HBT Financial, Inc. 10-Q

Table of Contents ​ ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ​ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ For the quarterly period ended March 31, 2021 OR ​ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ For the transition period from to Commission file number: 001-39085 HBT Financial, Inc. (Exact name of registrant as specified in its charter) ​ Delaware 37-1117216 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) ​ ​ 401 North Hershey Rd Bloomington , Illinois 61704 ( 888 ) 897-2276 (Address of principal executive offices, including zip code) (Registrant’s telephone number, including area code) ​ Securities registered pursuant to Section 12(b) of the Act: ​ Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share HBT The Nasdaq Stock Market LLC ​ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ ​ ​ ​ ​ Non-accelerated filer ☐ Smaller reporting company ☐ ​ ​ ​ ​ Emerging growth company ☒ ​ ​ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of April 27, 2021, there were 27,366,459 shares outstanding of the registrant’s common stock, $0.01 par value. ​ ​ ​ ​ Table of Contents TABLE OF CONTENTS HBT Financial, Inc. ​ Page ​ ​ ​ PART I. FINANCIAL INFORMATION ​ 3 Item 1. Consolidated Financial Statements ​ 3 ​ Consolidated Balance Sheets ​ 3 ​ Consolidated Statements of Income ​ 4 ​ Consolidated Statements of Comprehensive Income ​ 5 ​ Consolidated Statement of Changes in Stockholders’ Equity ​ 6 ​ Consolidated Statements of Cash Flows ​ 7 ​ Notes to Consolidated Financial Statements ​ 9 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 47 Item 3. Quantitative and Qualitative Disclosures about Market Risk ​ 80 Item 4. Controls and Procedures ​ 81 PART II. OTHER INFORMATION ​ 82 Item 1. Legal Proceedings ​ 82 Item 1A. Risk Factors ​ 82 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ​ 82 Item 3. Defaults Upon Senior Securities ​ 82 Item 4. Mine Safety Disclosures ​ 83 Item 5. Other Information ​ 83 Item 6. Exhibits ​ 83 ​ ​ ​ ​ Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this quarterly report are forward-looking statements. Forward-looking statements may include statements relating to our plans, strategies and expectations, the economic impact of the COVID-19 pandemic and our future financial results, near-term loan growth, net interest margin, mortgage banking profits, wealth management fees, expenses, asset quality, capital levels, continued earnings and liquidity. Forward looking statements are generally identifiable by use of the words "believe," "may," "will," "should," "could," "expect," "estimate," "intend," "anticipate," "project," "plan" or similar expressions. Forward looking statements are frequently based on assumptions that may or may not materialize and are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause actual results to differ materially from the results anticipated or projected and which could materially and adversely affect our operating results, financial condition or prospects include, but are not limited to: ● our asset quality and any loan charge-offs; ● the composition of our loan portfolio; ● time and effort necessary to resolve nonperforming assets and the loans modified or deferred as a result of the impact of the COVID-19 pandemic; ● the length and severity of the COVID-19 pandemic, and the effects of the COVID-19 pandemic, including the impact of the pandemic on our operations and the operations of our customers and the communities that we serve; ● environmental liability associated with our lending activities; ● the effects of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin, our investments, and our loan originations, and our modeling estimates relating to interest rate changes; ● changes in and uncertainty related to benchmark interest rates used to price our loans, including the expected elimination of LIBOR; ● our access to sources of liquidity and capital to address our liquidity needs; ● our inability to receive dividends from the Bank, pay dividends to our common stockholders or satisfy obligations as they become due; ● the effects of problems encountered by other financial institutions; ● our ability to achieve organic loan and deposit growth and the composition of such growth; ● our ability to attract and retain skilled employees or changes in our management personnel; ● any failure or interruption of our information and communications systems; ● our ability to identify and address cybersecurity risks; ● the effects of the failure of any component of our business infrastructure provided by a third party; ● our ability to keep pace with technological changes; ● our ability to successfully develop and commercialize new or enhanced products and services; ● current and future business, economic and market conditions in the United States generally or in Illinois in particular; ● the geographic concentration of our operations in the State of Illinois; ● our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business; ● our ability to attract and retain customer deposits; ● our ability to maintain the Bank’s reputation; ● severe weather, natural disasters, pandemics, acts of war or terrorism or other external events; ● possible impairment of our goodwill and other intangible assets; ● the impact of, and changes in applicable laws, regulations and accounting standards and policies; ● our prior status as an S Corp; ● possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations; ● the effectiveness of our risk management and internal disclosure controls and procedures; ● market perceptions associated with certain aspects of our business; ● our ability to meet our obligations as a public company, including our obligations under Section 404 of Sarbanes-Oxley; damage to our reputation from any of the factors described above; and 1 Table of Contents ● the factors discussed in “Risk Factors”, "Management's Discussion and Analysis of Financial Condition and Results of Operations" or elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update any forward-looking statement in the future, or to reflect circumstances and events that occur after the date on which the forward-looking statement was made. ​ 2 Table of Contents PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ (Unaudited) ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 ​ 2020 ASSETS ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 22,976 ​ $ 24,912 Interest-bearing deposits with banks ​ ​ 406,760 ​ ​ 287,539 Cash and cash equivalents ​ ​ 429,736 ​ ​ 312,451 ​ ​ ​ ​ ​ ​ ​ Debt securities available-for-sale, at fair value ​ ​ 856,835 ​ ​ 922,869 Debt securities held-to-maturity (fair value of $ 195,608 in 2021 and $ 72,441 in 2020) ​ ​ 192,994 ​ ​ 68,395 Equity securities with readily determinable fair value ​ ​ 3,332 ​ ​ 3,292 Equity securities with no readily determinable fair value ​ ​ 1,552 ​ ​ 1,552 Restricted stock, at cost ​ ​ 2,498 ​ ​ 2,498 Loans held for sale ​ ​ 12,882 ​ ​ 14,713 Loans, net of allowance for loan losses of $ 28,759 in 2021 and $ 31,838 in 2020 ​ ​ 2,241,946 ​ ​ 2,215,168 Bank premises and equipment, net ​ ​ 52,548 ​ ​ 52,904 Bank premises held for sale ​ ​ 121 ​ ​ 121 Foreclosed assets ​ ​ 4,748 ​ ​ 4,168 Goodwill ​ ​ 23,620 ​ ​ 23,620 Core deposit intangible assets, net ​ ​ 2,509 ​ ​ 2,798 Mortgage servicing rights, at fair value ​ ​ 7,629 ​ ​ 5,934 Investments in unconsolidated subsidiaries ​ ​ 1,165 ​ ​ 1,165 Accrued interest receivable ​ ​ 12,718 ​ ​ 14,255 Other assets ​ ​ 18,781 ​ ​ 20,664 Total assets ​ $ 3,865,614 ​ $ 3,666,567 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ Noninterest-bearing ​ $ 968,991 ​ $ 882,939 Interest-bearing ​ ​ 2,386,975 ​ ​ 2,247,595 Total deposits ​ ​ 3,355,966 ​ ​ 3,130,534 ​ ​ ​ ​ ​ ​ ​ Securities sold under agreements to repurchase ​ ​ 41,976 ​ ​ 45,736 Subordinated notes ​ ​ 39,257 ​ ​ 39,238 Junior subordinated debentures issued to capital trusts ​ ​ 37,665 ​ ​ 37,648 Other liabilities ​ ​ 33,344 ​ ​ 49,494 Total liabilities ​ ​ 3,508,208 ​ ​ 3,302,650 ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENCIES (Notes 7 and 18) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' Equity ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value; 25,000,000 shares authorized; none issued or outstanding ​ ​ — ​ ​ — Common stock, $ 0.01 par value; 125,000,000 shares authorized; shares issued of 27,477,531 in 2021 and 27,457,306 in 2020; shares outstanding of 27,382,069 in 2021 and 27,457,306 in 2020 ​ ​ 275 ​ ​ 275 Surplus ​ ​ 191,004 ​ ​ 190,875 Retained earnings ​ ​ 165,735 ​ ​ 154,614 Accumulated other comprehensive income ​ ​ 1,906 ​ ​ 18,153 Treasury stock at cost, 95,462 shares in 2021 ​ ​ ( 1,514 ) ​ ​ — Total stockholders’ equity ​ ​ 357,406 ​ ​ 363,917 Total liabilities and stockholders’ equity ​ $ 3,865,614 ​ $ 3,666,567 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) ​ ​ 3 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 INTEREST AND DIVIDEND INCOME ​ (dollars in thousands, except per share data) Loans, including fees: ​ ​ ​ ​ ​ ​ Taxable ​ $ 25,134 ​ $ 26,941 Federally tax exempt ​ ​ 610 ​ ​ 674 Securities: ​ ​ ​ ​ ​ ​ Taxable ​ ​ 3,633 ​ ​ 3,334 Federally tax exempt ​ ​ 1,136 ​ ​ 1,028 Interest-bearing deposits in bank ​ ​ 80 ​ ​ 729 Other interest and dividend income ​ ​ 13 ​ ​ 14 Total interest and dividend income ​ ​ 30,606 ​ ​ 32,720 ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Deposits ​ ​ 644 ​ ​ 1,595 Securities sold under agreements to repurchase ​ ​ 7 ​ ​ 20 Borrowings ​ ​ 1 ​ ​ — Subordinated notes ​ ​ 470 ​ ​ — Junior subordinated debentures issued to capital trusts ​ ​ 355 ​ ​ 443 Total interest expense ​ ​ 1,477 ​ ​ 2,058 Net interest income ​ ​ 29,129 ​ ​ 30,662 PROVISION FOR LOAN LOSSES ​ ​ ( 3,405 ) ​ ​ 4,355 Net interest income after provision for loan losses ​ ​ 32,534 ​ ​ 26,307 ​ ​ ​ ​ ​ ​ ​ NONINTEREST INCOME ​ ​ ​ ​ ​ ​ Card income ​ ​ 2,258 ​ ​ 1,792 Service charges on deposit accounts ​ ​ 1,297 ​ ​ 1,834 Wealth management fees ​ ​ 1,972 ​ ​ 1,814 Mortgage servicing ​ ​ 685 ​ ​ 724 Mortgage servicing rights fair value adjustment ​ ​ 1,695 ​ ​ ( 2,171 ) Gains on sale of mortgage loans ​ ​ 2,100 ​ ​ 536 Gains (losses) on securities ​ ​ 40 ​ ​ ( 52 ) Gains (losses) on foreclosed assets ​ ​ ( 76 ) ​ ​ 35 Gains (losses) on other assets ​ ​ 1 ​ ​ ( 3 ) Other noninterest income ​ ​ 836 ​ ​ 743 Total noninterest income ​ ​ 10,808 ​ ​ 5,252 ​ ​ ​ ​ ​ ​ ​ NONINTEREST EXPENSE ​ ​ ​ ​ ​ ​ Salaries ​ ​ 12,596 ​ ​ 12,754 Employee benefits ​ ​ 1,722 ​ ​ 2,434 Occupancy of bank premises ​ ​ 1,938 ​ ​ 1,828 Furniture and equipment ​ ​ 623 ​ ​ 603 Data processing ​ ​ 1,688 ​ ​ 1,586 Marketing and customer relations ​ ​ 565 ​ ​ 1,044 Amortization of intangible assets ​ ​ 289 ​ ​ 317 FDIC insurance ​ ​ 240 ​ ​ 36 Loan collection and servicing ​ ​ 365 ​ ​ 348 Foreclosed assets ​ ​ 143 ​ ​ 89 Other noninterest expense ​ ​ 2,375 ​ ​ 2,268 Total noninterest expense ​ ​ 22,544 ​ ​ 23,307 INCOME BEFORE INCOME TAX EXPENSE ​ ​ 20,798 ​ ​ 8,252 INCOME TAX EXPENSE ​ ​ 5,553 ​ ​ 2,031 NET INCOME ​ $ 15,245 ​ $ 6,221 ​ ​ ​ ​ ​ ​ ​ EARNINGS PER SHARE - BASIC ​ $ 0.55 ​ $ 0.23 EARNINGS PER SHARE - DILUTED ​ $ 0.55 ​ $ 0.23 WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING ​ ​ 27,430,912 ​ ​ 27,457,306 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) ​ ​ 4 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ (dollars in thousands) NET INCOME $ 15,245 ​ $ 6,221 ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE (LOSS) INCOME ​ ​ ​ ​ ​ Unrealized (losses) gains on debt securities available-for-sale ​ ( 23,074 ) ​ ​ 7,602 Reclassification adjustment for amortization (accretion) of net unrealized gain (loss) on debt securities transferred to held-to-maturity ​ 32 ​ ​ ( 9 ) Unrealized gains (losses) on derivative instruments ​ 219 ​ ​ ( 970 ) Reclassification adjustment for net settlements on derivative instruments ​ 99 ​ ​ 2 Total other comprehensive (loss) income, before tax ​ ( 22,724 ) ​ ​ 6,625 Income tax (benefit) expense ​ ( 6,477 ) ​ ​ 1,888 Total other comprehensive (loss) income ​ ( 16,247 ) ​ ​ 4,737 TOTAL COMPREHENSIVE (LOSS) INCOME $ ( 1,002 ) ​ $ 10,958 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) ​ ​ 5 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ ​ ​ ​ Retained ​ Comprehensive ​ Treasury ​ Stockholders’ ​ Shares Amount Surplus Earnings Income (Loss) Stock Equity ​ ​ (dollars in thousands, except per share data) Balance, December 31, 2020 ​ 27,457,306 ​ $ 275 ​ $ 190,875 ​ $ 154,614 ​ $ 18,153 ​ $ — ​ $ 363,917 Net income ​ — ​ ​ — ​ ​ — ​ ​ 15,245 ​ ​ — ​ ​ — ​ ​ 15,245 Other comprehensive loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16,247 ) ​ ​ — ​ ​ ( 16,247 ) Stock-based compensation ​ — ​ ​ — ​ ​ 129 ​ ​ — ​ ​ — ​ ​ — ​ ​ 129 Issuance of common stock upon vesting of restricted stock units ​ 20,225 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Repurchase of common stock ​ ( 95,462 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,514 ) ​ ​ ( 1,514 ) Cash dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ — ​ ​ — ​ ​ ( 4,124 ) ​ ​ — ​ ​ — ​ ​ ( 4,124 ) Balance, March 31, 2021 ​ 27,382,069 ​ $ 275 ​ $ 191,004 ​ $ 165,735 ​ $ 1,906 ​ $ ( 1,514 ) ​ $ 357,406 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2019 ​ 27,457,306 ​ $ 275 ​ $ 190,524 ​ $ 134,287 ​ $ 7,832 ​ $ — ​ $ 332,918 Net income ​ — ​ ​ — ​ ​ — ​ ​ 6,221 ​ ​ — ​ ​ — ​ ​ 6,221 Other comprehensive income ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,737 ​ ​ — ​ ​ 4,737 Stock-based compensation ​ — ​ ​ — ​ ​ 67 ​ ​ — ​ ​ — ​ ​ — ​ ​ 67 Cash dividends and dividend equivalents ($ 0.15 per share) ​ — ​ ​ — ​ ​ — ​ ​ ( 4,130 ) ​ ​ — ​ ​ — ​ ​ ( 4,130 ) Balance, March 31, 2020 ​ 27,457,306 ​ $ 275 ​ $ 190,591 ​ $ 136,378 ​ $ 12,569 ​ $ — ​ $ 339,813 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) ​ ​ 6 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ ​ ​ ​ Net income ​ $ 15,245 ​ $ 6,221 Adjustments to reconcile net income to net cash provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation expense ​ ​ 774 ​ ​ 690 Provision for loan losses ​ ​ ( 3,405 ) ​ ​ 4,355 Net amortization of debt securities ​ ​ 1,732 ​ ​ 790 Amortization of unrealized gain on dedesignated cash flow hedge ​ ​ — ​ ​ ( 32 ) Deferred income tax expense (benefit) ​ ​ 685 ​ ​ ( 678 ) Stock-based compensation ​ ​ 129 ​ ​ 67 Net accretion of discount and deferred loan fees on loans ​ ​ ( 2,562 ) ​ ​ ( 922 ) Net unrealized (gain) loss on equity securities ​ ​ ( 40 ) ​ ​ 52 Net loss on sales of bank premises and equipment ​ ​ — ​ ​ 3 Net loss (gain) on sales of foreclosed assets ​ ​ 3 ​ ​ ( 75 ) Write-down of foreclosed assets ​ ​ 73 ​ ​ 47 Amortization of intangibles ​ ​ 289 ​ ​ 317 (Increase) decrease in mortgage servicing rights ​ ​ ( 1,695 ) ​ ​ 2,171 Amortization of discount and issuance costs on subordinated notes and debentures ​ ​ 36 ​ ​ 16 Mortgage loans originated for sale ​ ​ ( 71,835 ) ​ ​ ( 32,156 ) Proceeds from sale of mortgage loans ​ ​ 75,766 ​ ​ 32,418 Net gain on sale of mortgage loans ​ ​ ( 2,100 ) ​ ​ ( 536 ) Decrease in accrued interest receivable ​ ​ 1,537 ​ ​ 1,855 Decrease in other assets ​ ​ 875 ​ ​ 887 Decrease in other liabilities ​ ​ ( 9,032 ) ​ ​ ( 2,971 ) Net cash provided by operating activities ​ ​ 6,475 ​ ​ 12,519 ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Net change in interest-bearing time deposits with banks ​ ​ — ​ ​ 248 Proceeds from paydowns, maturities, and calls of debt securities ​ ​ 59,641 ​ ​ 48,305 Purchase of securities ​ ​ ( 142,980 ) ​ ​ ( 56,349 ) Net (increase) decrease in loans ​ ​ ( 21,482 ) ​ ​ 31,210 Purchases of bank premises and equipment ​ ​ ( 418 ) ​ ​ ( 841 ) Proceeds from sales of foreclosed assets ​ ​ 15 ​ ​ 677 Net cash (used in) provided by investing activities ​ ​ ( 105,224 ) ​ ​ 23,250 ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ Net increase (decrease) in deposits ​ ​ 225,432 ​ ​ ( 46,552 ) Net decrease in repurchase agreements ​ ​ ( 3,760 ) ​ ​ ( 3,622 ) Repurchase of common stock ​ ​ ( 1,514 ) ​ ​ — Cash dividends and dividend equivalents paid ​ ​ ( 4,124 ) ​ ​ ( 4,130 ) Net cash provided by (used in) financing activities ​ ​ 216,034 ​ ​ ( 54,304 ) ​ ​ ​ ​ ​ ​ ​ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ​ ​ 117,285 ​ ​ ( 18,535 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ​ ​ 312,451 ​ ​ 283,971 CASH AND CASH EQUIVALENTS AT END OF PERIOD ​ $ 429,736 ​ $ 265,436 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) 7 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 2,077 ​ $ 2,166 Cash paid for income taxes ​ $ — ​ $ 985 ​ ​ ​ ​ ​ ​ ​ SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Transfers of loans to foreclosed assets ​ $ 671 ​ $ 19 ​ See accompanying Notes to Consolidated Financial Statements (Unaudited) ​ ​ ​ 8 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 1 – ACCOUNTING POLICIES Basis of Presentation HBT Financial, Inc. (the Company) is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company (the Bank or Heartland Bank). The Bank provides a comprehensive suite of business, commercial, wealth management and retail banking products and services to individuals, businesses, and municipal entities throughout Central and Northeastern Illinois. The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with generally accepted accounting principles (GAAP) interim reporting requirements. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission. These interim unaudited consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 12, 2021. The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year. The Company qualifies as an "emerging growth company" as defined by the Jumpstart Our Business Startups Act (JOBS Act). The JOBS Act permits emerging growth companies an extended transition period for complying with new or revised accounting standards affecting public companies. The Company has elected to use the extended transition period until the Company is no longer an emerging growth company or until the Company chooses to affirmatively and irrevocably opt out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies. Merger of State Bank of Lincoln into Heartland Bank On October 20, 2020, Heartland Bank and State Bank of Lincoln, both wholly-owned bank subsidiaries of the Company on that date, entered into a Bank Merger Agreement providing for the merger of State Bank of Lincoln into Heartland Bank. The merger was consummated on December 31, 2020, resulting in Heartland Bank being our sole bank subsidiary, with the branch locations in Lincoln, Illinois operating as “State Bank of Lincoln, a division of Heartland Bank and Trust Company.” Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and the reported results of operations for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant changes in the near term relate to the determination of the allowance for loan losses, goodwill, and income taxes. 9 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Segment Reporting The Company’s operations consist of one reportable segment called community banking. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or stockholders’ equity. Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, ASU 2016-13 amends the accounting for credit losses on debt securities available-for-sale and purchased financial assets with credit deterioration. ASU 2016-13 is effective for years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for years beginning after December 31, 2018, including interim periods within those years. The Company is currently evaluating the effect that this standard will have on the consolidated results of operations and financial position. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This ASU simplifies measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the ASU, a company should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The impairment charge is limited to the amount of goodwill allocated to that reporting unit. The amendments in this update are effective for annual or any interim goodwill impairment tests in years beginning after December 15, 2022, including interim periods within those years. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. This standard is not expected to have a material impact on the Company’s consolidated results of operations or financial position. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. In January 2021, the FASB also issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope which refined the scope for certain optional expedients and exceptions for contract modifications and hedge accounting to apply to derivative contracts and certain hedging relationships affected by the discounting transition. Entities may apply the provisions as of the beginning of the reporting period when the election is made and are available until December 31, 2022. The Company is currently evaluating the effect that this standard will have on the consolidated results of operations and financial position. ​ 10 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 2 – SECURITIES The carrying balances of the securities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 2020 ​ ​ (dollars in thousands) Debt securities available-for-sale ​ $ 856,835 ​ $ 922,869 Debt securities held-to-maturity ​ ​ 192,994 ​ ​ 68,395 Equity securities with readily determinable fair value ​ ​ 3,332 ​ ​ 3,292 Equity securities with no readily determinable fair value ​ ​ 1,552 ​ ​ 1,552 Total securities ​ $ 1,054,713 ​ $ 996,108 ​ There were no sales of securities during the three months ended March 31, 2021 and 2020. Gains (losses) on securities were as follows during the three months ended March 31: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ (dollars in thousands) Net realized gains (losses) on sales $ — ​ $ — Net unrealized gains (losses) on equity securities: ​ ​ ​ ​ ​ Readily determinable fair value ​ 40 ​ ​ ( 52 ) No readily determinable fair value ​ — ​ ​ — Gains (losses) on securities $ 40 ​ $ ( 52 ) ​ On March 31, 2021, the Company transferred certain debt securities from the available-for-sale category to the held-to-maturity category in order to better reflect the revised intentions of the Company due to possible market value volatility, resulting from a potential rise in interest rates. The following is a summary of the amortized cost and fair value of securities transferred to the held-to-maturity category: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ ​ ​ ​ Cost Fair Value ​ ​ (dollars in thousands) U.S. government agency ​ $ 7,593 ​ $ 7,323 Mortgage-backed: ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 8,776 ​ ​ 8,536 Agency commercial ​ ​ 118,792 ​ ​ 113,861 Total ​ $ 135,161 ​ $ 129,720 ​ The debt securities were transferred between categories at fair value, with the transfer date fair value becoming the new amortized cost for each security transferred. The unrealized gain (loss), net of tax, at the date of transfer remains a component of accumulated other comprehensive income, but will be amortized over the remaining life of the debt securities as an adjustment of yield in a manner consistent with amortization of any premium or discount. As a result, the amortization of an unrealized gain (loss) reported in accumulated other comprehensive income will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held-to-maturity debt security. ​ 11 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Debt Securities The amortized cost and fair values of debt securities, with gross unrealized gains and losses, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale: ​ (dollars in thousands) U.S. government agency ​ $ 129,494 ​ $ 1,785 ​ $ ( 3,341 ) ​ $ 127,938 Municipal ​ ​ 280,212 ​ ​ 6,479 ​ ​ ( 4,358 ) ​ ​ 282,333 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 164,942 ​ ​ 4,366 ​ ​ ( 204 ) ​ ​ 169,104 Agency commercial ​ ​ 208,692 ​ ​ 2,861 ​ ​ ( 3,556 ) ​ ​ 207,997 Corporate ​ ​ 67,959 ​ ​ 1,950 ​ ​ ( 446 ) ​ ​ 69,463 Total available-for-sale ​ ​ 851,299 ​ ​ 17,441 ​ ​ ( 11,905 ) ​ ​ 856,835 Held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ ​ 7,323 ​ ​ — ​ ​ — ​ ​ 7,323 Municipal ​ ​ 21,067 ​ ​ 1,188 ​ ​ — ​ ​ 22,255 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 20,335 ​ ​ 388 ​ ​ — ​ ​ 20,723 Agency commercial ​ ​ 144,269 ​ ​ 1,323 ​ ​ ( 285 ) ​ ​ 145,307 Total held-to-maturity ​ ​ 192,994 ​ ​ 2,899 ​ ​ ( 285 ) ​ ​ 195,608 Total debt securities ​ $ 1,044,293 ​ $ 20,340 ​ $ ( 12,190 ) ​ $ 1,052,443 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale: ​ (dollars in thousands) U.S. government agency ​ $ 118,282 ​ $ 3,720 ​ $ ( 9 ) ​ $ 121,993 Municipal ​ ​ 265,309 ​ ​ 9,232 ​ ​ ( 280 ) ​ ​ 274,261 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 198,543 ​ ​ 4,871 ​ ​ ( 162 ) ​ ​ 203,252 Agency commercial ​ ​ 246,649 ​ ​ 4,651 ​ ​ ( 534 ) ​ ​ 250,766 Corporate ​ ​ 70,917 ​ ​ 1,786 ​ ​ ( 106 ) ​ ​ 72,597 Total available-for-sale ​ ​ 899,700 ​ ​ 24,260 ​ ​ ( 1,091 ) ​ ​ 922,869 Held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Municipal ​ ​ 22,484 ​ ​ 1,390 ​ ​ — ​ ​ 23,874 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 13,031 ​ ​ 452 ​ ​ — ​ ​ 13,483 Agency commercial ​ ​ 32,880 ​ ​ 2,222 ​ ​ ( 18 ) ​ ​ 35,084 Total held-to-maturity ​ ​ 68,395 ​ ​ 4,064 ​ ​ ( 18 ) ​ ​ 72,441 Total debt securities ​ $ 968,095 ​ $ 28,324 ​ $ ( 1,109 ) ​ $ 995,310 ​ ​ 12 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ As of March 31, 2021 and December 31, 2020, the Bank had debt securities with a carrying value of $ 283,967,000 and $ 308,064,000 , 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 43 % of the obligations of local municipalities portfolio consists of debt securities issued by municipalities located in Illinois as of March 31, 2021. Approximately 94 % of such debt securities were general obligation issues as of March 31, 2021. The amortized cost and fair value of debt securities by contractual maturity, as of March 31, 2021, 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 ​ $ 31,406 ​ $ 31,734 ​ $ 2,772 ​ $ 2,817 Due after 1 year through 5 years ​ ​ 76,138 ​ ​ 78,807 ​ ​ 12,000 ​ ​ 12,770 Due after 5 years through 10 years ​ ​ 242,096 ​ ​ 242,487 ​ ​ 13,227 ​ ​ 13,580 Due after 10 years ​ ​ 128,025 ​ ​ 126,706 ​ ​ 391 ​ ​ 411 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ 164,942 ​ ​ 169,104 ​ ​ 20,335 ​ ​ 20,723 Agency commercial ​ ​ 208,692 ​ ​ 207,997 ​ ​ 144,269 ​ ​ 145,307 Total ​ $ 851,299 ​ $ 856,835 ​ $ 192,994 ​ $ 195,608 ​ ​ 13 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments in a Continuous Unrealized Loss Position ​ ​ Less than 12 Months ​ 12 Months or More ​ Total March 31, 2021 Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Available-for-sale: ​ (dollars in thousands) U.S. government agency ​ $ ( 3,341 ) ​ $ 80,395 ​ $ — ​ $ — ​ $ ( 3,341 ) ​ $ 80,395 Municipal ​ ​ ( 4,358 ) ​ ​ 119,502 ​ ​ — ​ ​ — ​ ​ ( 4,358 ) ​ ​ 119,502 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ ( 165 ) ​ ​ 26,810 ​ ​ ( 39 ) ​ ​ 3,594 ​ ​ ( 204 ) ​ ​ 30,404 Agency commercial ​ ​ ( 3,556 ) ​ ​ 119,719 ​ ​ — ​ ​ — ​ ​ ( 3,556 ) ​ ​ 119,719 Corporate ​ ​ ( 446 ) ​ ​ 7,009 ​ ​ — ​ ​ — ​ ​ ( 446 ) ​ ​ 7,009 Total available-for-sale ​ ​ ( 11,866 ) ​ ​ 353,435 ​ ​ ( 39 ) ​ ​ 3,594 ​ ​ ( 11,905 ) ​ ​ 357,029 Held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency commercial ​ ​ ( 285 ) ​ ​ 7,669 ​ ​ — ​ ​ — ​ ​ ( 285 ) ​ ​ 7,669 Total held-to-maturity ​ ​ ( 285 ) ​ ​ 7,669 ​ ​ — ​ ​ — ​ ​ ( 285 ) ​ ​ 7,669 Total debt securities ​ $ ( 12,151 ) ​ $ 361,104 ​ $ ( 39 ) ​ $ 3,594 ​ $ ( 12,190 ) ​ $ 364,698 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investments in a Continuous Unrealized Loss Position ​ ​ Less than 12 Months ​ 12 Months or More ​ Total December 31, 2020 Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Available-for-sale: ​ (dollars in thousands) U.S. government agency ​ $ ( 9 ) ​ $ 5,919 ​ $ — ​ $ — ​ $ ( 9 ) ​ $ 5,919 Municipal ​ ​ ( 280 ) ​ ​ 19,652 ​ ​ — ​ ​ — ​ ​ ( 280 ) ​ ​ 19,652 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ ( 142 ) ​ ​ 20,387 ​ ​ ( 20 ) ​ ​ 4,490 ​ ​ ( 162 ) ​ ​ 24,877 Agency commercial ​ ​ ( 524 ) ​ ​ 57,126 ​ ​ ( 10 ) ​ ​ 3,449 ​ ​ ( 534 ) ​ ​ 60,575 Corporate ​ ​ ( 106 ) ​ ​ 4,849 ​ ​ — ​ ​ — ​ ​ ( 106 ) ​ ​ 4,849 Total available-for-sale ​ ​ ( 1,061 ) ​ ​ 107,933 ​ ​ ( 30 ) ​ ​ 7,939 ​ ​ ( 1,091 ) ​ ​ 115,872 Held-to-maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency commercial ​ ​ ( 18 ) ​ ​ 2,983 ​ ​ — ​ ​ — ​ ​ ( 18 ) ​ ​ 2,983 Total held-to-maturity ​ ​ ( 18 ) ​ ​ 2,983 ​ ​ — ​ ​ — ​ ​ ( 18 ) ​ ​ 2,983 Total debt securities ​ $ ( 1,079 ) ​ $ 110,916 ​ $ ( 30 ) ​ $ 7,939 ​ $ ( 1,109 ) ​ $ 118,855 ​ As of March 31, 2021, there were 14 debt securities in an unrealized loss position for a period of twelve months or more, and 184 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. ​ 14 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Equity Securities 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, 2021 Fair Value Fair Value ​ ​ (dollars in thousands) Initial cost ​ $ 3,098 ​ $ 1,717 Cumulative net unrealized gains (losses) ​ ​ 234 ​ ​ ( 165 ) Carrying value ​ $ 3,332 ​ $ 1,552 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Readily ​ No Readily ​ ​ Determinable ​ Determinable December 31, 2020 Fair Value Fair Value ​ ​ (dollars in thousands) Initial cost ​ $ 3,098 ​ $ 1,717 Cumulative net unrealized gains (losses) ​ ​ 194 ​ ​ ( 165 ) Carrying value ​ $ 3,292 ​ $ 1,552 ​ As of March 31, 2021 and December 31, 2020, 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. ​ 15 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 3 – LOANS AND THE ALLOWANCE FOR LOAN LOSSES Major categories of loans are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2021 2020 ​ ​ (dollars in thousands) Commercial and industrial ​ $ 412,812 ​ $ 393,312 Agricultural and farmland ​ ​ 228,032 ​ ​ 222,723 Commercial real estate - owner occupied ​ ​ 224,599 ​ ​ 222,360 Commercial real estate - non-owner occupied ​ ​ 516,963 ​ ​ 520,395 Multi-family ​ ​ 236,381 ​ ​ 236,391 Construction and land development ​ ​ 215,375 ​ ​ 225,652 One-to-four family residential ​ ​ 300,768 ​ ​ 306,775 Municipal, consumer, and other ​ ​ 135,775 ​ ​ 119,398 Loans, before allowance for loan losses ​ ​ 2,270,705 ​ ​ 2,247,006 Allowance for loan losses ​ ​ ( 28,759 ) ​ ​ ( 31,838 ) Loans, net of allowance for loan losses ​ $ 2,241,946 ​ $ 2,215,168 ​ ​ ​ ​ ​ ​ ​ Paycheck Protection Program (PPP) loans (included above) ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 175,389 ​ $ 153,860 Agricultural and farmland ​ ​ 8,921 ​ ​ 3,049 Municipal, consumer, and other ​ ​ 6,249 ​ ​ 6,587 Total PPP loans ​ $ 190,559 ​ $ 163,496 ​ 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, 2021 Industrial Farmland Occupied Occupied Multi-Family Development Residential 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ and ​ and ​ Owner ​ Non-owner ​ ​ ​ ​ Construction ​ Residential ​ and ​ ​ ​ Three Months Ended March 31, 2020 Industrial Farmland Occupied Occupied Multi-Family and Land Real Estate Other Total Allowance for loan losses: ​ (dollars in thousands) Balance, December 31, 2019 ​ $ 4,441 ​ $ 2,766 ​ $ 1,779 ​ $ 3,663 ​ $ 1,024 ​ $ 2,977 ​ $ 2,540 ​ $ 3,109 ​ $ 22,299 Provision for loan losses ​ ​ 538 ​ ​ 254 ​ ​ ( 97 ) ​ ​ 820 ​ ​ 450 ​ ​ 237 ​ ​ 777 ​ ​ 1,376 ​ ​ 4,355 Charge-offs ​ ​ ( 809 ) ​ ​ ( 27 ) ​ ​ — ​ ​ ( 56 ) ​ ​ — ​ ​ ( 1 ) ​ ​ ( 104 ) ​ ​ ( 224 ) ​ ​ ( 1,221 ) Recoveries ​ ​ 54 ​ ​ — ​ ​ 440 ​ ​ 5 ​ ​ — ​ ​ 10 ​ ​ 71 ​ ​ 74 ​ ​ 654 Balance, March 31, 2020 ​ $ 4,224 ​ $ 2,993 ​ $ 2,122 ​ $ 4,432 ​ $ 1,474 ​ $ 3,223 ​ $ 3,284 ​ $ 4,335 ​ $ 26,087 ​ 16 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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, 2021 Industrial Farmland Occupied Occupied Multi-Family Development Residential Other Total Loan balances: ​ (dollars in thousands) Collectively evaluated for impairment ​ $ 408,664 ​ $ 226,668 ​ $ 204,327 ​ $ 477,116 ​ $ 234,257 ​ $ 208,835 ​ $ 283,562 ​ $ 122,266 ​ $ 2,165,695 Individually evaluated for impairment ​ ​ 3,230 ​ ​ 548 ​ ​ 12,680 ​ ​ 25,871 ​ ​ 874 ​ ​ 4,165 ​ ​ 9,443 ​ ​ 13,455 ​ ​ 70,266 Acquired with deteriorated credit quality ​ ​ 918 ​ ​ 816 ​ ​ 7,592 ​ ​ 13,976 ​ ​ 1,250 ​ ​ 2,375 ​ ​ 7,763 ​ ​ 54 ​ ​ 34,744 Total ​ $ 412,812 ​ $ 228,032 ​ $ 224,599 ​ $ 516,963 ​ $ 236,381 ​ $ 215,375 ​ $ 300,768 ​ $ 135,775 ​ $ 2,270,705 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collectively evaluated for impairment ​ $ 1,218 ​ $ 845 ​ $ 2,032 ​ $ 6,947 ​ $ 2,080 ​ $ 3,846 ​ $ 1,091 ​ $ 1,328 ​ $ 19,387 Individually evaluated for impairment ​ ​ 1,095 ​ ​ 19 ​ ​ 420 ​ ​ 4,142 ​ ​ — ​ ​ 144 ​ ​ 479 ​ ​ 2,431 ​ ​ 8,730 Acquired with deteriorated credit quality ​ ​ 107 ​ ​ 1 ​ ​ 263 ​ ​ 241 ​ ​ 10 ​ ​ 16 ​ ​ 3 ​ ​ 1 ​ ​ 642 Total ​ $ 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 ​ ​ ​ December 31, 2020 Industrial Farmland Occupied Occupied Multi-Family Development Residential Other Total Loan balances: ​ (dollars in thousands) Collectively evaluated for impairment ​ $ 387,072 ​ $ 217,077 ​ $ 201,417 ​ $ 480,165 ​ $ 234,252 ​ $ 219,822 ​ $ 287,845 ​ $ 105,796 ​ $ 2,133,446 Individually evaluated for impairment ​ ​ 5,312 ​ ​ 4,793 ​ ​ 13,132 ​ ​ 25,993 ​ ​ 876 ​ ​ 3,809 ​ ​ 10,343 ​ ​ 13,546 ​ ​ 77,804 Acquired with deteriorated credit quality ​ ​ 928 ​ ​ 853 ​ ​ 7,811 ​ ​ 14,237 ​ ​ 1,263 ​ ​ 2,021 ​ ​ 8,587 ​ ​ 56 ​ ​ 35,756 Total ​ $ 393,312 ​ $ 222,723 ​ $ 222,360 ​ $ 520,395 ​ $ 236,391 ​ $ 225,652 ​ $ 306,775 ​ $ 119,398 ​ $ 2,247,006 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collectively evaluated for impairment ​ $ 2,736 ​ $ 771 ​ $ 2,306 ​ $ 6,736 ​ $ 1,950 ​ $ 3,984 ​ $ 1,237 ​ $ 1,432 ​ $ 21,152 Individually evaluated for impairment ​ ​ 1,193 ​ ​ 22 ​ ​ 429 ​ ​ 4,255 ​ ​ — ​ ​ 222 ​ ​ 560 ​ ​ 3,301 ​ ​ 9,982 Acquired with deteriorated credit quality ​ ​ — ​ ​ — ​ ​ 406 ​ ​ 260 ​ ​ 7 ​ ​ 26 ​ ​ 4 ​ ​ 1 ​ ​ 704 Total ​ $ 3,929 ​ $ 793 ​ $ 3,141 ​ $ 11,251 ​ $ 1,957 ​ $ 4,232 ​ $ 1,801 ​ $ 4,734 ​ $ 31,838 ​ ​ 17 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following tables present loans individually evaluated for impairment by category of loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unpaid ​ ​ ​ ​ ​ ​ ​ Principal ​ Recorded ​ Related March 31, 2021 Balance Investment Allowance With an allowance recorded: ​ (dollars in thousands) Commercial and industrial ​ $ 2,252 ​ $ 2,240 ​ $ 1,095 Agricultural and farmland ​ ​ 166 ​ ​ 165 ​ ​ 19 Commercial real estate - owner occupied ​ ​ 3,156 ​ ​ 3,121 ​ ​ 420 Commercial real estate - non-owner occupied ​ ​ 20,605 ​ ​ 20,256 ​ ​ 4,142 Multi-family ​ ​ — ​ ​ — ​ ​ — Construction and land development ​ ​ 2,229 ​ ​ 2,196 ​ ​ 144 One-to-four family residential ​ ​ 2,835 ​ ​ 2,587 ​ ​ 479 Municipal, consumer, and other ​ ​ 8,770 ​ ​ 8,744 ​ ​ 2,431 Total ​ $ 40,013 ​ $ 39,309 ​ $ 8,730 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With no related allowance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 1,738 ​ $ 990 ​ $ — Agricultural and farmland ​ ​ 383 ​ ​ 383 ​ ​ — Commercial real estate - owner occupied ​ ​ 9,635 ​ ​ 9,559 ​ ​ — Commercial real estate - non-owner occupied ​ ​ 5,747 ​ ​ 5,615 ​ ​ — Multi-family ​ ​ 874 ​ ​ 874 ​ ​ — Construction and land development ​ ​ 1,978 ​ ​ 1,969 ​ ​ — One-to-four family residential ​ ​ 8,556 ​ ​ 6,856 ​ ​ — Municipal, consumer, and other ​ ​ 4,774 ​ ​ 4,711 ​ ​ — Total ​ $ 33,685 ​ $ 30,957 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans individually evaluated for impairment: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 3,990 ​ $ 3,230 ​ $ 1,095 Agricultural and farmland ​ ​ 549 ​ ​ 548 ​ ​ 19 Commercial real estate - owner occupied ​ ​ 12,791 ​ ​ 12,680 ​ ​ 420 Commercial real estate - non-owner occupied ​ ​ 26,352 ​ ​ 25,871 ​ ​ 4,142 Multi-family ​ ​ 874 ​ ​ 874 ​ ​ — Construction and land development ​ ​ 4,207 ​ ​ 4,165 ​ ​ 144 One-to-four family residential ​ ​ 11,391 ​ ​ 9,443 ​ ​ 479 Municipal, consumer, and other ​ ​ 13,544 ​ ​ 13,455 ​ ​ 2,431 Total ​ $ 73,698 ​ $ 70,266 ​ $ 8,730 ​ ​ 18 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unpaid ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ Recorded ​ Related December 31, 2020 Balance Investment Allowance With an allowance recorded: ​ (dollars in thousands) Commercial and industrial ​ $ 2,737 ​ $ 2,725 ​ $ 1,193 Agricultural and farmland ​ ​ 169 ​ ​ 168 ​ ​ 22 Commercial real estate - owner occupied ​ ​ 3,072 ​ ​ 3,040 ​ ​ 429 Commercial real estate - non-owner occupied ​ ​ 20,726 ​ ​ 20,394 ​ ​ 4,255 Multi-family ​ ​ — ​ ​ — ​ ​ — Construction and land development ​ ​ 2,081 ​ ​ 2,055 ​ ​ 222 One-to-four family residential ​ ​ 2,963 ​ ​ 2,739 ​ ​ 560 Municipal, consumer, and other ​ ​ 12,207 ​ ​ 12,181 ​ ​ 3,301 Total ​ $ 43,955 ​ $ 43,302 ​ $ 9,982 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With no related allowance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 3,322 ​ $ 2,587 ​ $ — Agricultural and farmland ​ ​ 4,625 ​ ​ 4,625 ​ ​ — Commercial real estate - owner occupied ​ ​ 10,164 ​ ​ 10,092 ​ ​ — Commercial real estate - non-owner occupied ​ ​ 5,727 ​ ​ 5,599 ​ ​ — Multi-family ​ ​ 876 ​ ​ 876 ​ ​ — Construction and land development ​ ​ 1,762 ​ ​ 1,754 ​ ​ — One-to-four family residential ​ ​ 9,325 ​ ​ 7,604 ​ ​ — Municipal, consumer, and other ​ ​ 1,431 ​ ​ 1,365 ​ ​ — Total ​ $ 37,232 ​ $ 34,502 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans individually evaluated for impairment: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 6,059 ​ $ 5,312 ​ $ 1,193 Agricultural and farmland ​ ​ 4,794 ​ ​ 4,793 ​ ​ 22 Commercial real estate - owner occupied ​ ​ 13,236 ​ ​ 13,132 ​ ​ 429 Commercial real estate - non-owner occupied ​ ​ 26,453 ​ ​ 25,993 ​ ​ 4,255 Multi-family ​ ​ 876 ​ ​ 876 ​ ​ — Construction and land development ​ ​ 3,843 ​ ​ 3,809 ​ ​ 222 One-to-four family residential ​ ​ 12,288 ​ ​ 10,343 ​ ​ 560 Municipal, consumer, and other ​ ​ 13,638 ​ ​ 13,546 ​ ​ 3,301 Total ​ $ 81,187 ​ $ 77,804 ​ $ 9,982 ​ ​ 19 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following table presents the average recorded investment and interest income recognized for loans individually evaluated for impairment by category of loans during the three months ended March 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 ​ Average ​ Interest ​ Average Interest ​ ​ Recorded ​ Income ​ Recorded ​ Income ​ Investment Recognized Investment Recognized With an allowance recorded: ​ (dollars in thousands) Commercial and industrial ​ $ 2,266 ​ $ 31 ​ $ 3,486 ​ $ 49 Agricultural and farmland ​ ​ 168 ​ ​ 2 ​ ​ 573 ​ ​ 4 Commercial real estate - owner occupied ​ ​ 3,244 ​ ​ 41 ​ ​ 828 ​ ​ 11 Commercial real estate - non-owner occupied ​ ​ 20,361 ​ ​ 208 ​ ​ 99 ​ ​ 2 Multi-family ​ ​ — ​ ​ — ​ ​ — ​ ​ — Construction and land development ​ ​ 2,248 ​ ​ 27 ​ ​ 3,064 ​ ​ 41 One-to-four family residential ​ ​ 2,644 ​ ​ 23 ​ ​ 3,261 ​ ​ 27 Municipal, consumer, and other ​ ​ 8,802 ​ ​ 40 ​ ​ 12,487 ​ ​ 83 Total ​ $ 39,733 ​ $ 372 ​ $ 23,798 ​ $ 217 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ With no related allowance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 1,068 ​ $ 14 ​ $ 5,941 ​ $ 58 Agricultural and farmland ​ ​ 383 ​ ​ 6 ​ ​ 12,520 ​ ​ 161 Commercial real estate - owner occupied ​ ​ 9,600 ​ ​ 122 ​ ​ 10,432 ​ ​ 131 Commercial real estate - non-owner occupied ​ ​ 5,665 ​ ​ 68 ​ ​ 3,340 ​ ​ 41 Multi-family ​ ​ 876 ​ ​ 10 ​ ​ — ​ ​ — Construction and land development ​ ​ 1,764 ​ ​ 26 ​ ​ 324 ​ ​ 4 One-to-four family residential ​ ​ 6,981 ​ ​ 49 ​ ​ 8,344 ​ ​ 62 Municipal, consumer, and other ​ ​ 4,746 ​ ​ 22 ​ ​ 1,370 ​ ​ 56 Total ​ $ 31,083 ​ $ 317 ​ $ 42,271 ​ $ 513 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans individually evaluated for impairment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 3,334 ​ $ 45 ​ $ 9,427 ​ $ 107 Agricultural and farmland ​ ​ 551 ​ ​ 8 ​ ​ 13,093 ​ ​ 165 Commercial real estate - owner occupied ​ ​ 12,844 ​ ​ 163 ​ ​ 11,260 ​ ​ 142 Commercial real estate - non-owner occupied ​ ​ 26,026 ​ ​ 276 ​ ​ 3,439 ​ ​ 43 Multi-family ​ ​ 876 ​ ​ 10 ​ ​ — ​ ​ — Construction and land development ​ ​ 4,012 ​ ​ 53 ​ ​ 3,388 ​ ​ 45 One-to-four family residential ​ ​ 9,625 ​ ​ 72 ​ ​ 11,605 ​ ​ 89 Municipal, consumer, and other ​ ​ 13,548 ​ ​ 62 ​ ​ 13,857 ​ ​ 139 Total ​ $ 70,816 ​ $ 689 ​ $ 66,069 ​ $ 730 ​ ​ 20 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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, 2021 Current Past Due Past Due Nonaccrual Loans ​ ​ (dollars in thousands) Commercial and industrial ​ $ 412,005 ​ $ — ​ $ — ​ $ 807 ​ $ 412,812 Agricultural and farmland ​ ​ 228,032 ​ ​ — ​ ​ — ​ ​ — ​ ​ 228,032 Commercial real estate - owner occupied ​ ​ 224,026 ​ ​ — ​ ​ — ​ ​ 573 ​ ​ 224,599 Commercial real estate - non-owner occupied ​ ​ 512,889 ​ ​ 92 ​ ​ — ​ ​ 3,982 ​ ​ 516,963 Multi-family ​ ​ 236,381 ​ ​ — ​ ​ — ​ ​ — ​ ​ 236,381 Construction and land development ​ ​ 215,221 ​ ​ 15 ​ ​ — ​ ​ 139 ​ ​ 215,375 One-to-four family residential ​ ​ 296,530 ​ ​ 706 ​ ​ 29 ​ ​ 3,503 ​ ​ 300,768 Municipal, consumer, and other ​ ​ 135,550 ​ ​ 113 ​ ​ 10 ​ ​ 102 ​ ​ 135,775 Total ​ $ 2,260,634 ​ $ 926 ​ $ 39 ​ $ 9,106 ​ $ 2,270,705 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accruing Interest ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30 - 89 Days ​ 90+ Days ​ ​ ​ ​ Total December 31, 2020 Current Past Due Past Due Nonaccrual Loans ​ ​ (dollars in thousands) Commercial and industrial ​ $ 392,490 ​ $ — ​ $ — ​ $ 822 ​ $ 393,312 Agricultural and farmland ​ ​ 222,723 ​ ​ — ​ ​ — ​ ​ — ​ ​ 222,723 Commercial real estate - owner occupied ​ ​ 221,308 ​ ​ 112 ​ ​ — ​ ​ 940 ​ ​ 222,360 Commercial real estate - non-owner occupied ​ ​ 516,387 ​ ​ — ​ ​ — ​ ​ 4,008 ​ ​ 520,395 Multi-family ​ ​ 236,391 ​ ​ — ​ ​ — ​ ​ — ​ ​ 236,391 Construction and land development ​ ​ 225,508 ​ ​ — ​ ​ — ​ ​ 144 ​ ​ 225,652 One-to-four family residential ​ ​ 301,282 ​ ​ 984 ​ ​ 595 ​ ​ 3,914 ​ ​ 306,775 Municipal, consumer, and other ​ ​ 119,055 ​ ​ 211 ​ ​ 21 ​ ​ 111 ​ ​ 119,398 Total ​ $ 2,235,144 ​ $ 1,307 ​ $ 616 ​ $ 9,939 ​ $ 2,247,006 ​ ​ 21 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following tables present total loans by category based on their assigned risk ratings determined by management: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Pass Pass-Watch Substandard Doubtful Total ​ ​ (dollars in thousands) Commercial and industrial ​ $ 392,957 ​ $ 15,734 ​ $ 4,121 ​ $ — ​ $ 412,812 Agricultural and farmland ​ ​ 196,773 ​ ​ 29,994 ​ ​ 1,265 ​ ​ — ​ ​ 228,032 Commercial real estate - owner occupied ​ ​ 180,381 ​ ​ 31,165 ​ ​ 13,053 ​ ​ — ​ ​ 224,599 Commercial real estate - non-owner occupied ​ ​ 429,273 ​ ​ 58,874 ​ ​ 28,816 ​ ​ — ​ ​ 516,963 Multi-family ​ ​ 208,800 ​ ​ 26,707 ​ ​ 874 ​ ​ — ​ ​ 236,381 Construction and land development ​ ​ 182,730 ​ ​ 28,480 ​ ​ 4,165 ​ ​ — ​ ​ 215,375 One-to-four family residential ​ ​ 276,413 ​ ​ 13,839 ​ ​ 10,516 ​ ​ — ​ ​ 300,768 Municipal, consumer, and other ​ ​ 121,991 ​ ​ 330 ​ ​ 13,454 ​ ​ — ​ ​ 135,775 Total ​ $ 1,989,318 ​ $ 205,123 ​ $ 76,264 ​ $ — ​ $ 2,270,705 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Pass Pass-Watch Substandard Doubtful Total ​ ​ (dollars in thousands) Commercial and industrial ​ $ 368,843 ​ $ 18,258 ​ $ 6,211 ​ $ — ​ $ 393,312 Agricultural and farmland ​ ​ 191,662 ​ ​ 25,540 ​ ​ 5,521 ​ ​ — ​ ​ 222,723 Commercial real estate - owner occupied ​ ​ 176,823 ​ ​ 31,990 ​ ​ 13,547 ​ ​ — ​ ​ 222,360 Commercial real estate - non-owner occupied ​ ​ 432,752 ​ ​ 58,699 ​ ​ 28,944 ​ ​ — ​ ​ 520,395 Multi-family ​ ​ 204,449 ​ ​ 31,066 ​ ​ 876 ​ ​ — ​ ​ 236,391 Construction and land development ​ ​ 193,646 ​ ​ 28,193 ​ ​ 3,813 ​ ​ — ​ ​ 225,652 One-to-four family residential ​ ​ 280,198 ​ ​ 14,526 ​ ​ 12,051 ​ ​ — ​ ​ 306,775 Municipal, consumer, and other ​ ​ 105,539 ​ ​ 312 ​ ​ 13,547 ​ ​ — ​ ​ 119,398 Total ​ $ 1,953,912 ​ $ 208,584 ​ $ 84,510 ​ $ — ​ $ 2,247,006 ​ ​ 22 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ There were no troubled debt restructurings during the three months ended March 31, 2021 and 2020. 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, 2021 and 2020. 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, 2021 and December 31, 2020, the Company had $ 8,673,000 and $ 8,950,000 of troubled debt restructurings, respectively. Restructured loans are evaluated for impairment quarterly as part of the Company’s determination of the allowance for loan losses. There were no material commitments to lend additional funds to debtors owing receivables whose terms have been modified in troubled debt restructurings. 