REGULATORY CAPITAL REQUIREMENTS AND RESTRICTIONS ON SUBSIDIARY DIVIDENDS

12 Months Ended

Dec. 31, 2022

REGULATORY CAPITAL REQUIREMENTS AND RESTRICTIONS ON SUBSIDIARY DIVIDENDS

The HTLF Banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the HTLF Banks’ financial statements. The regulations prescribe specific capital adequacy guidelines that involve quantitative measures of a bank’s assets, liabilities and certain off balance sheet items as calculated under regulatory accounting practices. Capital classification is also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the HTLF Banks to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined).

The requirements to be categorized as well-capitalized under the Tier 1 leverage capital ratio is 4% for all banks. The minimum requirement to be well-capitalized for the Tier 1 risk-based capital ratio is 8%. The total risk-based capital ratio minimum requirement to be well-capitalized remained is 10%. Management believes, as of December 31, 2022 and 2021, that the HTLF Banks met all capital adequacy requirements to which they were subject.

As of December 31, 2022 and 2021, the FDIC categorized each of the HTLF Banks as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the HTLF Banks must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 common equity and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since December 31, 2022, that management believes have changed each institution’s category.

The HTLF Banks’ actual capital amounts and ratios are also presented in the tables below, in thousands:


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2022
Total Capital (to Risk-Weighted Assets)
Consolidated	$	2,204,829	14.76	%	$	1,194,970	8.00	%	N/A
HTLF Bank	824,069		11.72		562,497		8.00		$	703,122	10.00	%
Dubuque Bank and Trust Company	184,096		13.01		113,197		8.00		141,497		10.00

Wisconsin Bank & Trust	128,490		13.12		78,336		8.00		97,920		10.00
New Mexico Bank & Trust	238,190		13.23		144,059		8.00		180,073		10.00

Rocky Mountain Bank	69,792		12.84		43,489		8.00		54,361		10.00


Bank of Blue Valley	162,131		16.07		80,689		8.00		100,861		10.00

First Bank & Trust	288,518		13.51		170,835		8.00		213,543		10.00

Tier 1 Capital (to Risk-Weighted Assets)
Consolidated	$	1,763,990	11.81	%	$	896,228	6.00	%	N/A
HTLF Bank	762,103		10.84		421,873		6.00		$	562,497	8.00	%
Dubuque Bank and Trust Company	174,684		12.35		84,898		6.00		113,197		8.00

Wisconsin Bank & Trust	119,231		12.18		58,752		6.00		78,336		8.00
New Mexico Bank & Trust	223,602		12.42		108,044		6.00		144,059		8.00

Rocky Mountain Bank	63,814		11.74		32,617		6.00		43,489		8.00


Bank of Blue Valley	155,002		15.37		60,516		6.00		80,689		8.00

First Bank & Trust	267,169		12.51		128,126		6.00		170,835		8.00


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2022
Common Equity Tier 1 (to Risk-Weighted Assets)
Consolidated	$	1,653,285	11.07	%	$	672,171	4.50	%	N/A
HTLF Bank	762,103		10.84		316,405		4.50		$	457,029	6.50	%
Dubuque Bank and Trust Company	174,684		12.35		63,674		4.50		91,973		6.50

Wisconsin Bank & Trust	119,231		12.18		44,064		4.50		63,648		6.50
New Mexico Bank & Trust	223,602		12.42		81,033		4.50		117,048		6.50

Rocky Mountain Bank	63,814		11.74		24,463		4.50		35,335		6.50


Bank of Blue Valley	155,002		15.37		45,387		4.50		65,560		6.50

First Bank & Trust	267,169		12.51		96,094		4.50		138,803		6.50
Tier 1 Capital (to Average Assets)
Consolidated	$	1,763,990	9.13	%	$	772,911	4.00	%	N/A
HTLF Bank	762,103		8.64		352,914		4.00		$	441,143	5.00	%
Dubuque Bank and Trust Company	174,684		8.08		86,473		4.00		108,091		5.00

Wisconsin Bank & Trust	119,231		9.22		51,753		4.00		64,691		5.00
New Mexico Bank & Trust	223,602		8.12		110,214		4.00		137,767		5.00

