Under its 2020 Long-Term Incentive Plan (the "Plan"), HTLF's Compensation and Human Capital Committee, (the "Compensation Committee"), may grant non-qualified and incentive stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units and cash incentive awards. The Plan authorized 1,460,000 shares of common stock for issuance, of which 474,721 shares of common stock were available as of March 31, 2024, for issuance of future awards to employees and directors of, and service providers to, HTLF or its subsidiaries.

The cost of each award is based upon its fair value estimated on the date of grant and recognized in the consolidated statements of income over the vesting period of the award. The fair market value of restricted stock and restricted stock units is based on the fair value of the underlying shares of common stock on the date of grant. Forfeitures are accounted for as they occur.

HTLF's income tax expense included $418,000 of tax expense during the three months ended March 31, 2024, and a tax benefit of $46,000 during the three months ended March 31, 2023, related to the exercise, vesting and forfeiture of equity-based awards.

The Plan permits the Compensation Committee to grant restricted stock units ("RSUs"). The time-based RSUs are generally granted in the first quarter of each year and represent the right, without payment, to receive shares of HTLF common stock on a specified date in the future. Generally, the time-based RSUs vest over three years in equal installments in March of each of the three years following the year of the grant.

The Compensation Committee has also granted three-year performance-based RSUs, generally in the first quarter of each year. These performance-based RSUs will be earned based on satisfaction of performance targets for the three-year performance period as defined in the RSU agreement. These performance-based RSUs or a portion thereof vest after measurement of performance in relation to the performance targets.

The time-based RSUs also vest upon death, disability, a "qualified retirement" (as defined in the RSU agreement), or upon certain terminations of employment following a change in control, and the three-year performance-based RSUs may also vest to the extent that they are earned upon those same conditions.

All of HTLF's RSUs will be settled in common stock upon vesting. Most RSUs granted after March 2023 accrue dividend equivalents, which are paid in cash without interest only upon vesting. Dividend equivalents with respect to RSUs forfeited are also forfeited. RSUs granted prior to March 2023 are not entitled to dividend equivalents.

A summary of the RSUs outstanding as of March 31, 2024, and March 31, 2023, and changes during the three months ended March 31, 2024 and 2023, follows:


	2024			2023
	Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at January 1,	466,105	$	47.22	424,086	$	46.15
Granted	307,374	33.09		198,562	50.75
Vested	(130,524)	50.28		(125,870)	42.15
Forfeited	(32,624)	51.68		(21,338)	42.40
Outstanding at March 31,	610,331	$	39.21	475,440	$	49.30

Total compensation costs recorded for RSUs were $3.6 million and $4.3 million during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there were $14.6 million of total unrecognized compensation costs related to the Plan for RSUs that are expected to be recognized through 2027.

The Plan provides the Compensation Committee the authority to grant stock options. During the year ended December 31, 2022, 64,518 options were granted, and the fair value of the options granted was determined using the Black-Scholes valuation model. The options granted generally vest over the first four years in equal installments on the anniversary date of the grant. The options may also vest upon death, disability, upon a change in control or upon a "qualified retirement" as defined in the stock option agreement.

The exercise price of the stock options was established by the Compensation Committee, but the exercise price may not be less than the fair market value of the shares on the date the options are granted.

A summary of the status of stock options as of March 31, 2024, and March 31, 2023, and changes during the three months ended March 31, 2024 and 2023, follows:


	2024			2023
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding January 1,	58,066	$	48.79	64,518	$	48.79
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited	(5,161)	48.79		(3,226)	48.79
Outstanding at March 31,	52,905	48.79		61,292	48.79
Options exercisable at March 31,	13,224	$	48.79	—	$	—