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LOANS
 3 Months Ended
Mar. 31, 2024
Receivables [Abstract]  
LOANS LOANS
Loans as of March 31, 2024, and December 31, 2023, were as follows, in thousands:
March 31, 2024December 31, 2023
Loans receivable held to maturity:  
Commercial and industrial$3,545,051 $3,652,047 
Paycheck Protection Program ("PPP")2,172 2,777 
Owner occupied commercial real estate2,545,033 2,638,175 
Non-owner occupied commercial real estate2,495,068 2,553,711 
Real estate construction1,041,583 1,011,716 
Agricultural and agricultural real estate809,876 919,184 
Residential real estate756,021 797,829 
Consumer449,837 493,206 
Total loans receivable held to maturity11,644,641 12,068,645 
Allowance for credit losses(123,934)(122,566)
Loans receivable, net$11,520,707 $11,946,079 

As of March 31, 2024, and December 31, 2023, HTLF had $66.4 million and $65.4 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 allowance for credit losses calculation.

The following table shows the balance in the allowance for credit losses at March 31, 2024, and December 31, 2023, 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
March 31, 2024
Commercial and industrial$20,555 $20,550 $41,105 $42,847 $3,502,204 $3,545,051 
PPP — — — — 2,172 2,172 
Owner occupied commercial real estate— 14,395 14,395 30,089 2,514,944 2,545,033 
Non-owner occupied commercial real estate— 15,770 15,770 — 2,495,068 2,495,068 
Real estate construction56 34,869 34,925 697 1,040,886 1,041,583 
Agricultural and agricultural real estate2,479 2,629 5,108 7,143 802,733 809,876 
Residential real estate— 5,155 5,155 727 755,294 756,021 
Consumer— 7,476 7,476 — 449,837 449,837 
Total$23,090 $100,844 $123,934 $81,503 $11,563,138 $11,644,641 
December 31, 2023
Commercial and industrial$18,425 $22,254 $40,679 $41,847 $3,610,200 $3,652,047 
PPP— — — — 2,777 2,777 
Owner occupied commercial real estate— 17,156 17,156 30,400 2,607,775 2,638,175 
Non-owner occupied commercial real estate— 17,249 17,249 — 2,553,711 2,553,711 
Real estate construction56 28,717 28,773 697 1,011,019 1,011,716 
Agricultural and agricultural real estate1,932 2,360 4,292 6,700 912,484 919,184 
Residential real estate— 5,845 5,845 741 797,088 797,829 
Consumer— 8,572 8,572 — 493,206 493,206 
Total$20,413 $102,153 $122,566 $80,385 $11,988,260 $12,068,645 
The following tables show the amortized cost basis as of March 31, 2024 and March 31, 2023, of the loans modified during the three months ended March 31, 2024 and March 31, 2023, to borrowers experiencing financial difficulty by loan category and type of concession granted, dollars in thousands.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm Extension and Interest Only Payments
For the Three Months Ended March 31, 2024Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category
Commercial and industrial$267 0.01 %$— — %
Real estate construction739 0.07 — — 
Total$1,006 0.01 %$— — %

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm Extension and Interest Only Payments
For the Three Months Ended March 31, 2023Amortized
Cost
Basis		% of
Loan
Category		Amortized
Cost
Basis		% of
Loan
Category
Commercial$3,682 0.11 %$— — %
Owner occupied commercial real estate— — 5,043 0.22 
Real estate construction1,498 0.06 — — 
Residential real estate762 0.01 — — 
Total$5,942 0.05 %$5,043 0.22 %
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty in the three months ending March 31, 2024 and March 31, 2023.
For the Three Months Ended March 31, 2024Weighted Average
Term Extension
(months)		Weighted Average Term Extension
and Interest Only Payments
(months)
Commercial and industrial60
Real estate construction40
For the Three Months Ended March 31, 2023Weighted Average
Term Extension
(months)		Weighted Average Term Extension
and Interest Only Payments
(months)
Commercial and industrial100
Owner occupied commercial real estate012
Real estate construction60
Residential real estate120

