LOANS |
LOANS Loans as of June 30, 2023, and December 31, 2022, were as follows, in thousands: | | | | | | | | | | | | | June 30, 2023 | | December 31, 2022 | Loans receivable held to maturity: | | | | Commercial and industrial | $ | 3,590,680 | | | $ | 3,464,414 | | Paycheck Protection Program ("PPP") | 4,139 | | | 11,025 | | Owner occupied commercial real estate | 2,398,698 | | | 2,265,307 | | Non-owner occupied commercial real estate | 2,530,736 | | | 2,330,940 | | Real estate construction | 1,013,134 | | | 1,076,082 | | Agricultural and agricultural real estate | 839,817 | | | 920,510 | | Residential real estate | 828,437 | | | 853,361 | | Consumer | 512,333 | | | 506,713 | | Total loans receivable held to maturity | 11,717,974 | | | 11,428,352 | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses | (111,198) | | | (109,483) | | Loans receivable, net | $ | 11,606,776 | | | $ | 11,318,869 | |
As of June 30, 2023, and December 31, 2022, HTLF had $52.1 million and $49.1 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 allowance for credit losses calculation.
The following table shows the balance in the allowance for credit losses at June 30, 2023, and December 31, 2022, and the related loan balances, disaggregated on the basis of measurement methodology, in thousands. If a loan no longer shares similar risk characteristics with other loans in the pool, it is evaluated on an individual basis and is not included in the collective evaluation. Lending relationships on nonaccrual with $500,000 or more of total exposure are individually assessed using a collateral dependency calculation. All other loans are collectively evaluated for losses. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance For Credit Losses | | Gross Loans Receivable Held to Maturity | | Individually Evaluated for Credit Losses | | Collectively Evaluated for Credit Losses | | Total | | Loans Individually Evaluated for Credit Losses | | Loans Collectively Evaluated for Credit Losses | | Total | June 30, 2023 | | | | | | | | | | | | Commercial and industrial | $ | 6,817 | | | $ | 22,579 | | | $ | 29,396 | | | $ | 16,051 | | | $ | 3,574,629 | | | $ | 3,590,680 | | PPP | — | | | — | | | — | | | — | | | 4,139 | | | 4,139 | | Owner occupied commercial real estate | 290 | | | 14,419 | | | 14,709 | | | 7,629 | | | 2,391,069 | | | 2,398,698 | | Non-owner occupied commercial real estate | 257 | | | 17,719 | | | 17,976 | | | 14,018 | | | 2,516,718 | | | 2,530,736 | | Real estate construction | — | | | 28,246 | | | 28,246 | | | 910 | | | 1,012,224 | | | 1,013,134 | | Agricultural and agricultural real estate | 1,000 | | | 2,511 | | | 3,511 | | | 7,147 | | | 832,670 | | | 839,817 | | Residential real estate | — | | | 7,644 | | | 7,644 | | | 2,254 | | | 826,183 | | | 828,437 | | Consumer | — | | | 9,716 | | | 9,716 | | | — | | | 512,333 | | | 512,333 | | | | | | | | | | | | | | Total | $ | 8,364 | | | $ | 102,834 | | | $ | 111,198 | | | $ | 48,009 | | | $ | 11,669,965 | | | $ | 11,717,974 | | | | | | | | | | | | | | December 31, 2022 | | | | | | | | | | | | Commercial and industrial | $ | 6,670 | | | $ | 22,401 | | | $ | 29,071 | | | $ | 18,712 | | | $ | 3,445,702 | | | $ | 3,464,414 | | PPP | — | | | — | | | — | | | — | | | 