8-K/A - UMBF - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 31, 2025

UMB FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

MO	001-38481	43-0903811
(State or other jurisdiction of<br> <br>incorporation or organization)	(Commission<br> <br>File No.)	(IRS Employer<br> <br>Identification No.)
1010 Grand Blvd.<br> <br>Kansas City, MO	64106
---	---
(Address of principal executive offices)	(Zip Code)

(816) 860-7000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12)
---	---
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
---	---
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
---	---

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>Symbol(s)	Name of exchange<br> <br>on which registered
Common Stock, $1.00 Par Value	UMBF	The Nasdaq Global Select Market
Depositary Shares, each representing a 1/400th interest in a share of 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A	UMBFP	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

On February 3, 2025, UMB Financial Corporation, a Missouri corporation (“UMB” or the “Company”), filed a Current Report on Form 8-K (the “Initial Form 8-K”) in connection with (a) the completion on January 31, 2025 of the previously announced merger (the “Merger”) between UMB and Heartland Financial USA, Inc., a Delaware corporation (“HTLF”), pursuant to the Agreement and Plan of Merger, dated as of April 28, 2024 (the “Merger Agreement”), by and among the Company, HTLF and Blue Sky Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company.

This Current Report on Form 8-K/A amends the Original 8-K to file the financial information required by Items 9.01(a) and 9.01(b) of Form 8-K. Such information should be read in conjunction with the Initial Form 8-K. Except as provided herein, the disclosures made in the Initial Form 8-K remain unchanged.

Item 9.01.	Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The audited consolidated balance sheets of HTLF as of December 31, 2024 and 2023, and the related audited consolidated statements of income, comprehensive income, changes in equity and cash flows for the fiscal years ended December 31, 2024 and 2023, together with the notes thereto and independent auditor’s reports thereon required by Item 9.01(a) of Form 8-K are filed as Exhibit 99.1 hereto and are incorporated herein by reference.

(b) Pro Forma Financial Information

The following unaudited pro forma combined financial information is filed as Exhibit 99.2 hereto and is incorporated herein by reference.

•	Unaudited pro forma condensed combined balance sheet as of December 31, 2024;
•	Unaudited pro forma condensed combined statement of income for the year ended December 31, 2024; and
---	---
•	Notes to the unaudited pro forma combined financial information.
---	---

The unaudited pro forma condensed combined financial information is not intended to represent or be indicative of the Company’s consolidated results of operations or financial position that would have been reported had the Merger been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operations or financial condition. The pro forma adjustments are based on available information and certain assumptions that management believes are reasonable under the circumstances.

Exhibit<br>No.	Description of Exhibits
23.1	Consent of KPMG LLP relating to Heartland Financial USA, Inc.’s financial statements.
99.1	The audited consolidated balance sheets of Heartland Financial USA, Inc. as of December 31, 2024 and 2023, and the related audited consolidated statements of income, comprehensive income, changes in equity and cash flows for the fiscal years ended December 31, 2024 and 2023, together with the notes thereto and independent auditor’s reports thereon.
99.2	The unaudited pro forma condensed combined balance sheet as of December 31, 2024, and the unaudited pro forma condensed combined statement of income for the year ended December 31, 2024, together with the notes thereto.
104	Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UMB FINANCIAL CORPORATION
Date: April 11, 2025	By:	/s/ Ram Shankar
	Name:	Ram Shankar
	Title:	Chief Financial Officer

EX-23.1

Exhibit 23.1

LOGO

KPMG LLP<br> <br>2500 Ruan Center<br><br><br>666 Grand Avenue<br> <br>Des Moines, IA 50309

Consent of Independent Auditors

We consent to the incorporation by reference in the registration statements (Nos. 333-230787 and 333-266941) on Form S-3 and (Nos. 333-65807, 333-125067, 333-161398, 333-181111, 333-188100, 333-224585, 333-283713, and 333-284660) on Form S-8 of UMB Financial Corporation of our report dated February 27, 2025, with respect to the consolidated financial statements of Heartland Financial USA, Inc., which report appears in the Current Report on Form 8-K/A of UMB Financial Corporation filed on April 11, 2025.

/s/ KPMG LLP

Des Moines, Iowa

April 11, 2025

KPMG LLP, a Delaware limited liability partnership and a member firm of<br><br><br>the KPMG global organization of independent member firms affiliated with<br><br><br>KPMG International Limited, a private English company limited by guarantee.

EX-99.1

Exhibit 99.1

HEARTLAND FINANCIAL USA, INC.

Consolidated Financial Statements

December 31, 2024 and 2023

(With Independent Auditors’ Report Thereon)

HEARTLAND FINANCIAL USA, INC.

Table of Contents

	Page(s)
Independent Auditors’ Report		3-4
Consolidated Balance Sheets		5
Consolidated Statements of Income		6
Consolidated Statements of Comprehensive Income		7
Consolidated Statements of Changes in Equity		8
Consolidated Statements of Cash Flows		9-10
Notes to the Financial Statements		11-57

LOGO

KPMG LLP<br> <br>2500 Ruan Center<br><br><br>666 Grand Avenue<br> <br>Des Moines, IA 50309

Independent Auditors’ Report

Board of Directors

UMB Financial Corporation:

Opinion

We have audited the consolidated financial statements of Heartland Financial USA, Inc. and subsidiaries (the Company), which comprise the consolidated balance sheets as of December 31, 2024 and December 31, 2023, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in accordance with U.S. generally accepted accounting principles.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, subsequent to the date of the consolidated financial statements, on January 31, 2025, UMB Financial Corporation (UMB) acquired all of the outstanding stock of the Company. At that time, the Company merged with and into UMB, with UMB continuing as the surviving corporation. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and

KPMG LLP, a Delaware limited liability partnership and a member firm of<br><br><br>the KPMG global organization of independent member firms affiliated with<br><br><br>KPMG International Limited, a private English company limited by guarantee.

LOGO

therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•	Exercise professional judgment and maintain professional skepticism throughout the audit.
•	Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to<br>fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
---	---
•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are<br>appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.
---	---
•	Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting<br>estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
---	---
•	Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise<br>substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
---	---

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ KPMG LLP

Des Moines, Iowa

February 27, 2025

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands,except per share data)