At March 31, 2024, there were no 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 ended March 31, 2024, 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 tables show the performance of loans that have been modified in the three months ended March 31, 2024 and March 31, 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
March 31, 2024
Commercial and industrial$— $— $— $— $267 $— 
Real estate construction— — — — 739 — 
Total$— $— $— $— $1,006 $— 
Accruing Loans
30-59
Days
Past Due		60-89
Days
Past Due		90 Days or
More
Past Due		Total Past DueCurrentNonaccrual
March 31, 2023
Commercial and industrial$— $— $— $— $3,682 $— 
Owner occupied commercial real estate— — — — 5,043 — 
Real estate construction— — — — — 1,498 
Residential real estate— — — — — 762 
Total$— $— $— $— $8,725 $2,260 
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 consists of 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, insufficient 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 these loans 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, capital, and the 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 March 31, 2024, and December 31, 2023.

The following table shows the risk category of loans by loan category, year of origination and charge-offs as of March 31, 2024, in thousands:
As of March 31, 2024Amortized Cost Basis of Term Loans by Year of Origination
202420232022202120202019 and PriorRevolvingTotal
Commercial and industrial
Pass$85,028 $592,529 $710,480 $286,818 $163,724 $374,702 $1,122,778 $3,336,059 
Watch 13,514 20,205 16,882 12,357 1,657 3,862 31,468 99,945 
Substandard 267 18,289 20,161 3,011 5,439 11,091 50,789 109,047 
Commercial and industrial total$98,809 $631,023 $747,523 $302,186 $170,820 $389,655 $1,205,035 $3,545,051 
Commercial and industrial charge-offs$— $8 $766 $50 $511 $26 $936 $2,297 
As of March 31, 2024Amortized Cost Basis of Term Loans by Year of Origination
202420232022202120202019 and PriorRevolvingTotal
PPP
Pass$— $— $— $1,877 $41 $— $— $1,918 
Watch— — — 254 — — — 254 
Substandard— — — — — — — — 
PPP total $— $— $— $2,131 $41 $— $— $2,172 
PPP charge-offs$— $— $— $— $— $— $— $— 
Owner occupied commercial real estate
Pass$83,691 $406,814 $532,653 $728,430 $209,476 $413,348 $43,734 $2,418,146 
Watch— 3,924 30,954 8,071 3,802 12,888 — 59,639 
Substandard— 23,469 13,465 2,256 20,279 7,779 — 67,248 
Owner occupied commercial real estate total$83,691 $434,207 $577,072 $738,757 $233,557 $434,015 $43,734 $2,545,033 
Owner occupied commercial real estate charge-offs$— $— $— $— $— $— $— $— 
Non-owner occupied commercial real estate
Pass$14,376 $459,002 $661,486 $423,897 $184,310 $465,008 $16,824 $2,224,903 
Watch4,917 66,454 34,504 4,320 3,987 91,904 5,122 211,208 
Substandard— 5,043 — 8,648 — 45,266 — 58,957 
Non-owner occupied commercial real estate total$19,293 $530,499 $695,990 $436,865 $188,297 $602,178 $21,946 $2,495,068 
Non-owner occupied commercial real estate charge-offs$— $— $— $— $— $— $— $— 
Real estate construction
Pass$12,901 $308,707 $410,479 $121,769 $7,877 $11,397 $7,544 $880,674 
Watch — 708 70,775 51,157 107 — — 122,747 
Substandard— 9,006 28,989 — — 81 86 38,162 
Real estate construction total$12,901 $318,421 $510,243 $172,926 $7,984 $11,478 $7,630 $1,041,583 
Real estate construction charge-offs$— $— $— $— $— $— $— $— 
Agricultural and agricultural real estate
Pass$17,192 $121,110 $182,587 $103,742 $54,124 $62,884 $220,613 $762,252 
Watch340 3,738 1,546 744 723 49 2,444 9,584 
Substandard— 160 22,825 1,506 4 12,698 847 38,040 
Agricultural and agricultural real estate total$17,532 $125,008 $206,958 $105,992 $54,851 $75,631 $223,904 $809,876 
Agricultural and agricultural real estate charge-offs$— $— $— $— $— $167 $100 $267 
Residential real estate
Pass$13,804 $65,266 $167,944 $223,447 $70,074 $183,684 $17,444 $741,663 
Watch3 176 146 935 686 3,704 252 5,902 
Substandard— 727 145 3,358 427 3,799 — 8,456 
Residential real estate total $13,807 $66,169 $168,235 $227,740 $71,187 $191,187 $17,696 $756,021 
Residential real estate charge-offs$— $— $— $— $— $— $— $— 
Consumer
Pass$8,163 $40,081 $53,661 $31,283 $4,008 $7,704 $295,533 $440,433 
Watch— 749 175 94 612 962 2,528 5,120 
Substandard191 91 202 403 1,117 1,331 949 4,284 
Consumer total$8,354 $40,921 $54,038 $31,780 $5,737 $9,997 $299,010 $449,837 
Consumer charge-offs$— $30 $76 $44 $10 $29 $1,340 $1,529 
As of March 31, 2024Amortized Cost Basis of Term Loans by Year of Origination
202420232022202120202019 and PriorRevolvingTotal
Total Pass$235,155 $1,993,509 $2,719,290 $1,921,263 $693,634 $1,518,727 $1,724,470 $10,806,048 
Total Watch18,774 95,954 154,982 77,932 11,574 113,369 41,814 514,399 
Total Substandard 458 56,785 85,787 19,182 27,266 82,045 52,671 324,194 
Total Loans$254,387 $2,146,248 $2,960,059 $2,018,377 $732,474 $1,714,141 $1,818,955 $11,644,641 
Total charge-offs$— $38 $842 $94 $521 $222 $2,376 $4,093 

