512,691						$	3,453,149						$	3,202,642

Net interest income/Net interest margin ⁽³⁾				$	28,871	3.39	%				$	28,908	3.51	%				$	33,141	4.27	%
Tax-equivalent adjustment ⁽²⁾					495	0.06						483	0.06						559	0.08
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis)^{(1) (2)}				$	29,366	3.45	%				$	29,391	3.57	%				$	33,700	4.35	%
Net interest rate spread ⁽⁴⁾						3.31	%						3.42	%						4.14	%
Net interest-earning assets ⁽⁵⁾	$	1,115,300						$	1,091,361						$	910,289
Ratio of interest-earning assets to interest-bearing liabilities		1.49							1.49							1.42
Cost of total deposits						0.11	%						0.14	%						0.29	%

* Annualized measure.
(1) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
(2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(4) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(5) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

HBT Financial, Inc.
Consolidated Financial Summary


	Nine Months Ended
	September 30, 2020							September 30, 2019
	Average							Average
	Balance			Interest		Yield/Cost *		Balance			Interest		Yield/Cost *

	(dollars in thousands)
ASSETS
Loans	$	2,228,145		$	79,144	4.74	%	$	2,184,263		$	91,387	5.59	%
Securities		740,834			13,260	2.39			779,375			15,754	2.70
Deposits with banks		283,730			873	0.41			131,209			1,948	1.99
Other		2,473			42	2.29			2,527			46	2.42
Total interest-earning assets		3,255,182		$	93,319	3.83	%		3,097,374		$	109,135	4.71	%
Allowance for loan losses		(26,288	)						(21,346	)
Noninterest-earning assets		156,121							147,972
Total assets	$	3,385,015						$	3,224,000

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Interest-bearing deposits:
Interest-bearing demand	$	853,775		$	536	0.08	%	$	821,848		$	1,175	0.19	%
Money market		473,647			608	0.17			455,469			1,356	0.40
Savings		467,482			157	0.04			428,865			207	0.06
Time		321,905			2,179	0.90			408,972			3,356	1.10
Total interest-bearing deposits		2,116,809			3,480	0.22			2,115,154			6,094	0.39
Securities sold under agreements to repurchase		49,183			40	0.11			39,542			48	0.16
Borrowings		1,333			2	0.19			378			7	2.61
Subordinated notes		4,021			147	4.87			—			—	—
Junior subordinated debentures issued to capital trusts		37,605			1,209	4.30			37,544			1,462	5.21
Total interest-bearing liabilities		2,208,951		$	4,878	0.29	%		2,192,618		$	7,611	0.46	%
Noninterest-bearing deposits		780,826							654,818
Noninterest-bearing liabilities		47,426							31,720
Total liabilities		3,037,203							2,879,156
Stockholders' Equity		347,812							344,844
Total liabilities and stockholders’ equity	$	3,385,015							3,224,000

Net interest income/Net interest margin ⁽³⁾				$	88,441	3.63	%				$	101,524	4.38	%
Tax-equivalent adjustment ⁽²⁾					1,441	0.06						1,775	0.08
Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) ^{(1) (2)}				$	89,882	3.69	%				$	103,299	4.46	%
Net interest rate spread ⁽⁴⁾						3.54	%						4.25	%
Net interest-earning assets ⁽⁵⁾	$	1,046,231						$	904,756
Ratio of interest-earning assets to interest-bearing liabilities		1.47							1.41
Cost of total deposits						0.16	%						0.29	%

HBT Financial, Inc.
Consolidated Financial Summary


	September 30,			June 30,			September 30,
	2020			2020			2019

	(dollars in thousands)
NONPERFORMING ASSETS
Nonaccrual	$	15,191		$	13,945		$	18,977
Past due 90 days or more, still accruing ⁽¹⁾		17			7			95
Total nonperforming loans		15,208			13,952			19,072
Foreclosed assets		3,857			4,450			6,574
Total nonperforming assets	$	19,065		$	18,402		$	25,646

NONPERFORMING ASSETS (Originated)⁽²⁾
Nonaccrual	$	10,179		$	9,059		$	11,268
Past due 90 days or more, still accruing		17			7			95
Total nonperforming loans (originated)		10,196			9,066			11,363
Foreclosed assets		939			1,092			1,048
Total nonperforming (originated)	$	11,135		$	10,158		$	12,411