		As of December 31,
		2024			2023
ASSETS:
Cash and due from banks		$	174,686		$	275,554
Interest bearing deposits with other banks and other short-term investments			206,138			47,459
Cash and cash equivalents			380,824			323,013
Time deposits in other financial institutions			800			1,240
Securities:
Carried at fair value (cost of 3,979,633 at December 31, 2024, and cost of 5,100,344 at<br>December 31, 2023)	2		3,560,358			4,646,891
Held to maturity, net of allowance for credit losses of 0 at both December 31, 2024, and<br>December 31, 2023 (fair value of 797,324 at December 31, 2024, and 816,399 at December 31, 2023)	2		837,390			838,241
Other investments, at cost	2		67,890			91,277
Loans held for sale			—			5,071
Loans receivable:	3
Held to maturity			11,155,866			12,068,645
Allowance for credit losses	3, 4		(96,500	)		(122,566	)
Loans receivable, net			11,059,366			11,946,079
Premises, furniture and equipment, net	5		143,930			177,001
Premises, furniture and equipment held for sale			8,952			4,069
Other real estate, net			4,291			12,548
Goodwill	6		576,005			576,005
Core deposit intangibles, net	6		12,823			18,415
Servicing rights, net	6		—			—
Cash surrender value on life insurance			201,298			197,085
Other assets			436,490			574,772
TOTAL ASSETS		$	17,290,417	****	$	19,411,707	****
LIABILITIES AND EQUITY
LIABILITIES:
Deposits:	7
Demand		$	3,773,753		$	4,500,304
Savings			9,249,071			8,805,597
Time			1,613,792			2,895,813
Total deposits			14,636,616			16,201,714
Borrowings	8		73,819			622,255
Term debt	9		298,661			372,396
Accrued expenses and other liabilities			203,526			282,225
TOTAL LIABILITIES		$	15,212,622	****	****	17,478,590	****
STOCKHOLDERS’ EQUITY:	14, 15
Preferred stock (par value 1 per share; authorized 188,500 shares at both December 31, 2024<br>and December 31, 2023; none issued or outstanding at both December 31, 2024, and December 31, 2023)			—			—
Series E Fixed-Rate Reset Non-Cumulative Perpetual<br>Preferred Stock (par value 1 per share; 11,500 shares authorized at both December 31, 2024, and December 31, 2023; 11,500 shares issued and outstanding at both December 31, 2024, and December 31, 2023)			110,705			110,705
Common stock (par value 1 per share; 60,000,000 shares authorized at both December 31, 2024<br>and December 31, 2023; issued 42,901,273 shares at December 31, 2024, and 42,688,008 shares at December 31, 2023)			42,901			42,688
Capital surplus			1,102,084			1,090,740
Retained earnings			1,253,255			1,141,501
Accumulated other comprehensive loss			(431,150	)		(452,517	)
TOTAL STOCKHOLDERS’ EQUITY		****	2,077,795	****	****	1,933,117	****
TOTAL LIABILITIES AND EQUITY		$	17,290,417	****	$	19,411,707	****

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars inthousands, except per share data)

			For the Years Ended December 31,
		2024				2023				2022
INTEREST INCOME:
Interest and fees on loans	3		$	764,516			$	697,997			$	477,970
Interest on securities:
Taxable				187,877				223,521				169,544
Nontaxable				23,179				25,268				24,006
Interest on federal funds sold				—				3				11
Interest on interest bearing deposits in other financial institutions				16,136				7,007				3,125
TOTAL INTEREST INCOME			****	991,708	****		****	953,796	****		****	674,656	****
INTEREST EXPENSE:
Interest on deposits	7			327,353				319,688				56,880
Interest on borrowings				28,820				10,311				2,717
Interest on term debt (includes (705), 575, and 246 of interest (income) expense related to<br>derivatives reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022, respectively)	9, 10			22,328				22,560				16,823
TOTAL INTEREST EXPENSE			****	378,501	****		****	352,559	****		****	76,420	****
NET INTEREST INCOME			****	613,207	****		****	601,237	****		****	598,236	****
Provision for credit losses	3, 4			53,436				21,707				15,370
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			****	559,771	****		****	579,530	****		****	582,866	****
NONINTEREST INCOME:
Service charges and fees	18			67,253				74,024				68,031
Loan servicing income	6			456				1,561				2,741
Trust fees	18			21,213				20,715				22,570
Brokerage and insurance commissions	18			3,318				2,794				2,986
Capital markets fees				6,887				10,007				11,543
Securities losses, net (includes (25,298), (141,377), and (1,892) of net security losses<br>reclassified from accumulated other comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022, respectively)	2			(21,144	)			(141,539	)			(425	)
Unrealized gain (loss) on equity securities, net	2			539				240				(622	)
Net gains on sale of loans held for sale				104				3,880				9,032
Valuation adjustment on servicing rights	6			—				—				1,658
Income on bank owned life insurance				4,837				3,771				2,341
Other noninterest income				9,490				3,621				8,409
TOTAL NONINTEREST INCOME (LOSS)			****	92,953	****		****	(20,926	)		****	128,264	****
NONINTEREST EXPENSES:
Salaries and employee benefits	12, 14			253,337				251,276				254,478
Occupancy	20			25,949				26,847				28,155
Furniture and equipment	5			8,674				11,599				12,499
Professional fees				67,457				58,667				58,606
FDIC insurance assessments				14,741				19,940				7,000
Advertising				7,050				8,347				6,221
Core deposit intangibles and customer relationship intangibles amortization	6			5,591				6,739				7,834
Other real estate and loan collection expenses				1,493				1,489				950
Gain on sales/valuations of assets, net				(25,171	)			(77	)			(1,047	)
Acquisition, integration and restructuring costs				10,227				10,359				7,586
Partnership investment in tax credit projects				6,148				5,401				5,040
Other noninterest expenses				57,260				61,240				56,055
TOTAL NONINTEREST EXPENSES			****	432,756	****		****	461,827	****		****	443,377	****
INCOME BEFORE INCOME TAXES			****	219,968	****		****	96,777	****		****	267,753	****
Income taxes (includes (3,828), (43,560), and (355) of income tax benefit reclassified from<br>accumulated other comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022, respectively)	11			48,367				16,857				55,573
NET INCOME			****	171,601	****		****	79,920	****		****	212,180	****
Preferred dividends				(8,050	)			(8,050	)			(8,050	)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS			$	163,551	****		$	71,870	****		$	204,130	****
EARNINGS PER COMMON SHARE - BASIC	1		$	3.81	****		$	1.68	****		$	4.80	****
EARNINGS PER COMMON SHARE - DILUTED	1		$	3.79	****		$	1.68	****		$	4.79	****
CASH DIVIDENDS DECLARED PER COMMON SHARE			$	1.20	****		$	1.20	****		$	1.09	****

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

	For the Years Ended December 31,
	2024			2023			2022
NET INCOME	$	171,601	****	$	79,920	****	$	212,180	****
OTHER COMPREHENSIVE INCOME (LOSS)
Change in available for sale (“AFS”) securities:
Net change in unrealized gain (loss) on securities		8,880			46,755			(637,513	)
Reclassification adjustment for net losses realized in net income		25,298			141,377			1,892
Reclassification adjustment for net (gains) losses on hedged AFS securities		(20,913	)		20,913			—
Income tax (expense) benefit		(918	)		(52,096	)		158,049
Other comprehensive income (loss) on AFS securities		12,347			156,949			(477,572	)
Change in securities held to maturity
Adjustment for securities transferred from AFS		—			—			(186,286	)
Net amortization of unrealized losses on securities transferred from AFS		11,353			11,237			3,842
Income tax (expense) benefit		(1,809	)		(2,633	)		45,174
Other comprehensive income (loss) on held to maturity securities		9,544			8,604			(137,270	)
Change in cash flow hedges:
Net change in unrealized gain on derivatives		—			1,952			500
Reclassification adjustment for net (gains) losses on derivatives realized in net income		(705	)		575			246
Income tax benefit (expense)		181			(591	)		(158	)
Other comprehensive income on cash flow hedges		(524	)		1,936			588
Other comprehensive income (loss)		21,367			167,489			(614,254	)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	192,968	****	$	247,409	****	$	(402,074	)

See accompanying notes to consolidated financial statements.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Dollarsin thousands, except per share data)