The following table shows the risk category of loans by loan category and year of origination as of December 31, 2023, in thousands.
As of December 31, 2023Amortized Cost Basis of Term Loans by Year of Origination
202320222021202020192018 and PriorRevolvingTotal
Commercial and industrial
Pass$608,030 $779,218 $333,900 $187,406 $78,455 $327,775 $1,159,397 $3,474,181 
Watch 20,694 19,788 257 3,631 2,398 2,953 28,749 78,470 
Substandard 20,171 12,658 2,636 5,447 18,535 7,489 32,460 99,396 
Commercial and industrial total$648,895 $811,664 $336,793 $196,484 $99,388 $338,217 $1,220,606 $3,652,047 
Commercial and industrial charge-offs245 794 680 1,425 563 1,949 2,966 8,622 
PPP
Pass$— $— $2,591 $50 $— $— $— $2,641 
Watch— — 89 — — — — 89 
Substandard— — 47 — — — — 47 
PPP total $— $— $2,727 $50 $— $— $— $2,777 
PPP charge-offs— — — — — — — — 
Owner occupied commercial real estate
Pass$443,683 $547,898 $799,978 $225,257 $225,405 $224,608 $41,072 $2,507,901 
Watch8,052 25,947 13,114 2,662 8,115 7,553 — 65,443 
Substandard31,904 10,489 2,268 11,609 6,390 2,171 — 64,831 
Owner occupied commercial real estate total$483,639 $584,334 $815,360 $239,528 $239,910 $234,332 $41,072 $2,638,175 
Owner occupied commercial real estate charge-offs— 802 — 5 — 63 — 870 
Non-owner occupied commercial real estate
Pass$480,683 $656,824 $423,420 $203,330 $262,541 $251,499 $26,978 $2,305,275 
Watch71,400 34,651 8,237 3,834 27,345 57,083 — 202,550 
Substandard5,043 952 1,391 — 4,238 34,262 — 45,886 
Non-owner occupied commercial real estate total$557,126 $692,427 $433,048 $207,164 $294,124 $342,844 $26,978 $2,553,711 
Non-owner occupied commercial real estate charge-offs— 52 — 29 399 147 — 627 
Real estate construction
Pass$283,519 $468,646 $176,604 $9,889 $11,048 $3,405 $6,486 $959,597 
Watch 629 33,220 9,418 72 — 65 — 43,404 
Substandard— 8,522 — 107 — — 86 8,715 
As of December 31, 2023Amortized Cost Basis of Term Loans by Year of Origination
202320222021202020192018 and PriorRevolvingTotal
Real estate construction total$284,148 $510,388 $186,022 $10,068 $11,048 $3,470 $6,572 $1,011,716 
Real estate construction charge-offs284 — — 32 — — — 316 
Agricultural and agricultural real estate
Pass$152,665 $208,375 $114,798 $67,006 $28,247 $43,663 $260,941 $875,695 
Watch2,245 16,257 293 622 70 349 427 20,263 
Substandard12 7,616 1,649 4 855 12,591 499 23,226 
Agricultural and agricultural real estate total$154,922 $232,248 $116,740 $67,632 $29,172 $56,603 $261,867 $919,184 
Agricultural and agricultural real estate charge-offs— — — 9 — 1 5,309 5,319 
Residential real estate
Pass$71,470 $177,564 $241,362 $73,029 $42,526 $155,899 $19,534 $781,384 
Watch171 973 945 659 158 4,845 — 7,751 
Substandard741 150 3,400 464 290 3,649 — 8,694 
Residential real estate total $72,382 $178,687 $245,707 $74,152 $42,974 $164,393 $19,534 $797,829 
Residential real estate charge-offs— 59 124 — — — — 183 
Consumer
Pass$45,595 $62,900 $35,459 $7,731 $3,663 $6,109 $324,218 $485,675 
Watch730 84 694 21 41 644 2,060 4,274 
Substandard80 308 401 75 159 1,769 465 3,257 
Consumer total$46,405 $63,292 $36,554 $7,827 $3,863 $8,522 $326,743 $493,206 
Consumer charge-offs2 246 154 27 19 112 3,117 3,677 
Total Pass$2,085,645 $2,901,425 $2,128,112 $773,698 $651,885 $1,012,958 $1,838,626 $11,392,349 
Total Watch103,921 130,920 33,047 11,501 38,127 73,492 31,236 422,244 
Total Substandard 57,951 40,695 11,792 17,706 30,467 61,931 33,510 254,052 
Total Loans$2,247,517 $3,073,040 $2,172,951 $802,905 $720,479 $1,148,381 $1,903,372 $12,068,645 
Total charge-offs$531 $1,953 $958 $1,527 $981 $2,272 $11,392 $19,614 