NONPERFORMING ASSETS (Acquired)⁽²⁾
Nonaccrual	$	5,012		$	4,886		$	7,709
Past due 90 days or more, still accruing ⁽¹⁾		—			—			—
Total nonperforming loans (acquired)		5,012			4,886			7,709
Foreclosed assets		2,918			3,358			5,526
Total nonperforming assets (acquired)	$	7,930		$	8,244		$	13,235

Allowance for loan losses	$	31,654		$	29,723		$	22,761

Loans, before allowance for loan losses	$	2,279,639		$	2,275,795		$	2,171,014
Loans, before allowance for loan losses (originated)⁽²⁾		2,148,074			2,132,189			1,987,265
Loans, before allowance for loan losses (acquired) ⁽²⁾		131,565			143,606			183,749

CREDIT QUALITY RATIOS
Allowance for loan losses to loans, before allowance for loan losses		1.39	%		1.31	%		1.05	%
Allowance for loan losses to nonperforming loans		208.14			213.04			119.34
Nonperforming loans to loans, before allowance for loan losses		0.67			0.61			0.88
Nonperforming assets to total assets		0.54			0.53			0.81
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		0.83			0.81			1.18

CREDIT QUALITY RATIOS (Originated)⁽²⁾
Nonperforming loans to loans, before allowance for loan losses		0.47	%		0.43	%		0.57	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		0.52			0.48			0.62

CREDIT QUALITY RATIOS (Acquired) ⁽²⁾
Nonperforming loans to loans, before allowance for loan losses		3.81	%		3.40	%		4.20	%
Nonperforming assets to loans, before allowance for loan losses and foreclosed assets		5.90			5.61			6.99

(1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days, still accruing totaling $30 thousand, $0.1 million, and $0.7 million as of September 30, 2020, June 30, 2020, and September 30, 2019, respectively.
(2) Originated loans and acquired loans along with the related credit quality ratios such as nonperforming loans to loans, before allowance for loan losses (originated and acquired) and nonperforming assets to loans, before allowance for loan losses and foreclosed assets (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.

HBT Financial, Inc.
Consolidated Financial Summary


	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2020				2020				2019				2020				2019

ALLOWANCE FOR LOAN LOSSES	(dollars in thousands)
Beginning balance	$	29,723			$	26,087			$	22,542			$	22,299			$	20,509
Provision		2,174				3,573				684				10,102				3,266
Charge-offs		(1,078	)			(160	)			(937	)			(2,459	)			(2,436	)
Recoveries		835				223				472				1,712				1,422
Ending balance	$	31,654			$	29,723			$	22,761			$	31,654			$	22,761

Net charge-offs (recoveries)	$	243			$	(63	)		$	465			$	747			$	1,014
Net charge-offs (recoveries) - (originated) ⁽¹⁾		(20	)			3				224				155				182
Net charge-offs (recoveries) - (acquired)⁽¹⁾		263				(66	)			241				592				832

Average loans, before allowance for loan losses	$	2,277,826			$	2,265,032			$	2,191,230			$	2,228,145			$	2,184,263
Average loans, before allowance for loan losses (originated) ⁽¹⁾		2,140,376				2,117,131				2,001,803				2,080,668				1,979,383
Average loans, before allowance for loan losses (acquired) ⁽¹⁾		137,450				147,901				189,427				147,477				204,880

Net charge-offs to average loans, before allowance for loan losses *		0.04		%		(0.01	)	%		0.08		%		0.04		%		0.06		%
Net charge-offs to average loans, before allowance for loan losses (originated) * ⁽¹⁾		—				—				0.04				0.01				0.01
Net charge-offs to average loans, before allowance for loan losses (acquired) * ⁽¹⁾		0.76				(0.18	)			0.50				0.54				0.54

* Annualized measure.
(1) Originated loans and acquired loans along with the related credit quality ratios such as net charge-offs (originated and acquired), average loans, before allowance for loan losses (originated and acquired), and net charge-offs to average loans, before allowance for loan losses (originated and acquired) are non-GAAP financial measures. Originated loans represent loans initially originated by the Company and acquired loans that were refinanced using the Company’s underwriting criteria. Acquired loans represent loans originated under the underwriting criteria used by a bank that was acquired by Heartland Bank and Trust Company or State Bank of Lincoln. We believe these non-GAAP financial measures provide investors with information regarding the credit quality of loans underwritten using the Company’s policies and procedures.