		CommonStock		CapitalSurplus		RetainedEarnings			AccumulatedOtherComprehensiveIncome (Loss)			Total Equity
Balance at January 1, 2022	110,705	$	42,275	$	1,071,956	$	962,994	****	$	(5,752	)	$	2,182,178	****
Comprehensive income (loss)							212,180			(614,254	)		(402,074	)
Cash dividends declared:
Preferred, 700.00 per share							(8,050	)					(8,050	)
Common, 1.09 per share							(46,199	)					(46,199	)
Issuance of 192,130 shares of common stock			192		846								1,038
Stock-based compensation					8,162								8,162
Balance at December 31, 2022	110,705	$	42,467	$	1,080,964	$	1,120,925	****	$	(620,006	)	$	1,735,055	****
Balance at January 1, 2023	110,705	$	42,467	$	1,080,964	$	1,120,925	****	$	(620,006	)	$	1,735,055	****
Comprehensive income							79,920			167,489			247,409
Cash dividends declared:
Preferred, 700.00 per share							(8,050	)					(8,050	)
Common, 1.20 per share							(51,294	)					(51,294	)
Issuance of 220,614 shares of common stock			221		327								548
Stock-based compensation					9,449								9,449
Balance at December 31, 2023	110,705	$	42,688	$	1,090,740	$	1,141,501	****	$	(452,517	)	$	1,933,117	****
Balance at January 1, 2024	110,705	$	42,688	$	1,090,740	$	1,141,501	****	$	(452,517	)	$	1,933,117	****
Comprehensive income							171,601			21,367			192,968
Cash dividends declared:
Preferred, 700.00 per share							(8,050	)					(8,050	)
Common, 1.20 per share							(51,797	)					(51,797	)
Issuance of 213,265 shares of common stock			213		690								903
Stock-based compensation					10,654								10,654
Balance at December 31, 2024	110,705	$	42,901	$	1,102,084	$	1,253,255	****	$	(431,150	)	$	2,077,795	****

All values are in US Dollars.

See accompanying notes to consolidated financial statements.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars inthousands)

	For the Years Ended December 31,
	2024			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	171,601		$	79,920		$	212,180
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,586			20,385			24,479
Provision for credit losses		53,436			21,707			15,370
Net amortization of premium on securities		16,938			29,671			59,454
Provision (benefit) for deferred taxes		5,079			(9,196	)		(3,887	)
Securities losses, net		21,144			141,539			425
Unrealized (gain) loss on equity securities, net		(539	)		(240	)		622
Stock-based compensation		10,654			9,449			8,162
(Gain) loss on sales/valuations of assets, net		(25,171	)		(77	)		1,998
Loans originated for sale		—			(136,734	)		(284,324	)
Proceeds on sales of loans held for sale		5,175			160,705			308,294
Net gains on sales of loans held for sale		(104	)		(3,856	)		(7,607	)
Decrease (increase) in accrued interest receivable		11,511			(11,294	)		(17,530	)
Decrease (increase) in prepaid expenses		5,262			(1,183	)		(1,580	)
(Decrease) increase in accrued interest payable		(31,788	)		45,987			3,737
Capitalization of servicing rights		—			(24	)		(1,425	)
Valuation adjustment on servicing rights		—			—			(1,658	)
Net excess tax (expense) benefit from stock-based compensation		(178	)		(123	)		131
Income from fair value hedge activity		3,654			(4,021	)		—
Other, net		94,361			(62,303	)		71,167
NET CASH PROVIDED BY OPERATING ACTIVITIES	****	358,621	****	****	280,312	****	****	388,008	****
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of time deposits in other financial institutions		(100	)		—			—
Proceeds from the sale of securities available for sale		273,917			1,196,586			1,048,525
Proceeds from the sale of securities held to maturity		—			—			2,337
Proceeds from the sale, maturity of and principal paydowns on other investments		56,811			42,875			22,359
Proceeds from the maturity of and principal paydowns on securities available for sale		995,822			604,088			903,514
Proceeds from the maturity of and principal paydowns on securities held to maturity		12,406			2,427			6,082
Proceeds from the maturity of time deposits in other financial institutions		540			500			1,154
Purchase of securities available for sale		(208,240	)		(337,667	)		(2,226,881	)
Purchase of other investments		(29,270	)		(59,747	)		(12,992	)
Net decrease (increase) in loans		468,507			(661,445	)		(1,506,338	)
Purchase of bank owned life insurance policies		(324	)		(320	)		(283	)
Proceeds from bank owned life insurance policies		—			—			966
Proceeds from sale of mortgage servicing rights		—			6,714			—
Capital expenditures and investments		(3,550	)		(7,060	)		(14,804	)
Net cash expended in divestitures		(176,764	)		—			(50,616	)
Proceeds from sale of premises, furniture and equipment		3,274			9,254			10,872
Proceeds on sale of OREO and other repossessed assets		15,516			5,990			3,062
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES	****	1,408,545	****	****	802,195	****	****	(1,813,043	)

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars inthousands)

	For the Years Ended December 31,
	2024			2023			2022
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in demand deposits		(594,814	)		(1,201,036	)		(206,366	)
Net increase (decrease) in savings accounts		727,818			(1,188,794	)		566,033
Net (decrease) increase in time deposit accounts		(1,166,229	)		1,078,535			799,938
Net (decrease) increase in borrowings		(22,945	)		(225,048	)		194,520
Proceeds from Bank Term Funding Program advances		500,000			—			—
Repayment of Bank Term Funding Program advances		(500,000	)		—			—
Proceeds from short term FHLB advances		643,309			1,295,488			286,000
Repayments of short term FHLB advances		(1,164,495	)		(824,302	)		(236,000	)
Repayments of other borrowings		—			(740	)		(228	)
Repayment of subordinated notes		(75,000	)		—			—
Proceeds from issuance of common stock		2,502			2,467			2,875
Dividends paid		(59,501	)		(59,151	)		(54,249	)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES	****	(1,709,355	)	****	(1,122,581	)	****	1,352,523	****
Net increase (decrease) in cash and cash equivalents		57,811			(40,074	)		(72,512	)
Cash and cash equivalents at beginning of year		323,013			363,087			435,599
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	380,824	****	$	323,013	****	$	363,087	****
Supplemental disclosures:
Cash paid for income/franchise taxes	$	34,479		$	48,624		$	37,782
Cash paid for interest		411,334			306,572			72,683
Loans transferred to OREO		7,994			13,181			9,423
Transfer of premises from premises, furniture and equipment held for sale to premises, furniture<br>and equipment, net		350			5,824			—
Transfer of premises from premises, furniture and equipment, net to premises, furniture and<br>equipment held for sale		8,666			6,786			5,188
Securities transferred from available for sale to held to maturity		—			—			934,538
Dividends declared, not paid		2,551			2,205			2,013

See accompanying notes to consolidated financial statements.

HEARTLAND FINANCIAL USA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ONE

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations - Heartland Financial USA, Inc. (“HTLF”) is a bank holding company with locations in the West, Southwest and Midwest regions. The principal services of HTLF, which are provided through HTLF Bank, are FDIC-insured deposit accounts and related services, and loans to businesses and consumers. The loans consist primarily of commercial and industrial, owner-occupied commercial real estate, non-owner occupied commercial real estate, real estate construction, agricultural and agricultural real estate, residential real estate and consumer loans.

