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REGULATORY MATTERS
 12 Months Ended
Dec. 31, 2019
REGULATORY MATTERS  
REGULATORY MATTERS

NOTE 18 – 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 December 31, 2019 and 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 consodliated 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 December 31, 2019 and 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

 

December 31, 2019

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

 

 

 

(dollars in thousands)

 

Total Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

356,994

 
14.54

%  

$

196,358

 

8.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

 

315,516

 
14.02

 

 

180,071

 

8.00

 

$

225,088

 

10.00

%

State Bank of Lincoln

 

 

35,390

 
17.58

 

 

16,104

 

8.00

 

 

20,130

 

10.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

334,695

 
13.64

%  

$

147,268

 

6.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

 

295,385

 
13.12

 

 

135,053

 

6.00

 

$

180,071

 

8.00

%

State Bank of Lincoln

 

 

33,222

 
16.50

 

 

12,078

 

6.00

 

 

16,104

 

8.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

298,277

 
12.15

%  

$

110,451

 

4.50

%  

 

N/A

 

N/A

 

Heartland Bank

 

 

295,385

 
13.12

 

 

101,290

 

4.50

 

$

146,307

 

6.50

%

State Bank of Lincoln

 

 

33,222

 
16.50

 

 

9,058

 

4.50

 

 

13,084

 

6.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Average Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated HBT Financial, Inc.

 

$

334,695

 
10.38

%  

$

129,027

 

4.00

%  

 

N/A

 

N/A

 

Heartland Bank

 

 

295,385

 
10.25

 

 

115,281

 

4.00

 

$

144,102

 

5.00

%

State Bank of Lincoln

 

 

33,222

 
9.82

 

 

13,531

 

4.00

 

 

16,914

 

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

%

State Bank of Lincoln

 

 

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

%

State Bank of Lincoln

 

 

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

%

State Bank of Lincoln

 

 

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

%

State Bank of Lincoln

 

 

36,535

 
10.21

 

 

14,319

 

4.00

 

 

17,899

 

5.00