HBT Financial, Inc.
Consolidated Financial Summary


	As of or for the Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019

	(dollars in thousands, except per share amounts)
EARNINGS AND PER SHARE INFORMATION
Net income	$	10,563		$	7,419		$	17,437		$	24,203		$	50,778
Earnings per share - Basic		0.38			0.27			0.97			0.88			2.82
Earnings per share - Diluted		0.38			0.27			0.97			0.88			2.82

C Corp equivalent net income ⁽¹⁾		N/A			N/A		$	13,122			N/A		$	38,284
C Corp equivalent earnings per share - Basic ⁽¹⁾		N/A			N/A			0.73			N/A			2.12
C Corp equivalent earnings per share - Diluted ⁽¹⁾		N/A			N/A			0.73			N/A			2.12

Book value per share	$	12.94		$	12.67		$	19.36

Ending number shares of common stock outstanding		27,457,306			27,457,306			18,027,512
Weighted average shares of common stock outstanding		27,457,306			27,457,306			18,027,512			27,457,306			18,027,512

SUMMARY RATIOS
Net interest margin *		3.39	%		3.51	%		4.27	%		3.63	%		4.38	%
Efficiency ratio		56.98			62.74			53.94			61.15			54.86
Loan to deposit ratio		75.57			75.48			80.29

Return on average assets *		1.20	%		0.86	%		2.16	%		0.96	%		2.11	%
Return on average stockholders' equity *		11.83			8.61			19.84			9.30			19.69

C Corp equivalent return on average assets * ⁽¹⁾		N/A			N/A			1.63	%		N/A			1.59	%
C Corp equivalent return on average stockholders' equity * ⁽¹⁾		N/A			N/A			14.93			N/A			14.84

NON-GAAP FINANCIAL MEASURES
Adjusted net income ⁽²⁾	$	10,755		$	8,218		$	14,343		$	27,352		$	43,010
Adjusted earnings per share - Basic ⁽²⁾		0.39			0.30			0.80			0.99			2.39
Adjusted earnings per share - Diluted⁽²⁾		0.39			0.30			0.80			0.99			2.39

Tangible book value per share ⁽²⁾	$	11.97		$	11.68		$	17.80

Net interest margin (tax equivalent basis) * ⁽²⁾		3.45	%		3.57	%		4.35	%		3.69	%		4.46	%
Efficiency ratio (tax equivalent basis) ⁽²⁾		56.27			61.93			53.21			60.37			54.08

Adjusted return on average assets * ⁽²⁾		1.22	%		0.96	%		1.78	%		1.08	%		1.78	%
Adjusted return on average stockholders' equity * ⁽²⁾		12.04			9.54			16.32			10.50			16.68

Return on average tangible common equity *⁽²⁾		12.80	%		9.34	%		21.58	%		10.08	%		21.46	%
C Corp equivalent return on average tangible common equity *^{(1) (2)}		N/A			N/A			16.24			N/A			16.18
Adjusted return on average tangible common equity * ⁽²⁾		13.03			10.35			17.75			11.40			18.18

* Annualized measure.
(1) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.
(2) See "Reconciliation of Non-GAAP Financial Measures" below for reconciliation of non-GAAP financial measures to their most comparable GAAP financial measures.
N/A Not applicable.

Reconciliation of Non-GAAP Financial Measures –
Adjusted Net Income and Adjusted Return on Average Assets


	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2020				2020				2019				2020			2019

	(dollars in thousands)
Net income	$	10,563			$	7,419			$	17,437			$	24,203		$	50,778
C Corp equivalent adjustment ⁽²⁾		—				—				(4,315	)			—			(12,494	)
C Corp equivalent net income ⁽²⁾		10,563				7,419				13,122				24,203			38,284
Adjustments:
Net earnings (losses) from closed or sold operations, including gains on sale ⁽¹⁾		—				—				(3	)			—			533
Charges related to termination of certain employee benefit plans		—				(609	)			(845	)			(1,457	)		(4,161	)
Mortgage servicing rights fair value adjustment		(268	)			(508	)			(860	)			(2,947	)		(2,982	)
Total adjustments		(268	)			(1,117	)			(1,708	)			(4,404	)		(6,610	)
Tax effect of adjustments		76				318				487				1,255			1,884
Less adjustments after tax effect		(192	)			(799	)			(1,221	)			(3,149	)		(4,726	)
Adjusted net income	$	10,755			$	8,218			$	14,343			$	27,352		$	43,010