Principles of Presentation - The consolidated financial statements include the accounts of HTLF and its subsidiaries: HTLF Bank; DB&T Community Development Corp.; Heartland Community Development, Inc.; Heartland Financial USA, Inc. Insurance Services; Heartland Financial Statutory Trust IV; Heartland Financial Statutory Trust V; Heartland Financial Statutory Trust VI; Heartland Financial Statutory Trust VII; Morrill Statutory Trust I; Morrill Statutory Trust II; Sheboygan Statutory Trust I, CBNM Capital Trust I, Citywide Capital Trust III, Citywide Capital Trust IV, Citywide Capital Trust V, OCGI Statutory Trust III, OCGI Capital Trust IV, BVBC Capital Trust II, and BVBC Capital Trust III. All HTLF’s subsidiaries are wholly-owned as of December 31, 2024.

As of December 31, 2024, HTLF Bank and its respective bank brands listed below operated as divisions of HTLF Bank:

•	Arizona Bank & Trust
•	Bank of Blue Valley
---	---
•	Citywide Banks
---	---
•	Dubuque Bank & Trust
---	---
•	First Bank & Trust
---	---
•	Illinois Bank & Trust
---	---
•	Minnesota Bank & Trust
---	---
•	New Mexico Bank & Trust
---	---
•	Premier Valley Bank
---	---
•	Wisconsin Bank & Trust
---	---

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and prevailing practices within the banking industry. In preparing such financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheets and revenues and expenses for the years then ended. Actual results could differ significantly from those estimates. A material estimate that is particularly susceptible to significant change relates to the determination of the allowance for credit losses.

Business Combinations - HTLF applies the acquisition method of accounting in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under the acquisition method, HTLF recognizes assets acquired, including identified intangible assets, and the liabilities assumed in acquisitions at fair value as of the acquisition date, with the acquisition-related transaction costs expensed in the period incurred. Determining the fair value of assets acquired and liabilities assumed often involves estimates based on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques that may include estimates of attrition, inflation, asset growth rates, discount rates, multiples of earnings or other relevant factors. In addition, the determination of the useful lives over which an intangible asset will be amortized is subjective.

Cash and Cash Equivalents - For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, interest bearing deposits held at the Federal Reserve Bank, federal funds sold to other banks and other short-term investments. Generally, federal funds are purchased and sold for one-day periods.

Trading Securities - Trading securities represent those securities HTLF intends to actively trade and are stated at fair value with changes in fair value reflected in noninterest income. HTLF had no trading securities at both December 31, 2024 and 2023.

Available for Sale (“AFS”) Debt Securities and Equity Securities - Available for sale securities consist of those securities not classified as held to maturity or trading, which management intends to hold for indefinite periods of time or that may be sold in response to changes in interest rates, prepayments or other similar factors. Available for sale securities are stated at fair value with any unrealized gain or loss, net of applicable income tax, reported as a separate component of stockholders’ equity. Security premiums and discounts are amortized/accreted using the interest method over the period from the purchase date to the expected maturity or call date of the related security.

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, the financial condition of the issuer, as well as security and industry-specific economic conditions. In addition, regarding 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.

Realized securities gains or losses on securities sales (using a specific identification method) are included in securities losses, net in the consolidated statements of income.

Equity securities include Community Reinvestment Act funds with readily determinable fair values and are carried at fair value. Certain equity securities do not have readily determinable fair values, such as Federal Reserve Bank stock and Federal Home Loan Bank stock, which are held for debt and regulatory purposes and are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer. HTLF did not record any impairment or other adjustments to the carrying amount of these investments during the years ended December 31, 2024, and December 31, 2023.

Allowance for Credit Losseson AFS Debt Securities - 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 decline in fair value of an AFS debt security due to credit loss results in recording an allowance for credit losses to the extent the fair value is less than the amortized cost basis. Declines in fair value that have not been recorded through an allowance for credit losses, such as declines due to changes in market interest rates, are recorded through other comprehensive income, net of applicable taxes. Although these evaluations involve judgment, an unrealized loss in the fair value of a debt security is generally considered to not be related to credit when the fair value of the security is below the carrying value primarily due to changes in risk-free interest rates, there has not been significant deterioration in the financial condition of the issuer, and HTLF does not intend to sell nor does it believe it will be required to sell the security before the recovery of its cost basis. HTLF had no allowance for credit losses on AFS debt securities recorded at December 31, 2024, and December 31, 2023.

Securities Held to Maturity - Securities which HTLF has the ability and positive intent to hold to maturity are classified as held to maturity. Such securities are stated at amortized cost, adjusted for premiums and discounts that are amortized/accreted using the interest method over the period from the purchase date to the expected maturity or call date of the related security.

Allowance for Credit Losses on Held to Maturity Debt Securities - HTLF measures expected credit losses on held to maturity debt securities on a collective basis based on security type. The estimate of expected credit losses considers historical credit information that is adjusted for current conditions and supportable forecasts. HTLF’s held to maturity debt securities consist primarily of investment grade obligations of states and political subdivisions. The forecast and forecast period used in the calculation of the allowance for credit losses for loans is used in calculating the allowance for credit losses on held to maturity debt securities. HTLF had no allowance for credit losses on held to maturity debt securities recorded at both December 31, 2024, and December 31, 2023.

Loans Held to Maturity - Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, which is the principal amount outstanding, net of cumulative charge-offs, unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans. HTLF has a loan policy which establishes the credit risk appetite, lending standards and underwriting criteria designed so that HTLF may extend credit in a prudent and sound manner. The HTLF loan policy is reviewed and approved on a regular basis. A reporting system supplements the review process by providing management and the board with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

HTLF originates commercial and industrial loans and owner occupied commercial real estate loans for a wide variety of business purposes, including lines of credit for capital and operating purposes and term loans for real estate and equipment purchases. Non-owner occupied commercial real estate loans provide financing for various non-owner occupied or income producing properties. Real estate construction loans are generally short-term or interim loans that provide financing for acquiring or developing commercial income properties, multi-family projects or single-family residential homes. Agricultural and agricultural real estate loans provide financing for capital improvements and farm operations, as well as livestock and machinery purchases. Residential real estate loans are originated for the purchase or refinancing of single-family residential properties. Consumer loans include loans for motor vehicles, home improvement, home equity and personal lines of credit.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. HTLF’s policy is to discontinue the accrual of interest income on any loan when, in the opinion of management, there is a reasonable doubt as to the timely collection of the interest and principal, normally when a loan is 90 days past due. When interest accruals are deemed uncollectible, interest credited to income in the current year is reversed and interest accrued in prior years is charged to the allowance for credit losses. A loan can be restored to accrual status if the borrower has resumed paying the full amount of the scheduled contractual interest and principal payments on the loan, and (1) all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period of time, and (2) there is a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the scheduled contractual terms.

Allowance for Credit Losses for Loans - The allowance for credit losses is a valuation account that is deducted from the loans held to maturity amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged-off against the allowance when management believes the loan balance is deemed to be uncollectible. Provisions for credit losses for loans and recoveries on loans previously charged-off by HTLF are added back to the allowance.