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 to borrowers experiencing financial hardship due to COVID-19 generally do not need to be accounted for as a troubled debt restructuring. As of March 31, 2021 and December 31, 2020, the Company had loans that were granted a payment modification due to a COVID-19 related financial hardship and have not returned to regular payments were $ 16,697,000 and $ 27,986,000 , 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. Changes in the accretable yield for loans acquired with deteriorated credit quality were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Beginning balance ​ $ 1,397 ​ $ 1,662 Reclassification from non-accretable difference ​ ​ 74 ​ ​ 8 Accretion income ​ ​ ( 133 ) ​ ​ ( 160 ) Ending balance ​ $ 1,338 ​ $ 1,510 ​ ​ NOTE 4 – LOAN SERVICING Mortgage loans serviced for others, which are not included in the accompanying consolidated balance sheets, amounted to $ 1,077,291,000 and $ 1,090,219,000 as of March 31, 2021 and December 31, 2020, respectively. Activity in mortgage servicing rights is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Beginning balance ​ $ 5,934 ​ $ 8,518 Capitalized servicing rights ​ ​ 397 ​ ​ 214 Fair value adjustment: ​ ​ ​ ​ ​ ​ Attributable to payments and principal reductions ​ ​ ( 467 ) ​ ​ ( 403 ) Attributable to changes in valuation inputs and assumptions ​ ​ 1,765 ​ ​ ( 1,982 ) Total fair value adjustment ​ ​ 1,298 ​ ​ ( 2,385 ) Ending balance ​ $ 7,629 ​ $ 6,347 ​ ​ 23 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 5 – FORECLOSED ASSETS Foreclosed assets activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Beginning balance ​ $ 4,168 ​ $ 5,099 Transfers from loans ​ ​ 671 ​ ​ 19 Proceeds from sales ​ ​ ( 15 ) ​ ​ ( 677 ) Net gain (loss) on sales ​ ​ ( 3 ) ​ ​ 75 Direct write-downs ​ ​ ( 73 ) ​ ​ ( 47 ) Ending balance ​ $ 4,748 ​ $ 4,469 ​ Gains (losses) on foreclosed assets includes the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Direct write-downs ​ $ ( 73 ) ​ $ ( 47 ) Net gain (loss) on sales ​ ​ ( 3 ) ​ ​ 75 Guarantee reimbursements ​ ​ — ​ ​ 7 Gains (losses) on foreclosed assets ​ $ ( 76 ) ​ $ 35 ​ The carrying value of foreclosed one-to-four family residential real estate property as of March 31, 2021 and December 31, 2020, was $ 1,341,000 and $ 868,000 , respectively. As of March 31, 2021, there were 8 one-to-four family residential real estate loans in the process of foreclosure totaling approximately $ 947,000 . As of December 31, 2020, there were 11 one-to-four family residential real estate loans in the process of foreclosure totaling approximately $ 1,526,000 . ​ 24 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 6 – DEPOSITS The Company’s deposits are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ ​ (dollars in thousands) Noninterest-bearing deposits ​ $ 968,991 ​ $ 882,939 Interest-bearing deposits: ​ ​ ​ ​ ​ ​ Interest-bearing demand ​ ​ 1,008,954 ​ ​ 968,592 Money market ​ ​ 499,088 ​ ​ 462,056 Savings ​ ​ 593,472 ​ ​ 517,473 Time ​ ​ 285,461 ​ ​ 299,474 Total interest-bearing deposits ​ ​ 2,386,975 ​ ​ 2,247,595 Total deposits ​ $ 3,355,966 ​ $ 3,130,534 ​ Money market deposits include $ 6,853,000 and $ 6,489,000 of reciprocal transaction deposits as of March 31, 2021 and December 31, 2020, respectively. Time deposits include $ 2,687,000 and $ 3,164,000 of reciprocal time deposits as of March 31, 2021 and December 31, 2020, respectively. The aggregate amounts of time deposits in denominations of $250,000 or more amounted to $ 21,900,000 and $ 26,687,000 as of March 31, 2021 and December 31, 2020, respectively. The aggregate amounts of time deposits in denominations of $100,000 or more amounted to $ 92,266,000 and $ 99,649,000 as of March 31, 2021 and December 31, 2020, respectively. The components of interest expense on deposits are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ (dollars in thousands) Interest-bearing demand ​ $ 117 ​ $ 251 Money market ​ ​ 89 ​ ​ 394 Savings ​ ​ 41 ​ ​ 70 Time ​ ​ 397 ​ ​ 880 Total interest expense on deposits ​ $ 644 ​ $ 1,595 ​ ​ NOTE 7 – BORROWINGS There were no Federal Home Loan Bank of Chicago (FHLB) borrowings outstanding as of March 31, 2021 and December 31, 2020. Available borrowings from the FHLB are secured by FHLB stock held by the Company and pledged security in the form of qualifying loans. The total amount of loans pledged as of March 31, 2021 and December 31, 2020 was $ 499,886,000 and $ 493,690,000 , respectively. As of March 31, 2021 and December 31, 2020, loans pledged also served as collateral for credit exposure of approximately $ 355,000 associated with the Bank’s participation in the FHLB’s Mortgage Partnership Finance Program. The Bank also has available borrowings through the discount window of the Federal Reserve Bank of Chicago (FRB). Available borrowings are based on the collateral pledged. As of March 31, 2021 and December 31, 2020, the carrying value of debt securities pledged amounted to $ 479,000 and $ 499,000 , respectively. There was no outstanding borrowings under the FRB discount window as of March 31, 2021 and December 31, 2020. 25 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 8 – SUBORDINATED NOTES On September 3, 2020, the Company issued $ 40,000,000 of fixed-to-floating rate subordinated notes that mature on September 15, 2030. The subordinated notes, which are unsecured obligations of the Company, bear a fixed interest rate of 4.50 % for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month SOFR, as determined on the Floating Interest Determination Date, plus 4.37 %. Interest is payable semi-annually during the five year fixed rate period and quarterly during the subsequent five year floating rate period. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after September 15, 2025. If the subordinated notes are redeemed before they mature, the redemption price will be the principal amount plus any accrued but unpaid interest. The transaction resulted in debt issuance costs of $ 789,000 which will be amortized over 10 years . As of March 31, 2021 and December 31, 2020, 100 % of the subordinated notes qualified as Tier 2 capital. The face value and carrying value of the subordinated notes are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ ​ (dollars in thousands) Subordinated notes, at face value ​ $ 40,000 ​ $ 40,000 Unamortized issuance costs ​ ​ ( 743 ) ​ ​ ( 762 ) Subordinated notes, at carrying value ​ $ 39,257 ​ $ 39,238 ​ ​ NOTE 9 – JUNIOR SUBORDINATED DEBENTURES ISSUED TO CAPITAL TRUSTS Five subsidiary business trusts of the Company have issued floating rate capital securities (“capital securities”) which are guaranteed by the Company. The Company owns all of the outstanding stock of the five subsidiary business trusts. The trusts used the proceeds from the issuance of their capital securities to buy floating rate junior subordinated deferrable interest debentures (“junior subordinated debentures”) issued by the Company. These junior subordinated debentures are the only assets of the trusts and the interest payments from the junior subordinated debentures finance the distributions paid on the capital securities. The junior subordinated debentures are unsecured and rank junior and subordinate in the right of payment to all senior debt of the Company. The trusts are not consolidated in the Company’s financial statements. The face and carrying value of junior subordinated debentures are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ ​ (dollars in thousands) Heartland Bancorp, Inc. Capital Trust B ​ $ 10,310 ​ $ 10,310 Heartland Bancorp, Inc. Capital Trust C ​ ​ 10,310 ​ ​ 10,310 Heartland Bancorp, Inc. Capital Trust D ​ ​ 5,155 ​ ​ 5,155 FFBI Capital Trust I ​ ​ 7,217 ​ ​ 7,217 National Bancorp Statutory Trust I ​ ​ 5,773 ​ ​ 5,773 Total junior subordinated debentures, at face value ​ ​ 38,765 ​ ​ 38,765 National Bancorp Statutory Trust I unamortized discount ​ ​ ( 1,100 ) ​ ​ ( 1,117 ) Total junior subordinated debentures, at carrying value ​ $ 37,665 ​ $ 37,648 ​ ​ 26 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The interest rates on the junior subordinated debentures are variable, reset quarterly, and are equal to the three-month LIBOR, as determined on the LIBOR Determination Date specific to each junior subordinated debenture, plus a fixed percentage. The interest rates and maturities of the junior subordinated debentures are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Rate at ​ ​ ​ ​ Variable ​ March 31, ​ December 31, ​ Maturity ​ Interest Rate 2021 2020 Date Heartland Bancorp, Inc. Capital Trust B ​ LIBOR plus 2.75 % 2.99 % 2.99 % April 6, 2034 Heartland Bancorp, Inc. Capital Trust C ​ LIBOR plus 1.53 ​ 1.71 ​ 1.75 ​ June 15, 2037 Heartland Bancorp, Inc. Capital Trust D ​ LIBOR plus 1.35 ​ 1.53 ​ 1.57 ​ September 15, 2037 FFBI Capital Trust I ​ LIBOR plus 2.80 ​ 3.04 ​ 3.04 ​ April 6, 2034 National Bancorp Statutory Trust I ​ LIBOR plus 2.90 ​ 3.08 ​ 3.12 ​ December 31, 2037 ​ The distribution rate payable on the junior subordinated debentures is cumulative and payable quarterly in arrears. The Company has the right, subject to events in default, to defer payments of interest on the junior subordinated debentures at any time by extending the interest payment period for a period not exceeding 20 quarterly periods with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the junior subordinated debentures. The capital securities are subject to mandatory redemption upon payment of the junior subordinated debentures and carry an interest rate identical to that of the related junior subordinated debenture. The junior subordinated debentures maturity dates may be shortened if certain conditions are met, or at any time within 90 days following the occurrence and continuation of certain changes in either tax treatment or the capital treatment of the debentures or the capital securities. If the junior subordinated debentures are redeemed before they mature, the redemption price will be the principal amount plus any accrued but unpaid interest. The Company has the right to terminate each Capital Trust and cause the junior subordinated debentures to be distributed to the holders of the capital securities in liquidation of such trusts. Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of March 31, 2021 and December 31, 2020, 100 %of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005. ​ 27 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 10 – 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, 2021 ​ December 31, 2020 ​ ​ Notional ​ Fair ​ Notional ​ Fair ​ Amount Value Amount Value ​ ​ (dollars in thousands) Fair value recorded in other liabilities ​ $ 17,000 ​ $ ( 1,140 ) ​ $ 17,000 ​ $ ( 1,458 ) ​ As of March 31, 2021, the interest rate swap agreements designated as cash flow hedges had contractual maturities between 2024 and 2025. As of March 31, 2021 and December 31, 2020, the Company had cash pledged and held on deposit at counterparties of $ 1,310,000 and $ 1,630,000 , respectively. In 2019, the Company had an interest rate swap contract with a notional amount of $ 10,000,000 designated as a cash flow hedge on variable-rate loans. Beginning April 1, 2019, this hedging relationship was no longer considered highly effective, and the Company discontinued hedge accounting. In accordance with hedge accounting guidance, the net unrealized gain associated with the discontinued hedging relationship, recorded within accumulated other comprehensive income, was reclassified into earnings through April 7, 2020, the period the hedged forecasted transactions affected earnings. The effect of interest rate swap agreements designated as cash flow hedges on the consolidated statements of income are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ Location of gross gain (loss) reclassified ​ Amounts of gross gain (loss) from accumulated other ​ reclassified from accumulated comprehensive income to income ​ other comprehensive income ​ ​ Three Months Ended ​ ​ March 31, ​ 2021 2020 Designated as cash flow hedges: ​ (dollars in thousands) Taxable loan interest income ​ $ — ​ $ 32 Junior subordinated debentures interest expense ​ ​ ( 99 ) ​ ​ ( 34 ) Total ​ $ ( 99 ) ​ $ ( 2 ) ​ 28 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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, 2021 ​ December 31, 2020 ​ ​ 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 ​ $ 115,378 ​ $ 8,496 ​ $ 122,313 ​ $ 15,360 Interest rate swaps with a financial institution counterparty ​ ​ 3,992 ​ ​ 64 ​ ​ — ​ ​ — Total fair value recorded in other assets ​ $ 119,370 ​ $ 8,560 ​ $ 122,313 ​ $ 15,360 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value recorded in other liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps with a commercial borrower counterparty ​ $ 3,992 ​ $ ( 64 ) ​ $ — ​ $ — Interest rate swaps with a financial institution counterparty ​ ​ 115,378 ​ ​ ( 8,496 ) ​ ​ 122,313 ​ ​ ( 15,360 ) Total fair value recorded in other liabilities ​ $ 119,370 ​ $ ( 8,560 ) ​ $ 122,313 ​ $ ( 15,360 ) ​ As of March 31, 2021, the interest rate swap agreements not designated as hedging instruments had contractual maturities between 2022 and 2042. As of March 31, 2021 and December 31, 2020, the Company had $ 9,974,000 and $ 15,490,000 , respectively, of debt securities pledged and held in safekeeping at the financial institution counterparty. 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, ​ 2021 2020 Not designated as hedging instruments: ​ (dollars in thousands) Gross gains ​ $ 7,564 ​ $ 13,571 Gross losses ​ ​ ( 7,564 ) ​ ​ ( 13,571 ) Net gains (losses) ​ $ — ​ $ — ​ ​ 29 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 11 – ACCUMULATED OTHER COMPREHENSIVE INCOME 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, 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 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2019 ​ $ 8,659 ​ $ ( 131 ) ​ $ ( 696 ) ​ $ 7,832 Other comprehensive income (loss) before reclassifications ​ ​ 7,602 ​ ​ — ​ ​ ( 970 ) ​ ​ 6,632 Reclassifications ​ ​ — ​ ​ ( 9 ) ​ ​ 2 ​ ​ ( 7 ) Other comprehensive income (loss), before tax ​ ​ 7,602 ​ ​ ( 9 ) ​ ​ ( 968 ) ​ ​ 6,625 Income tax expense (benefit) ​ ​ 2,166 ​ ​ ( 2 ) ​ ​ ( 276 ) ​ ​ 1,888 Other comprehensive income (loss), after tax ​ ​ 5,436 ​ ​ ( 7 ) ​ ​ ( 692 ) ​ ​ 4,737 Balance, March 31, 2020 ​ $ 14,095 ​ $ ( 138 ) ​ $ ( 1,388 ) ​ $ 12,569 ​ The amounts reclassified from accumulated other comprehensive income (loss) for unrealized gains (losses) on debt securities available-for-sale are included in gain (loss) on securities in the accompanying consolidated statements of income. The amounts reclassified from accumulated other comprehensive income (loss) for unrealized gains on debt securities held-to-maturity are included in securities interest income in the accompanying consolidated statements of income. The amounts reclassified from accumulated other comprehensive income (loss) for the fair value of derivative financial instruments represent net interest payments received or made on derivatives designated as cash flow hedges. See Note 10 for additional information. ​ 30 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 12 – INCOME TAXES Allocation of income tax expense between current and deferred portions is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Current ​ ​ ​ ​ ​ ​ Federal ​ $ 3,170 ​ $ 1,721 State ​ ​ 1,698 ​ ​ 988 Total current ​ ​ 4,868 ​ ​ 2,709 ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ ​ ​ ​ ​ Federal ​ ​ 457 ​ ​ ( 457 ) State ​ ​ 228 ​ ​ ( 221 ) Total deferred ​ 685 ​ ( 678 ) Income tax expense ​ $ 5,553 ​ $ 2,031 ​ Income tax expense differs from the statutory federal rate due to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2021 ​ 2020 ​ ​ ​ Amount ​ Percentage ​ Amount ​ Percentage ​ ​ ​ (dollars in thousands) ​ Federal income tax, at statutory rate ​ $ 4,368 ​ 21.0 % $ 1,733 ​ 21.0 % Increase (decrease) resulting from: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Federally tax exempt interest income ​ ​ ( 367 ) ​ ( 1.8 ) ​ ​ ( 357 ) ​ ( 4.3 ) ​ State taxes, net of federal benefit ​ ​ 1,514 7.3 ​ ​ 631 7.6 ​ Other ​ ​ 38 0.2 ​ ​ 24 0.3 ​ Income tax expense ​ $ 5,553 26.7 % $ 2,031 24.6 % ​ ​ 31 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The components of the net deferred tax asset (liability) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2021 ​ 2020 ​ ​ (dollars in thousands) Deferred tax assets ​ ​ ​ ​ Allowance for loan losses ​ $ 8,170 $ 9,046 Compensation related ​ ​ 1,802 ​ 2,301 Deferred loan fees ​ ​ 2,470 ​ ​ 1,595 Nonaccrual interest ​ 646 ​ ​ 660 Foreclosed assets ​ 59 ​ ​ 45 Goodwill ​ 287 ​ ​ 336 Other ​ 1,049 ​ ​ 1,011 Total deferred tax assets ​ 14,483 ​ ​ 14,994 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities ​ ​ ​ ​ ​ ​ Fixed asset depreciation ​ 4,368 ​ ​ 4,361 Mortgage servicing rights ​ 2,175 ​ ​ 1,692 Other purchase accounting adjustments ​ ​ 1,080 ​ ​ 1,115 Intangible assets ​ ​ 521 ​ ​ 580 Prepaid assets ​ 557 ​ ​ 685 Net unrealized gain on debt securities ​ 1 ​ ​ 6,569 Other ​ 367 ​ ​ 370 Total deferred tax liabilities ​ 9,069 ​ ​ 15,372 Net deferred tax asset (liability) ​ $ 5,414 ​ $ ( 378 ) ​ ​ NOTE 13 – 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 that could occur if the Company’s outstanding restricted stock units were vested. ​ 32 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following table sets forth the computation of basic and diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) Numerator: ​ ​ ​ ​ ​ ​ Net income ​ $ 15,245 ​ $ 6,221 Earnings allocated to participating securities ​ ​ ( 31 ) ​ ​ ( 15 ) Numerator for earnings per share - basic and diluted ​ $ 15,214 ​ $ 6,206 ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ ​ 27,430,912 ​ ​ 27,457,306 Dilutive effect of outstanding restricted stock units ​ ​ 2,489 ​ ​ — Weighted average common shares outstanding, including all dilutive potential shares ​ ​ 27,433,401 ​ ​ 27,457,306 ​ ​ ​ ​ ​ ​ ​ Earnings per share - Basic ​ $ 0.55 ​ $ 0.23 Earnings per share - Diluted ​ $ 0.55 ​ $ 0.23 ​ ​ NOTE 14 – DEFERRED COMPENSATION The Company maintained a supplemental executive retirement plan (the SERP) for certain key executive officers. The SERP benefit payments were scheduled to be paid in equal monthly installments over 30 years . In June 2019, the Company approved the termination of the SERP agreements, and a lump sum payment was made in June 2020 to each participant equal to the present value of any remaining installment payments. During the three months ended March 31, 2020, the Company recognized employee benefits expense for the SERP of $ 970,000 . NOTE 15 – 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, ​ 2021 2020 ​ ​ (dollars in thousands) Restricted stock units ​ $ 114 ​ $ 67 Performance restricted stock units ​ ​ 15 ​ ​ — Total awards classified as equity ​ ​ 129 ​ ​ 67 Stock appreciation rights ​ ​ 130 ​ ​ ( 335 ) Total stock-based compensation expense (benefit) ​ $ 259 ​ $ ( 268 ) ​ 33 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Restricted Stock Units A restricted stock unit grants a participant the right to receive one share of common stock, following the completion of the requisite service period. Restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and is recognized on a straight-line basis over the 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. On February 19, 2021, the Company granted 43,047 restricted stock units to certain key employees which vest in three annual installments beginning on February 28, 2022. On February 19, 2021, the Company also granted 3,300 restricted stock units to non-employee directors which vest on February 28, 2022. The total fair value of the restricted stock units granted on February 19, 2021 was $ 720,000 , based on the grant date closing price of $ 15.53 per share. The following is a summary of restricted stock unit activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ Weighted ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ Average ​ ​ Restricted ​ Grant Date ​ Restricted ​ Grant Date ​ Stock Units Fair Value Stock Units Fair Value Beginning balance ​ 71,000 ​ $ 18.98 ​ — ​ $ — Granted ​ 46,347 ​ ​ 15.53 ​ 73,150 ​ ​ 19.03 Vested ​ ( 20,225 ) ​ ​ 18.86 ​ — ​ ​ — Forfeited ​ — ​ ​ — ​ — ​ ​ — Ending balance ​ 97,122 ​ $ 17.36 ​ 73,150 ​ $ 19.03 ​ A further summary of restricted stock units as of March 31, 2021, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ Restricted ​ Remaining Grant Date Fair Values Stock Units Contractual Term $ 15.53 ​ 46,347 ​ 2.8 years $ 19.03 ​ 50,775 ​ 2.8 years ​ As of March 31, 2021, unrecognized compensation cost related to non-vested restricted stock units was $ 1,602,000 . ​ 34 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Performance Restricted Stock Units A performance restricted stock unit is similar to a restricted stock unit, except that the number of shares of common stock awarded is based on a performance condition and the completion of the requisite service period. Performance restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price and an assessment of the probable outcome of the performance condition and is recognized on a straight-line basis over the service period of the entire award. Dividend equivalents on performance restricted stock units, which are accrued until vested, are classified as dividends charged to retained earnings. On February 19, 2021, the Company granted 28,697 performance restricted stock units to certain key employees which vest on February 28, 2024. The performance condition is based on the average annual return on average tangible common equity during a three-year performance period. The number of shares of common stock that may be earned ranges from 0 % to 150 % of the number of performance restricted stock units granted. The total fair value of the performance restricted stock units granted on February 19, 2021 was $ 405,000 , based on the grant date closing price of $ 15.53 per share 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, ​ ​ 2021 ​ 2020 ​ ​ Maximum ​ ​ ​ Maximum ​ ​ ​ ​ Awarded ​ Weighted ​ Awarded ​ Weighted ​ ​ Performance ​ Average ​ Performance ​ Average ​ ​ Restricted ​ Grant Date ​ Restricted ​ Grant Date ​ Stock Units Fair Value Stock Units Fair Value Beginning balance ​ — ​ $ — ​ — ​ $ — Granted ​ 43,046 ​ ​ 15.53 ​ — ​ ​ — Vested ​ — ​ ​ — ​ — ​ ​ — Forfeited ​ — ​ ​ — ​ — ​ ​ — Ending balance ​ 43,046 ​ $ 15.53 ​ — ​ $ — ​ A further summary of performance restricted stock units as of March 31, 2021, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ Awarded ​ ​ ​ ​ ​ Performance ​ Weighted Average ​ ​ Restricted ​ Remaining Grant Date Fair Values Stock Units Contractual Term $ 15.53 ​ 43,046 ​ 2.9 years ​ As of March 31, 2021, unrecognized compensation cost related to non-vested performance restricted stock units was $ 390,000 , based on the current assessment of the probable outcome of the performance condition. ​ 35 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Stock Appreciation Rights A stock appreciation right grants a participant the right to receive an amount of cash, the value of which equals the appreciation in the Company’s stock price between the grant date and the exercise date. Stock appreciation rights units are classified as liabilities. The liability is based on an option-pricing model used to estimate the fair value of the stock appreciation rights. Compensation cost for unvested stock appreciation rights is recognized on a straight line basis over the service period of the entire award. The unvested stock appreciation rights vest in four equal annual installments beginning on the first anniversary of the grant date. The following is a summary of stock appreciation rights activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 ​ Stock Appreciation Rights Weighted Average Grant Date Assigned Value Stock Appreciation Rights Weighted Average Grant Date Assigned Value Beginning balance ​ 105,570 ​ $ 16.32 ​ 110,160 ​ $ 16.32 Granted ​ — ​ ​ — ​ — ​ ​ — Exercised ​ — ​ ​ — ​ — ​ ​ — Expired ​ ( 1,530 ) ​ ​ 16.32 ​ — ​ ​ — Forfeited ​ — ​ ​ — ​ — ​ ​ — Ending balance ​ 104,040 ​ $ 16.32 ​ 110,160 ​ $ 16.32 ​ A further summary of stock appreciation rights as of March 31, 2021, is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ Stock Appreciation Rights ​ Remaining Grant Date Assigned Values Outstanding Exercisable Contractual Term $ 16.32 ​ 104,040 ​ 85,680 ​ 7.9 years ​ As of March 31, 2021, unrecognized compensation cost related to non-vested stock appreciation rights was $ 67,000 . ​ 36 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ As of March 31, 2021 and December 31, 2020, the liability recorded for outstanding stock appreciation rights was $ 402,000 and $ 272,000 , 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, ​ December 31, ​ ​ 2021 2020 ​ Risk-free interest rate ​ ​ 1.55 % ​ 0.80 % Expected volatility ​ ​ 34.96 % ​ 34.72 % Expected life (in years) ​ ​ 8.4 ​ ​ 8.7 ​ Expected dividend yield ​ ​ 3.50 % ​ 3.96 % ​ As of March 31, 2021, the liability recorded for previously exercised stock appreciation rights was $ 797,000 , which will be paid in three remaining equal annual installments. As of December 31, 2020, the liability recorded for previously exercised units was $ 1,087,000 . ​ NOTE 16 – REGULATORY MATTERS 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. 