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LOANS (Tables)
6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Schedule of Loans
Loans as of June 30, 2023, and December 31, 2022, were as follows, in thousands:
June 30, 2023December 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 estate2,398,698 2,265,307 
Non-owner occupied commercial real estate2,530,736 2,330,940 
Real estate construction1,013,134 1,076,082 
Agricultural and agricultural real estate839,817 920,510 
Residential real estate828,437 853,361 
Consumer512,333 506,713 
Total loans receivable held to maturity11,717,974 11,428,352 
Allowance for credit losses(111,198)(109,483)
Loans receivable, net$11,606,776 $11,318,869 
Allowance for Loan and Lease Losses, Based on Impairment Methodology
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 LossesGross Loans Receivable Held to Maturity
Individually Evaluated for Credit LossesCollectively Evaluated for Credit LossesTotalLoans Individually Evaluated for Credit LossesLoans 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 estate290 14,419 14,709 7,629 2,391,069 2,398,698 
Non-owner occupied commercial real estate257 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 estate1,000 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 estate376 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 estate63 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 
Financing Receivable, Loan Modification
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, 2023Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm 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 estate1,354 0.16 — — 
Residential real estate— — — — 
Total$2,765 0.02 %$— — %

For the Six Months Ended June 23, 2023Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm 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 construction1,477 0.15 — — 
Agricultural and agricultural real estate1,354 0.16 — — 
Residential real estate752 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 TypeWeighted Average
Term Extension
(months)
Weighted Average Term Extension
and Interest Only Payments
(months)
Commercial and industrial90
Owner occupied commercial real estate012
Real estate construction60
Agricultural and agricultural real estate90
Residential real estate120
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 DueCurrentNonaccrual
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 
Schedule of Financing Receivable Credit Quality Indicators
The following table summarizes, in thousands, the carrying amount of HTLF's held to maturity debt securities by investment rating as of June 30, 2023, and December 31, 2022, which are updated quarterly and used to monitor the credit quality of the securities:
June 30, 2023December 31, 2022
Rating
AAA$83,190 $79,598 
AA, AA+, AA-588,448 588,354 
A+, A, A-138,122 136,624 
BBB20,618 20,623 
Not Rated4,295 4,204 
Total $834,673 $829,403 
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, 2023Amortized Cost Basis of Term Loans by Year of Origination
202320222021202020192018 and PriorRevolvingTotal
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— — — — — — 
Substandard— — 120 — — — — 120 
PPP total $— $— $4,070 $69 $— $— $— $4,139 
PPP charge-offs$— $— $— $— $— $— $— $— 
Owner occupied commercial real estate
As of June 30, 2023Amortized Cost Basis of Term Loans by Year of Origination
202320222021202020192018 and PriorRevolvingTotal
Pass$223,815 $500,240 $768,837 $228,536 $246,327 $242,129 $40,683 $2,250,567 
Watch19,888 15,187 15,238 4,013 8,418 11,065 321 74,130 
Substandard23,518 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 $2,398,698 
Owner occupied commercial real estate charge-offs$— $— $— $$— $14 $— $19 
Non-owner occupied commercial real estate
Pass$282,886 $742,328 $518,555 $219,439 $245,083 $302,523 $63,131 $2,373,945 
Watch— 4,448 1,355 3,222 27,118 40,103 — 76,246 
Substandard— 6,873 3,757 942 26,916 42,057 — 80,545 
Non-owner occupied commercial real estate total$282,886 $753,649 $523,667 $223,603 $299,117 $384,683 $63,131 $2,530,736 
Non-owner occupied commercial real estate charge-offs$— $— $— $29 $— $— $— $29 
Real estate construction
Pass$114,193 $557,657 $262,600 $41,632 $12,094 $4,591 $7,906 $1,000,673 
Watch — 6,546 — 76 — 102 — 6,724 
Substandard406 4,239 665 340 17 70 — 5,737 
Real estate construction total$114,599 $568,442 $263,265 $42,048 $12,111 $4,763 $7,906 $1,013,134 
Real estate construction charge-offs$— $— $— $— $— $— $— $— 
Agricultural and agricultural real estate
Pass$109,375 $233,885 $120,638 $69,406 $30,000 $51,715 $187,766 $802,785 
Watch780 240 750 2,901 418 607 764 6,460 
Substandard1,366 9,832 3,374 54 911 14,117 918 30,572 
Agricultural and agricultural real estate total$111,521 $243,957 $124,762 $72,361 $31,329 $66,439 $189,448 $839,817 
Agricultural and agricultural real estate charge-offs$— $— $— $— $— $— $5,309 $5,309 
Residential real estate
Pass$41,579 $189,390 $256,355 $80,165 $44,278 $177,741 $19,838 $809,346 
Watch— 2,045 3,006 48 1,441 4,632 34 11,206 
Substandard799 203 1,512 827 219 3,926 399 7,885 
Residential real estate total $42,378 $191,638 $260,873 $81,040 $45,938 $186,299 $20,271 $828,437 
Residential real estate charge-offs$— $59 $— $— $— $— $— $59 
Consumer
Pass$30,129 $70,624 $41,217 $9,952 $4,700 $15,735 $332,789 $505,146 
Watch625 69 829 35 44 801 1,491 3,894 
Substandard264 222 95 185 1,938 581 3,293 
Consumer total$30,762 $70,957 $42,268 $10,082 $4,929 $18,474 $334,861 $512,333 
Consumer charge-offs$— $87 $71 $23 $18 $$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 Watch26,793 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, 2022Amortized Cost Basis of Term Loans by Year of Origination
202220212020201920182017 and PriorRevolvingTotal
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— — — — — — 
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 
Watch22,079 3,410 12,346 8,520 3,645 11,899 — 61,899 
Substandard2,971 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 
Watch8,131 792 2,849 38,218 38,510 16,180 547 105,227 
Substandard202 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 
Substandard2,587 356 173 446 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 
Watch3,795 515 3,865 641 444 672 902 10,834 
Substandard8,674 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 
Watch706 1,095 88 957 2,296 2,237 399 7,778 
Substandard28 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 
Watch20 191 35 119 74 1,584 953 2,976 
Substandard188 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 Watch48,034 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 
Past Due Financing Receivables
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
CurrentNonaccrualTotal Loans
June 30, 2023
Commercial and industrial$6,646 $1,202 $517 $8,365 $3,561,379 $20,936 $3,590,680 
PPP19 — 109 128 4,011 — 4,139 
Owner occupied commercial real estate137 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 construction36 — — 36 1,010,274 2,824 1,013,134 
Agricultural and agricultural real estate108 360 469 829,814 9,534 839,817 
Residential real estate673 321 780 1,774 821,925 4,738 828,437 
Consumer1,499 371 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 estate12 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 construction16 28 — 44 1,073,687 2,351 1,076,082 
Agricultural and agricultural real estate48 — 142 190 914,088 6,232 920,510 
Residential real estate1,206 152 — 1,358 846,739 5,264 853,361 
Consumer1,526 196 — 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