11,025 | | | 11,025 | | Owner occupied commercial real estate | 376 | | | 13,572 | | | 13,948 | | | 7,932 | | | 2,257,375 | | | 2,265,307 | | Non-owner occupied commercial real estate | — | | | 16,539 | | | 16,539 | | | 11,371 | | | 2,319,569 | | | 2,330,940 | | Real estate construction | — | | | 29,998 | | | 29,998 | | | 1,518 | | | 1,074,564 | | | 1,076,082 | | Agricultural and agricultural real estate | 63 | | | 2,571 | | | 2,634 | | | 3,851 | | | 916,659 | | | 920,510 | | Residential real estate | — | | | 7,711 | | | 7,711 | | | 1,607 | | | 851,754 | | | 853,361 | | Consumer | — | | | 9,582 | | | 9,582 | | | — | | | 506,713 | | | 506,713 | | | | | | | | | | | | | | Total | $ | 7,109 | | | $ | 102,374 | | | $ | 109,483 | | | $ | 44,991 | | | $ | 11,383,361 | | | $ | 11,428,352 | |
The following tables show the amortized cost basis as of June 30, 2023, of the loans modified during the three- and six-months ended June 30, 2023, to borrowers experiencing financial difficulty by loan category and type of concession granted, dollars in thousands. | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended June 30, 2023 | Loan Modifications Made to Borrowers Experiencing Financial Difficulty | | Term Extension | | Term Extension and Interest Only Payments | | Amortized Cost Basis | | % of Loan Category | | Amortized Cost Basis | | % of Loan Category | Commercial | $ | 1,411 | | | 0.04 | % | | $ | — | | | — | % | | | | | | | | | Owner occupied commercial real estate | — | | | — | | | — | | | — | | | | | | | | | | Real estate construction | — | | | — | | | — | | | — | | Agricultural and agricultural real estate | 1,354 | | | 0.16 | | | — | | | — | | Residential real estate | — | | | — | | | — | | | — | | | | | | | | | | Total | $ | 2,765 | | | 0.02 | % | | $ | — | | | — | % |
| | | | | | | | | | | | | | | | | | | | | | | | For the Six Months Ended June 23, 2023 | Loan Modifications Made to Borrowers Experiencing Financial Difficulty | | Term Extension | | Term Extension and Interest Only Payments | | Amortized Cost Basis | | % of Loan Category | | Amortized Cost Basis | | % of Loan Category | Commercial | $ | 5,073 | | | 0.14 | % | | $ | — | | | — | % | | | | | | | | | Owner occupied commercial real estate | — | | | — | | | 5,043 | | | 0.21 | | | | | | | | | | Real estate construction | 1,477 | | | 0.15 | | | — | | | — | | Agricultural and agricultural real estate | 1,354 | | | 0.16 | | | — | | | — | | Residential real estate | 752 | | | 0.09 | | | — | | | — | | | | | | | | | | Total | $ | 8,656 | | | 0.07 | % | | $ | 5,043 | | | 0.04 | % |
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty in the six months ending June 30, 2023. | | | | | | | | | | | | | | | Loan Type | | Weighted Average Term Extension (months) | | Weighted Average Term Extension and Interest Only Payments (months) | Commercial and industrial | | 9 | | 0 | | | | | | Owner occupied commercial real estate | | 0 | | 12 | | | | | | Real estate construction | | 6 | | 0 | Agricultural and agricultural real estate | | 9 | | 0 | Residential real estate | | 12 | | 0 | | | | | |
At June 30, 2023, there were $2.7 million in unfunded commitments to extend credit to the borrowers experiencing financial difficulty.