HTLF’s allowance model is designed to consider the current contractual term of the loan, defined as starting as of the most recent renewal date and ending at maturity date.

Management’s estimation of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts, including expected defaults and prepayments. Historical loss experience is generally the starting point for estimating expected credit losses. Adjustments are made to historical loss experience to reflect differences in asset-specific risk characteristics, such as underwriting standards, portfolio mix or asset terms and differences in economic conditions, both current conditions and reasonable and supportable forecasts. If HTLF is not able to make or obtain reasonable and supportable forecasts for the entire life of the financial asset, it is required to estimate expected credit losses for the remaining life using an approach that reverts to historical credit loss information. The components of the allowance for credit losses are described more specifically below.

Quantitative Factors

The quantitative component of the allowance for credit losses is measured using historical loss experience using a look back period, currently over the most recent 16 years, on a pool basis for loans with similar risk characteristics. HTLF utilizes third-party software to calculate the expected credit losses using two separate methodologies. For certain commercial and agricultural loans, the expected credit losses are calculated through a transition matrix model derived probability of default and loss given default methodology. The transition matrix model determines the life of loan probability of default using the historical transitions of loans between risk ratings and through default. The probability of default and loss given default methodology has been developed using HTLF’s historical loss experience over the look back period. For smaller commercial and agricultural loans, residential real estate loans and consumer loans, a lifetime average historical loss rate is established for each pool of loans based upon an average loss rate calculated using HTLF historical loss experience over the look back period.

The risks in the commercial and industrial loan portfolio include the unpredictability of the cash flow of the borrowers and the variability in the value of the collateral securing the loans. Owner occupied commercial real estate loans depend upon the cash flow of the borrowers and the collateral value of the real estate. Non-owner occupied commercial real estate loans typically depend, in large part, on sufficient income from the properties securing the loans to cover the operating expenses and debt service. Real estate construction loans involve additional risks because funds are advanced based upon estimates of costs and the estimated value of the completed project. Additionally, real estate construction loans have a greater risk of default in a weaker economy because the source of repayment relies on the successful and timely completion of the project. Agricultural

and agricultural real estate loans depend upon the profitable operation or management of the farm property securing the loan. Loans secured by farm equipment, livestock or crops may not provide an adequate source of repayment because of damage or depreciation. Residential real estate loans depend upon the borrower’s ability to repay the loan and the underlying collateral value. Consumer loans depend upon the borrower’s personal financial circumstances and continued financial stability.

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 with $500,000 or more of total exposure and on nonaccrual status are individually assessed using a collateral dependency calculation. A loan is collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. The impairment will be recognized by creating a specific reserve against the loan with a corresponding charge to provision expense. In most cases, the specific reserve will be charged off in the same quarter the loss is probable. In some cases, when HTLF believes certain loans do not share the same risk characteristics with other loans in the pool, the standard allows for these loans to be individually assessed. All individually assessed loan calculations are completed at least semi-annually.

Qualitative Factors

HTLF’s allowance methodology also has a qualitative component, the purpose of which is to provide management with a means to take into consideration changes in current conditions that could potentially have an effect on the level of recognized loan losses, that otherwise fail to show up in the quantitative analysis performed in determining its base loan loss rates.

HTLF utilizes the following qualitative factors:

•	changes in lending policies and procedures
•	changes in the nature of loans
---	---
•	experience and ability of management
---	---
•	changes in the credit quality of the loan portfolio
---	---
•	risk in acquired portfolios
---	---
•	concentrations of credit
---	---

The qualitative factors for changes in lending policies and procedures, management and acquired portfolios are weighted as one factor. The other qualitative factors noted above are equally weighted as individual factors.

The qualitative adjustments are based on the comparison of the current condition to the average condition over the look back period. The adjustment amount can be either positive or negative depending on whether the current condition is better or worse than the historical average. HTLF incorporates the adjustments for changes in current conditions using an overlay approach. The adjustments are applied as a percentage adjustment in addition to the calculated historical loss rates of each pool. These adjustments reflect the extent to which HTLF expects current conditions to differ from the conditions that existed for the period over which historical information was evaluated. HTLF utilizes an anchoring approach to determine the minimum and maximum amount of qualitative allowance for credit losses, which is determined by comparing the highest and lowest historical rate to the current quantitative allowance rate to calculate the rate for the adjustment.

Economic Forecasting

The allowance for credit losses estimate incorporates a reasonable and supportable forecast of various macro-economic indices over the remaining life of HTLF’s assets. HTLF utilizes an overlay approach for its economic forecasting component, similar to the method utilized for the qualitative factors. The length of the reasonable and supportable forecast period is a judgmental determination based on the level to which the entity can support its forecast of economic conditions that drive its estimate of expected loss. HTLF compares forecasted macro-economic indices, such as unemployment and gross domestic product, to the economic conditions that existed over HTLF’s look back period.

HTLF uses Moody’s baseline economic forecast scenario, which is updated quarterly in HTLF’s methodology, and considers other Moody’s forecast scenarios to support the economic forecast component of the allowance for credit losses. The economic forecast reverts to the historical mean immediately at the end of the reasonable and supportable forecast period. HTLF utilized a one-year reasonable and supportable forecast period for the calculation of the December 31, 2024, and December 31, 2023, allowance for credit losses.

It is expected that actual economic conditions will, in many cases, differ from forecasts because the ultimate outcomes during the forecast period may be affected by events that were unforeseen, such as economic disruption and fiscal or monetary policy actions, which are exacerbated by longer forecasting periods. This uncertainty would be relevant to the entity’s confidence level as to the outcomes being forecasted. That is, an entity is likely less confident in the ultimate outcome of events that will occur at the end of the forecast period as compared to the beginning. As a result, actual future economic conditions may not be an effective indicator of the quality of management’s forecasting process, including the length of the forecast period.

Financial Difficulty Modifications - Any loans that are modified are reviewed by HTLF to identify if a financial difficulty modification has occurred, which is when HTLF modifies a loan related to a borrower experiencing financial difficulties. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status. The modification of the terms of such loans includes one or a combination of the following: a reduction of the stated interest rate of the loan, an extension of the maturity date, a permanent reduction of the recorded investment of the loan, or an other-than-insignificant payment delay. The adoption of ASU 2022-02 on January 1, 2023 eliminated the recognition and measurement of TDRs and enhanced disclosures for modifications to loans related to borrowers experiencing financial difficulties. See Note Three to the consolidated financial statements for additional detail regarding the adoption of ASU 2022-02.

Loans Held for Sale - Loans held for sale are stated at the lower of cost or fair value on an aggregate basis. Gains or losses on sales are recorded in noninterest income. Direct loan origination costs and fees are deferred at origination of the loan. These deferred costs and fees are recognized in noninterest income as part of the gain or loss on sales of loans upon sale of the loan.

At December 31 2023, loans held for sale primarily consisted of 1-4 family residential mortgages.

Allowance for Credit Losses on Unfunded Loan Commitments - HTLF estimates expected credit losses over the contractual term of the loan for the unfunded portion of the loan commitment that is not unconditionally cancellable by HTLF using the same collective allowance methodology for credit losses for loans described above. Management uses an estimated average utilization rate to determine the exposure at default. The allowance for unfunded commitments is recorded in the accrued expenses and other liabilities section of the consolidated balance sheets.