Average assets	$	3,512,691			$	3,453,149			$	3,202,642			$	3,385,015		$	3,224,000

Return on average assets *		1.20		%		0.86		%		2.16		%		0.96			2.11		%
C Corp equivalent return on average assets * ⁽²⁾		N/A				N/A				1.63				N/A			1.59
Adjusted return on average assets *		1.22				0.96				1.78				1.08			1.78

* Annualized measure.
(1) Closed or sold operations include HB Credit Company, HBT Insurance, and First Community Title Services, Inc.
(2) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.
N/A Not applicable.

Reconciliation of Non-GAAP Financial Measures –
Adjusted Earnings Per Share


	Three Months Ended								Nine Months Ended
	September 30,			June 30,			September 30,		September 30,
	2020			2020			2019		2020			2019

	(dollars in thousands, except per share amounts)
Numerator:
Net income	$	10,563		$	7,419		$	17,437	$	24,203		$	50,778
Earnings allocated to unvested restricted stock units ⁽¹⁾		(28	)		(19	)		—		(62	)		—
Numerator for earnings per share - basic and diluted	$	10,535		$	7,400		$	17,437	$	24,141		$	50,778

C Corp equivalent net income ⁽³⁾		N/A			N/A		$	13,122		N/A		$	38,284
Earnings allocated to unvested restricted stock units ^{(1) (3)}		N/A			N/A			—		N/A			—
Numerator for C Corp equivalent earnings per share - basic and diluted ⁽³⁾		N/A			N/A		$	13,122		N/A		$	38,284

Adjusted net income	$	10,755		$	8,218		$	14,343	$	27,352		$	43,010
Earnings allocated to unvested restricted stock units ⁽¹⁾		(28	)		(22	)		—		(69	)		—
Numerator for adjusted earnings per share - basic and diluted	$	10,727		$	8,196		$	14,343	$	27,283		$	43,010

Denominator:
Weighted average common shares outstanding		27,457,306			27,457,306			18,027,512		27,457,306			18,027,512
Dilutive effect of outstanding restricted stock units ⁽²⁾		—			—			—		—			—
Weighted average common shares outstanding, including all dilutive potential shares		27,457,306			27,457,306			18,027,512		27,457,306			18,027,512

Earnings per share - Basic	$	0.38		$	0.27		$	0.97	$	0.88		$	2.82
Earnings per share - Diluted	$	0.38		$	0.27		$	0.97	$	0.88		$	2.82

C Corp equivalent earnings per share - Basic ⁽³⁾		N/A			N/A		$	0.73		N/A		$	2.12
C Corp equivalent earnings per share - Diluted ⁽³⁾		N/A			N/A		$	0.73		N/A		$	2.12

Adjusted earnings per share - Basic	$	0.39		$	0.30		$	0.80	$	0.99		$	2.39
Adjusted earnings per share - Diluted	$	0.39		$	0.30		$	0.80	$	0.99		$	2.39

(1) The Company has granted restricted stock units that contain non-forfeitable rights to dividend equivalents. Such restricted stock units are considered participating securities. As such, we have included these restricted stock units in the calculation of basic earnings per share and calculate basic earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.
(2) Restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents during the three months ended September 30, 2020 and June 30, 2020 and during the nine months ended September 30, 2020. There were no restricted stock units outstanding during the three and nine months ended September 30, 2019.
(3) Reflects adjustment to our historical net income for each period to give effect to the C Corp equivalent income tax expense for such period. No such adjustment is necessary for periods subsequent to 2019.
N/A Not applicable.