HTLF had no loans to borrowers experiencing financial difficulty that had a payment default during the three months and six months ended June 30, 2023, that had been modified in the twelve-month period prior to the default. HTLF closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of loans that have been modified in the six months ended June 30, 2023, dollars in thousands. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accruing Loans | | | | | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due | | | | Total Past Due | | Current | | Nonaccrual | | | June 30, 2023 | | | | | | | | | | | | | | | | Commercial and industrial | $ | — | | | $ | — | | | $ | — | | | | | $ | — | | | $ | 5,073 | | | $ | — | | | | | | | | | | | | | | | | | | | | Owner occupied commercial real estate | — | | | — | | | — | | | | | — | | | 5,043 | | | — | | | | | | | | | | | | | | | | | | | | Real estate construction | — | | | — | | | — | | | | | — | | | — | | | 1,477 | | | | Agricultural and agricultural real estate | — | | | — | | | — | | | | | — | | | 1,354 | | | — | | | | Residential real estate | — | | | — | | | — | | | | | — | | | — | | | 752 | | | | | | | | | | | | | | | | | | | | Total | $ | — | | | $ | — | | | $ | — | | | | | $ | — | | | $ | 11,470 | | | $ | 2,229 | | | |
HTLF's internal rating system is a series of grades reflecting management's credit risk assessment, based on its analysis of the borrower's financial condition. The "pass" category consists of all loans that are not in the "nonpass" category and categorized into a range of loan grades that reflect increasing, though still acceptable, risk. Movement of risk through the various grade levels in the pass category is monitored for early identification of credit deterioration and risk rating migration analysis.
The "nonpass" category consists of watch, substandard, doubtful and loss rated loans. The "watch" rating is attached to loans where the borrower exhibits negative trends in financial circumstances due to borrower specific or systemic conditions that, if left uncorrected, threaten the borrower's capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. These credits are closely monitored for improvement or deterioration.
The "substandard" rating is assigned to loans that are inadequately protected by the current net worth and repaying capacity of the borrower and that may be further at risk due to deterioration in the value of collateral pledged. Well-defined weaknesses jeopardize liquidation of the debt. These loans are still considered collectible; however, a distinct possibility exists that HTLF will sustain some loss if deficiencies are not corrected. Substandard loans may exhibit some or all of the following weaknesses: deteriorating financial trends, lack of earnings, inadequate debt service capacity, excessive debt and/or lack of liquidity.
The "doubtful" rating is assigned to loans where identified weaknesses in the borrowers' ability to repay the loan make collection or liquidation in full, on the basis of existing facts, conditions and values, highly questionable and improbable. These borrowers are usually in default, lack liquidity and capital, as well as resources necessary to remain as an operating entity. Specific pending events, such as capital injections, liquidations or perfection of liens on additional collateral, may strengthen the credit, thus deferring the rating of the loan as "loss" until the exact status of the loan can be determined. The "loss" rating is assigned to loans considered uncollectible. HTLF had no loans classified as "loss" or "doubtful" as of June 30, 2023, and December 31, 2022.