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. 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 the 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 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, 2021 and December 31, 2020, the capital conservation buffer was 2.5 %. As of March 31, 2021, the Company and the Bank each met all capital adequacy requirements to which they were subject. 37 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The actual and required capital amounts and ratios of HBT Financial, Inc. (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, 2021 Amount Ratio Amount Ratio Amount Ratio ​ ​ ​ (dollars in thousands) ​ Total Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 434,408 ​ 17.37 % $ 200,018 ​ 8.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 397,098 ​ 15.90 ​ ​ 199,847 ​ 8.00 ​ $ 249,809 ​ 10.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 366,392 ​ 14.65 % $ 150,014 ​ 6.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 368,339 ​ 14.74 ​ ​ 149,885 ​ 6.00 ​ $ 199,847 ​ 8.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 329,892 ​ 13.19 % $ 112,510 ​ 4.50 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 368,339 ​ 14.74 ​ ​ 112,414 ​ 4.50 ​ $ 162,376 ​ 6.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Average Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 366,392 ​ 9.85 % $ 148,768 ​ 4.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 368,339 ​ 9.91 ​ ​ 148,616 ​ 4.00 ​ $ 185,770 ​ 5.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual ​ For Capital Adequacy Purposes ​ To Be Well Capitalized Under Prompt Corrective Action Provisions ​ December 31, 2020 Amount Ratio Amount Ratio Amount Ratio ​ ​ ​ (dollars in thousands) ​ Total Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 426,283 ​ 17.40 % $ 195,970 ​ 8.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 382,511 ​ 15.63 ​ ​ 195,787 ​ 8.00 ​ $ 244,733 ​ 10.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 356,410 ​ 14.55 % $ 146,977 ​ 6.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 351,904 ​ 14.38 ​ ​ 146,840 ​ 6.00 ​ $ 195,787 ​ 8.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 319,927 ​ 13.06 % $ 110,233 ​ 4.50 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 351,904 ​ 14.38 ​ ​ 110,130 ​ 4.50 ​ $ 159,077 ​ 6.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Average Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ $ 356,410 ​ 9.94 % $ 143,454 ​ 4.00 % ​ N/A ​ N/A ​ Heartland Bank and Trust Company ​ ​ 351,904 ​ 9.82 ​ ​ 143,296 ​ 4.00 ​ $ 179,120 ​ 5.00 % ​ ​ 38 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ NOTE 17 – 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 12, 2021. There were no transfers between levels during the three months ended March 31, 2021 and 2020. 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, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value ​ ​ ​ (dollars in thousands) Debt securities available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ — ​ $ 127,938 ​ $ — ​ $ 127,938 Municipal ​ ​ — ​ ​ 282,333 ​ ​ — ​ ​ 282,333 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ — ​ ​ 169,104 ​ ​ — ​ ​ 169,104 Agency commercial ​ ​ — ​ ​ 207,997 ​ ​ — ​ ​ 207,997 Corporate ​ ​ — ​ ​ 69,463 ​ ​ — ​ ​ 69,463 Equity securities with readily determinable fair values ​ ​ 3,332 ​ ​ — ​ ​ — ​ ​ 3,332 Mortgage servicing rights ​ ​ — ​ ​ — ​ ​ 7,629 ​ ​ 7,629 Derivative financial assets ​ ​ — ​ ​ 8,560 ​ ​ — ​ ​ 8,560 Derivative financial liabilities ​ ​ — ​ ​ 9,700 ​ ​ — ​ ​ 9,700 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value ​ ​ ​ (dollars in thousands) Debt securities available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ — ​ $ 121,993 ​ $ — ​ $ 121,993 Municipal ​ ​ — ​ ​ 274,261 ​ ​ — ​ ​ 274,261 Mortgage-backed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency residential ​ ​ — ​ ​ 203,252 ​ ​ — ​ ​ 203,252 Agency commercial ​ ​ — ​ ​ 250,766 ​ ​ — ​ ​ 250,766 Corporate ​ ​ — ​ ​ 72,597 ​ ​ — ​ ​ 72,597 Equity securities with readily determinable fair values ​ ​ 3,292 ​ ​ — ​ ​ — ​ ​ 3,292 Mortgage servicing rights ​ ​ — ​ ​ — ​ ​ 5,934 ​ ​ 5,934 Derivative financial assets ​ ​ — ​ ​ 15,360 ​ ​ — ​ ​ 15,360 Derivative financial liabilities ​ ​ — ​ ​ 16,818 ​ ​ — ​ ​ 16,818 ​ 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, 2020 to March 31, 2021. ​ 39 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Investment Securities When available, the Company uses quoted market prices to determine the fair value of securities; such items are classified in Level 1 of the fair value hierarchy. For the Company’s securities where quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, cannot be obtained or cannot be corroborated, a security is generally classified as Level 3. The change in fair value of debt securities available-for-sale is recorded through an adjustment to the consolidated statement of comprehensive income. The change in fair value of equity securities with readily determinable fair values is recorded through an adjustment to the consolidated statement of income. Derivative Financial Instruments Interest rate swap agreements are carried at fair value as determined by dealer valuation models. Based on the inputs used, the derivative financial instruments subjected to recurring fair value adjustments are classified as Level 2. For derivative financial instruments designated as a hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of comprehensive income. For derivative financial instruments not designated as a hedging instruments, the change in fair value is recorded through an adjustment to the consolidated statement of income. Mortgage Servicing Rights The Company has elected to record its mortgage servicing rights at fair value. Mortgage servicing rights do not trade in an active market with readily observable prices. Accordingly, the Company determines the fair value of mortgage servicing rights by estimating the fair value of the future cash flows associated with the mortgage loans being serviced as calculated by an independent third party. Key economic assumptions used in measuring the fair value of mortgage servicing rights include, but are not limited to, prepayment speeds and discount rates. Due to the nature of the valuation inputs, mortgage servicing rights are classified as Level 3. The change in fair value is recorded through an adjustment to the consolidated statement of income. ​ 40 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) Mortgage servicing rights ​ $ 7,629 ​ Discounted cash flows ​ Constant pre-payment rates (CPR) ​ 7.0 % to 85.0 % ( 12.3 %) ​ ​ ​ ​ ​ ​ ​ Discount rate ​ 8.8 % to 11.0 % ( 9.0 %) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ Fair Value ​ Valuation Technique ​ Unobservable Inputs ​ Range (Weighted Average) Mortgage servicing rights ​ $ 5,934 ​ Discounted cash flows ​ Constant pre-payment rates (CPR) ​ 7.0 % to 85.0 % ( 17.3 %) ​ ​ ​ ​ ​ ​ ​ Discount rate ​ 9.0 % to 11.0 % ( 9.0 %) ​ Nonrecurring Basis Certain assets are measured at fair value on a nonrecurring basis. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as there is evidence of impairment or a change in the amount of previously recognized impairment. The following tables present the balances of the assets measured at fair value on a nonrecurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value ​ ​ ​ (dollars in thousands) Loans held for sale ​ $ — ​ $ 12,882 ​ $ — ​ $ 12,882 Collateral-dependent impaired loans ​ ​ — ​ ​ — ​ ​ 30,579 ​ ​ 30,579 Bank premises held for sale ​ ​ — ​ ​ — ​ ​ 121 ​ ​ 121 Foreclosed assets ​ ​ — ​ ​ — ​ ​ 4,748 ​ ​ 4,748 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value ​ ​ ​ (dollars in thousands) Loans held for sale ​ $ — ​ $ 14,713 ​ $ — ​ $ 14,713 Collateral-dependent impaired loans ​ ​ — ​ ​ — ​ ​ 33,320 ​ ​ 33,320 Bank premises held for sale ​ ​ — ​ ​ — ​ ​ 121 ​ ​ 121 Foreclosed assets ​ ​ — ​ ​ — ​ ​ 4,168 ​ ​ 4,168 ​ 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. 41 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ Collateral-Dependent Impaired Loans In accordance with the provisions of the loan impairment guidance, impairment was measured for loans which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. The fair value of collateral-dependent impaired loans is estimated based on the fair value of the underlying collateral supporting the loan. Collateral-dependent impaired loans require classification in the fair value hierarchy. Impaired loans include loans acquired with deteriorated credit quality. Collateral values are estimated using Level 3 inputs based on customized discounting criteria. Bank Premises Held for Sale Bank premises held for sale are recorded at the lower of cost or fair value, less estimated selling costs, at the date classified as held for sale. Values are estimated using Level 3 inputs based on appraisals and customized discounting criteria. The carrying value of bank premises held for sale is not re-measured to fair value on a recurring basis but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. Foreclosed Assets Foreclosed assets are recorded at fair value based on property appraisals, less estimated selling costs, at the date of the transfer. Subsequent to the transfer, foreclosed assets are carried at the lower of cost or fair value, less estimated selling costs. Values are estimated using Level 3 inputs based on appraisals and customized discounting criteria. The carrying value of foreclosed assets is not re-measured to fair value on a recurring basis but is subject to fair value adjustments when the carrying value exceeds the fair value, less estimated selling costs. Collateral-Dependent Impaired Loans, Bank Premises Held for Sale, and Foreclosed Assets The estimated fair value of collateral-dependent impaired loans, bank premises held for sale, and foreclosed assets is based on the appraised fair value of the collateral, less estimated costs to sell. Collateral-dependent impaired loans, bank premises held for sale, and foreclosed assets are classified within Level 3 of the fair value hierarchy. The Company considers the appraisal or a similar evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals or a similar evaluation of the collateral underlying collateral-dependent loans and foreclosed assets are obtained at the time a loan is first considered impaired or a loan is transferred to foreclosed assets. Appraisals or a similar evaluation of bank premises held for sale are obtained when first classified as held for sale. Appraisals or similar evaluations are obtained subsequently as deemed necessary by management but at least annually on foreclosed assets and bank premises held for sale. Appraisals are reviewed for accuracy and consistency by management. Appraisals are performed by individuals selected from the list of approved appraisers maintained by management. The appraised values are reduced by estimated costs to sell. These discounts and estimates are developed by management by comparison to historical results. 42 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) Collateral-dependent impaired loans ​ $ 30,579 ​ Appraisal of collateral ​ Appraisal adjustments ​ Not meaningful Bank premises held for sale ​ ​ 121 ​ Appraisal ​ Appraisal adjustments ​ 7 % ( 7 %) Foreclosed assets ​ ​ 4,748 ​ Appraisal ​ Appraisal adjustments ​ 7 % ( 7 %) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ Fair Value ​ Valuation Technique ​ Unobservable Inputs ​ Range (Weighted Average) Collateral-dependent impaired loans ​ $ 33,320 ​ Appraisal of collateral ​ Appraisal adjustments ​ Not meaningful Bank premises held for sale ​ ​ 121 ​ Appraisal ​ Appraisal adjustments ​ 7 % ( 7 %) Foreclosed assets ​ ​ 4,168 ​ Appraisal ​ Appraisal adjustments ​ 7 % ( 7 %) ​ Other Fair Value Methods The following methods and assumptions were used by the Company in estimating fair value disclosures of its other financial instruments. There were no changes in the methods and significant assumptions used to estimate the fair value of these financial instruments. Cash and Cash Equivalents The carrying amounts of these financial instruments approximate their fair values. Interest-bearing Time Deposits with Banks The carrying values of interest-bearing time deposits with banks approximate their fair values. Restricted Stock The carrying amount of FHLB stock approximates fair value based on the redemption provisions of the FHLB. Loans The fair value estimation process for the loan portfolio uses an exit price concept and reflects discounts the Company believes are consistent with discounts in the market place. Fair values are estimated for portfolios of loans with similar characteristics. Loans are segregated by type such as commercial and industrial, agricultural and farmland, commercial real estate - owner occupied, commercial real estate - non-owner occupied, multi-family, construction and land development, one-to-four family residential, and municipal, consumer, and other. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for similar maturities. The fair value analysis also includes other assumptions to estimate fair value, intended to approximate those a market participant would use in an orderly transaction, with adjustments for discount rates, interest rates, liquidity, and credit spreads, as appropriate. 43 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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. 44 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ The following table provides summary information on the carrying amounts and estimated fair values of the Company’s financial instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ March 31, 2021 ​ December 31, 2020 ​ ​ Hierarchy ​ Carrying ​ Estimated ​ Carrying ​ Estimated ​ Level Amount Fair Value Amount Fair Value ​ ​ ​ ​ ​ (dollars in thousands) Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ Level 1 ​ $ 429,736 ​ $ 429,736 ​ $ 312,451 ​ $ 312,451 Debt securities held-to-maturity ​ Level 2 ​ ​ 192,994 ​ ​ 195,608 ​ ​ 68,395 ​ ​ 72,441 Restricted stock ​ Level 3 ​ ​ 2,498 ​ ​ 2,498 ​ ​ 2,498 ​ ​ 2,498 Loans, net ​ Level 3 ​ ​ 2,241,946 ​ ​ 2,264,145 ​ ​ 2,215,168 ​ ​ 2,235,767 Investments in unconsolidated subsidiaries ​ Level 3 ​ ​ 1,165 ​ ​ 1,165 ​ ​ 1,165 ​ ​ 1,165 Accrued interest receivable ​ Level 2 ​ ​ 12,718 ​ ​ 12,718 ​ ​ 14,255 ​ ​ 14,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits ​ Level 3 ​ ​ 285,461 ​ ​ 286,430 ​ ​ 299,474 ​ ​ 300,989 Securities sold under agreements to repurchase ​ Level 2 ​ ​ 41,976 ​ ​ 41,976 ​ ​ 45,736 ​ ​ 45,736 Subordinated notes ​ Level 3 ​ ​ 39,257 ​ ​ 38,162 ​ ​ 39,238 ​ ​ 38,403 Junior subordinated debentures ​ Level 3 ​ ​ 37,665 ​ ​ 23,528 ​ ​ 37,648 ​ ​ 23,766 Accrued interest payable ​ Level 2 ​ ​ 551 ​ ​ 551 ​ ​ 1,151 ​ ​ 1,151 ​ The Company estimated the fair value of lending related commitments as described in Note 18 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. NOTE 18 – 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, ​ December 31, ​ 2021 2020 ​ ​ ​ (dollars in thousands) Commitments to extend credit ​ $ 523,646 ​ $ 530,191 Standby letters of credit ​ ​ 10,235 ​ ​ 10,031 ​ 45 Table of Contents HBT FINANCIAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ​ 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. ​ ​ 46 Table of Contents ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context requires otherwise, references in this report to the “Company,” “we,” “us” and “our” refer to HBT Financial, Inc. and its subsidiaries. The following is management’s discussion and analysis of the financial condition as of March 31, 2021 (unaudited), as compared with December 31, 2020, and the results of operations for the three months ended March 31, 2021 and 2020 (unaudited). Management’s discussion and analysis should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Results of operations for the three months ended March 31, 2021 are not necessarily indicative of results to be attained for any other period. OVERVIEW HBT Financial, Inc. is headquartered in Bloomington, Illinois and is the holding company for Heartland Bank and Trust Company. 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 through 63 branches. As of March 31, 2021, the Company had total assets of $3.9 billion, total loans of $2.3 billion, and total deposits of $3.4 billion. HBT Financial, Inc. is a longstanding Central Illinois company, with banking roots that can be traced back to 1920. Market Area We currently operate 63 branch locations across 18 counties in Central and Northeastern Illinois. We hold a leading deposit share in many of our markets in Central Illinois, which we define as a top three deposit share rank, providing the foundation for our strong deposit base. The stability provided by this low-cost funding is a key driver of our strong track record of financial performance. Below is a summary of the loan and deposit balances by the metropolitan and micropolitan statistical areas in which we operate: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ ​ (dollars in thousands) Loans, before allowance for loan losses ​ ​ ​ ​ ​ ​ Bloomington-Normal ​ $ 535,934 ​ $ 523,418 Champaign-Urbana ​ ​ 201,597 ​ ​ 214,646 Chicago ​ ​ 1,168,524 ​ ​ 1,132,893 Lincoln ​ ​ 98,301 ​ ​ 103,614 Ottawa-Peru ​ ​ 106,920 ​ ​ 107,098 Peoria ​ ​ 159,429 ​ ​ 165,337 Loans, before allowance for loan losses ​ $ 2,270,705 ​ $ 2,247,006 ​ ​ ​ ​ ​ ​ ​ Total deposits ​ ​ ​ ​ ​ ​ Bloomington-Normal ​ $ 829,832 ​ $ 774,082 Champaign-Urbana ​ ​ 190,533 ​ ​ 174,653 Chicago ​ ​ 1,171,392 ​ ​ 1,077,691 Lincoln ​ ​ 198,591 ​ ​ 201,012 Ottawa-Peru ​ ​ 373,704 ​ ​ 347,211 Peoria ​ ​ 591,914 ​ ​ 555,885 Total deposits ​ $ 3,355,966 ​ $ 3,130,534 ​ 47 Table of Contents The Bloomington-Normal metropolitan statistical area includes our branches within McLean and De Witt counties. The Champaign-Urbana metropolitan statistical area includes our branches within Champaign and Ford counties. The Chicago metropolitan statistical area includes our branches within Cook, DeKalb, Grundy, Kane, Kendall, Lake, and Will counties. The Lincoln micropolitan statistical area includes our branches within Logan county. The Ottawa-Peru micropolitan statistical area includes our branches within Bureau and LaSalle counties. The Peoria metropolitan statistical area includes our branches within Peoria, Marshall, Tazewell, and Woodford counties. COVID-19 Response and Impact Overview The Company has taken a number of steps to support our employees and customers while maintaining the health and safety of all involved, including, but not limited to: ● Placed the health of customers and employees first by maintaining enhanced cleaning protocols and other safety measures at all locations; ● Enabling work from home for many employees and social distancing for employees who need to report to the office; ● Maintaining regular business hours at our branches and call center to continue serving our customers throughout the pandemic; ● Participating in both rounds of the Small Business Administration’s (SBA) Paycheck Protection Program; ● Offering loan payment modifications to customers experiencing financial hardship due to COVID-19. ​ Paycheck Protection Program Loans We continue to process forgiveness applications for Paycheck Protection Program (PPP) loans, with $80.0 million of PPP loans originated in round 1 receiving full or partial forgiveness by March 31, 2021. We expect the vast majority of the PPP loans from round 1 that were outstanding as of March 31, 2021 to be forgiven in the second quarter of 2021. In December 2020, the PPP was extended and allowed eligible borrowers to receive a second PPP loan. Through March 31, 2021, we have funded $92.3 million of PPP loans as part of the second round of the program. The following table summarizes outstanding PPP loans as of March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Round 1 Round 2 Total ​ (dollars in thousands) PPP loan balance, before net deferred origination fees $ 105,405 ​ ​ 92,309 $ 197,714 Net deferred origination fees ​ (2,071) ​ ​ (5,084) ​ (7,155) PPP loan balance ​ $ 103,334 ​ ​ 87,225 ​ $ 190,559 ​ During the three months ended March 31, 2021, the deferred origination fees on round 2 PPP loans were reduced by direct origination costs of $0.3 million, consisting primarily of salaries and benefits costs. During the three months ended March 31, 2021, net deferred origination fees on PPP loans of $2.2 million were recognized as taxable loan interest income. Recognition of net deferred originations fees is accelerated upon loan forgiveness or repayment prior to contractual maturity. Payment Modifications Related to COVID-19 Loan payment modifications have been made for borrowers experiencing financial hardship due to COVID-19, with substantially all modifications in the form of a three-month interest-only period or a one-month payment deferral. Consistent with the applicable accounting and regulatory guidance, short-term loan payment modifications such as these are generally not considered to be a troubled debt restructuring. 