Mortgage Servicing and Transfers of Financial Assets - Prior to dissolving its mortgage operations in 2023, HTLF regularly sold residential mortgage loans to others, primarily government sponsored entities, on a non-recourse basis. Sold loans are not included in the accompanying consolidated balance sheets. HTLF generally retained the right to service the sold loans for a fee prior to the sale of its mortgage servicing rights portfolio in the first quarter of 2023.

Premises,Furniture and Equipment, Net - Premises, furniture and equipment are stated at cost less accumulated depreciation. The provision for depreciation of premises, furniture and equipment is determined by straight-line and accelerated methods over the estimated useful lives of 18 to 39 years for buildings, 15 years for land improvements and 3 to 7 years for furniture and equipment.

Premises, Furniture and Equipment Held for Sale - Premises, furniture and equipment are stated at the estimated fair value less disposal costs. Subsequent write-downs and gains or losses on the sales are recorded to gain on sales/valuation of assets, net.

Other Real Estate - Other real estate represents property acquired through foreclosures and settlements of loans. Property acquired is recorded at the estimated fair value of the property less disposal costs. The excess of carrying value over fair value less disposal costs is charged against the allowance for credit losses. Subsequent write downs estimated on the basis of later valuations and gains or losses on sales are charged to gain on sales/valuation of assets, net. Expenses incurred in maintaining such properties are charged to other real estate and loan collection expenses.

Goodwill - Goodwill represents the excess of the purchase price of acquired subsidiaries’ net assets over their fair value at the purchase date. HTLF assesses goodwill for impairment annually, and more frequently if events occur which may indicate possible impairment, and assesses goodwill at the reporting unit level, also giving consideration to overall enterprise value as part of that assessment.

In evaluating goodwill for impairment, HTLF first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount. If HTLF concludes that it is more likely than not that the fair value of a reporting unit is more than its carrying value, then no further testing of goodwill assigned to the reporting unit is required. However, if HTLF concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then HTLF performs a quantitative goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment to recognize, if any. In addition, the income tax effects of tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. A goodwill impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.

Core Deposit Intangibles, Net - Core deposit intangibles are amortized over 8 to 18 years on an accelerated basis. Annually, HTLF reviews these intangible assets for events or circumstances that may indicate a change in the recoverability of the underlying basis.

Servicing Rights, Net - Mortgage and commercial servicing rights associated with loans originated and sold, where servicing is retained, are initially capitalized at fair value and recorded on the consolidated statements of income as a component of gains on sale of loans held for sale. The values of these capitalized servicing rights are amortized as an offset to the loan servicing income earned in relation to the servicing revenue expected to be earned.

First Bank & Trust, a division of HTLF Bank, sold its mortgage servicing portfolio in the first quarter of 2023, and the value of the mortgage servicing rights was derecognized on the consolidated balance sheets. In prior periods, the carrying values of these rights were reviewed quarterly for impairment based on the calculation of their fair value as performed by an outside third-party. For purposes of measuring impairment, the rights were stratified into certain risk characteristics including loan type and loan term.

Cash Surrender Value on Life Insurance - HTLF and its subsidiaries have purchased life insurance policies on the lives of certain officers. The one-time premiums paid for the policies, which coincide with the initial cash surrender value, are recorded as an asset. Increases or decreases in the cash surrender value, other than proceeds from death benefits, are recorded as noninterest income in income on bank owned life insurance. Proceeds from death benefits first reduce the cash surrender value attributable to the individual policy and then any additional proceeds are recorded in other noninterest income.

Income Taxes - HTLF and its subsidiaries file a consolidated federal income tax return and separate or combined income or franchise tax returns as required by the various states. HTLF recognizes certain income and expenses in different time periods for financial reporting and income tax purposes. The provision for deferred income taxes is based on an asset and liability approach and represents the change in deferred income tax accounts during the year, including the effect of enacted tax rate changes. A valuation allowance is provided to reduce deferred tax assets if their expected realization is deemed not to be more likely than not.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. HTLF recognizes interest and penalties related to income tax matters in income tax expense.

Derivative Financial Instruments - HTLF uses derivative financial instruments as part of its interest rate risk management, which includes interest rate swaps, certain interest rate lock commitments and forward sales of securities related to mortgage banking activities. FASB ASC Topic 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As required by ASC 815, HTLF records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives used to manage the exposure to changes in the fair value of a recognized asset or liability on the consolidated balance sheets are fair value hedges. To qualify for hedge accounting, HTLF must comply with the detailed rules and documentation requirements at the inception of the hedge, and hedge effectiveness is assessed at inception and periodically throughout the life of each hedging relationship. Hedge ineffectiveness, if any, is measured periodically throughout the life of the hedging relationship.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (loss) and subsequently reclassified to interest income or expense when the hedged transaction affects earnings, while the ineffective portion of changes in the fair value of the derivative, if any, is recognized immediately in other noninterest income. HTLF assesses the effectiveness of each hedging relationship by comparing the cumulative changes in cash flows of the derivative hedging instrument with the cumulative changes in cash flows of the designated hedged item or transaction. No component of the change in the fair value of the hedging instrument is excluded from the assessment of hedge effectiveness. In the first quarter of 2023 HTLF terminated its cash flow hedges. It was determined that the forecasted transactions remain probable, so the unrealized gains at termination were kept in accumulated comprehensive income and are being amortized into income over the remaining life of the forecasted transaction.

HTLF had multiple fair value hedging relationships at December 31, 2023. HTLF uses hedge accounting in accordance with ASC 815. For hedges where the fair value change in the loan portfolio is being hedged, unrealized gains and losses representing the change in fair value of the derivative and the change in fair value of the risk being hedged on the related loan are being recorded in the consolidated statements of income. The ineffective portions of the unrealized gains or losses, if any, are recorded in interest income in the consolidated statements of income. For hedges where the fair value change in the investment

portfolio are being hedged, the change in the fair value of the derivative and the change in the fair value of the risk being hedged on the related investments is being recorded in interest income on the consolidated statements of income. The ineffective portions of the unrealized gains or losses, if any, are recorded in interest income in the consolidated statements of income. HTLF uses statistical regression to assess hedge effectiveness, both at the inception of the hedge as well as on a continual basis. The regression analysis involves regressing the periodic change in fair value of the hedging instrument against the periodic changes in the fair value of the asset being hedged due to changes in the hedge risk. In the fourth quarter of 2024, HTLF terminated the interest rate swaps designated as fair value hedges which were primarily designed to provide protection against unrealized securities losses. Additionally in the fourth quarter of 2024, HTLF terminated the interest rate swaps designated as fair value hedges which were used to convert certain long-term fixed rate loans to floating rates to hedge interest rate risk exposure The net fair value basis will be amortized over the remaining life of the underlying assets.

HTLF also has loan interest rate swap relationships with customers to assist them in managing their interest rate risk. Upon entering into these loan swaps HTLF enters into offsetting positions with counterparties in order to minimize interest rate risk to HTLF. These back-to-back loan swaps qualify as free standing financial derivatives with the fair values reported in other assets and other liabilities on the consolidated balance sheets. Any gains and losses on these back-to-back swaps are recorded in noninterest income on the consolidated statements of income.

