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LOANS
 6 Months Ended
Jun. 30, 2024
Receivables [Abstract]  
LOANS LOANS
Loans as of June 30, 2024, and December 31, 2023, were as follows, in thousands:
June 30, 2024December 31, 2023
Loans receivable held to maturity:  
Commercial and industrial$3,541,239 $3,652,047 
Paycheck Protection Program ("PPP")1,864 2,777 
Owner occupied commercial real estate2,555,964 2,638,175 
Non-owner occupied commercial real estate2,434,258 2,553,711 
Real estate construction1,082,726 1,011,716 
Agricultural and agricultural real estate802,958 919,184 
Residential real estate733,401 797,829 
Consumer455,899 493,206 
Total loans receivable held to maturity11,608,309 12,068,645 
Allowance for credit losses(126,861)(122,566)
Loans receivable, net$11,481,448 $11,946,079 

As of June 30, 2024, and December 31, 2023, HTLF had $64.4 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 June 30, 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
June 30, 2024
Commercial and industrial$22,729 $22,071 $44,800 $42,667 $3,498,572 $3,541,239 
PPP — — — — 1,864 1,864 
Owner occupied commercial real estate3 14,711 14,714 12,582 2,543,382 2,555,964 
Non-owner occupied commercial real estate— 13,697 13,697 — 2,434,258 2,434,258 
Real estate construction22 32,188 32,210 697 1,082,029 1,082,726 
Agricultural and agricultural real estate6,773 2,132 8,905 31,484 771,474 802,958 
Residential real estate— 5,036 5,036 727 732,674 733,401 
Consumer— 7,499 7,499 — 455,899 455,899 
Total$29,527 $97,334 $126,861 $88,157 $11,520,152 $11,608,309 
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 June 30, 2024 and June 30, 2023, of the loans modified during the three and six months ended June 30, 2024 and June 30, 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 Term Extension and Interest Rate Reduction
For the Three Months Ended June 30, 2024Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category
Non-owner occupied commercial real estate$614 0.03 %$— — %$— — %
Real estate construction— — — — 3,116 0.29 
Residential real estate1,348 0.18 — — — — 
Consumer169 0.04 — — — — 
Total$2,131 0.02 %$— — %$3,116 0.03 %

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm Extension and Interest Only PaymentsTerm Extension and Interest Rate Reduction
For the Three Months Ended June 30, 2023Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category
Commercial$1,411 0.04 %$— — %$— — %
Agricultural and agricultural real estate1,354 0.16 — — — — 
Total$2,765 0.02 %$— — %$— — %
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm Extension and
Interest Only Payments		Term Extension and Interest Rate Reduction
For the Six Months Ended June 30, 2024Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category		Amortized
Cost Basis		% of Loan
Category
Commercial$266 0.01 %$— — %$— — %
Non-owner occupied commercial real estate614 0.03 — 0— — — 
Real estate construction739 0.07 — — 3,116 0.29 
Residential real estate1,348 0.18 — — — — 
Consumer169 0.04 — — 
Total$3,136 0.03 %$— — %$3,116 0.03 %
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Term ExtensionTerm Extension and
Interest Only Payments		Term Extension and Interest Rate Reduction
For the Six Months Ended June 30, 2023Amortized
Cost Basis		% of Loan
Category		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 tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty in the six months ending June 30, 2024 and June 30, 2023.
For the Six Months Ended June 30, 2024Weighted Average
Term Extension
(months)		Weighted Average
Term Extension and Interest Only Payments (months)		Weighted Average Term Extension and Interest Rate Reduction (months)
Commercial and industrial600
Non-owner occupied commercial real estate4025
Real estate construction400
Residential real estate200
Consumer8600
For the Six Months Ended June 30, 2023Weighted Average
Term Extension
(months)		Weighted Average
Term Extension and Interest Only Payments (months)		Weighted Average Term Extension and Interest Rate Reduction (months)
Commercial and industrial900
Owner occupied commercial real estate0120
Real estate construction600
Agricultural and agricultural real estate900
Residential real estate1200