48 Table of Contents The volume of loan modification requests related to a COVID-19 financial hardship have declined significantly from its height during the second quarter of 2020. As of March 31, 2021 and December 31, 2020, total loans granted a payment modification related to a COVID-19 financial hardship were $16.7 million and $28.0 million, respectively. Industries Adversely Impacted by COVID-19 While many industries have been and may continue to be adversely impacted by the COVID-19 pandemic, the restaurant and hotel industries are considered particularly susceptible to significant adverse impacts. While many areas of consumer and business spending have rebounded in recent months, there is uncertainty about the longer lasting impact on the restaurant and hotel industries resulting from the COVID-19 pandemic. Adverse impacts in these and other industries may result in a deterioration of the loan portfolio’s credit quality or an increase in loan losses. The below table summarizes loan balances within the restaurant and hotel industries, along with select credit quality information, as of March 31, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Carrying Balance ​ Modified Payments (1) ​ Substandard ​ Non-PPP Loans PPP Loans Total Pass Pass-Watch Substandard Total Risk Rating (2) ​ (dollars in thousands) Restaurants ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 2,590 $ 22,983 ​ $ 25,573 ​ $ 192 ​ $ — ​ $ 330 ​ $ 522 $ 330 Commercial real estate - owner occupied ​ ​ 15,506 ​ ​ — ​ ​ 15,506 ​ ​ — ​ ​ — ​ ​ 504 ​ ​ 504 ​ 2,692 Commercial real estate - non-owner occupied ​ ​ 5,743 ​ ​ — ​ ​ 5,743 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ 458 Total ​ $ 23,839 $ 22,983 ​ $ 46,822 ​ $ 192 ​ $ — ​ $ 834 ​ $ 1,026 $ 3,480 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hotels ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 300 $ 2,716 ​ $ 3,016 ​ $ — ​ $ — ​ $ — ​ $ — $ — Commercial real estate - non-owner occupied ​ ​ 20,360 ​ ​ — ​ ​ 20,360 ​ ​ — ​ ​ 2,526 ​ ​ — ​ ​ 2,526 ​ 6,619 Construction and land development ​ ​ 1,734 ​ ​ — ​ ​ 1,734 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ $ 22,394 $ 2,716 ​ $ 25,110 ​ $ — ​ $ 2,526 ​ $ — ​ $ 2,526 $ 6,619 (1) Borrowers that were granted a loan payment modification related to a COVID-19 financial hardship that have not returned to regular payments as of March 31, 2021. (2) Includes those loans shown as Modified Payments – Substandard. ​ Branch Rationalization Plan In April 2021, the Company made plans to close or consolidate six branches during the third quarter of 2021. This branch rationalization plan is expected to result in approximately $0.8 million of pre-tax nonrecurring costs, primarily related to asset impairment charges and severance payments. When fully realized, the Company estimates annual cost savings, net of associated revenue impacts, related to the branch rationalization plan to be approximately $1.1 million. ​ 49 Table of Contents FACTORS AFFECTING OUR RESULTS OF OPERATIONS Economic Conditions The Company's business and financial performance are affected by economic conditions generally in the United States and more directly in the Illinois markets where we primarily operate. The significant economic factors that are most relevant to our business and our financial performance include the general economic conditions in the U.S. and in the Company's markets, unemployment rates, real estate markets, and interest rates. COVID-19 Pandemic Although the Company has maintained business operations since the beginning of the COVID-19 pandemic, it has caused significant economic disruption throughout the United States and the communities that we serve. While the economic outlook has generally improved in 2021, compared to 2020, uncertainty surrounding potential surges in COVID-19 infections and the longer lasting impact on specific industries remains. As a result, the businesses we serve may continue to be adversely impacted and the ability of our customers to fulfill their contractual obligations to us may deteriorate. This could adversely affect our asset valuations, financial condition, liquidity and results of operations, and the impacts may be material. During 2020, we experienced the following adverse impacts of the COVID-19 pandemic: ● Decrease in net interest income and net interest margin, as a result of the lower interest rate environment; ● Increase in provision for loan losses due to deterioration in the loan portfolio’s credit quality, as a result of the economic slow-down caused by the COVID-19 pandemic; ● Decrease in debit and credit card interchange income, as a result of a lower level of consumer activity and lower associated volume of debit and credit card transactions; ● Decrease in service charge income on deposit accounts, such as overdraft fees, as a result of federal economic stimulus payments received by customers; ● Decrease in demand for loans, excluding PPP loans, as a result of the economic slow-down caused by the COVID-19 pandemic. While some of these trends have reversed in 2021, sustained improvements are highly dependent upon strengthening economic conditions. The COVID-19 pandemic continues to cause economic uncertainties which may again result in these and other adverse impacts to our financial condition and results of operations. The Company’s executive management continues to closely monitor the COVID-19 pandemic. As of the date of this filing, we anticipate we will continue to take actions to support our customers in a manner consistent with the current guidance provided by federal banking regulatory authorities. Interest Rates Net interest income is our primary source of revenue. Net interest income equals the excess of interest income earned on interest earning assets (including discount accretion on purchased loans plus certain loan fees) over interest expense incurred on interest-bearing liabilities. The level of interest rates as well as the volume of interest-earning assets and interest-bearing liabilities both impact net interest income. Net interest income is also influenced by both the pricing and mix of interest-earning assets and interest-bearing liabilities which, in turn, are impacted by external factors such as local economic conditions, competition for loans and deposits, the monetary policy of the Federal Reserve Board and market interest rates. ​ 50 Table of Contents The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, which are primarily driven by the Federal Reserve Board’s actions. The yields generated by our loans and securities are typically driven by short-term and long-term interest rates, which are set by the market and, to some degree, by the Federal Reserve Board’s actions. The level of net interest income is therefore influenced by movements in such interest rates and the pace at which such movements occur. With significant cash inflows realized from the forgiveness of PPP loans and growth in deposit balances, driven by federal economic stimulus payments received by retail customers, the current yields on funds reinvested into new securities are lower than existing portfolio yields. Considering the recent drastic changes in market rates and the ongoing economic uncertainty, our net interest income and net interest margin could decrease in future periods. Credit Trends We focus on originating loans with appropriate risk / reward profiles. We have a detailed loan policy that guides our overall loan origination philosophy and a well-established loan approval process that requires experienced credit officers to approve larger loan relationships. Although we believe our loan approval process and credit review process is a strength that allows us to maintain a high quality loan portfolio, we recognize that credit trends in the markets in which we operate and in our loan portfolio can materially impact our financial condition and performance and that these trends are primarily driven by the economic conditions in our markets. The economic slow-down caused by the COVID-19 pandemic has resulted in, and may continue to result in, decreased loan demand, excluding PPP loans. In addition, potential surges in COVID-19 infections and the longer lasting impact on specific industries may result in deterioration in the loan portfolio’s credit quality and an increase in loan losses. Competition Our profitability and growth are affected by the highly competitive nature of the financial services industry. We compete with community banks in all our markets and, to a lesser extent, with money center banks, primarily in the Chicago MSA. Additionally, we compete with non-bank financial services companies and other financial institutions operating within the areas we serve. We compete by emphasizing personalized service and efficient decision-making tailored to individual needs. We do not rely on any individual, group, or entity for a material portion of our loans or our deposits. We continue to see increased competitive pressures on loan rates and terms which may affect our financial results in the future. Digital Banking Throughout the banking industry, in-person branch traffic continues to decline as more customers turn to digital banking for routine banking transactions. The COVID-19 pandemic has accelerated this transition, and in-person branch traffic is not expected to return to pre-pandemic levels. We plan to continue investing in our digital banking platforms, while maintaining an appropriately sized branch network. An inability to meet evolving customer expectations for both digital and in-person banking may adversely affect our financial results in the future. Regulatory Environment / Trends We are subject to federal and state regulation and supervision, which continue to evolve as the legal and regulatory framework governing our operations continues to change. The current operating environment includes extensive regulation and supervision in areas such as consumer compliance, the BSA and anti-money laundering compliance, risk management and internal audit. We anticipate that this environment of extensive regulation and supervision will continue for the industry. As a result, changes in the regulatory environment may result in additional costs for additional compliance, risk management and audit personnel or professional fees associated with advisors and consultants. 51 Table of Contents RESULTS OF OPERATIONS Overview of Recent Financial Results The following table presents selected financial results and measures: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ (dollars in thousands, except per share data) ​ Statement of Income Information ​ ​ ​ ​ ​ ​ Total interest and dividend income $ 30,606 ​ $ 32,720 ​ Total interest expense ​ 1,477 ​ ​ 2,058 ​ Net interest income ​ 29,129 ​ ​ 30,662 ​ Provision for loan losses ​ (3,405) ​ ​ 4,355 ​ Net income after provision for loan losses ​ 32,534 ​ ​ 26,307 ​ Total noninterest income ​ 10,808 ​ ​ 5,252 ​ Total noninterest expense ​ 22,544 ​ ​ 23,307 ​ Income before income tax expense ​ 20,798 ​ ​ 8,252 ​ Income tax expense ​ 5,553 ​ ​ 2,031 ​ Net income $ 15,245 ​ $ 6,221 ​ ​ ​ ​ ​ ​ ​ ​ Adjusted net income (1) $ 14,033 ​ $ 8,379 ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (tax-equivalent basis) (1) (2) $ 29,632 ​ $ 31,125 ​ ​ ​ ​ ​ ​ ​ ​ Share and Per Share Information ​ ​ Earnings per share - Diluted $ 0.55 ​ $ 0.23 ​ Adjusted earnings per share - Diluted (1) 0.51 ​ 0.30 ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares of common stock outstanding 27,430,912 ​ 27,457,306 ​ ​ ​ ​ ​ ​ ​ ​ Summary Ratios ​ ​ Net interest margin * 3.25 % 4.03 % Net interest margin (tax-equivalent basis) * (1) (2) 3.30 ​ 4.09 ​ Yield on loans * ​ 4.57 ​ ​ 5.19 ​ Yield on interest-earning assets * ​ 3.41 ​ ​ 4.30 ​ Cost of interest-bearing liabilities * ​ 0.25 ​ ​ 0.39 ​ Cost of total deposits * 0.08 ​ 0.24 ​ ​ ​ ​ ​ ​ ​ ​ Efficiency ratio 55.73 % 64.01 % Efficiency ratio (tax-equivalent basis) (1) (2) 55.03 ​ 63.20 ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets * 1.64 % 0.78 % Return on average stockholders' equity * 17.01 ​ 7.33 ​ Return on average tangible common equity * (1) 18.33 ​ 7.97 ​ ​ ​ ​ ​ ​ ​ ​ Adjusted return on average assets * (1) 1.51 % 1.06 % Adjusted return on average stockholders' equity * (1) 15.65 ​ 9.87 ​ Adjusted return on average tangible common equity * (1) 16.88 ​ 10.73 ​ * Annualized measure. (1) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. (2) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%. ​ 52 Table of Contents Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 For the three months ended March 31, 2021, net income was $15.2 million increasing by $9.0 million, or 145.1%, when compared to net income for the three months ended March 31, 2020. Net income increased primarily due to the following: ● A $7.8 million improvement in the provision for loan losses, reflecting the improvements in the economic environment from a year ago. ● A $3.9 million improvement in the mortgage servicing rights fair value adjustment, primarily resulting from changes in mortgage prepayment speed expectations. ● A $1.6 million increase in gains on sale of mortgage loans, primarily as a result of the strong mortgage refinance environment that started in the second quarter of 2020. ● Partially offsetting these improvements was a $3.5 million increase in income tax expense, primarily as a result of higher pre-tax income. ​ Net Interest Income Net interest income equals the excess of interest income (including discount accretion on acquired loans) plus fees earned on interest earning assets over interest expense incurred on interest-bearing liabilities. Interest rate spread and net interest margin are utilized to measure and explain changes in net interest income. Interest rate spread is the difference between the yield on interest-earning assets and the rate paid for interest-bearing liabilities that fund those assets. The net interest margin is expressed as the percentage of net interest income to average interest-earning assets. The net interest margin exceeds the interest rate spread because noninterest-bearing sources of funds, principally noninterest-bearing demand deposits and stockholders’ equity, also support interest-earning assets. ​ 53 Table of Contents The following table sets forth average balances, average yields and costs, and certain other information for the three months ended March 31, 2021 and 2020. Average balances are daily average balances. Nonaccrual loans are included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees and costs, discounts and premiums, as well as purchase accounting adjustments that are accreted or amortized to interest income or expense. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, 2021 March 31, 2020 ​ ​ Average ​ ​ Average ​ ​ ​ ​ Balance ​ Interest Yield/Cost * Balance ​ Interest Yield/Cost * ​ ​ (dollars in thousands) ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 2,284,159 ​ $ 25,744 4.57 % $ 2,141,031 ​ $ 27,615 5.19 % Securities ​ 1,004,877 ​ 4,769 1.92 ​ 668,572 ​ ​ 4,362 2.62 ​ Deposits with banks ​ 345,915 ​ 80 0.09 ​ 251,058 ​ ​ 729 1.17 ​ Other ​ 2,498 ​ 13 2.04 ​ 2,425 ​ ​ 14 2.38 ​ Total interest-earning assets ​ 3,637,449 ​ $ 30,606 3.41 % 3,063,086 ​ $ 32,720 4.30 % Allowance for loan losses ​ (31,856) ​ ​ ​ ​ (22,474) ​ ​ Noninterest-earning assets ​ 155,622 ​ ​ ​ ​ 148,131 ​ ​ Total assets ​ $ 3,761,215 ​ ​ ​ ​ $ 3,188,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ Interest-bearing deposits: ​ ​ ​ ​ ​ Interest-bearing demand ​ $ 997,720 ​ $ 117 0.05 % $ 811,866 ​ $ 251 0.12 % Money market ​ 482,385 ​ ​ 89 0.07 ​ 464,124 ​ ​ 394 0.34 ​ Savings ​ 541,896 ​ ​ 41 0.03 ​ 434,276 ​ ​ 70 0.06 ​ Time ​ 294,172 ​ ​ 397 0.55 ​ 341,770 ​ ​ 880 1.04 ​ Total interest-bearing deposits ​ 2,316,173 ​ 644 0.11 ​ 2,052,036 ​ 1,595 0.31 ​ Securities sold under agreements to repurchase ​ 46,348 ​ ​ 7 0.06 ​ 41,968 ​ ​ 20 0.19 ​ Borrowings ​ 500 ​ ​ 1 0.44 ​ 221 ​ ​ — 0.52 ​ Subordinated notes ​ ​ 39,245 ​ ​ 470 ​ 4.85 ​ ​ — ​ ​ — ​ — ​ Junior subordinated debentures issued to capital trusts ​ 37,655 ​ ​ 355 3.83 ​ 37,589 ​ ​ 443 4.74 ​ Total interest-bearing liabilities ​ 2,439,921 ​ $ 1,477 0.25 % 2,131,814 ​ $ 2,058 0.39 % Noninterest-bearing deposits ​ 920,514 ​ ​ ​ 670,714 ​ ​ Noninterest-bearing liabilities ​ 37,223 ​ ​ ​ 44,696 ​ ​ Total liabilities ​ 3,397,658 ​ ​ ​ 2,847,224 ​ ​ Stockholders' Equity ​ 363,557 ​ ​ ​ 341,519 ​ ​ Total liabilities and stockholders’ equity ​ $ 3,761,215 ​ ​ ​ ​ 3,188,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income/Net interest margin (3) ​ ​ ​ ​ $ 29,129 ​ 3.25 % ​ ​ $ 30,662 4.03 % Tax-equivalent adjustment (2) ​ ​ ​ ​ 503 ​ 0.05 ​ ​ ​ 463 0.06 ​ Net interest income (tax-equivalent basis)/ Net interest margin (tax-equivalent basis) (1) (2) ​ ​ ​ ​ $ 29,632 ​ 3.30 % ​ ​ $ 31,125 4.09 % Net interest rate spread (4) ​ ​ ​ ​ ​ 3.16 % ​ 3.91 % Net interest-earning assets (5) ​ $ 1,197,528 ​ ​ ​ ​ ​ $ 931,272 ​ ​ Ratio of interest-earning assets to interest-bearing liabilities ​ 1.49 ​ ​ ​ ​ 1.44 ​ ​ Cost of total deposits ​ ​ ​ ​ ​ 0.08 % ​ 0.24 % * Annualized measure. (1) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP 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. ​ 54 Table of Contents The following table sets forth the components of loan interest income, which includes contractual interest on loans, loan fees, accretion of acquired loan discounts and net earnings on cash flow hedges. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ ​ ​ Yield ​ ​ Yield ​ ​ ​ Interest Contribution * ​ Interest Contribution * ​ ​ (dollars in thousands) ​ Contractual interest ​ $ 22,683 4.02 % $ 26,022 4.89 % Loan fees (excluding PPP loans) ​ 776 0.14 ​ 1,164 0.22 ​ PPP loan fees ​ ​ 2,226 ​ 0.40 ​ ​ — ​ — ​ Accretion of acquired loan discounts ​ 59 0.01 ​ 397 0.07 ​ Net cash flow hedge earnings ​ — — ​ 32 0.01 ​ Total loan interest income ​ $ 25,744 4.57 % $ 27,615 5.19 % * Annualized measure. The following table sets forth the components of net interest income. Total interest income consists of contractual interest on loans, contractual interest on securities, contractual interest on interest-bearing deposits in banks, loan fees, accretion of acquired loan discounts, securities amortization, net and other interest and dividend income. Total interest expense consists of contractual interest on deposits, contractual interest on other interest-bearing liabilities and other interest expense. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 ​ ​ ​ ​ ​ Net Interest ​ ​ ​ ​ Net Interest ​ ​ ​ ​ ​ ​ Margin ​ ​ ​ ​ Margin ​ ​ ​ Interest ​ Contribution * ​ Interest ​ Contribution * ​ ​ (dollars in thousands) ​ Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contractual interest on loans ​ $ 22,683 ​ 2.53 % $ 26,022 ​ 3.42 % Contractual interest on securities ​ ​ 6,501 ​ 0.72 ​ ​ 5,151 ​ 0.68 ​ Contractual interest on deposits with banks ​ ​ 80 ​ 0.01 ​ ​ 729 ​ 0.09 ​ Loan fees (excluding PPP loans) ​ ​ 776 ​ 0.09 ​ ​ 1,164 ​ 0.15 ​ PPP loan fees ​ ​ 2,226 ​ 0.25 ​ ​ — ​ — ​ Accretion of acquired loan discounts ​ ​ 59 ​ 0.01 ​ ​ 397 ​ 0.05 ​ Securities amortization, net ​ ​ (1,732) ​ (0.20) ​ ​ (790) ​ (0.10) ​ Other ​ ​ 13 ​ — ​ ​ 47 ​ 0.01 ​ Total interest income ​ ​ 30,606 3.41 ​ 32,720 4.30 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contractual interest on deposits ​ ​ 641 ​ 0.07 ​ ​ 1,588 ​ 0.21 ​ Contractual interest on other interest-bearing liabilities ​ ​ 698 ​ 0.08 ​ ​ 413 ​ 0.05 ​ Other ​ ​ 138 ​ 0.01 ​ ​ 57 ​ 0.01 ​ Total interest expense ​ ​ 1,477 0.16 ​ 2,058 0.27 ​ Net interest income ​ ​ 29,129 3.25 ​ 30,662 4.03 ​ Tax equivalent adjustment (1) ​ ​ 503 ​ 0.05 ​ ​ 463 ​ 0.06 ​ Net interest income (tax equivalent) (1) (2) ​ $ 29,632 3.30 % $ 31,125 4.09 % * Annualized measure. (1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state income tax rate of 9.5%. (2) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. ​ 55 Table of Contents Rate/Volume Analysis The following table sets forth the dollar amount of changes in interest income and interest expense for the major categories of our interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to changes attributable to changes in volume ( i.e. , changes in average balances multiplied by the prior-period average rate), and changes attributable to rate ( i.e. , changes in average rate multiplied by prior-period average balances). For purposes of this table, changes attributable to both volume and rate that cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2021 ​ vs. ​ Three Months Ended March 31, 2020 ​ Increase (Decrease) Due to ​ ​ ​ ​ Volume Rate Total ​ (dollars in thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ $ 1,765 ​ $ (3,636) ​ $ (1,871) Securities ​ 1,806 ​ (1,399) ​ 407 Deposits with banks ​ 202 ​ (851) ​ (649) Other ​ — ​ (1) ​ (1) Total interest-earning assets ​ 3,773 ​ (5,887) ​ (2,114) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ Interest-bearing deposits: ​ ​ ​ Interest-bearing demand ​ 48 ​ (182) ​ (134) Money market ​ 14 ​ (319) ​ (305) Savings ​ 14 ​ (43) ​ (29) Time ​ (110) ​ (373) ​ (483) Total interest-bearing deposits ​ (34) ​ (917) ​ (951) Securities sold under agreements to repurchase ​ 2 ​ (15) ​ (13) Borrowings ​ 1 ​ — ​ 1 Subordinated notes ​ ​ 470 ​ ​ — ​ ​ 470 Junior subordinated debentures issued to capital trusts ​ 1 ​ (89) ​ (88) Total interest-bearing liabilities ​ 440 ​ (1,021) ​ (581) Change in net interest income ​ $ 3,333 ​ $ (4,866) ​ $ (1,533) ​ Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 Net interest income for the three months ended March 31, 2021 was $29.1 million, decreasing $1.5 million, or 5.0%, from the three months ended March 31, 2020. The decrease is primarily attributable to declines in benchmark interest rates, which drove lower yields on interest-earning assets. Partially offsetting this decline was a substantial increase in interest-earning asset balances, driven by PPP loan originations and federal economic stimulus payments received by our retail customers. Also partially mitigating the decline in net interest income were lower costs on deposits and a decrease in time deposit balances. Net interest margin decreased as well to 3.25% for the three months ended March 31, 2021 compared to 4.03% for the three months ended March 31, 2020. The decrease was primarily attributable to the decline in the average yield on earning assets. The contribution of acquired loan discount accretion to net interest income declined to less than $0.1 million, or 1 basis points of the net interest margin, for the three months ended March 31, 2021 from $0.4 million, or 5 basis points of the net interest margin, for the three months ended March 31, 2020. Additionally, the $40 million of subordinated notes issued during the third quarter of 2020 has added downward pressure to net interest income and net interest margin in subsequent periods. However, the proceeds from the issuance, which were primarily invested in debt securities, provide additional regulatory capital to buffer against higher than estimated credit losses and support organic or acquisitive growth. 