Included in the nonpass loans at March 31, 2024, and December 31, 2023, were $254,000 and $136,000, 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.

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.

As of March 31, 2024, HTLF had $189,000 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 March 31, 2024, and December 31, 2023, 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
March 31, 2024
Commercial and industrial$6,540 $512 $437 $7,489 $3,490,499 $47,063 $3,545,051 
PPP— — — — 2,172 — 2,172 
Owner occupied commercial real estate1,969 74 — 2,043 2,511,873 31,117 2,545,033 
Non-owner occupied commercial real estate— — — — 2,495,068 — 2,495,068 
Real estate construction3,931 19,968 — 23,899 1,016,781 903 1,041,583 
Agricultural and agricultural real estate382 — 12 394 800,038 9,444 809,876 
Residential real estate818 53 103 974 750,166 4,881 756,021 
Consumer855 818 59 1,732 446,713 1,392 449,837 
Total loans receivable held to maturity$14,495 $21,425 $611 $36,531 $11,513,310 $94,800 $11,644,641 
December 31, 2023
Commercial and industrial$1,738 $126 $2,203 $4,067 $3,601,165 $46,815 $3,652,047 
PPP94 53 — 147 2,630 — 2,777 
Owner occupied commercial real estate205 2,664 74 2,943 2,603,640 31,592 2,638,175 
Non-owner occupied commercial real estate875 — — 875 2,552,469 367 2,553,711 
Real estate construction332 — — 332 1,010,601 783 1,011,716 
Agricultural and agricultural real estate121 — 12 133 909,841 9,210 919,184 
Residential real estate2,082 273 21 2,376 790,367 5,086 797,829 
Consumer2,257 150 197 2,604 489,029 1,573 493,206 
Total loans receivable held to maturity$7,704 $3,266 $2,507 $13,477 $11,959,742 $95,426 $12,068,645 

Loans delinquent 30 to 89 days as a percent of total loans were 0.31% at March 31, 2024, compared to 0.09% at December 31, 2023.

HTLF recognized $0 of interest income on nonaccrual loans during the three months ended March 31, 2024 and March 31, 2023. As of March 31, 2024, and December 31, 2023, HTLF had $51.1 million and $52.5 million of nonaccrual loans with no related allowance, respectively.