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REGULATORY MATTERS
 9 Months Ended
Sep. 30, 2019
REGULATORY MATTERS  
REGULATORY MATTERS

NOTE 14 – REGULATORY MATTERS

The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Company on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. As allowed under the new regulations, the Banks and Company elected to exclude accumulated other comprehensive income, including unrealized gains and losses on securities, in the computation of regulatory capital.

The ability of the Company to pay dividends to its stockholders is dependent upon the ability of the Banks to pay dividends to the Company. The Banks are subject to certain statutory and regulatory restrictions on the amount it may pay in dividends. Under the Basel III regulations, a capital conservation buffer calculation will phase in over five years which limits allowable bank dividends if regulatory capital ratios fall below specific thresholds. As of September 30, 2019 and December 31, 2018, the capital conservation buffer was 2.5% and 1.875%, respectively.

HBT Financial, Inc. (on a consolidated basis) and the Banks 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 financial statements of HBT Financial, Inc. and the Banks. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, HBT Financial, Inc. and the Banks 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. Prompt corrective action provisions are not applicable to bank holding companies.

Management believes, as of September 30, 2019 and December 31, 2018, that HBT Financial, Inc. and the Banks each met all capital adequacy requirements to which they are subject.

The actual and required capital amounts and ratios of HBT Financial, Inc. (consolidated) and the Banks are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual

 

For Capital
Adequacy
Purposes

 

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions

 

September 30, 2019

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

 

 

 

(dollars in thousands)

 

Total Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

371,681

 
14.88

%  

$

199,798

 

8.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

329,689

 
14.30

%  

$

184,457

 

8.00

%  

$

230,572

 

10.00

%

Lincoln Bank

 

$

37,349

 
19.88

%  

$

15,031

 

8.00

%  

$

18,789

 

10.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

348,920

 
13.97

%  

$

149,848

 

6.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

309,145

 
13.41

%  

$

138,343

 

6.00

%  

$

184,457

 

8.00

%

Lincoln Bank

 

$

35,132

 
18.70

%  

$

11,274

 

6.00

%  

$

15,031

 

8.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

312,519

 
12.51

%  

$

112,386

 

4.50

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

309,145

 
13.41

%  

$

103,757

 

4.50

%  

$

149,871

 

6.50

%

Lincoln Bank

 

$

35,132

 
18.70

%  

$

8,455

 

4.50

%  

$

12,213

 

6.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Average Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

348,920

 
11.02

%  

$

126,601

 

4.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

309,145

 
11.00

%  

$

112,366

 

4.00

%  

$

140,458

 

5.00

%

Lincoln Bank

 

$

35,132

 
9.96

%  

$

14,104

 

4.00

%  

$

17,631

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual

 

For Capital
Adequacy
Purposes

 

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions

 

December 31, 2018

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

 

 

 

(dollars in thousands)

 

Total Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

372,472

 
14.99

%  

$

198,730

 

8.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

332,391

 
14.44

%  

$

184,127

 

8.00

%  

$

230,159

 

10.00

%

Lincoln Bank

 

$

38,059

 
21.02

%  

$

14,488

 

8.00

%  

$

18,110

 

10.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

351,963

 
14.17

%  

$

149,047

 

6.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

313,406

 
13.62

%  

$

138,095

 

6.00

%  

$

184,127

 

8.00

%

Lincoln Bank

 

$

36,535

 
20.17

%  

$

10,866

 

6.00

%  

$

14,488

 

8.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

315,611

 
12.71

%  

$

111,785

 

4.50

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

313,406

 
13.62

%  

$

103,572

 

4.50

%  

$

149,603

 

6.50

%

Lincoln Bank

 

$

36,535

 
20.17

%  

$

8,150

 

4.50

%  

$

11,772

 

6.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Average Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

351,963

 
10.80

%  

$

130,393

 

4.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

$

313,406

 
11.03

%  

$

113,668

 

4.00

%  

$

142,085

 

5.00

%

Lincoln Bank

 

$

36,535

 
10.21

%  

$

14,319

 

4.00

%  

$

17,899

 

5.00

%