Rocky Mountain Bank	63,814		8.49		30,064		4.00		37,580		5.00


Bank of Blue Valley	155,002		10.75		57,676		4.00		72,095		5.00

First Bank & Trust	267,169		9.29		115,026		4.00		143,782		5.00


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2021
Total Capital (to Risk-Weighted Assets)
Consolidated	$	2,040,500	15.90	%	$	1,026,345	8.00	%	N/A
Dubuque Bank and Trust Company	180,934		13.07		110,758		8.00		$	138,447	10.00	%
Illinois Bank & Trust	135,986		12.88		84,466		8.00		105,583		10.00
Wisconsin Bank & Trust	124,009		14.27		69,499		8.00		86,874		10.00
New Mexico Bank & Trust	213,981		12.10		141,530		8.00		176,912		10.00
Arizona Bank & Trust	157,475		12.61		99,886		8.00		124,858		10.00
Rocky Mountain Bank	64,366		13.07		39,385		8.00		49,231		10.00
Citywide Banks	265,964		15.09		140,999		8.00		176,248		10.00
Minnesota Bank & Trust	87,263		14.79		47,194		8.00		58,993		10.00
Bank of Blue Valley	160,694		16.74		76,785		8.00		95,982		10.00
Premier Valley Bank	111,741		12.82		69,720		8.00		87,151		10.00
First Bank & Trust	282,231		15.48		145,823		8.00		182,279		10.00


	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 Capital (to Risk-Weighted Assets)
Consolidated	$	1,590,111	12.39	%	$	769,759	6.00	%	N/A
Dubuque Bank and Trust Company	168,321		12.16		83,068		6.00		$	110,758	8.00	%
Illinois Bank & Trust	126,869		12.02		63,350		6.00		84,466		8.00
Wisconsin Bank & Trust	114,825		13.22		52,124		6.00		69,499		8.00
New Mexico Bank & Trust	198,728		11.23		106,147		6.00		141,530		8.00
Arizona Bank & Trust	147,098		11.78		74,915		6.00		99,886		8.00
Rocky Mountain Bank	59,159		12.02		29,538		6.00		39,385		8.00
Citywide Banks	244,722		13.89		105,749		6.00		140,999		8.00
Minnesota Bank & Trust	81,637		13.84		35,396		6.00		47,194		8.00
Bank of Blue Valley	150,305		15.66		57,589		6.00		76,785		8.00
Premier Valley Bank	104,336		11.97		52,290		6.00		69,720		8.00
First Bank & Trust	263,096		14.43		109,367		6.00		145,823		8.00
Common Equity Tier 1 (to Risk Weighted Assets)
Consolidated	$	1,479,406	11.53	%	$	577,319	4.50	%	N/A
Dubuque Bank and Trust Company	168,321		12.16		62,301		4.50		$	89,991	6.50	%
Illinois Bank & Trust	126,869		12.02		47,512		4.50		68,629		6.50
Wisconsin Bank & Trust	114,825		13.22		39,093		4.50		56,468		6.50
New Mexico Bank & Trust	198,728		11.23		79,611		4.50		114,993		6.50
Arizona Bank & Trust	147,098		11.78		56,186		4.50		81,158		6.50
Rocky Mountain Bank	59,159		12.02		22,154		4.50		32,000		6.50
Citywide Banks	244,722		13.89		79,312		4.50		114,561		6.50
Minnesota Bank & Trust	81,637		13.84		26,547		4.50		38,346		6.50
Bank of Blue Valley	150,305		15.66		43,192		4.50		62,388		6.50
Premier Valley Bank	104,336		11.97		39,218		4.50		56,648		6.50
First Bank & Trust	263,096		11.43		82,025		4.50		118,481		6.50
Tier 1 Capital (to Average Assets)
Consolidated	$	1,590,111	8.57	%	$	742,155	4.00	%	N/A
Dubuque Bank and Trust Company	168,321		8.02		83,982		4.00		$	104,978	5.00	%
Illinois Bank & Trust	126,869		7.55		67,212		4.00		84,016		5.00
Wisconsin Bank & Trust	114,825		9.66		47,551		4.00		59,439		5.00
New Mexico Bank & Trust	198,728		7.78		102,173		4.00		127,716		5.00
Arizona Bank & Trust	147,098		7.99		73,605		4.00		92,006		5.00
Rocky Mountain Bank	59,159		8.27		28,614		4.00		35,767		5.00
Citywide Banks	244,722		9.54		102,587		4.00		128,233		5.00
Minnesota Bank & Trust	81,637		9.69		33,698		4.00		42,123		5.00
Bank of Blue Valley	150,305		10.75		55,921		4.00		69,901		5.00
Premier Valley Bank	104,336		9.22		45,256		4.00		56,570		5.00
First Bank & Trust	263,096		9.84		106,986		4.00		133,732		5.00

The ability of HTLF to pay dividends to its stockholders is dependent upon dividends paid by its subsidiaries. The HTLF banks are subject to certain statutory and regulatory restrictions on the amount they may pay in dividends. To maintain acceptable capital ratios for the Banks, certain portions of their retained earnings are not available for the payment of dividends. Retained earnings that could be available for the payment of dividends to HTLF totaled approximately $702.2 million as of December 31, 2022, under the most restrictive minimum capital requirements. Retained earnings that could be available for the payment of dividends to HTLF totaled approximately $403.9 million as of December 31, 2022, under the capital requirements to remain well capitalized.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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