The following table shows the risk category of loans by loan category, year of origination and charge-offs as of June 30, 2023, in thousands: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2023 | Amortized Cost Basis of Term Loans by Year of Origination | | | | | | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | 2018 and Prior | | Revolving | | Total | Commercial and industrial | | | | | | | | | | | | | | | | Pass | $ | 347,091 | | | $ | 891,309 | | | $ | 375,623 | | | $ | 221,147 | | | $ | 88,352 | | | $ | 340,468 | | | $ | 1,139,264 | | | $ | 3,403,254 | | Watch | 5,500 | | | 16,536 | | | 1,431 | | | 1,764 | | | 6,012 | | | 11,266 | | | 46,907 | | | 89,416 | | Substandard | 20,127 | | | 7,012 | | | 5,520 | | | 9,008 | | | 20,299 | | | 10,765 | | | 25,279 | | | 98,010 | | Commercial and industrial total | $ | 372,718 | | | $ | 914,857 | | | $ | 382,574 | | | $ | 231,919 | | | $ | 114,663 | | | $ | 362,499 | | | $ | 1,211,450 | | | $ | 3,590,680 | | Commercial and industrial charge-offs | $ | — | | | $ | 290 | | | $ | 101 | | | $ | 1,414 | | | $ | 554 | | | $ | 1,386 | | | $ | 1,392 | | | $ | 5,137 | | | | | | | | | | | | | | | | | | PPP | | | | | | | | | | | | | | | | Pass | $ | — | | | $ | — | | | $ | 3,944 | | | $ | 69 | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,013 | | Watch | — | | | — | | | 6 | | | — | | | — | | | — | | | — | | | 6 | | Substandard | — | | | — | | | 120 | | | — | | | — | | | — | | | — | | | 120 | | PPP total | $ | — | | | $ | — | | | $ | 4,070 | | | $ | 69 | | | $ | — | | | $ | — | | | $ | — | | | $ | 4,139 | | PPP charge-offs | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | Owner occupied commercial real estate | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2023 | Amortized Cost Basis of Term Loans by Year of Origination | | | | | | 2023 | | 2022 | | 2021 | | 2020 | | 2019 | | 2018 and Prior | | Revolving | | Total | Pass | $ | 223,815 | | | $ | 500,240 | | | $ | 768,837 | | | $ | 228,536 | | | $ | 246,327 | | | $ | 242,129 | | | $ | 40,683 | | | $ | 2,250,567 | | Watch | 19,888 | | | 15,187 | | | 15,238 | | | 4,013 | | | 8,418 | | | 11,065 | | | 321 | | | 74,130 | | Substandard | 23,518 | | | 9,897 | | | 3,665 | | | 22,093 | | | 5,154 | | | 9,322 | | | 352 | | | 74,001 | | Owner occupied commercial real estate total | $ | 267,221 | | | $ | 525,324 | | | $ | 787,740 | | | $ | 254,642 | | | $ | 259,899 | | | $ | 262,516 | | | $ | 41,356 | | | $ | 2,398,698 | | Owner occupied commercial real estate charge-offs | $ | — | | | $ | — | | | $ | — | | | $ | 5 | | | $ | — | | | $ | 14 | | | $ | — | | | $ | 19 | | | | | | | | | | | | | | | | | | Non-owner occupied commercial real estate | | | | | | | | | | | | | | | | Pass | $ | 282,886 | | | $ | 742,328 | | | $ | 518,555 | | | $ | 219,439 | | | $ | 245,083 | | | $ | 302,523 | | | $ | 63,131 | | | $ | 2,373,945 | | Watch | — | | | 4,448 | | | 1,355 | | | 3,222 | | | 27,118 | | | 40,103 | | | — | | | 76,246 | | Substandard | — | | | 6,873 | | | 3,757 | | | 942 | | | 26,916 | | | 42,057 | | | — | | | 80,545 | | Non-owner occupied