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SECURITIES
 9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
SECURITIES SECURITIES
The amortized cost, gross unrealized gains and losses, and estimated fair values of debt securities available for sale and equity securities with a readily determinable fair value that are carried at fair value as of September 30, 2022, and December 31, 2021, are summarized in the table below, in thousands:
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
September 30, 2022    
U.S. treasuries$27,364 $— $(627)$26,737 
U.S. agencies49,604 — (6,304)43,300 
Obligations of states and political subdivisions1,052,960 1 (218,338)834,623 
Mortgage-backed securities - agency2,097,286 67 (269,077)1,828,276 
Mortgage-backed securities - non-agency2,261,005 2,730 (140,876)2,122,859 
Commercial mortgage-backed securities - agency102,289 — (16,141)86,148 
Commercial mortgage-backed securities - non-agency708,763 — (19,088)689,675 
Asset-backed securities411,063 — (11,031)400,032 
Corporate bonds9,210 — (787)8,423 
Total debt securities6,719,544 2,798 (682,269)6,040,073 
Equity securities with a readily determinable fair value20,258 — — 20,258 
Total$6,739,802 $2,798 $(682,269)$6,060,331 
December 31, 2021
U.S. treasuries$997 $11 $— $1,008 
U.S. agencies193,932 264 (812)193,384 
Obligations of states and political subdivisions2,045,386 56,263 (16,616)2,085,033 
Mortgage-backed securities - agency2,388,601 11,870 (51,182)2,349,289 
Mortgage-backed securities - non-agency1,749,838 4,570 (11,029)1,743,379 
Commercial mortgage-backed securities - agency125,397 1,429 (2,914)123,912 
Commercial mortgage-backed securities - non-agency600,253 998 (363)600,888 
Asset-backed securities408,167 2,803 (1,317)409,653 
Corporate bonds2,979 61 — 3,040 
Total debt securities7,515,550 78,269 (84,233)7,509,586 
Equity securities with a readily determinable fair value20,788 — — 20,788 
Total$7,536,338 $78,269 $(84,233)$7,530,374 

The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of September 30, 2022, and December 31, 2021, are summarized in the table below, in thousands:
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value		Allowance for Credit Losses
September 30, 2022    
Obligations of states and political subdivisions$830,247 $1,761 $(49,203)$782,805 $— 
Total$830,247 $1,761 $(49,203)$782,805 $— 
December 31, 2021
Obligations of states and political subdivisions$84,709 $9,430 $— $94,139 $— 
Total$84,709 $9,430 $— $94,139 $— 

During the third quarter of 2022, HTLF transferred taxable municipal bonds with an amortized cost basis of $934.5 million and fair value of $748.3 million from available for sale to held to maturity. On the date of the transfer, accumulated other
comprehensive income (loss) included $186.3 million of net unrealized losses, after tax, attributable to these securities, and the net unrealized losses will be amortized into interest income over the remaining life of the transferred securities. The bonds were transferred at fair value at the date of transfer.

As of September 30, 2022, and December 31, 2021, HTLF had $28.5 million and $29.4 million, respectively, of accrued interest receivable, which is included in other assets on the consolidated balance sheets. HTLF does not consider accrued interest receivable in the carrying amount of financial assets held at amortized cost basis or in the allowance for credit losses calculation.

The amortized cost and estimated fair value of investment securities carried at fair value at September 30, 2022, by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.
September 30, 2022
Amortized CostEstimated Fair Value
Due in 1 year or less$1,490 $1,486 
Due in 1 to 5 years30,702 29,814 
Due in 5 to 10 years54,131 46,087 
Due after 10 years1,052,815 835,696 
Total debt securities1,139,138 913,083 
Mortgage and asset-backed securities5,580,406 5,126,990 
Equity securities with a readily determinable fair value 20,258 20,258 
Total investment securities$6,739,802 $6,060,331 

The amortized cost and estimated fair value of debt securities held to maturity at September 30, 2022, by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.
September 30, 2022
Amortized CostEstimated Fair Value
Due in 1 year or less$4,772 $4,773 
Due in 1 to 5 years68,014 67,496 
Due in 5 to 10 years125,603 121,978 
Due after 10 years631,858 588,558 
Total debt securities$830,247 $782,805 

As of September 30, 2022, and December 31, 2021, securities with a carrying value of $1.27 billion and $1.66 billion, respectively, were pledged to secure public and trust deposits, short-term borrowings and for other purposes as required or permitted by law.

Gross gains and losses realized related to the sales of securities carried at fair value for the three and nine months ended September 30, 2022 and 2021, are summarized as follows, in thousands:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Proceeds from sales$57,610 $169,108 $1,031,521 $799,588 
Gross security gains— 1,591 7,298 5,880 
Gross security losses1,070 56 9,018 1,533 

