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SECURITIES
 9 Months Ended
Sep. 30, 2021
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, 2021, and December 31, 2020, are summarized in the table below, in thousands:
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
September 30, 2021    
U.S. treasuries$997 $16 $— $1,013 
U.S. agencies35,453 208 (628)35,033 
Obligations of states and political subdivisions1,790,972 53,601 (21,108)1,823,465 
Mortgage-backed securities - agency2,387,792 17,104 (33,632)2,371,264 
Mortgage-backed securities - non-agency1,619,636 9,760 (1,493)1,627,903 
Commercial mortgage-backed securities - agency128,609 2,021 (2,769)127,861 
Commercial mortgage-backed securities - non-agency560,445 1,612 (390)561,667 
Asset-backed securities868,215 10,570 (1,139)877,646 
Corporate bonds3,234 63 (3)3,294 
Total debt securities7,395,353 94,955 (61,162)7,429,146 
Equity securities with a readily determinable fair value20,790 — — 20,790 
Total$7,416,143 $94,955 $(61,162)$7,449,936 
December 31, 2020
U.S. treasuries$1,995 $31 $— $2,026 
U.S. agencies167,048 657 (926)166,779 
Obligations of states and political subdivisions1,562,631 75,555 (2,959)1,635,227 
Mortgage-backed securities - agency1,351,964 16,029 (12,723)1,355,270 
Mortgage-backed securities - non-agency1,428,068 22,688 (1,640)1,449,116 
Commercial mortgage-backed securities - agency171,451 3,440 (738)174,153 
Commercial mortgage-backed securities - non-agency253,421 37 (691)252,767 
Asset-backed securities1,064,255 9,421 (4,410)1,069,266 
Corporate bonds3,763 8 (29)3,742 
Total debt securities6,004,596 127,866 (24,116)6,108,346 
Equity securities with a readily determinable fair value19,629 — — 19,629 
Total$6,024,225 $127,866 $(24,116)$6,127,975 

The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of September 30, 2021, and December 31, 2020, 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, 2021    
Obligations of states and political subdivisions$85,354 $9,656 $— $95,010 $— 
Total$85,354 $9,656 $— $95,010 $— 
December 31, 2020
Obligations of states and political subdivisions$88,890 $11,151 $— $100,041 $(51)
Total$88,890 $11,151 $— $100,041 $(51)

As of September 30, 2021, and December 31, 2020, HTLF had $25.3 million and $20.8 million, respectively, of accrued interest receivable, which is included in other assets on the consolidated balance sheet. 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, 2021, 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, 2021
Amortized CostEstimated Fair Value
Due in 1 year or less$12,487 $12,527 
Due in 1 to 5 years19,354 20,278 
Due in 5 to 10 years238,253 241,971 
Due after 10 years1,560,562 1,588,029 
Total debt securities1,830,656 1,862,805 
Mortgage and asset-backed securities5,564,697 5,566,341 
Equity securities with a readily determinable fair value 20,790 20,790 
Total investment securities$7,416,143 $7,449,936 

The amortized cost and estimated fair value of debt securities held to maturity at September 30, 2021, 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, 2021
Amortized CostEstimated Fair Value
Due in 1 year or less$2,547 $2,553 
Due in 1 to 5 years42,225 44,163 
Due in 5 to 10 years34,046 39,188 
Due after 10 years6,536 9,106 
Total debt securities85,354 95,010 

As of September 30, 2021, and December 31, 2020, securities with a carrying value of $1.88 billion and $2.12 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, 2021 and 2020, are summarized as follows, in thousands:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2021202020212020
Proceeds from sales$169,108 $306,383 $799,588 $818,022 
Gross security gains1,591 1,825 5,880 8,687 
Gross security losses56 726 1,533 3,924 

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, 2021, and December 31, 2020. 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, 2020, and December 31, 2019, respectively.
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, 2021
U.S. agencies$18,861 $(628)1 $— $— — $18,861 $(628)1 
Obligations of states and political subdivisions740,885 (18,939)131 47,453 (2,169)13 788,338 (21,108)144 
Mortgage-backed securities - agency1,413,527 (21,898)58 336,528 (11,734)15 1,750,055 (33,632)73 
Mortgage-backed securities - non-agency468,119 (1,241)12 48,728 (252)5 516,847 (1,493)17 
Commercial mortgage-backed securities - agency80,595 (2,769)14 — — — 80,595 (2,769)14 
Commercial mortgage-backed securities - non-agency76,559 (218)1 14,944 (172)2 91,503 (390)3 
Asset-backed securities127,455 (943)10 21,692 (196)8 149,147 (1,139)18 
Corporate bonds497 (3)1 — — — 497 (3)1 
Total temporarily impaired securities$2,926,498 $(46,639)228 $469,345 $(14,523)43 $3,395,843 $(61,162)271 
December 31, 2020
U.S. agencies$2,981 $(8)5 $99,922 $(918)72 $102,903 $(926)77 
Obligations of states and political subdivisions346,598 (2,959)49 — — — 346,598 (2,959)49 
Mortgage-backed securities - agency653,793 (12,342)35 31,012 (381)3 684,805 (12,723)38 
Mortgage-backed securities - non-agency378,843 (1,639)17 1,622 (1)1 380,465 (1,640)18 
Commercial mortgage-backed securities - agency46,541 (738)6 — — — 46,541 (738)6 
Commercial mortgage-backed securities - non-agency100,042 (15)2 35,428 (676)3 135,470 (691)5 
Asset-backed securities141,824 (643)9 340,452 (3,767)24 482,276 (4,410)33 
Corporate bonds1,908 (29)4 — — — 1,908 (29)4 
Total temporarily impaired securities$1,672,530 $(18,373)127 $508,436 $(5,743)103 $2,180,966 $(24,116)230 
HTLF had no securities held to maturity with unrealized losses at September 30, 2021, or December 31, 2020.

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 remaining unrealized losses on HTLF's 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, 2021 and 2020.

The unrealized losses on HTLF's obligations of states and political subdivisions 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, 2021 and 2020.

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, 2021 and 2020:
Three Months Ended
September 30,
20212020
Beginning balance$51 $62 
Provision (benefit) for credit losses(51)(1)
Balance at period end$— $61 
Nine Months Ended
September 30,
20212020
Beginning balance$51 $— 
Impact of ASU 2016-13 adoption on January 1,— 158 
Adjusted balance at January 1,51 158 
Provision (benefit) for credit losses(51)(97)
Balance at period end$— $61 

Based on HTLF's credit loss model applicable to held to maturity debt securities, no allowance for credit losses was required at September 30, 2021 compared to $51,000 at December 31, 2020.

The following table summarizes, in thousands, the carrying amount of HTLF's held to maturity debt securities by investment rating as of September 30, 2021 and December 31, 2020, which are updated quarterly and used to monitor the credit quality of the securities:
September 30, 2021December 31, 2020
Rating
AAA$3,236 $— 
AA, AA+, AA-61,793 64,385 
A+, A, A-14,933 18,353 
BBB4,914 4,208 
Not Rated478 1,944 
Total $85,354 $88,890 

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 $21.9 million at September 30, 2021 and $19.5 million at December 31, 2020.

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, 2021, did not consider the investments to be impaired.