56 Table of Contents The quarterly net interest margins were as follows: ​ ​ ​ ​ ​ ​ ​ 2021 2020 Three months ended: ​ ​ ​ ​ ​ March 31 3.25 % 4.03 % June 30 — ​ 3.51 ​ September 30 — ​ 3.39 ​ December 31 — ​ 3.31 ​ ​ In March 2020, the Federal Open Markets Committee lowered Federal Funds target rates twice, for a combined decrease of 150 basis points in response to the economic downturn related to the COVID-19 pandemic. These rate cuts have put downward pressure on our net interest margin. In general, we believe that rate increases will lead to improved net interest margins while rate decreases will result in lower net interest margins. Provision for Loan Losses Provisions for loan losses are charged to operations in order to maintain the allowance for loan losses at a level we consider necessary to absorb probable incurred credit losses in the loan portfolio. In determining the level of the allowance for loan losses, management considers past and current loss experience, evaluations of collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower’s ability to repay a loan and the levels of nonperforming and other classified loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates as more information becomes available or events change. We assess the allowance for loan losses on a quarterly basis and make provisions for loan losses in order to maintain the allowance. The provision for loan losses is a function of the allowance for loan loss methodology we use to determine the appropriate level of the allowance for inherent loan losses after net charge-offs have been deducted. The deterioration of economic conditions related to the COVID-19 pandemic has adversely affected, and may continue to adversely affect, the communities that we serve. As a result, our allowance for loan losses has increased since the onset of the COVID-19 pandemic, and may remain elevated until economic conditions improve. Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 The Company recorded a negative provision for loan losses of $3.4 million during the three months ended March 31, 2021, compared to a provision for loan losses of $4.4 million during the three months ended March 31, 2020. The negative provision was primarily due to changes to qualitative factors reflecting an improved economic environment and improved asset quality metrics, resulting in a $1.8 million decrease in required reserve; a decrease in specific reserves on loans individually evaluated for impairment, resulting in a $1.3 million decrease in required reserves; and a $0.3 million net recovery during the three months ended March 31, 2021. ​ ​ 57 Table of Contents Noninterest Income The following table sets forth the major categories of noninterest income for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 $ Change ​ ​ (dollars in thousands) Card income ​ $ 2,258 ​ $ 1,792 ​ $ 466 Service charges on deposit accounts ​ ​ 1,297 ​ ​ 1,834 ​ ​ (537) Wealth management fees ​ ​ 1,972 ​ ​ 1,814 ​ ​ 158 Mortgage servicing ​ ​ 685 ​ ​ 724 ​ ​ (39) Mortgage servicing rights fair value adjustment ​ ​ 1,695 ​ ​ (2,171) ​ ​ 3,866 Gains on sale of mortgage loans ​ ​ 2,100 ​ ​ 536 ​ ​ 1,564 Gains (losses) on securities ​ ​ 40 ​ ​ (52) ​ ​ 92 Gains (losses) on foreclosed assets ​ ​ (76) ​ ​ 35 ​ ​ (111) Gains (losses) on other assets ​ ​ 1 ​ ​ (3) ​ ​ 4 Other noninterest income ​ ​ 836 ​ ​ 743 ​ ​ 93 Total noninterest income ​ $ 10,808 ​ $ 5,252 ​ $ 5,556 ​ Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 Total noninterest income for the three months ended March 31, 2021 was $10.8 million, an increase of $5.6 million, or 105.8%, from the three months ended March 31, 2020. Noninterest income increased primarily due to the following: ● A $3.9 million improvement in the mortgage servicing rights fair value adjustment, primarily resulting from changes in mortgage prepayment speed expectations. ● A $1.6 million increase in gains on sale of mortgage loans, primarily as a result of the strong mortgage refinance environment that started in the second quarter of 2020. A lower level of mortgage refinancing activity is anticipated during the remainder of 2021 and is expected to result in lower mortgage banking profits, relative to the three months ended March 31, 2021 and the second half of 2020. ● A $0.5 million increase in card income was primarily due to the 2020 results reflecting a lower volume of debit and credit card transactions which coincided with the beginning of the COVID-19 pandemic and the related initial economic slowdown. ● Slightly offsetting these improvements was a $0.5 million decrease in service charges on deposit accounts, as a result of lower overdraft incidences driven by federal economic stimulus received by our customers. ​ ​ ​ 58 Table of Contents Noninterest Expense The following table sets forth the major categories of noninterest expense for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 $ Change ​ ​ (dollars in thousands) Salaries $ 12,596 ​ $ 12,754 ​ $ (158) Employee benefits ​ 1,722 ​ ​ 2,434 ​ ​ (712) Occupancy of bank premises ​ 1,938 ​ ​ 1,828 ​ ​ 110 Furniture and equipment ​ 623 ​ ​ 603 ​ ​ 20 Data processing ​ 1,688 ​ ​ 1,586 ​ ​ 102 Marketing and customer relations ​ 565 ​ ​ 1,044 ​ ​ (479) Amortization of intangible assets ​ 289 ​ ​ 317 ​ ​ (28) FDIC insurance ​ 240 ​ ​ 36 ​ ​ 204 Loan collection and servicing ​ 365 ​ ​ 348 ​ ​ 17 Foreclosed assets ​ 143 ​ ​ 89 ​ ​ 54 Other noninterest expense ​ 2,375 ​ ​ 2,268 ​ ​ 107 Total noninterest expense ​ $ 22,544 ​ $ 23,307 ​ $ (763) ​ Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 Total noninterest expense for the three months ended March 31, 2021 was $22.5 million, a decrease of $0.8 million, or 3.3%, from the three months ended March 31, 2020. Noninterest expense decreased primarily due to the following: ● A $0.7 million decrease in employee benefits expense, primarily due to the 2020 results including a $0.8 million charge for the supplemental executive retirement plan (SERP) which was terminated in June 2019 and paid out in June 2020. ● A $0.5 million decrease in marketing and customer relations expense. ● Partially offsetting these decreases was a $0.2 million increase in FDIC insurance expense, as the 2020 results included the application of small bank assessment credits which were fully utilized by March 31, 2020. ​ Income Taxes Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 We recorded income tax expense of $5.6 million, or 26.7% effective tax rate, during the three months ended March 31, 2021 compared to $2.0 million, or 24.6% effective tax rate, during the three months ended March 31, 2020. The effective tax rate increased primarily due to the tax exempt interest income making up a smaller portion of pre-tax income during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The effective income tax rate was lower than the combined federal and state statutory rate of approximately 28.5% primarily due to tax exempt interest income. ​ 59 Table of Contents FINANCIAL CONDITION ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2021 2020 $ Change % Change ​ Balance Sheet Information ​ (dollars in thousands, except per share data) ​ Cash and cash equivalents ​ $ 429,736 ​ $ 312,451 ​ $ 117,285 ​ 37.5 % Debt securities available-for-sale, at fair value ​ 856,835 ​ 922,869 ​ (66,034) ​ (7.2) ​ Debt securities held-to-maturity ​ 192,994 ​ 68,395 ​ 124,599 ​ 182.2 ​ Loans held for sale ​ ​ 12,882 ​ ​ 14,713 ​ ​ (1,831) ​ (12.4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans, before allowance for loan losses ​ ​ 2,270,705 ​ ​ 2,247,006 ​ ​ 23,699 ​ 1.1 ​ Less: allowance for loan losses ​ ​ 28,759 ​ ​ 31,838 ​ ​ (3,079) ​ (9.7) ​ Loans, net of allowance for loan losses ​ ​ 2,241,946 ​ ​ 2,215,168 ​ ​ 26,778 ​ 1.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ ​ 23,620 ​ ​ 23,620 ​ ​ — ​ — ​ Core deposit intangible assets, net ​ ​ 2,509 ​ ​ 2,798 ​ ​ (289) ​ (10.3) ​ Other assets ​ ​ 105,092 ​ ​ 106,553 ​ ​ (1,461) ​ (1.4) ​ Total assets ​ $ 3,865,614 ​ $ 3,666,567 ​ 199,047 ​ 5.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deposits ​ $ 3,355,966 ​ $ 3,130,534 ​ $ 225,432 ​ 7.2 % Securities sold under agreements to repurchase ​ ​ 41,976 ​ ​ 45,736 ​ ​ (3,760) ​ (8.2) ​ Subordinated notes ​ ​ 39,257 ​ ​ 39,238 ​ ​ 19 ​ — ​ Junior subordinated debentures ​ ​ 37,665 ​ ​ 37,648 ​ ​ 17 ​ — ​ Other liabilities ​ ​ 33,344 ​ ​ 49,494 ​ ​ (16,150) ​ (32.6) ​ Total liabilities ​ ​ 3,508,208 ​ ​ 3,302,650 ​ ​ 205,558 ​ 6.2 ​ Total stockholders' equity ​ ​ 357,406 ​ ​ 363,917 ​ ​ (6,511) ​ (1.8) ​ Total liabilities and stockholders' equity ​ $ 3,865,614 ​ $ 3,666,567 ​ 199,047 ​ 5.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible assets (1) ​ $ 3,839,485 ​ $ 3,640,149 ​ $ 199,336 ​ 5.5 % Tangible common equity (1) ​ 331,277 ​ 337,499 ​ (6,222) ​ (1.8) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Core deposits (1) ​ $ 3,334,066 ​ $ 3,103,847 ​ $ 230,219 ​ 7.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Share and Per Share Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book value per share ​ $ 13.05 ​ $ 13.25 ​ ​ ​ ​ ​ ​ Tangible book value per share (1) ​ ​ 12.10 ​ ​ 12.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares of common stock outstanding ​ ​ 27,382,069 ​ ​ 27,457,306 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Ratios ​ ​ ​ ​ ​ Loan to deposit ratio ​ 67.66 % 71.78 % ​ ​ Core deposits to total deposits (1) ​ 99.35 ​ 99.15 ​ ​ ​ Stockholders' equity to total assets ​ 9.25 ​ 9.93 ​ ​ ​ Tangible common equity to tangible assets (1) ​ 8.63 ​ 9.27 ​ ​ ​ (1) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. Total assets were $3.87 billion at March 31, 2021, an increase of $199.0 million, or 5.4%, from December 31, 2020. Significant changes in our balance sheet include the following: ● Total deposits increased $225.4 million, primarily due to funds received by our commercial customers from round 2 PPP loans and federal economic stimulus payments received by retail customers. ● Cash and cash equivalents increased by $117.3 million, primarily as a result of funds received from the forgiveness of round 1 PPP loans and federal economic stimulus received by retail customers. ● Excess liquidity was reinvested into debt securities which increased $58.6 million. ​ 60 Table of Contents Loan Portfolio The following table sets forth the composition of the loan portfolio, excluding loans held-for-sale, by type of loan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ December 31, 2020 ​ ​ Balance Percent ​ Balance Percent ​ ​ (dollars in thousands) ​ Commercial and industrial ​ $ 412,812 18.2 % $ 393,312 17.5 % Agricultural and farmland ​ 228,032 10.0 ​ 222,723 9.9 ​ Commercial real estate - owner occupied ​ 224,599 9.9 ​ 222,360 9.9 ​ Commercial real estate - non-owner occupied ​ 516,963 22.8 ​ 520,395 23.2 ​ Multi-family ​ 236,381 10.4 ​ 236,391 10.5 ​ Construction and land development ​ 215,375 9.5 ​ 225,652 10.0 ​ One-to-four family residential ​ 300,768 13.2 ​ 306,775 13.7 ​ Municipal, consumer, and other ​ 135,775 6.0 ​ 119,398 5.3 ​ Loans, before allowance for loan losses ​ 2,270,705 100.0 % 2,247,006 100.0 % Allowance for loan losses ​ (28,759) ​ ​ (31,838) ​ Loans, net of allowance for loan losses ​ $ 2,241,946 ​ ​ ​ $ 2,215,168 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans, before allowance for loan losses (originated) (1) ​ $ 2,156,095 ​ 95.0 % $ 2,126,323 94.6 % Loans, before allowance for loan losses (acquired) (1) ​ 114,610 ​ 5.0 ​ 120,683 5.4 ​ Loans, before allowance for loan losses ​ $ 2,270,705 ​ 100.0 % $ 2,247,006 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PPP loans (included above) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ 175,389 ​ ​ ​ $ 153,860 ​ ​ ​ Agricultural and farmland ​ 8,921 ​ ​ ​ 3,049 ​ ​ ​ Municipal, consumer, and other ​ 6,249 ​ ​ ​ 6,587 ​ ​ ​ Total PPP loans ​ $ 190,559 ​ ​ ​ $ 163,496 ​ ​ ​ (1) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. Loans, before allowance for loan losses were $2.27 billion at March 31, 2021, an increase of $23.7 million, or 1.1%, from December 31, 2020. The increase in loans was primarily attributable to an increase in PPP loans, as originations of round 2 PPP loans exceeded the payoffs and paydowns from PPP loan forgiveness. ​ 61 Table of Contents Loan Portfolio Maturities The following table summarizes the scheduled maturities of the loan portfolio. Demand loans (loans having no stated repayment schedule or maturity) and overdraft loans are reported as being due in one year or less. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ After 1 Year After 5 Years ​ ​ ​ ​ ​ 1 Year ​ Through ​ Through ​ After ​ ​ March 31, 2021 ​ or Less ​ 5 Years ​ 15 Years ​ 15 Years ​ Total ​ (dollars in thousands) Commercial and industrial ​ $ 152,849 ​ $ 248,293 ​ $ 11,670 ​ $ — ​ $ 412,812 Agricultural and farmland ​ 95,218 ​ 97,488 ​ 33,167 ​ ​ 2,159 ​ 228,032 Commercial real estate - owner occupied ​ 33,031 ​ 127,919 ​ 61,005 ​ ​ 2,644 ​ 224,599 Commercial real estate - non-owner occupied ​ 87,197 ​ 307,684 ​ 120,724 ​ ​ 1,358 ​ 516,963 Multi-family ​ 40,914 ​ 121,757 ​ 73,710 ​ ​ — ​ 236,381 Construction and land development ​ 127,304 ​ 84,584 ​ 2,962 ​ ​ 525 ​ 215,375 One-to-four family residential ​ 45,160 ​ 121,737 ​ 79,114 ​ ​ 54,757 ​ 300,768 Municipal, consumer, and other ​ 16,606 ​ 32,841 ​ 72,496 ​ ​ 13,832 ​ 135,775 Total ​ $ 598,279 ​ $ 1,142,303 ​ $ 454,848 ​ $ 75,275 ​ $ 2,270,705 ​ The following table summarizes loans maturing after one year, segregated into variable and fixed interest rates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable Interest Rates ​ ​ ​ ​ ​ Repricing ​ Repricing ​ Total ​ Predetermined ​ ​ ​ ​ 1 Year ​ After ​ Variable ​ (Fixed) ​ ​ March 31, 2021 ​ or Less ​ 1 Year ​ Interest Rates ​ Interest Rates ​ Total ​ (dollars in thousands) Commercial and industrial ​ $ 12,591 ​ $ 4,402 ​ $ 16,993 ​ $ 242,970 ​ $ 259,963 Agricultural and farmland ​ 15,625 ​ 5,139 ​ 20,764 ​ ​ 112,050 ​ 132,814 Commercial real estate - owner occupied ​ 31,860 ​ 20,239 ​ 52,099 ​ ​ 139,469 ​ 191,568 Commercial real estate - non-owner occupied ​ 71,046 ​ 21,167 ​ 92,213 ​ ​ 337,553 ​ 429,766 Multi-family ​ 15,196 ​ 26,575 ​ 41,771 ​ ​ 153,696 ​ 195,467 Construction and land development ​ 35,689 ​ 30 ​ 35,719 ​ ​ 52,352 ​ 88,071 One-to-four family residential ​ 99,542 ​ 16,656 ​ 116,198 ​ ​ 139,410 ​ 255,608 Municipal, consumer, and other ​ 45,573 ​ 4,805 ​ 50,378 ​ ​ 68,791 ​ 119,169 Total ​ $ 327,122 ​ $ 99,013 ​ $ 426,135 ​ $ 1,246,291 ​ $ 1,672,426 ​ Nonperforming Assets Nonperforming loans consist of all loans past due 90 days or more or on nonaccrual. Nonperforming assets consist of all nonperforming loans and foreclosed assets. Typically, loans are placed on nonaccrual when they reach 90 days past due, or when, in management’s opinion, there is reasonable doubt regarding the collection of the amounts due through the normal means of the borrower. Interest accrued and unpaid at the time a loan is placed on nonaccrual status is reversed from interest income. Interest payments received on nonaccrual loans are recognized in accordance with our significant accounting policies. Once a loan is placed on nonaccrual status, the borrower must generally demonstrate at least six months of payment performance and we must believe that all remaining principal and interest is fully collectible, before the loan is eligible to return to accrual status. Management believes the Company’s lending practices and active approach to managing nonperforming assets has resulted in timely resolution of problem assets. Loans acquired with deteriorated credit quality are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement remains unpaid after the due date of the scheduled payment. However, these loans may be considered performing, even though they may be contractually past due, as any non-payment of contractual principal or interest is considered in the periodic re-estimation of expected cash flows and is included in the resulting recognition of current period loan loss provision or future period yield adjustments. The accrual of interest is discontinued on loans acquired with deteriorated credit quality if management can no longer estimate future cash flows on the loan. Therefore, interest revenue, through accretion of the difference between the carrying value of the loans and the expected cash flows, is being recognized on all loans acquired with deteriorated credit quality, except those management can no longer estimate future cash flows. 62 Table of Contents The following table below sets forth information concerning nonperforming loans and nonperforming assets as of each of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ (dollars in thousands) ​ NONPERFORMING ASSETS ​ ​ ​ ​ ​ ​ ​ Nonaccrual ​ $ 9,106 ​ $ 9,939 Past due 90 days or more, still accruing (1) ​ 10 ​ 21 Total nonperforming loans ​ 9,116 ​ 9,960 Foreclosed assets ​ 4,748 ​ 4,168 Total nonperforming assets ​ $ 13,864 ​ $ 14,128 ​ ​ ​ ​ ​ ​ ​ ​ ​ NONPERFORMING ASSETS (Originated) (2) ​ ​ ​ Nonaccrual ​ $ 2,101 ​ $ 2,908 ​ Past due 90 days or more, still accruing ​ 10 ​ 21 ​ Total nonperforming loans (originated) ​ 2,111 ​ 2,929 ​ Foreclosed assets ​ 737 ​ 674 ​ Total nonperforming assets (originated) ​ $ 2,848 ​ $ 3,603 ​ ​ ​ ​ ​ ​ ​ ​ ​ NONPERFORMING ASSETS (Acquired) (2) ​ ​ ​ Nonaccrual ​ $ 7,005 ​ $ 7,031 ​ Past due 90 days or more, still accruing (1) ​ — ​ — ​ Total nonperforming loans (acquired) ​ 7,005 ​ 7,031 ​ Foreclosed assets ​ 4,011 ​ 3,494 ​ Total nonperforming assets (acquired) ​ $ 11,016 ​ $ 10,525 ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses ​ $ 28,759 ​ $ 31,838 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans, before allowance for loan losses ​ $ 2,270,705 ​ $ 2,247,006 ​ Loans, before allowance for loan losses (originated) (2) ​ 2,156,095 ​ 2,126,323 ​ Loans, before allowance for loan losses (acquired) (2) ​ 114,610 ​ 120,683 ​ ​ ​ ​ ​ ​ ​ ​ ​ CREDIT QUALITY RATIOS ​ ​ ​ Allowance for loan losses to loans, before allowance for loan losses ​ 1.27 % 1.42 % Allowance for loan losses to nonperforming loans ​ 315.48 ​ 319.66 ​ Nonperforming loans to loans, before allowance for loan losses ​ 0.40 ​ 0.44 ​ Nonperforming assets to total assets ​ 0.36 ​ 0.39 ​ Nonperforming assets to loans, before allowance for loan losses and foreclosed assets ​ 0.61 ​ 0.63 ​ ​ ​ ​ ​ ​ ​ ​ ​ CREDIT QUALITY RATIOS (Originated) (2) ​ ​ ​ Nonperforming loans to loans, before allowance for loan losses ​ 0.10 % 0.14 % Nonperforming assets to loans, before allowance for loan losses and foreclosed assets ​ 0.13 ​ 0.17 ​ ​ ​ ​ ​ ​ ​ ​ ​ CREDIT QUALITY RATIOS (Acquired) (2) ​ ​ ​ Nonperforming loans to loans, before allowance for loan losses ​ 6.11 % 5.83 % Nonperforming assets to loans, before allowance for loan losses and foreclosed assets ​ 9.29 ​ 8.48 ​ (1) Excludes loans acquired with deteriorated credit quality that are past due 90 or more days totaling $29 thousand and $0.6 million as of March 31, 2021 and December 31, 2020, respectively. (2) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. Total nonperforming assets were $13.9 million at March 31, 2021, a decrease of $0.3 million, or 1.9%, from December 31, 2020. The decrease was primarily attributable to the pay down, pay off, or return to accrual status of several smaller loans. ​ 63 Table of Contents Troubled Debt Restructurings In general, if the Company grants a troubled debt restructuring (TDR) that involves either the absence of principal amortization or a material extension of an existing loan amortization period in excess of our underwriting standards, the loan will be placed on nonaccrual status. However, if a TDR is well secured by an abundance of collateral and the collectability of both interest and principal is probable, the loan may remain on accrual status. A nonaccrual TDR in full compliance with the payment requirements specified in the loan modification for at least six months may return to accrual status, if the collectability of both principal and interest is probable. All TDRs are individually evaluated for impairment. The following table presents TDRs by loan category. ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ (dollars in thousands) Commercial and industrial ​ $ 283 ​ $ 296 Agricultural and farmland ​ — ​ — Commercial real estate - owner occupied ​ 6,471 ​ 6,491 Commercial real estate - non-owner occupied ​ 1,335 ​ 1,354 Multi-family ​ — ​ — Construction and land development ​ — ​ — One-to-four family residential ​ 250 ​ 454 Municipal, consumer, and other ​ — ​ — Total accrual troubled debt restructurings ​ 8,339 ​ 8,595 ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ 59 ​ 75 Agricultural and farmland ​ — ​ — Commercial real estate - owner occupied ​ 137 ​ 141 Commercial real estate - non-owner occupied ​ — ​ — Multi-family ​ — ​ — Construction and land development ​ — ​ — One-to-four family residential ​ 138 ​ 139 Municipal, consumer, and other ​ — ​ — Total nonaccrual troubled debt restructurings ​ 334 ​ 355 Total troubled debt restructurings ​ $ 8,673 ​ $ 8,950 ​ TDRs have remained a small portion of our loan portfolio as loan modifications to borrowers with deteriorating financial condition are generally offered only as part of an overall workout strategy to minimize losses to the Company. ​ 64 Table of Contents Risk Classification of Loans Our policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality as pass-watch, substandard, doubtful, or loss. A pass-watch loan is still considered a "pass" credit and is not a classified or criticized asset, but is a reflection of a borrower who exhibits credit weaknesses or downward trends warranting close attention and increased monitoring. These potential weaknesses may result in deterioration of the repayment prospects for the loan. No loss of principal or interest is expected, and the borrower does not pose sufficient risk to warrant classification. A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized as probable that the borrower will not pay principal and interest in accordance with the contractual terms. An asset classified as doubtful has all the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets is not warranted; such balances are promptly charged-off as required by applicable federal regulations. As of March 31, 2021 and December 31, 2020, our risk classifications of loans were as follows: ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ (dollars in thousands) Pass ​ $ 1,989,318 ​ $ 1,953,912 Pass-watch ​ 205,123 ​ 208,584 Substandard ​ 76,264 ​ 84,510 Doubtful ​ — ​ — Total ​ $ 2,270,705 ​ $ 2,247,006 ​ Pass-watch loans decreased $3.5 million, or 1.7% from December 31, 2020 to March 31, 2021. Additionally, substandard loans decreased $8.2 million, or 9.8%, from December 31, 2020 to March 31, 2021. These improvements were primarily the result of improving economic conditions. 65 Table of Contents Net Charge-offs and Recoveries The following table sets forth activity in the allowance for loan losses. ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ (dollars in thousands) ​ Balance, beginning of period ​ $ 31,838 ​ $ 22,299 ​ ​ ​ ​ ​ ​ ​ ​ ​ Charge-offs: ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ — ​ (809) ​ Agricultural and farmland ​ — ​ (27) ​ Commercial real estate - owner occupied ​ — ​ — ​ Commercial real estate - non-owner occupied ​ — ​ (56) ​ Multi-family ​ — ​ — ​ Construction and land development ​ — ​ (1) ​ One-to-four family residential ​ (72) ​ (104) ​ Municipal, consumer, and other ​ (123) ​ (224) ​ Total charge-offs ​ (195) ​ (1,221) ​ ​ ​ ​ ​ ​ ​ ​ ​ Recoveries: ​ ​ ​ Commercial and industrial ​ 293 ​ 54 ​ Agricultural and farmland ​ — ​ — ​ Commercial real estate - owner occupied ​ — ​ 440 ​ Commercial real estate - non-owner occupied ​ 7 ​ 5 ​ Multi-family ​ — ​ — ​ Construction and land development ​ 90 ​ 10 ​ One-to-four family residential ​ 42 ​ 71 ​ Municipal, consumer, and other ​ 89 ​ 74 ​ Total recoveries ​ 521 ​ 654 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (charge-offs) recoveries ​ 326 ​ (567) ​ Provision for loan losses ​ (3,405) ​ 4,355 ​ Balance, end of period ​ $ 28,759 ​ $ 26,087 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs (recoveries) ​ $ (326) ​ $ 567 ​ Net charge-offs (recoveries) - (originated) (1) ​ (320) ​ 172 ​ Net charge-offs (recoveries) - (acquired) (1) ​ (6) ​ 395 ​ ​ ​ ​ ​ ​ ​ ​ ​ Average loans, before allowance for loan losses ​ $ 2,284,159 ​ $ 2,141,031 ​ Average loans, before allowance for loan losses (originated) (1) ​ 2,166,079 ​ 1,984,066 ​ Average loans, before allowance for loan losses (acquired) (1) ​ 118,080 ​ 156,965 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs (recoveries) to average loans, before allowance for loan losses * ​ (0.06) % 0.11 % Net charge-offs (recoveries) to average loans, before allowance for loan losses (originated) * (1) ​ (0.06) ​ 0.03 ​ Net charge-offs (recoveries) to average loans, before allowance for loan losses (acquired) * (1) ​ ​ (0.02) ​ ​ 1.01 ​ * Annualized measure. (1) See "Non-GAAP Financial Information" for reconciliation of non-GAAP measure to their most comparable GAAP measures. ​ 66 Table of Contents The following table summarizes net charge-offs (recoveries) to average loans, before allowance for loan losses, by loan category. ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ (dollars in thousands) ​ Net charge-offs (recoveries) ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ $ (293) ​ $ 755 ​ Agricultural and farmland ​ — ​ 27 ​ Commercial real estate - owner occupied ​ — ​ (440) ​ Commercial real estate - non-owner occupied ​ (7) ​ 51 ​ Multi-family ​ — ​ — ​ Construction and land development ​ (90) ​ (9) ​ One-to-four family residential ​ 30 ​ 33 ​ Municipal, consumer, and other ​ 34 ​ 150 ​ Total ​ $ (326) ​ $ 567 ​ ​ ​ ​ ​ ​ ​ ​ ​ Average loans, before allowance for loan losses ​ ​ ​ Commercial and industrial ​ $ 419,163 ​ $ 308,488 ​ Agricultural and farmland ​ 212,327 ​ 208,614 ​ Commercial real estate - owner occupied ​ 208,071 ​ 237,182 ​ Commercial real estate - non-owner occupied ​ 553,074 ​ 549,782 ​ Multi-family ​ 232,502 ​ 183,280 ​ Construction and land development ​ 216,404 ​ 217,475 ​ One-to-four family residential ​ 316,419 ​ 320,208 ​ Municipal, consumer, and other ​ 126,199 ​ 116,002 ​ Total ​ $ 2,284,159 ​ $ 2,141,031 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs (recoveries) to average loans, before allowance for loan losses * ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ (0.28) % ​ 0.98 % Agricultural and farmland ​ ​ — ​ ​ 0.05 ​ Commercial real estate - owner occupied ​ ​ — ​ ​ (0.75) ​ Commercial real estate - non-owner occupied ​ ​ (0.01) ​ ​ 0.04 ​ Multi-family ​ ​ — ​ ​ — ​ Construction and land development ​ ​ (0.17) ​ ​ (0.02) ​ One-to-four family residential ​ ​ 0.04 ​ ​ 0.04 ​ Municipal, consumer, and other ​ ​ 0.11 ​ ​ 0.52 ​ Total ​ ​ (0.06) % ​ 0.11 % * Annualized measure. ​ Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 Net charge-offs (recoveries) to average total loans before allowance for loan losses have remained low during each of the three months ended March 31, 2021 and March 31, 2020. This ratio has remained low for several years, due primarily to the favorable economic conditions prior to the COVID-19 pandemic and substantial federal economic stimulus during the pandemic. We also believe our continuous credit monitoring and collection efforts have resulted in lower levels of loan losses. 67 Table of Contents Allocation of Allowance for Loan Losses The following table sets forth the allocation of allowance for loan losses by major loan categories: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 December 31, 2020 ​ Allowance for Loan Allowance for Loan ​ Loan Losses ​ Balances Loan Losses ​ Balances ​ (dollars in thousands) Commercial and industrial ​ $ 2,420 ​ $ 412,812 ​ $ 3,929 ​ $ 393,312 Agricultural and farmland ​ 865 ​ 228,032 ​ 793 ​ 222,723 Commercial real estate - owner occupied ​ 2,715 ​ 224,599 ​ 3,141 ​ 222,360 Commercial real estate - non-owner occupied ​ 11,330 ​ 516,963 ​ 11,251 ​ 520,395 Multi-family ​ 2,090 ​ 236,381 ​ 1,957 ​ 236,391 Construction and land development ​ 4,006 ​ 215,375 ​ 4,232 ​ 225,652 One-to-four family residential ​ 1,573 ​ 300,768 ​ 1,801 ​ 306,775 Municipal, consumer, and other ​ 3,760 ​ 135,775 ​ 4,734 ​ 119,398 Total ​ $ 28,759 ​ $ 2,270,705 ​ $ 31,838 ​ $ 2,247,006 ​ Securities The Company’s investment policy is established by management and approved by the board of directors. The policy emphasizes safety of the investment, liquidity requirements, potential returns, cash flow targets and consistency with our interest rate risk management strategy. The following table sets forth the composition, amortized cost, and fair values of debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ December 31, 2020 ​ Amortized ​ ​ Amortized ​ ​ Cost Fair Value Cost Fair Value ​ (dollars in thousands) Available-for-sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 129,494 ​ $ 127,938 ​ $ 118,282 ​ $ 121,993 Municipal ​ 280,212 ​ 282,333 ​ 265,309 ​ 274,261 Mortgage-backed: ​ ​ ​ ​ Agency residential ​ 164,942 ​ 169,104 ​ 198,543 ​ 203,252 Agency commercial ​ 208,692 ​ 207,997 ​ 246,649 ​ 250,766 Corporate ​ 67,959 ​ 69,463 ​ 70,917 ​ 72,597 Total available-for-sale ​ ​ 851,299 ​ 856,835 ​ 899,700 ​ 922,869 Held-to-maturity: ​ ​ ​ ​ U.S. government agency ​ ​ 7,323 ​ 7,323 ​ — ​ — Municipal ​ 21,067 ​ 22,255 ​ 22,484 ​ 23,874 Mortgage-backed: ​ ​ ​ ​ Agency residential ​ 20,335 ​ 20,723 ​ 13,031 ​ 13,483 Agency commercial ​ 144,269 ​ 145,307 ​ 32,880 ​ 35,084 Total held-to-maturity ​ 192,994 ​ 195,608 ​ 68,395 ​ 72,441 Total debt securities ​ $ 1,044,293 ​ $ 1,052,443 ​ $ 968,095 ​ $ 995,310 ​ We evaluate securities with significant declines in fair value on a quarterly basis to determine whether they should be considered other-than-temporarily impaired. There were no other-than-temporary impairments during the three months ended March 31, 2021 and 2020. 68 Table of Contents Portfolio Maturities and Yields The composition and maturities of the debt securities portfolio as of March 31, 2021 are summarized in the following tables. Maturities are based on the final contractual payment dates, and do not reflect the impact of prepayments or early redemptions that may occur. Security yields have not been adjusted to a tax-equivalent basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2021 ​ ​ ​ Available-for-Sale Held-to-Maturity Total ​ ​ ​ ​ Weighted ​ ​ Weighted ​ ​ Weighted ​ Amortized Average Amortized Average Amortized Average ​ Cost Yield Cost Yield Cost Yield ​ ​ (dollars in thousands) ​ Due in 1 year or less ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 4,514 2.18 % $ — — % $ 4,514 2.18 % Municipal ​ 15,219 2.65 ​ 2,772 3.30 ​ 17,991 2.75 ​ Mortgage-backed: ​ ​ ​ ​ Agency residential ​ 35 1.30 ​ — — ​ 35 1.30 ​ Agency commercial ​ 9,223 2.10 ​ — — ​ 9,223 2.10 ​ Corporate ​ 11,673 2.13 ​ — — ​ 11,673 2.13 ​ Total ​ $ 40,664 2.32 % $ 2,772 3.30 % $ 43,436 2.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due after 1 year through 5 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 5,004 1.91 % $ — — % $ 5,004 1.91 % Municipal ​ 48,279 2.36 ​ 12,000 3.64 ​ 60,279 2.61 ​ Mortgage-backed: ​ ​ ​ ​ ​ Agency residential ​ 5,771 2.19 ​ — — ​ 5,771 2.19 ​ Agency commercial ​ 41,215 2.76 ​ 3,097 2.83 ​ 44,312 2.76 ​ Corporate ​ 22,855 2.93 ​ — — ​ 22,855 2.93 ​ Total ​ $ 123,124 2.57 % $ 15,097 3.47 % $ 138,221 2.67 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due after 5 years through 10 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 90,271 1.75 % $ 7,323 1.12 % $ 97,594 1.70 % Municipal ​ 120,394 1.82 ​ 5,904 3.47 ​ 126,298 1.90 ​ Mortgage-backed: ​ ​ ​ ​ ​ ​ Agency residential ​ 56,552 2.61 ​ 8,536 1.11 ​ 65,088 2.41 ​ Agency commercial ​ 108,973 1.54 ​ 81,663 1.57 ​ 190,636 1.55 ​ Corporate ​ 31,431 4.27 ​ — — ​ 31,431 4.27 ​ Total ​ $ 407,621 2.03 % $ 103,426 1.61 % $ 511,047 1.94 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due after 10 years ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 29,705 1.39 % $ — — % $ 29,705 1.39 % Municipal ​ 96,320 1.89 ​ 391 4.26 ​ 96,711 1.90 ​ Mortgage-backed: ​ ​ ​ ​ ​ Agency residential ​ 102,584 1.60 ​ 11,799 2.38 ​ 114,383 1.68 ​ Agency commercial ​ 49,281 1.81 ​ 59,509 1.53 ​ 108,790 1.66 ​ Corporate ​ 2,000 4.50 ​ — — ​ 2,000 4.50 ​ Total ​ $ 279,890 1.73 % $ 71,699 1.68 % $ 351,589 1.72 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agency ​ $ 129,494 1.69 % $ 7,323 1.12 % $ 136,817 1.66 % Municipal ​ 280,212 1.98 ​ 21,067 3.56 ​ 301,279 2.09 ​ Mortgage-backed: ​ ​ ​ ​ Agency residential ​ 164,942 1.96 ​ 20,335 1.85 ​ 185,277 1.95 ​ Agency commercial ​ 208,692 1.87 ​ 144,269 1.58 ​ 352,961 1.75 ​ Corporate ​ 67,959 3.46 ​ — — ​ 67,959 3.46 ​ Total ​ $ 851,299 2.02 % $ 192,994 1.81 % $ 1,044,293 1.98 % ​ 69 Table of Contents Deposits Management continues to focus on growing non-maturity deposits, through the Company’s relationship-driven banking philosophy and community-focused marketing programs, and to deemphasize higher cost deposit categories, such as time deposits. Additionally, the Bank continues to add and improve ancillary convenience services tied to deposit accounts, such as mobile, remote deposits and peer-to-peer payments, to solidify deposit relationships. The following table sets forth the distribution of average deposits, by account type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Percent ​ ​ ​ 2021 2020 Change in ​ ​ ​ Average Percent of Weighted Average Percent of Weighted Average ​ ​ ​ Balance Total Deposits Average Cost * Balance Total Deposits Average Cost * Balance ​ ​ ​ (dollars in thousands) ​ ​ Noninterest-bearing ​ $ 920,514 28.5 % — % $ 670,714 24.6 % — % 37.2 % Interest-bearing demand ​ 997,720 30.8 ​ 0.05 ​ 811,866 29.8 ​ 0.12 ​ 22.9 ​ Money market ​ 482,385 14.9 ​ 0.07 ​ 464,124 17.0 ​ 0.34 ​ 3.9 ​ Savings ​ 541,896 16.7 ​ 0.03 ​ 434,276 16.0 ​ 0.06 ​ 24.8 ​ Total non-maturity deposits ​ 2,942,515 90.9 ​ 0.03 ​ 2,380,980 87.4 ​ 0.12 ​ 23.6 ​ Time ​ 294,172 9.1 ​ 0.55 ​ 341,770 12.6 ​ 1.04 ​ (13.9) ​ Total deposits ​ $ 3,236,687 100.0 % 0.08 % $ 2,722,750 100.0 % 0.24 % 18.9 % * Annualized measure. ​ Comparison of the Three Months Ended March 31, 2021 to the Three Months Ended March 31, 2020 The average balances of non-maturity deposits increased 23.6% from the three months ended March 31, 2020 to the three months ended March 31, 2021, with the increase primarily attributable to PPP loan proceeds received by commercial customers and federal economic stimulus received by retail customers. Partially offsetting the increase in non-maturity deposits was a 13.9% decline in the average balances of time deposits, which resulted in a 18.9% increase in average balances of total deposits from the three months ended March 31, 2020 to the three months ended March 31, 2021. ​ The following table sets forth time deposits by remaining maturity as of March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3 Months or Over 3 through Over 6 through Over ​ ​ ​ Less 6 Months 12 Months ​ 12 Months ​ Total ​ (dollars in thousands) Time deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts less than $100,000 ​ $ 40,340 ​ $ 34,745 ​ $ 59,357 ​ $ 58,753 ​ $ 193,195 Amounts of $100,000 but less than $250,000 ​ 12,661 ​ 15,512 ​ 24,056 ​ 18,137 ​ 70,366 Amounts of $250,000 or more ​ 1,760 ​ 4,695 ​ 11,524 ​ 3,921 ​ 21,900 Total time deposits ​ $ 54,761 ​ $ 54,952 ​ $ 94,937 ​ $ 80,811 ​ $ 285,461 ​ As of March 31, 2021 and December 31, 2020, the Bank’s uninsured deposits, including related accrued interest, were estimated to be $607.0 million and $573.8 million, respectively. ​ IMPACT OF INFLATION The consolidated financial statements and the related notes have been prepared in conformity with GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The impact of inflation, if any, is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than the effects of inflation. 70 Table of Contents LIQUIDITY Bank Liquidity The overall objective of bank liquidity management is to ensure the availability of sufficient cash funds to meet all financial commitments and to take advantage of investment opportunities. The Bank manages liquidity in order to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings as they mature, and to fund new loans and investments as opportunities arise. The Bank continuously monitors its liquidity positions to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. The Bank manages its liquidity position to meet the daily cash flow needs of clients, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives. The Bank also monitors liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits. As part of the Bank’s liquidity management strategy, the Bank is also focused on minimizing costs of liquidity and attempts to decrease these costs by promoting noninterest bearing and low-cost deposits and replacing higher cost funding including time deposits and borrowed funds. While the Bank does not control the types of deposit instruments our clients choose, those choices can be influenced with the rates and the deposit specials offered. Additional sources of liquidity include unpledged securities, federal funds purchased, and borrowings from the Federal Home Loan Bank of Chicago (FHLB). Unpledged securities may be sold or pledged as collateral for borrowings to meet liquidity needs. Interest is charged at the prevailing market rate on federal funds purchased and FHLB borrowings. Funds obtained from federal funds purchased and FHLB borrowings are used primarily to meet daily liquidity needs. The total amount of the remaining credit available to the Bank from the FHLB at March 31, 2021 was $311.0 million. As of March 31, 2021, management believed adequate liquidity existed to meet all projected cash flow obligations of the Bank. As of March 31, 2021, the Bank had no material commitments for capital expenditures. Holding Company Liquidity The Company is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. As of March 31, 2021, HBT Financial, Inc. had cash and cash equivalents of $36.7 million. The Company’s main source of funding is dividends declared and paid to it by the Bank. Due to state banking laws, the Bank may not declare dividends in any calendar year in an amount that would exceed the accumulated retained earnings, after giving effect to any unrecognized losses and bad debts, without the prior approval of the Illinois Department of Financial and Professional Regulation. In addition, dividends paid by the Bank to the Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short-term cash obligations. During the three months ended March 31, 2021, the Bank did not pay a dividend to the Company. During the three months ended March 31, 2020, the Bank paid $4.4 million in dividends to the Company. The liquidity needs of the Company on an unconsolidated basis consist primarily of operating expenses, dividends to stockholders and interest payments on the subordinated notes and junior subordinated debentures. During the three months ended March 31, 2021 and 2020, holding company operating expenses consisted of interest expense of $0.8 million and $0.4 million, respectively, and other operating expenses of $0.6 million and $0.5 million, respectively. As of March 31, 2021, management was not aware of any known trends, events or uncertainties that had or were reasonably likely to have a material impact on the Company’s liquidity. 71 Table of Contents As of March 31, 2021, management believed adequate liquidity existed to meet all projected cash flow obligations of the Company. As of March 31, 2021, the Company had no material commitments for capital expenditures. CAPITAL RESOURCES The overall objectives of capital management are to ensure the availability of sufficient capital to support loan, deposit and other asset and liability growth opportunities and to maintain capital to absorb unforeseen losses or write-downs that are inherent in the business risks associated with the banking industry. The Company seeks to balance the need for higher capital levels to address such unforeseen risks and the goal to achieve an adequate return on the capital invested by our stockholders. Regulatory Capital Requirements The Company and Bank are each subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Company and the Bank. In addition to meeting minimum capital requirements, the Company and the Bank must also 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, 2021 and December 31, 2020, the capital conservation buffer requirement was 2.5% of risk-weighted assets. As of March 31, 2021 and December 31, 2020, the Company and the Bank met all capital adequacy requirements to which they were subject. As of those dates, the Bank was “well capitalized” under the regulatory prompt corrective action provisions. The following table sets forth actual capital ratios of the Company and the Bank for the dates indicated, the minimum ratios for capital adequacy purposes with the capital conservation buffer, and the minimum ratios to be well capitalized under regulatory prompt corrective action provisions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For Capital ​ To Be Well ​ ​ ​ ​ ​ ​ ​ Adequacy Purposes ​ Capitalized Under ​ ​ March 31, ​ December 31, ​ With Capital ​ Prompt Corrective ​ 2021 2020 Conversation Buffer (1) Action Provisions (2) Total Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ 17.37 % ​ 17.40 % ​ 10.50 % ​ N/A ​ Heartland Bank and Trust Company ​ 15.90 ​ ​ 15.63 ​ ​ 10.50 ​ ​ 10.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ 14.65 % ​ 14.55 % ​ 8.50 % ​ N/A ​ Heartland Bank and Trust Company ​ 14.74 ​ ​ 14.38 ​ ​ 8.50 ​ ​ 8.00 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Equity Tier 1 Capital (to Risk Weighted Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ 13.19 % ​ 13.06 % ​ 7.00 % ​ N/A ​ Heartland Bank and Trust Company ​ 14.74 ​ ​ 14.38 ​ ​ 7.00 ​ ​ 6.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Capital (to Average Assets) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated HBT Financial, Inc. ​ 9.85 % ​ 9.94 % ​ 4.00 ​ ​ N/A ​ Heartland Bank and Trust Company ​ 9.91 ​ ​ 9.82 ​ ​ 4.00 ​ ​ 5.00 % (1) The Tier 1 capital to average assets ratio (known as the “leverage ratio”) is not impacted by the capital conservation buffer. (2) The prompt corrective action provisions are not applicable to bank holding companies. N/A Not applicable. 