Reconciliation of Non-GAAP Financial Measures –
Net Interest Margin (Tax Equivalent Basis)


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019

	(dollars in thousands)
Net interest income (tax equivalent basis)
Net interest income	$	28,871		$	28,908		$	33,141		$	88,441		$	101,524
Tax-equivalent adjustment ⁽¹⁾		495			483			559			1,441			1,775
Net interest income (tax equivalent basis) ⁽¹⁾	$	29,366		$	29,391		$	33,700		$	89,882		$	103,299

Net interest margin (tax equivalent basis)
Net interest margin *		3.39	%		3.51	%		4.27	%		3.63	%		4.38	%
Tax-equivalent adjustment * ⁽¹⁾		0.06			0.06			0.08			0.06			0.08
Net interest margin (tax equivalent basis) * ⁽¹⁾		3.45	%		3.57	%		4.35	%		3.69	%		4.46	%

Average interest-earning assets	$	3,385,466		$	3,315,561		$	3,075,822		$	3,255,182		$	3,097,374

* Annualized measure.
(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.

Reconciliation of Non-GAAP Financial Measures –
Efficiency Ratio (Tax Equivalent Basis)


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019

	(dollars in thousands)
Efficiency ratio (tax equivalent basis)
Total noninterest expense	$	22,485		$	23,499		$	22,303		$	69,291		$	69,076
Less: amortization of intangible assets		305			305			335			927			1,087
Adjusted noninterest expense	$	22,180		$	23,194		$	21,968		$	68,364		$	67,989

Net interest income	$	28,871		$	28,908		$	33,141		$	88,441		$	101,524
Total noninterest income		10,052			8,060			7,582			23,364			22,415
Operating revenue		38,923			36,968			40,723			111,805			123,939
Tax-equivalent adjustment ⁽¹⁾		495			483			559			1,441			1,775
Operating revenue (tax equivalent basis) ⁽¹⁾	$	39,418		$	37,451		$	41,282		$	113,246		$	125,714

Efficiency ratio		56.98	%		62.74	%		53.94	%		61.15	%		54.86	%
Efficiency ratio (tax equivalent basis) ⁽¹⁾		56.27			61.93			53.21			60.37			54.08

(1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%.

Reconciliation of Non-GAAP Financial Measures –
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share


	September 30,			June 30,			September 30,
	2020			2020			2019

	(dollars in thousands)
Tangible Common Equity
Total stockholders' equity	$	355,294		$	347,840		$	348,936
Less: Goodwill		23,620			23,620			23,620
Less: Core deposit intangible assets, net		3,103			3,408			4,366
Tangible common equity	$	328,571		$	320,812		$	320,950

Tangible assets
Total assets	$	3,535,223		$	3,501,412		$	3,166,613
Less: Goodwill		23,620			23,620			23,620
Less: Core deposit intangible assets, net		3,103			3,408			4,366
Tangible assets	$	3,508,500		$	3,474,384		$	3,138,627

Total stockholders' equity to total assets		10.05	%		9.93	%		11.02	%
Tangible common equity to tangible assets		9.36			9.23			10.23

Ending number shares of common stock outstanding		27,457,306			27,457,306			18,027,512

Book value per share	$	12.94		$	12.67		$	19.36
Tangible book value per share		11.97			11.68			17.80

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


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
	2020			2020			2019			2020			2019

	(dollars in thousands)
Average Tangible Common Equity
Total stockholders' equity	$	355,296		$	346,540		$	348,750		$	347,812		$	344,844
Less: Goodwill		23,620			23,620			23,620			23,620			23,620
Less: Core deposit intangible assets, net		3,284			3,589			4,561			3,589			4,924
Average tangible common equity	$	328,392		$	319,331		$	320,569		$	320,603		$	316,300

Net income	$	10,563		$	7,419		$	17,437		$	24,203		$	50,778
C Corp equivalent net income ⁽¹⁾		N/A			N/A			13,122			N/A			38,284
Adjusted net income		10,755			8,218			14,343			27,352			43,010

Return on average stockholders' equity *		11.83	%		8.61	%		19.84	%		9.30	%		19.69	%
C Corp equivalent return on average stockholders' equity * ⁽¹⁾		N/A			N/A			14.93			N/A			14.84
Adjusted return on average stockholders' equity *		12.04			9.54			16.32			10.50			16.68

Return on average tangible common equity *		12.80	%		9.34	%		21.58	%		10.08	%		21.46	%
C Corp equivalent return on average tangible common equity * ⁽¹⁾		N/A			N/A			16.24			N/A			16.18
Adjusted return on average tangible common equity *		13.03			10.35			17.75			11.40			18.18

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