At June 30, 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 and six months ended June 30, 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 six months ended June 30, 2024 and 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, 2024
Commercial and industrial$— $— $— $— $267 $— 
Non-owner occupied commercial real estate— — — — 614 — 
Real estate construction— — — — 3,855 — 
Residential real estate— — — — 1,347 — 
Consumer— — — — — 169 
Total$— $— $— $— $6,083 $169 
Accruing Loans
30-59
Days
Past Due		60-89
Days
Past Due		90 Days or
More
Past Due		Total Past DueCurrentNonaccrual
June 30, 2023
Commercial and industrial$— $— $— $— $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 
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 June 30, 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 June 30, 2024, in thousands:
As of June 30, 2024Amortized Cost Basis of Term Loans by Year of Origination
202420232022202120202019 and PriorRevolvingTotal
Commercial and industrial
Pass$295,000 $512,146 $618,107 $261,964 $154,860 $358,689 $1,068,196 $3,268,962 
Watch 13,856 28,148 32,584 18,695 833 8,763 81,055 183,934 
Substandard 312 6,131 16,329 1,723 3,751 9,041 51,056 88,343 
Commercial and industrial total$309,168 $546,425 $667,020 $282,382 $159,444 $376,493 $1,200,307 $3,541,239 
Commercial and industrial charge-offs$— $8 $1,127 $784 $3,283 $30 $2,979 $8,211 
PPP
Pass$— $— $— $1,610 $31 $— $— $1,641 
Watch— — — 223 — — — 223 
Substandard— — — — — — — — 
PPP total $— $— $— $1,833 $31 $— $— $1,864 
PPP charge-offs$— $— $— $— $— $— $— $— 
Owner occupied commercial real estate
Pass$110,750 $425,238 $510,666 $711,407 $200,668 $368,105 $42,998 $2,369,832 
Watch2,788 4,983 36,793 11,004 2,920 39,109 — 97,597 
Substandard— 23,401 32,536 4,913 20,499 7,186 — 88,535 
Owner occupied commercial real estate total$113,538 $453,622 $579,995 $727,324 $224,087 $414,400 $42,998 $2,555,964 
Owner occupied commercial real estate charge-offs$— $— $87 $— $248 $62 $— $397 
Non-owner occupied commercial real estate
Pass$75,332 $423,879 $648,769 $401,764 $181,074 $434,109 $16,812 $2,181,739 
Watch3,943 67,195 44,057 4,601 4,097 67,735 — 191,628 
Substandard— — 135 8,538 — 52,218 — 60,891 
Non-owner occupied commercial real estate total$79,275 $491,074 $692,961 $414,903 $185,171 $554,062 $16,812 $2,434,258 
Non-owner occupied commercial real estate charge-offs$— $— $— $— $— $— $— $— 
As of June 30, 2024Amortized Cost Basis of Term Loans by Year of Origination
202420232022202120202019 and PriorRevolvingTotal
Real estate construction
Pass$64,091 $323,350 $404,646 $104,823 $7,544 $10,269 $7,324 $922,047 
Watch — 917 20,576 44,063 71 24,656 — 90,283 
Substandard3,116 9,375 57,650 88 — 81 86 70,396 
Real estate construction total$67,207 $333,642 $482,872 $148,974 $7,615 $35,006 $7,410 $1,082,726 
Real estate construction charge-offs$— $— $— $— $— $— $— $— 
Agricultural and agricultural real estate
Pass$50,760 $113,573 $178,283 $98,886 $49,712 $58,360 $204,938 $754,512 
Watch755 3,095 1,291 420 152 73 6,648 12,434 
Substandard526 181 19,399 2,040 1,582 12,284 — 36,012 
Agricultural and agricultural real estate total$52,041 $116,849 $198,973 $101,346 $51,446 $70,717 $211,586 $802,958 
Agricultural and agricultural real estate charge-offs$— $— $52 $— $8 $167 $648 $875 
Residential real estate
Pass$26,824 $61,048 $155,494 $214,982 $64,465 $173,439 $19,687 $715,939 
Watch2 534 998 1,452 1,829 3,537 250 8,602 
Substandard— 727 140 3,222 366 4,405 — 8,860 
Residential real estate total $26,826 $62,309 $156,632 $219,656 $66,660 $181,381 $19,937 $733,401 
Residential real estate charge-offs$— $— $— $— $— $— $— $— 
Consumer
Pass$18,993 $36,800 $50,951 $29,240 $3,133 $6,709 $301,963 $447,789 
Watch49 901 94 203 17 802 2,546 4,612 
Substandard334 51 317 372 108 1,377 939 3,498 
Consumer total$19,376 $37,752 $51,362 $29,815 $3,258 $8,888 $305,448 $455,899 
Consumer charge-offs$10 $51 $92 $62 $13 $49 $1,721 $1,998 
Total Pass$641,750 $1,896,034 $2,566,916 $1,824,676 $661,487 $1,409,680 $1,661,918 $10,662,461 
Total Watch21,393 105,773 136,393 80,661 9,919 144,675 90,499 589,313 
Total Substandard 4,288 39,866 126,506 20,896 26,306 86,592 52,081 356,535 
Total Loans$667,431 $2,041,673 $2,829,815 $1,926,233 $697,712 $1,640,947 $1,804,498 $11,608,309 
Total charge-offs$10 $59 $1,358 $846 $3,552 $308 $5,348 $11,481 

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-offs$245 $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 $— $— $— $2,777 
PPP charge-offs$— $— $— $— $— $— $— $— 
As of December 31, 2023Amortized Cost Basis of Term Loans by Year of Origination
202320222021202020192018 and PriorRevolvingTotal
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 
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-offs$284 $— $— $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-offs$2 $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 June 30, 2024, and December 31, 2023, were $223,000 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 June 30, 2024, HTLF had $1.1 million 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 June 30, 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
June 30, 2024
Commercial and industrial$7,061 $2,470 $251 $9,782 $3,483,319 $48,138 $3,541,239 
PPP— — — — 1,864 — 1,864 
Owner occupied commercial real estate3,471 73 — 3,544 2,539,381 13,039 2,555,964 
Non-owner occupied commercial real estate— — — — 2,434,123 135 2,434,258 
Real estate construction9,519 1,863 — 11,382 1,070,480 864 1,082,726 
Agricultural and agricultural real estate245 18 349 612 768,281 34,065 802,958 
Residential real estate1,321 205 — 1,526 726,372 5,503 733,401 
Consumer2,266 230 63 2,559 451,961 1,379 455,899 
Total loans receivable held to maturity$23,883 $4,859 $663 $29,405 $11,475,781 $103,123 $11,608,309 
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 0.25% at June 30, 2024, compared to 0.09% at December 31, 2023.

HTLF recognized $0 of interest income on nonaccrual loans during the three and six months ended June 30, 2024 and June 30, 2023. As of June 30, 2024, and December 31, 2023, HTLF had $28.1 million and $52.5 million of nonaccrual loans with no related allowance, respectively.