commercial real estate total | $ | 282,886 | | | $ | 753,649 | | | $ | 523,667 | | | $ | 223,603 | | | $ | 299,117 | | | $ | 384,683 | | | $ | 63,131 | | | $ | 2,530,736 | | Non-owner occupied commercial real estate charge-offs | $ | — | | | $ | — | | | $ | — | | | $ | 29 | | | $ | — | | | $ | — | | | $ | — | | | $ | 29 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Real estate construction | | | | | | | | | | | | | | | | Pass | $ | 114,193 | | | $ | 557,657 | | | $ | 262,600 | | | $ | 41,632 | | | $ | 12,094 | | | $ | 4,591 | | | $ | 7,906 | | | $ | 1,000,673 | | Watch | — | | | 6,546 | | | — | | | 76 | | | — | | | 102 | | | — | | | 6,724 | | Substandard | 406 | | | 4,239 | | | 665 | | | 340 | | | 17 | | | 70 | | | — | | | 5,737 | | Real estate construction total | $ | 114,599 | | | $ | 568,442 | | | $ | 263,265 | | | $ | 42,048 | | | $ | 12,111 | | | $ | 4,763 | | | $ | 7,906 | | | $ | 1,013,134 | | Real estate construction charge-offs | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Agricultural and agricultural real estate | | | | | | | | | | | | | | | | Pass | $ | 109,375 | | | $ | 233,885 | | | $ | 120,638 | | | $ | 69,406 | | | $ | 30,000 | | | $ | 51,715 | | | $ | 187,766 | | | $ | 802,785 | | Watch | 780 | | | 240 | | | 750 | | | 2,901 | | | 418 | | | 607 | | | 764 | | | 6,460 | | Substandard | 1,366 | | | 9,832 | | | 3,374 | | | 54 | | | 911 | | | 14,117 | | | 918 | | | 30,572 | | Agricultural and agricultural real estate total | $ | 111,521 | | | $ | 243,957 | | | $ | 124,762 | | | $ | 72,361 | | | $ | 31,329 | | | $ | 66,439 | | | $ | 189,448 | | | $ | 839,817 | | Agricultural and agricultural real estate charge-offs | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 5,309 | | | $ | 5,309 | | | | | | | | | | | | | | | | | | Residential real estate | | | | | | | | | | | | | | | | Pass | $ | 41,579 | | | $ | 189,390 | | | $ | 256,355 | | | $ | 80,165 | | | $ | 44,278 | | | $ | 177,741 | | | $ | 19,838 | | | $ | 809,346 | | Watch | — | | | 2,045 | | | 3,006 | | | 48 | | | 1,441 | | | 4,632 | | | 34 | | | 11,206 | | Substandard | 799 | | | 203 | | | 1,512 | | | 827 | | | 219 | | | 3,926 | | | 399 | | | 7,885 | | Residential real estate total | $ | 42,378 | | | $ | 191,638 | | | $ | 260,873 | | | $ | 81,040 | | | $ | 45,938 | | | $ | 186,299 | | | $ | 20,271 | | | $ | 828,437 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential real estate charge-offs | $ | — | | | $ | 59 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 59 | | | | | | | | | | | | | | | | | | Consumer | | | | | | | | | | | | | | | | Pass | $ | 30,129 | | | $ | 70,624 | | | $ | 41,217 | | | $ | 9,952 | | | $ | 4,700 | | | $ | 15,735 | | | $ | 332,789 | | | $ | 505,146 | | Watch | 625 | | | 69 | | | 829 | | | 35 | | | 44 | | | 801 | | | 1,491 | | | 3,894 | | Substandard | 8 | | | 264 | | | 222 | | | 95 | | | 185 | | | 1,938 | | | 581 | | | 3,293 | | Consumer total | $ | 30,762 | | | $ | 70,957 | | | $ | 42,268 | | | $ | 10,082 | | | $ | 4,929 | | | $ | 18,474 | | | $ | 334,861 | | | $ | 512,333 | | Consumer charge-offs | $ | — | | | $ | 87 | | | $ | 71 | | | $ | 23 | | | $ | 18 | | | $ | 8 | | | $ | 1,004 | | | $ | 1,211 | | | | | | | | | | | | | | | | | | Total Pass | $ | 1,149,068 | | | $ | 3,185,433 | | | $ | 2,347,769 | | | $ | 870,346 | | | $ | 670,834 | | | $ | 1,134,902 | | | $ | 1,791,377 | | | $ | 11,149,729 | | Total Watch | 26,793 | | | 45,071 | | | 22,615 | | | 12,059 | | | 43,451 | | | 68,576 | | | 49,517 | | | 268,082 | | Total Substandard | 46,224 | | | 38,320 | | | 18,835 | | | 33,359 | | | 53,701 | | | 82,195 | | | 27,529 | | | 300,163 | | Total Loans | $ | 1,222,085 | | | $ | 3,268,824 | | | $ | 2,389,219 | | | $ | 915,764 | | | $ | 767,986 | | | $ | 1,285,673 | | | $ | 1,868,423 | | | $ | 11,717,974 | | | | | | | | | | | | | | | | | | Total Charge-offs | $ | — | | | $ | 436 | | | $ | 172 | | | $ | 1,471 | | | $ | 572 | | | $ | 1,408 | | | $ | 7,705 | | | $ | 11,764 | |
The following table shows the risk category of loans by loan category and year of origination as of December 31, 2022, in thousands. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2022 | Amortized Cost Basis of Term Loans by Year of Origination | | | | | | 2022 | | 2021 | | 2020 | | 2019 | | 2018 | | 2017 and Prior | | Revolving | | Total | Commercial and industrial | | | | | | | | | | | | | | | | Pass | $ | 967,103 | | | $ | 442,001 | | | $ | 260,021 | | | $ | 101,998 | | | $ | 57,776 | | | $ | 421,312 | | | $ | 1,064,333 | | | $ | 3,314,544 | | Watch | 12,638 | | | 1,370 | | | 685 | | | 5,487 | | | 2,882 | | | 3,315 | | | 21,984 | | | 48,361 | | Substandard | 6,691 | | | 14,366 | | | 9,369 | | | 22,171 | | | 5,546 | | | 6,758 | | | 36,608 | | | 101,509 | | Commercial and industrial total | $ | 986,432 | | | $ | 457,737 | | | $ | 270,075 | | | $ | 129,656 | | | $ | 66,204 | | | $ | 431,385 | | | $ | 1,122,925 | | | $ | 3,464,414 | | PPP | | | | | | | | | | | | | | | | Pass | $ | — | | | $ | 7,807 | | | $ | 526 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 8,333 | | Watch | — | | | 7 | | | — | | | — | | | — | | | — | | | — | | | 7 | | Substandard | — | | | 2,685 | | | — | | | — | | | — | | | — | | | — | | | 2,685 | | PPP total | $ | — | | | $ | 10,499 | | | $ | 526 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 11,025 | | Owner occupied commercial real estate | | | | | | | | | | | | | | | | Pass | $ | 511,547 | | | $ | 781,946 | | | $ | 255,476 | | | $ | 266,228 | | | $ | 103,943 | | | $ | 179,503 | | | $ | 34,117 | | | $ | 2,132,760 | | Watch | 22,079 | | | 3,410 | | | 12,346 | | | 8,520 | | | 3,645 | | | 11,899 | | | — | | | 61,899 | | Substandard | 2,971 | | | 23,802 | | | 26,490 | | | 6,358 | | | 2,574 | | | 7,353 | | | 1,100 | | | 70,648 | | Owner occupied commercial real estate total | $ | 536,597 | | | $ | 809,158 | | | $ | 294,312 | | | $ | 281,106 | | | $ | 110,162 | | | $ | 198,755 | | | $ | 35,217 | | | $ | 2,265,307 | | Non-owner occupied commercial real estate | | | | | | | | | | | | | | | | Pass | $ | 756,059 | | | $ | 515,075 | | | $ | 227,383 | | | $ | 261,964 | | | $ | 127,400 | | | $ | 210,289 | | | $ | 70,398 | | | $ | 2,168,568 | | Watch | 8,131 | | | 792 | | | 2,849 | | | 38,218 | | | 38,510 | | | 16,180 | | | 547 | | | 105,227 | | Substandard | 202 | | | 6,784 | | | 1,838 | | | 16,019 | | | 22,332 | | | 9,970 | | | — | | | 57,145 | | Non-owner occupied commercial real estate total | $ | 764,392 | | | $ | 522,651 | | | $ | 232,070 | | | $ | 316,201 | | | $ | 188,242 | | | $ | 236,439 | | | $ | 70,945 | | | $ | 2,330,940 | | Real estate construction | | | | | | | | | | | | | | | | Pass | $ | 597,370 | | | $ | 328,391 | | | $ | 88,660 | | | $ | 21,221 | | | $ | 2,568 | | | $ | 6,274 | | | $ | 8,252 | | | $ | 1,052,736 | | Watch | 665 | | | 16,218 | | | 1,257 | | | — | | | — | | | 122 | | | — | | | 18,262 | | Substandard | 2,587 | | | 356 | | | 173 | | | 446 | | | 1,478 | | | 44 | | | — | | | 5,084 | | Real estate construction total | $ | 600,622 | | | $ | 344,965 | | | $ | 90,090 | | | $ | 21,667 | | | $ | 4,046 | | | $ | 6,440 | | | $ | 8,252 | | | $ | 1,076,082 | | | | | | | | | | | | | | | | | | Agricultural and agricultural real estate | | | | | | | | | | | | | | | | Pass | $ | 324,791 | | | $ | 140,252 | | | $ | 79,307 | | | $ | 34,447 | | | $ | 22,600 | | | $ | 38,672 | | | $ | 239,686 | | | $ | 879,755 | | Watch | 3,795 | | | 515 | | | 3,865 | | | 641 | | | 444 | | | 672 | | | 902 | | | 10,834 | | Substandard | 8,674 | | | 3,224 | | | 204 | | | 1,859 | | | 12,323 | | | 2,682 | | | 955 | | | 29,921 | | Agricultural and agricultural real estate total | $ | 337,260 | | | $ | 143,991 | | | $ | 83,376 | | | $ | 36,947 | | | $ | 35,367 | | | $ | 42,026 | | | $ | 241,543 | | | $ | 920,510 | | | | | | | | | | | | | | | | | | Residential real estate | | | | | | | | | | | | | | | | Pass | $ | 189,133 | | | $ | 268,561 | | | $ | 64,627 | | | $ | 39,468 | | | $ | 34,863 | | | $ | 217,489 | | | $ | 23,331 | | | $ | 837,472 | | Watch | 706 | | | 1,095 | | | 88 | | | 957 | | | 2,296 | | | 2,237 | | | 399 | | | 7,778 | | Substandard | 28 | | | 1,273 | | | 1,024 | | | 99 | | | 792 | | | 4,895 | | | — | | | 8,111 | | Residential real estate total | $ | 189,867 | | | $ | 270,929 | | | $ | 65,739 | | | $ | 40,524 | | | $ | 37,951 | | | $ | 224,621 | | | $ | 23,730 | | | $ | 853,361 | | | | | | | | | | | | | | | | | | Consumer | | | | | | | | | | | | | | | | Pass | $ | 80,592 | | | $ | 47,787 | | | $ | 11,722 | | | $ | 6,022 | | | $ | 4,840 | | | $ | 24,655 | | | $ | 325,247 | | | $ | 500,865 | | Watch | 20 | | | 191 | | | 35 | | | 119 | | | 74 | | | 1,584 | | | 953 | | | 2,976 | | Substandard | 188 | | | 331 | | | 242 | | | 303 | | | 75 | | | 1,539 | | | 194 | | | 2,872 | | Consumer total | $ | 80,800 | | | $ | 48,309 | | | $ | 11,999 | | | $ | 6,444 | | | $ | 4,989 | | | $ | 27,778 | | | $ | 326,394 | | | $ | 506,713 | | | | | | | | | | | | | | | | | | Total Pass | $ | 3,426,595 | | | $ | 2,531,820 | | | $ | 987,722 | | | $ | 731,348 | | | $ | 353,990 | | | $ | 1,098,194 | | | $ | 1,765,364 | | | $ | 10,895,033 | | Total Watch | 48,034 | | | 23,598 | | | 21,125 | | | 53,942 | | | 47,851 | | | 36,009 | | | 24,785 | | | 255,344 | | Total Substandard | 21,341 | | | 52,821 | | | 39,340 | | | 47,255 | | | 45,120 | | | 33,241 | | | 38,857 | | | 277,975 | | Total Loans | $ | 3,495,970 | | | $ | 2,608,239 | | | $ | 1,048,187 | | | $ | 832,545 | | | $ | 446,961 | | | $ | 1,167,444 | | | $ | 1,829,006 | | | $ | 11,428,352 | |
Included in the nonpass loans at June 30, 2023, and December 31, 2022, were $126,000 and $2.7 million, respectively, of nonpass PPP loans as a result of risk ratings on non-PPP related credits. HTLF's risk rating methodology assigns a risk rating to the whole lending relationship. HTLF has no allowance recorded related to the PPP loans because of the 100% government guarantee through the United States Small Business Administration ("SBA"). As of June 30, 2023, HTLF had $176,000 of loans secured by residential real estate property that were in the process of foreclosure.