HTLF does not use derivatives for speculative purposes. Derivatives not designated as hedges are not speculative and are used to manage HTLF’s exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements of ASC 815.

Mortgage Derivatives - HTLF uses interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans and mortgage-backed securities. These commitments are considered derivative instruments. The fair value of these commitments is recorded on the consolidated balance sheets with the changes in fair value recorded in the consolidated statements of income as a component of gains on sale of loans held for sale. These derivative contracts are designated as free-standing derivative contracts and are not designated against specific assets and liabilities on the consolidated balance sheets or forecasted transactions and therefore do not qualify for hedge accounting treatment.

Fair Value Measurements- Fair value represents the estimated price at which an orderly transaction to sell an asset or transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept). Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using discounted cash flow or other valuation techniques. Inputs into the valuation methods are subjective in nature, involve uncertainties, and require judgment and therefore cannot be determined with precision. Accordingly, the derived fair value estimates presented herein are not necessarily indicative of the amounts HTLF could realize in a current market exchange. Assets and liabilities are categorized into three levels based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine the fair value. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy in which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. HTLF’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Below is a brief description of each fair value level:

Level**1 — Valuation is based upon quoted prices for identical instruments in active markets.

Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 — Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques.

Treasury Stock - Treasury stock is accounted for by the cost method, whereby shares of common stock reacquired are recorded at their purchase price. When treasury stock is reissued, any difference between the sales proceeds, or fair value when issued for business combinations, and the cost is recognized as a charge or credit to capital surplus. HTLF had no treasury stock at December 31, 2024 and December 31, 2023.

Trust Department Assets - Property held for customers in fiduciary or agency capacities is not included in the accompanying consolidated balance sheets because such items are not assets of HTLF Bank.

Earnings Per Share - Basic earnings per share is determined using net income available to common stockholders and weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average common shares and assumed incremental common shares issued. Amounts used in the determination of basic and diluted earnings per share for the years ended December 31, 2024, 2023 and 2022, are shown in the table below, dollars and number of shares in thousands, except per share data:

	2024			2023			2022
Net income attributable to HTLF	$	171,601		$	79,920		$	212,180
Preferred dividends		(8,050	)		(8,050	)		(8,050	)
Net income available to common stockholders	$	163,551		$	71,870		$	204,130
Weighted average common shares outstanding for basic earnings per share		42,942			42,701			42,496
Assumed incremental common shares issued upon vesting of restricted stock units		207			91			135
Weighted average common shares for diluted earnings per share		43,149			42,792			42,631
Earnings per common share — basic	$	3.81		$	1.68		$	4.80
Earnings per common share — diluted	$	3.79		$	1.68		$	4.79
Number of antidilutive stock units excluded from diluted earnings per share computation		—			112			5
Number of antidilutive stock options excluded from diluted earnings per share computation		53			60			5

Subsequent Events - HTLF has evaluated subsequent events that may require recognition or disclosure through the filing date of this Annual Report on Form 10-K with the SEC.

On April 28, 2024, HTLF entered into an Agreement and Plan of Merger with UMB Financial Corporation, a Missouri corporation (“UMB”) and Blue Sky Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of UMB. The Merger Agreement was unanimously approved by the Board of Directors of each of HTLF and UMB.

On January 31, 2025, UMB acquired all of the outstanding stock of HTLF, in an all-stock transaction, issuing a total of 23.6 million shares of UMB’s common stock and 4.6 million shares of UMB’s 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A (UMB’s preferred stock). Pursuant to the merger agreement, (i) HTLF merged with and into UMB, with UMB continuing as the surviving corporation and (ii) one day after the closing date of the acquisition of HTLF by UMB, HTLF Bank, HTLF’s wholly owned bank subsidiary, a Colorado-chartered non-member bank, merged with and into UMB Bank, National Association, UMB’s national bank subsidiary, with UMB Bank, National Association, continuing as the surviving bank.

Total consideration for the acquisition was $2.93 billion, consisting of UMB’s common stock valued at $2.82 billion (based on UMB’s common stock price of $117.90) and UMB’s preferred stock valued at $115.2 million (based on UMB’s closing preferred stock price of $25.05). Each HTLF common stock share was converted into 0.55 shares of UMB’s common stock. Each HTLF preferred stock share was converted into a share of UMB’s preferred stock. Acquisition-related costs of $8.1 million for the year ending December 31, 2024, were recognized in HTLF’s Consolidated Statements of Income.

Subsequent to December 31, 2024, HTLF sold $1.23 billion of investments with security losses of $205.1 million. In addition, HTLF sold government guaranteed loans with an amortized cost basis of $367.3 million at a loss of $29.2 million.

Effect of New Financial Accounting Standards

ASU 2023-02

In March 2023, the FASB issued ASU 2023-02 “Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (aconsensus of the Emerging Issues Task Force).” ASU 2023-02 expands the permitted use of the proportional amortization method, which is currently only available to **** low-income housing tax credit investments, to other tax equity investments if certain conditions are met. Under the proportional amortization method, the initial cost of an investment is amortized in proportion to the income tax benefits received and both the amortization of the investment and the income tax benefits received are recognized as a component of income tax expense. This ASU was effective on January 1, 2024. HTLF has elected to use the proportional amortization method for investments in low-income housing projects. The amendments in this ASU do not have a material impact on the results of operations or financial position.

ASU 2023-06

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response tothe SEC’s Disclosure Update and Simplification Initiative.” The amendments in this Update modify the disclosure or presentation **** requirements of a variety of Topics in the Codification. Certain of the amendments represent clarifications to, or technical corrections of, the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The amendments in this ASU are not expected to have a material impact on the results of operations or financial position.

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, “Income Taxes(Topic 740): Improvements to Income Tax Disclosures.” The amendments in this Update require qualitative disclosure about specific categories of reconciling items and individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis, but retrospective application is permitted. HTLF is currently evaluating the impact of the standard and does not anticipate it will have a significant impact on the results of operations, financial position, or liquidity.

Qualified Affordable Housing Investments

HTLF uses the proportional amortization method for investments in low-income housing projects. HTLF’s net investments in low-income housing projects were $5.0 million and $5.9 million as of December 31, 2024, and December 31, 2023, respectively, and are included in other assets in the consolidated balance sheets.

With respect to HTLF’s investment in low-income housing projects for the twelve months ended December 31, 2024, we recognized income tax credits and other income tax benefits of $1.0 million and $131,000, respectively. The total income tax benefits of $1.2 million are partially offset in the “income taxes” item in the consolidated statements of income by $939,000 of investment amortization recognized, for a net income tax benefit of $219,000. The cash flows related to the total income tax benefits are presented in the following line items in the consolidated statement of cash flows:

•	$219,000 Net Income Tax Benefit, in the “Net income” line item in operating activities;<br>
•	$939,000 Investment Amortization, in the “Other, net” line item, which is an adjustment to reconcile<br>net income to cash from operating activities;
---	---
•	$1.0 million Tax Credits, in the “Other, net” line item, which is also an adjustment to reconcile<br>net income to cash from operating activities; and
---	---
•	$131,000 Other Tax Benefits Recognized, in the “Other, net” line item, which is also an adjustment to<br>reconcile net income to cash from operating activities.
---	---

There was no non-income-tax-related activity or impairment losses related to the low-income housing investments this reporting period.