72 Table of Contents Cash Dividends The below table summarizes the cash dividends paid by quarter for three months ended March 31, 2021 and the year ended December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ First Quarter Second Quarter Third Quarter Fourth Quarter Total ​ ​ (dollars in thousands) Regular ​ $ 4,116 ​ $ — ​ $ — ​ $ — ​ $ 4,116 Restricted stock unit dividend equivalent ​ ​ 8 ​ ​ — ​ ​ — ​ ​ — ​ ​ 8 Total cash dividends ​ $ 4,124 ​ $ — ​ $ — ​ $ — ​ $ 4,124 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ ​ First Quarter Second Quarter Third Quarter Fourth Quarter Total ​ ​ (dollars in thousands) Regular ​ $ 4,119 ​ $ 4,119 ​ $ 4,118 ​ $ 4,118 ​ $ 16,474 Restricted stock unit dividend equivalent ​ ​ 11 ​ ​ 11 ​ ​ 11 ​ ​ 11 ​ ​ 44 Total cash dividends ​ $ 4,130 ​ $ 4,130 ​ $ 4,129 ​ $ 4,129 ​ $ 16,518 ​ During the first quarter of 2021 and each quarter of 2020, the Company announced quarterly cash dividends of $0.15 per share. Stock Repurchase Program During the first quarter of 2021, the Company repurchased 95,462 shares of its common stock at a weighted average price of $15.86 under its stock repurchase program. The Company’s Board of Directors authorized the repurchase of up to $15.0 million of its common stock under its stock repurchase program in effect until December 31, 2021. As of March 31, 2021, the Company had $13.5 million remaining under the current stock repurchase authorization. OFF-BALANCE SHEET ARRANGEMENTS As financial services providers, the Bank routinely is a party to various financial instruments with off-balance sheet risks, such as commitments to extend credit, standby letters of credit, unused lines of credit and commitments to sell loans. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process afforded to loans originated by the Bank. Although commitments to extend credit are considered while evaluating our allowance for loan losses, as of March 31, 2021 and December 31, 2020, there were no reserves for unfunded commitments. For additional information, see “Note 18 – Commitments and Contingencies” to the consolidated financial statements. CONTRACTUAL OBLIGATIONS There have been no material changes to our contractual obligations and other funding needs as disclosed in our Annual Report on Form 10-K filed with the SEC on March 12, 2021. JOBS ACT ACCOUNTING ELECTION We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. We have elected to use the extended transition period until we are no longer an emerging growth company or until we choose to affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies. ​ 73 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Company has established various accounting policies that govern the application of accounting principles generally accepted in the United State of America in the preparation of its consolidated financial statements. Critical accounting estimates are those that are critical to the portrayal and understanding of the Company's financial condition and results of operations and require management to make assumptions that are difficult, subjective or complex. These estimates involve judgments, assumptions and uncertainties that are susceptible to change. In the event that different assumptions or conditions were to prevail, and depending on the severity of such changes, the possibility of a materially different financial condition or materially different results of operations is a reasonable likelihood. Further, changes in accounting standards could impact the Company's critical accounting estimates. There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in the Company's Annual Report on Form 10-K filed with the SEC on March 12, 2021. For more information, please refer to “Note 1 – Summary of Significant Accounting Policies” to our consolidated financial statements included in the Company's Annual Report on Form 10-K filed with the SEC on March 12, 2021. ​ 74 Table of Contents NON-GAAP FINANCIAL INFORMATION This Quarterly Report on Form 10-Q contains certain financial information determined by methods other than in accordance with GAAP. 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 below. Non-GAAP Financial Measure Definition How the Measure Provides Useful Information to Investors Adjusted Net Income ● Net income, with the following adjustments: - adds additional C Corp equivalent tax expense for periods prior to October 11, 2019, - excludes net earnings (losses) from closed or sold operations, - excludes charges related to termination of certain employee benefit plans, - excludes certain non-cash charges such as impairment losses related to the closure of branches and a nonrecurring charge related to an employee benefits policy change, - excludes expenses related to terminated FDIC Indemnification agreements, - excludes realized gains (losses) on sales of securities, - excludes mortgage servicing rights fair value adjustment, and - the income tax effect of these pre-tax adjustments. ● Enhances comparisons to prior periods and, accordingly, facilitates the development of future projections and earnings growth prospects. ● We also sometimes refer to ratios that include Adjusted Net Income, such as: - Adjusted Return on Average Assets, which is Adjusted Net Income divided by average assets. - Adjusted Return on Average Equity, which is Adjusted Net Income divided by average equity. - Adjusted Earnings Per Share - Basic, which is Adjusted Net Income allocated to common shares divided by weighted average common shares outstanding. - Adjusted Earnings Per Share – Diluted, which is Adjusted Net Income allocated to common shares divided by weighted average common shares outstanding, including all dilutive potential shares. Net Interest Income (Tax Equivalent Basis) ● Net interest income adjusted for the tax-favored status of tax-exempt loans and securities. (1) ​ ● We believe the tax equivalent basis is the preferred industry measurement of net interest income. ● Enhances comparability of net interest income arising from taxable and tax-exempt sources. ● We also sometimes refer to Net Interest Margin (Tax Equivalent Basis), which is Net Interest Income (Tax Equivalent Basis) divided by average interest-earning assets. Efficiency Ratio (Tax Equivalent Basis) ● Noninterest expense less amortization of intangible assets divided by the sum of net interest income (tax equivalent basis) and noninterest income. (1) ● Provides a measure of productivity in the banking industry. ● Calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. (1) Tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.50%. ​ 75 Table of Contents Non-GAAP Financial Measure Definition How the Measure Provides Useful Information to Investors Tangible Common Equity to Tangible Assets ● Tangible Common Equity is total stockholders’ equity less goodwill and other intangible assets. ● Tangible Assets is total assets less goodwill and other intangible assets. ● Generally used by investors, our management, and banking regulators to evaluate capital adequacy. ● Facilitates comparison of our earnings with the earnings of other banking organization with significant amounts of goodwill or intangible assets. ● We also sometimes refer to ratios that include Tangible Common Equity, such as: - Tangible Book Value Per Share, which is Tangible Common Equity divided by shares of common stock outstanding. - Return on Average Tangible Common Equity, which is net income divided by average Tangible Common Equity. - Adjusted Return on Average Tangible Common Equity, which is Adjusted Net Income divided by average Tangible Common Equity. Core Deposits ● Total deposits, excluding: - Time deposits of $250,000 or more, and - Brokered deposits ● Provides investors with information regarding the stability of the Company’s sources of funds. ● We also sometimes refer to the ratio of Core Deposits to total deposits. Originated Loans and Acquired Loans ● 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 the Company. ● Provides investors and our management with information regarding the credit quality of loans underwritten using the Company’s policies and procedures. ● We also sometimes refer to ratios that include Originated Loans and Acquired Loans, such as: - Net Charge-offs to Average Loans (Originated and Acquired). - Nonperforming Loans to Loans, Before Allowance for Loan Losses (Originated and Acquired). - Nonperforming Assets to Loans, Before Allowance for Loan losses and Foreclosed Assets (Originated and Acquired). ​ ​ 76 Table of Contents Reconciliation of Non-GAAP Financial Measure - Adjusted Net Income and Adjusted Return on Average Assets ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) ​ Net income $ 15,245 ​ $ 6,221 ​ Adjustments: ​ ​ ​ ​ ​ ​ Charges related to termination of certain employee benefit plans — ​ (848) ​ Mortgage servicing rights fair value adjustment 1,695 ​ (2,171) ​ Total adjustments 1,695 ​ (3,019) ​ Tax effect of adjustments (483) ​ 861 ​ Less adjustments after tax effect 1,212 ​ (2,158) ​ Adjusted net income $ 14,033 ​ $ 8,379 ​ ​ ​ ​ ​ ​ ​ ​ Average assets $ 3,761,215 ​ $ 3,188,743 ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets * 1.64 % 0.78 % Adjusted return on average assets * 1.51 ​ 1.06 ​ * Annualized measure. ​ Reconciliation of Non-GAAP Financial Measure - Adjusted Earnings Per Share ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ (dollars in thousands, except per share data) Numerator: ​ ​ ​ ​ ​ Net income $ 15,245 ​ $ 6,221 Earnings allocated to participating securities (1) ​ (31) ​ ​ (15) Numerator for earnings per share - basic and diluted $ 15,214 ​ $ 6,206 ​ ​ ​ ​ ​ ​ Adjusted net income $ 14,033 ​ $ 8,379 Earnings allocated to participating securities (1) ​ (28) ​ ​ (19) Numerator for adjusted earnings per share - basic and diluted $ 14,005 ​ $ 8,360 ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ Weighted average common shares outstanding ​ 27,430,912 ​ ​ 27,457,306 Dilutive effect of outstanding restricted stock units ​ 2,489 ​ ​ — Weighted average common shares outstanding, including all dilutive potential shares ​ 27,433,401 ​ ​ 27,457,306 ​ ​ ​ ​ ​ ​ Earnings per share - Basic $ 0.55 ​ $ 0.23 Earnings per share - Diluted $ 0.55 ​ $ 0.23 ​ ​ ​ ​ ​ ​ Adjusted earnings per share - Basic $ 0.51 ​ $ 0.30 Adjusted earnings per share - Diluted $ 0.51 ​ $ 0.30 (1) 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. ​ 77 Table of Contents Reconciliation of Non-GAAP Financial Measure - Net Interest Margin (Tax Equivalent Basis) ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) ​ Net interest income (tax equivalent basis) ​ ​ ​ ​ ​ ​ Net interest income $ 29,129 ​ $ 30,662 ​ Tax-equivalent adjustment (1) 503 ​ 463 ​ Net interest income (tax equivalent basis) (1) $ 29,632 ​ $ 31,125 ​ ​ ​ ​ ​ ​ ​ ​ Net interest margin (tax equivalent basis) ​ ​ Net interest margin * 3.25 % 4.03 % Tax-equivalent adjustment * (1) 0.05 ​ 0.06 ​ Net interest margin (tax equivalent basis) * (1) 3.30 % 4.09 % ​ ​ ​ ​ ​ ​ ​ Average interest-earning assets $ 3,637,449 ​ $ 3,063,086 ​ * 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 Measure - Efficiency Ratio (Tax Equivalent Basis) ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2021 2020 ​ ​ (dollars in thousands) ​ Efficiency ratio (tax equivalent basis) ​ ​ ​ ​ ​ ​ Total noninterest expense $ 22,544 ​ $ 23,307 ​ Less: amortization of intangible assets 289 ​ 317 ​ Adjusted noninterest expense $ 22,255 ​ $ 22,990 ​ ​ ​ ​ ​ ​ ​ ​ Net interest income $ 29,129 ​ $ 30,662 ​ Total noninterest income 10,808 ​ 5,252 ​ Operating revenue 39,937 ​ 35,914 ​ Tax-equivalent adjustment (1) 503 ​ 463 ​ Operating revenue (tax-equivalent basis) (1) $ 40,440 ​ $ 36,377 ​ ​ ​ ​ ​ ​ ​ ​ Efficiency ratio 55.73 % 64.01 % Efficiency ratio (tax equivalent basis) (1) 55.03 ​ 63.20 ​ (1) On a tax-equivalent basis assuming a federal income tax rate of 21% and a state tax rate of 9.5%. ​ 78 Table of Contents Reconciliation of Non-GAAP Financial Measure - Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2021 2020 ​ ​ ​ (dollars in thousands, except per share data) ​ Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ​ $ 357,406 ​ $ 363,917 ​ Less: Goodwill ​ ​ 23,620 ​ ​ 23,620 ​ Less: Core deposit intangible assets, net ​ ​ 2,509 ​ ​ 2,798 ​ Tangible common equity ​ $ 331,277 ​ $ 337,499 ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible Assets ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 3,865,614 ​ $ 3,666,567 ​ Less: Goodwill ​ ​ 23,620 ​ ​ 23,620 ​ Less: Core deposit intangible assets, net ​ ​ 2,509 ​ ​ 2,798 ​ Tangible assets ​ $ 3,839,485 ​ $ 3,640,149 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity to total assets ​ ​ 9.25 % ​ 9.93 % Tangible common equity to tangible assets ​ ​ 8.63 ​ ​ 9.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares of common stock outstanding ​ ​ 27,382,069 ​ 27,457,306 ​ ​ ​ ​ ​ ​ ​ ​ ​ Book value per share ​ $ 13.05 ​ $ 13.25 ​ Tangible book value per share ​ ​ 12.10 ​ ​ 12.29 ​ ​ Reconciliation of Non-GAAP Financial Measure – Adjusted Return on Average Stockholders’ Equity and Adjusted Return on Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 2020 ​ ​ ​ (dollars in thousands) ​ Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ​ $ 363,557 $ 341,519 ​ Less: Goodwill ​ 23,620 23,620 ​ Less: Core deposit intangible assets, net ​ 2,686 3,898 ​ Average tangible common equity ​ $ 337,251 $ 314,001 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 15,245 $ 6,221 ​ Adjusted net income ​ 14,033 ​ 8,379 ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average stockholders' equity * ​ 17.01 % ​ 7.33 % Return on average tangible common equity * ​ 18.33 ​ ​ 7.97 ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted return on average stockholders' equity * ​ 15.65 % ​ 9.87 % Adjusted return on average tangible common equity * ​ 16.88 ​ ​ 10.73 ​ * Annualized measure. ​ Reconciliation of Non-GAAP Financial Measure - Core Deposits ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2021 ​ 2020 ​ ​ (dollars in thousands) ​ Core Deposits ​ ​ ​ ​ ​ ​ ​ Total deposits ​ $ 3,355,966 ​ $ 3,130,534 ​ Less: time deposits of $250,000 or more ​ 21,900 ​ ​ 26,687 ​ Less: brokered deposits ​ — ​ ​ — ​ Core deposits ​ $ 3,334,066 ​ $ 3,103,847 ​ ​ ​ ​ ​ ​ ​ ​ ​ Core deposits to total deposits ​ 99.35 % ​ 99.15 % ​ ​ 79 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Managing risk is an essential part of successfully managing a financial institution. Our most prominent risk exposures are interest rate risk and credit risk. Interest rate risk is the potential reduction of net interest income as a result of changes in interest rates. Credit risk is the risk of not collecting the interest and/or the principal balance of a loan or investment when it is due and is disclosed in detail above. Interest Rate Risk The most significant form of market risk is interest rate risk inherent in the normal course of lending and deposit-taking activities. Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results. To that end, management actively monitors and manages our interest rate exposure. The Asset/Liability Management Committee (ALCO), which is authorized by the Company’s board of directors, monitors our interest rate sensitivity and makes decisions relating to that process. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis. We monitor the impact of changes in interest rates on our net interest income and economic value of equity, or EVE, using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time. A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet. The following table sets forth, as of March 31, 2021 and December 31, 2020, the estimated impact on our EVE and net interest income of immediate changes in interest rates at the specified levels. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase (Decrease) in ​ Estimated Increase Estimated Net Interest Income ​ ​ (Decrease) in EVE Year 1 Year 2 ​ Change in Interest Rates (basis points) Amount Percent Amount Percent Amount Percent ​ ​ ​ (dollars in thousands) ​ March 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ +400 ​ $ 122,361 29.4 % $ 28,053 24.4 % $ 45,970 43.7 % +300 ​ 96,117 23.1 ​ 21,454 18.7 ​ ​ 35,848 34.0 ​ +200 ​ 61,967 14.9 ​ 14,393 12.5 ​ ​ 24,841 23.6 ​ +100 ​ 15,007 3.6 ​ 6,820 5.9 ​ ​ 12,657 12.0 ​ Flat ​ — — ​ — — ​ ​ — — ​ -100 ​ 13,280 3.2 ​ (4,906) (4.3) ​ ​ (9,061) (8.6) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ +400 ​ $ 81,406 21.1 % $ 27,461 23.8 % $ 44,487 42.1 % +300 ​ 50,943 13.2 ​ 21,149 18.3 ​ ​ 34,815 32.9 ​ +200 ​ 11,166 2.9 ​ 14,272 12.4 ​ ​ 24,197 22.9 ​ +100 ​ (26,976) (7.0) ​ 6,851 5.9 ​ ​ 12,350 11.7 ​ Flat ​ — — ​ — — ​ ​ — — ​ -100 ​ 29,295 7.6 ​ (4,088) (3.5) ​ ​ (7,262) (6.9) ​ ​ 80 Table of Contents This data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors or changes in earning assets mix, which could reduce the actual impact on EVE and net interest income, if any. Certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in EVE and net interest income requires that we make certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The EVE and net interest income table presented above assumes that the composition of our interest-rate-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and, accordingly, the data does not reflect any actions that we may undertake in response to changes in interest rates, such as changes in rates paid on certain deposit accounts based on local competitive factors. The table also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or the repricing characteristics of specific assets and liabilities. Accordingly, although the EVE and net interest income table provides an indication of our sensitivity to interest rate changes at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results. Credit Risk Credit risk is the risk that borrowers or counterparties will be unable or unwilling to repay their obligations in accordance with the underlying contractual terms. We manage and control credit risk in the loan portfolio by adhering to well-defined underwriting criteria and account administration standards established by management. Our loan policy documents underwriting standards, approval levels, exposure limits and other limits or standards deemed necessary and prudent. Portfolio diversification at the borrower, industry, and product levels is actively managed to mitigate concentration risk. In addition, credit risk management also includes an independent loan review process that assesses compliance with loan policy, compliance with loan documentation standards, accuracy of the risk rating and overall credit quality of the loan portfolio. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this report was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2021, the end of the period covered by this report, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is: (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Changes in Internal Control over Financial Reporting There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ​ 81 Table of Contents PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are sometimes party to legal actions that are routine and incidental to our business. Management, in consultation with legal counsel, does not expect the ultimate disposition of any or a combination of these matters to have a material adverse effect on our assets, business, cash flow, condition (financial or otherwise), liquidity, prospects and results of operations. However, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business, including laws and regulations governing consumer protection, fair lending, fair labor, privacy, information security and anti-money laundering and anti-terrorism laws, we, like all banking organizations, are subject to heightened legal and regulatory compliance and litigation risk. ITEM 1A. RISK FACTORS There have been no material changes to the risk factors disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 12, 2021. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities On November 2, 2020, the Company’s board of directors approved a stock repurchase program that authorizes the Company to repurchase up to $15 million of its common stock. The stock repurchase program will be in effect until December 31, 2021 with the timing of purchases and number of shares repurchased dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements, and market conditions. The Company is not obligated to purchase any shares under the stock repurchase program, and the stock repurchase program may be suspended or discontinued at any time without notice. The following table sets forth information about the Company’s purchases of its common stock during the first quarter of 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number ​ Approximate ​ ​ ​ ​ ​ ​ ​ of Shares ​ Dollar Value of Shares ​ ​ ​ ​ ​ ​ ​ Purchased as ​ That May Yet be ​ ​ Total Number ​ Average ​ Part of Publicly ​ Purchased Under the ​ ​ of Shares ​ Price Paid ​ Announced Plans ​ Plans or Programs Period Purchased Per Share or Programs (in thousands) January 1 - 31, 2021 ​ — ​ $ — ​ — ​ $ 15,000 February 1 - 28, 2021 ​ 66,250 ​ ​ 15.43 ​ 66,250 ​ ​ 13,978 March 1 - 31, 2021 ​ 29,212 ​ ​ 16.86 ​ 29,212 ​ ​ 13,486 Total ​ 95,462 ​ $ 15.86 ​ 95,462 ​ $ 13,486 ​ ​ ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. 82 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS Exhibit No. Description ​ ​ ​ 31.1 ​ Certification of the Chief Executive Officer pursuant to Rule 13a-14(a). ​ ​ ​ 31.2 ​ Certification of the Chief Financial Officer pursuant to Rule 13a-14(a). ​ ​ ​ 32.1 * ​ Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350. ​ ​ ​ 32.2 * ​ Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350. ​ ​ ​ 101.INS ​ iXBRL Instance Document. ​ ​ ​ 101.SCH ​ iXBRL Taxonomy Extension Schema Document. ​ ​ ​ 101.CAL ​ iXBRL Taxonomy Extension Calculation Linkbase Document. ​ ​ ​ 101.LAB ​ iXBRL Taxonomy Extension Label Linkbase Document. ​ ​ ​ 101.PRE ​ iXBRL Taxonomy Extension Presentation Linkbase Document. ​ ​ ​ 101.DEF ​ iXBRL Taxonomy Extension Definition Linkbase Document. ​ ​ ​ 104 ​ Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101). * This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. ​ ​ 83 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ​ ​ ​ ​ HBT FINANCIAL, INC. ​ ​ ​ May 7, 2021 By: /s/ Matthew J. Doherty ​ ​ Matthew J. Doherty ​ ​ Chief Financial Officer ​ ​ (on behalf of the registrant and as principal financial officer) ​ ​ ​ ​ 84