The following table sets forth information regarding accruing and nonaccrual loans at June 30, 2023, and December 31, 2022, in thousands: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accruing Loans | | | | | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due | | Total Past Due | | Current | | Nonaccrual | | Total Loans | June 30, 2023 | | | | | | | | | | | | | | Commercial and industrial | $ | 6,646 | | | $ | 1,202 | | | $ | 517 | | | $ | 8,365 | | | $ | 3,561,379 | | | $ | 20,936 | | | $ | 3,590,680 | | PPP | 19 | | | — | | | 109 | | | 128 | | | 4,011 | | | — | | | 4,139 | | Owner occupied commercial real estate | 137 | | | 2,290 | | | — | | | 2,427 | | | 2,387,931 | | | 8,340 | | | 2,398,698 | | Non-owner occupied commercial real estate | — | | | — | | | — | | | — | | | 2,516,515 | | | 14,221 | | | 2,530,736 | | Real estate construction | 36 | | | — | | | — | | | 36 | | | 1,010,274 | | | 2,824 | | | 1,013,134 | | Agricultural and agricultural real estate | 108 | | | 360 | | | 1 | | | 469 | | | 829,814 | | | 9,534 | | | 839,817 | | Residential real estate | 673 | | | 321 | | | 780 | | | 1,774 | | | 821,925 | | | 4,738 | | | 828,437 | | Consumer | 1,499 | | | 371 | | | 52 | | | 1,922 | | | 509,048 | | | 1,363 | | | 512,333 | | Total gross loans receivable held to maturity | $ | 9,118 | | | $ | 4,544 | | | $ | 1,459 | | | $ | 15,121 | | | $ | 11,640,897 | | | $ | 61,956 | | | $ | 11,717,974 | | December 31, 2022 | | | | | | | | | | | | | | Commercial and industrial | $ | 1,099 | | | $ | 356 | | | $ | 131 | | | $ | 1,586 | | | $ | 3,440,062 | | | $ | 22,766 | | | $ | 3,464,414 | | PPP | — | | | — | | | — | | | — | | | 11,006 | | | 19 | | | 11,025 | | Owner occupied commercial real estate | 12 | | | 127 | | | — | | | 139 | | | 2,256,365 | | | 8,803 | | | 2,265,307 | | Non-owner occupied commercial real estate | — | | | — | | | — | | | — | | | 2,319,282 | | | 11,658 | | | 2,330,940 | | Real estate construction | 16 | | | 28 | | | — | | | 44 | | | 1,073,687 | | | 2,351 | | | 1,076,082 | | Agricultural and agricultural real estate | 48 | | | — | | | 142 | | | 190 | | | 914,088 | | | 6,232 | | | 920,510 | | Residential real estate | 1,206 | | | 152 | | | — | | | 1,358 | | | 846,739 | | | 5,264 | | | 853,361 | | Consumer | 1,526 | | | 196 | | | — | | | 1,722 | | | 503,853 | | | 1,138 | | | 506,713 | | Total gross loans receivable held to maturity | $ | 3,907 | | | $ | 859 | | | $ | 273 | | | $ | 5,039 | | | $ | 11,365,082 | | | $ | 58,231 | | | $ | 11,428,352 | |
Loans delinquent 30 to 89 days as a percent of total loans were 0.12% at June 30, 2023, compared to 0.04% at December 31, 2022. Changes in credit risk are monitored on a continuous basis as part of relationship management, and changes in risk ratings are made when credit quality improves or deteriorates in accordance with HTLF's credit risk rating framework. All individually assessed loans are reviewed at least annually.
HTLF recognized $0 of interest income on nonaccrual loans during the three and six months ended June 30, 2023 and June 30, 2022. As of June 30, 2023, and December 31, 2022, HTLF had $28.7 million and $26.7 million of nonaccrual loans with no related allowance, respectively.
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