The following table summarizes, in thousands, the amount of unrealized losses, defined as the amount by which cost or amortized cost exceeds fair value, and the related fair value of investments with unrealized losses in the securities portfolio as of September 30, 2022, and December 31, 2021. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for
12 months or more. The reference point for determining how long an investment was in an unrealized loss position was September 30, 2021, and December 31, 2020, respectively. For the securities transferred to held to maturity during the third quarter of 2022, the reference point was the date of the transfer.
Debt securities available for saleLess than 12 months12 months or longerTotal
 Fair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		Count
September 30, 2022
U.S. treasuries$26,737 $(627)4 $— $— — $26,737 $(627)4 
U.S. agencies27,662 (2,398)6 15,638 (3,906)1 43,300 (6,304)7 
Obligations of states and political subdivisions703,542 (175,773)141 127,428 (42,565)41 830,970 (218,338)182 
Mortgage-backed securities - agency523,192 (53,036)143 1,303,192 (216,041)82 1,826,384 (269,077)225 
Mortgage-backed securities - non-agency1,317,914 (93,124)35 394,034 (47,752)16 1,711,948 (140,876)51 
Commercial mortgage-backed securities - agency30,467 (2,733)14 55,681 (13,408)11 86,148 (16,141)25 
Commercial mortgage-backed securities - non-agency626,025 (18,189)19 63,650 (899)2 689,675 (19,088)21 
Asset-backed securities130,835 (4,860)8 57,620 (6,171)5 188,455 (11,031)13 
Corporate bonds8,422 (787)7 — — — 8,422 (787)7 
Total temporarily impaired securities$3,394,796 $(351,527)377 $2,017,243 $(330,742)158 $5,412,039 $(682,269)535 
December 31, 2021
U.S. agencies$100,839 $(812)2 $— $— — $100,839 $(812)2 
Obligations of states and political subdivisions596,866 (10,115)113 236,329 (6,501)49 833,195 (16,616)162 
Mortgage-backed securities - agency1,383,808 (33,291)83 474,724 (17,891)19 1,858,532 (51,182)102 
Mortgage-backed securities - non-agency929,515 (10,870)27 23,821 (159)5 953,336 (11,029)32 
Commercial mortgage-backed securities - agency26,999 (689)8 53,025 (2,225)5 80,024 (2,914)13 
Commercial mortgage-backed securities - non-agency74,450 (145)3 14,124 (218)2 88,574 (363)5 
Asset-backed securities113,945 (1,201)6 13,799 (116)6 127,744 (1,317)12 
Total temporarily impaired securities$3,226,422 $(57,123)242 $815,822 $(27,110)86 $4,042,244 $(84,233)328 

Securities held to maturityLess than 12 months12 months or longerTotal
Fair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		Count
September 30, 2022
Obligations of states and political subdivisions$708,291 $(49,203)161 $— $— — $708,291 $(49,203)161 
Total temporarily impaired securities$708,291 (49,203)161 $— $— — $708,291 (49,203)161 

HTLF had no securities held to maturity with unrealized losses at December 31, 2021.

HTLF reviews the investment securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors, and the relative significance of any single factor can vary by security. Some factors HTLF may consider include changes in security ratings, financial condition of the issuer, as well as security and industry specific economic conditions. In addition, with regard to debt securities, HTLF may also evaluate payment structure, whether there are defaulted payments or expected defaults, prepayment speeds and the value of any underlying collateral. For certain debt securities in unrealized loss positions, HTLF prepares cash flow analyses to compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.
The unrealized losses on HTLF's commercial mortgage, mortgage and asset-backed securities are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. The losses are not related to concerns regarding the underlying credit of the issuers or the underlying collateral. It is expected that the securities will not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because HTLF has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, no credit losses were recognized on these securities during the three and nine months ended September 30, 2022 and 2021.

The unrealized losses on HTLF's obligations of states and political subdivisions available for sale are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. Management monitors the published credit ratings of these securities and the stability of the underlying municipalities. Because the decline in fair value is attributable to changes in interest rates or widening market spreads due to insurance company downgrades and not underlying credit quality, and because HTLF has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, no credit losses were recognized on these securities during the three and nine months ended September 30, 2022 and 2021.

In the first quarter of 2022, HTLF sold two obligations of states and political subdivisions securities from the held to maturity portfolio. Because the evaluation of the underlying credit quality of the individual securities indicated significant deterioration, it was unlikely HTLF would recover the remaining basis of the securities prior to maturity and therefore inconsistent with HTLF's original intent upon purchase and classification of these held to maturity securities. The carrying value of these securities was $2.2 million, and the associated gross gains were $100,000.

The credit loss model under ASC 326-30, applicable to held to maturity debt securities, requires the recognition of lifetime expected credit losses through an allowance account at the time when the security is purchased. The following tables present, in thousands, the activity in the allowance for credit losses for securities held to maturity by obligations of states and political subdivisions securities for the three and nine months ended September 30, 2022 and 2021:
Three Months Ended
September 30,
20222021
Beginning balance$— $51 
Provision (benefit) for credit losses— (51)
Balance at period end$— $— 
Nine Months Ended
September 30,
20222021
Beginning balance$— $51 
Provision (benefit) for credit losses— (51)
Balance at period end$— $— 

Based on HTLF's credit loss methodology applicable to held to maturity debt securities, no allowance for credit losses was required at both September 30, 2022, and December 31, 2021.
The following table summarizes, in thousands, the carrying amount of HTLF's held to maturity debt securities by investment rating as of September 30, 2022, and December 31, 2021, which are updated quarterly and used to monitor the credit quality of the securities:
September 30, 2022December 31, 2021
Rating
AAA$94,727 $3,265 
AA, AA+, AA-576,141 61,471 
A+, A, A-135,835 15,034 
BBB23,544 4,939 
Not Rated— — 
Total $830,247 $84,709 

Included in other securities were shares of stock in each Federal Home Loan Bank (the "FHLB") of Des Moines, Chicago, Dallas, San Francisco and Topeka at an amortized cost of $18.6 million at September 30, 2022, and $22.6 million at December 31, 2021.

The HTLF banks are required by federal law to maintain FHLB stock as members of the various FHLBs. These equity securities are "restricted" in that they can only be sold back to the respective institutions from which they were acquired or another member institution at par. Therefore, the FHLB stock is less liquid than other marketable equity securities, and the fair value approximates amortized cost. HTLF considers its FHLB stock as a long-term investment that provides access to competitive products and liquidity. HTLF evaluates impairment in these investments based on the ultimate recoverability of the par value and, at September 30, 2022, and December 31, 2021, did not consider the investments to be impaired.