TWO

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 as of December 31, 2024, and December 31, 2023, are summarized in the table below, in thousands. Within the amortized cost basis of obligations of states and political subdivisions and mortgage-backed securities-agency, there is a basis adjustment of $9.3 million and $8.0 million, respectively, related to a portfolio layer method fair value hedge that was discontinued.

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
December 31, 2024
U.S. treasuries	$	7,999	$	3	$	(32	)	$	7,970
U.S. agencies		10,864		—		(132	)		10,732
Obligations of states and political subdivisions		819,824		3		(107,494	)		712,333
Mortgage-backed securities - agency		1,497,200		36		(220,012	)		1,277,224
Mortgage-backed securities - non-agency		1,189,764		1,538		(53,308	)		1,137,994
Commercial mortgage-backed securities - agency		68,653		—		(10,634	)		58,019
Commercial mortgage-backed securities -<br>non-agency		124,587		—		(4,050	)		120,537
Asset-backed securities		115,261		—		(11,989	)		103,272
Corporate bonds		123,273		—		(13,204	)		110,069
Total debt securities		3,957,425		1,580		(420,855	)		3,538,150
Equity securities with a readily determinable fair value		22,208		—		—			22,208
Total	$	3,979,633	$	1,580	$	(420,855	)	$	3,560,358
December 31, 2023
U.S. treasuries	$	32,459	$	—	$	(341	)	$	32,118
U.S. agencies		14,724		—		(194	)		14,530
Obligations of states and political subdivisions		839,754		25		(98,534	)		741,245
Mortgage-backed securities - agency		1,620,409		13		(226,793	)		1,393,629
Mortgage-backed securities - non-agency		1,616,414		363		(87,649	)		1,529,128
Commercial mortgage-backed securities - agency		76,076		—		(11,288	)		64,788
Commercial mortgage-backed securities -<br>non-agency		526,974		—		(12,116	)		514,858
Asset-backed securities		232,140		—		(14,770	)		217,370
Corporate bonds		120,338		—		(2,169	)		118,169
Total debt securities		5,079,288		401		(453,854	)		4,625,835
Equity securities		21,056		—		—			21,056
Total	$	5,100,344	$	401	$	(453,854	)	$	4,646,891

The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of December 31, 2024, and December 31, 2023, are summarized in the table below, in thousands:

			Gross		Gross			Estimated		Allowance
	Amortized		Unrealized		Unrealized			Fair		for Credit
	Cost		Gains		Losses			Value		Losses
December 31, 2024
Obligations of states and political subdivisions	$	837,390	$	2,237	$	(42,303	)	$	797,324	$	—
Total	$	837,390	$	2,237	$	(42,303	)	$	797,324	$	—
December 31, 2023
Obligations of states and political subdivisions	$	838,241	$	3,622	$	(25,464	)	$	816,399	$	—
Total	$	838,241	$	3,622	$	(25,464	)	$	816,399	$	—

During the third quarter of 2022, HTLF transferred taxable municipal bonds with an amortized cost basis of $934.5 million and fair value of $748.3 million from available for sale to held to maturity. On the date of the transfer, accumulated other comprehensive income (loss) included $186.3 million of net unrealized losses, after tax, attributable to these securities, and the net unrealized losses will be amortized into interest income over the remaining life of the transferred securities. The bonds were transferred at fair value at the date of transfer.

As of December 31, 2024, HTLF had $23.5 million compared to $28.0 million at December 31, 2023, of accrued interest receivable, which is included in other assets on the consolidated balance sheets. 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 December 31, 2024, 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.

	December 31, 2024
	AmortizedCost		EstimatedFair Value
Due in 1 year or less	$	8,936	$	8,893
Due in 1 to 5 years		54,068		52,320
Due in 5 to 10 years		33,481		30,270
Due after 10 years		865,475		749,621
Total debt securities		961,960		841,104
Mortgage and asset-backed securities		2,995,465		2,697,046
Equity securities with a readily determinable fair value		22,208		22,208
Total investment securities	$	3,979,633	$	3,560,358

The amortized cost and estimated fair value of debt securities held to maturity at December 31, 2024, 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.

	December 31, 2024
	AmortizedCost		EstimatedFair Value
Due in 1 year or less	$	9,981	$	9,991
Due in 1 to 5 years		89,972		90,379
Due in 5 to 10 years		232,487		225,742
Due after 10 years		504,950		471,212
Total investment securities	$	837,390	$	797,324

As of December 31, 2024, securities with a carrying value of $2.91 billion compared to $2.63 billion at December 31, 2023, were pledged to secure public and trust deposits, short-term borrowings and for other purposes as required and permitted by law.

Gross gains and losses realized related to sales of securities carried at fair value for the years ended December 31, 2024, 2023 and 2022 are summarized as follows, in thousands:

	For the Years Ended December 31,
	2024		2023		2022
Proceeds from sales	$	273,917	$	1,196,586	$	1,048,525
Gross security gains		—		589		7,299
Gross security losses		25,298		141,966		9,191

The following tables summarize, 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 HTLF’s securities portfolio as of December 31, 2024, and December 31, 2023. 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 or more months. The reference point for determining how long an investment was in an unrealized loss position was December 31, 2024, and December 31, 2023, respectively.

Debt securities available for sale	Less than 12 months							12 months or longer							Total
	Fair		Unrealized					Fair		Unrealized					Fair		Unrealized
	Value		Losses			Count		Value		Losses			Count		Value		Losses			Count
December 31, 2024
U.S. treasuries	$	—	$	—			—	$	4,970	$	(32	)		1	$	4,970	$	(32	)		1
U.S. agencies	$	—	$	—			—	$	10,732	$	(132	)		4	$	10,732	$	(132	)		4
Obligations of states and political subdivisions		25,785		(2,470	)		8		691,963		(105,024	)		146		717,748		(107,494	)		154
Mortgage-backed securities - agency		3,804		(111	)		5		1,275,977		(219,901	)		158		1,279,781		(220,012	)		163
Mortgage-backed securities - non-agency		134,211		(16,505	)		4		617,056		(36,803	)		26		751,267		(53,308	)		30
Commercial mortgage-backed securities - agency		—		—			—		58,019		(10,634	)		14		58,019		(10,634	)		14
Commercial mortgage-backed securities -<br>non-agency		54,158		(184	)		2		66,379		(3,866	)		6		120,537		(4,050	)		8
Asset-backed securities		—		—			—		103,272		(11,989	)		6		103,272		(11,989	)		6
Corporate bonds		53,444		(10,841	)		1		54,535		(2,363	)		6		107,979		(13,204	)		7
Total temporarily impaired securities	$	271,402	$	(30,111	)		20	$	2,882,903	$	(390,744	)		367	$	3,154,305	$	(420,855	)		387
December 31, 2023
U.S. treasuries	$	2,985	$	(12	)		1	$	26,138	$	(329	)		3	$	29,123	$	(341	)		4
U.S. agencies	$	—	$	—			—	$	14,530	$	(194	)		4	$	14,530	$	(194	)		4
Obligations of states and political subdivisions		1,440		(65	)		1		736,653		(98,469	)		150		738,093		(98,534	)		151
Mortgage-backed securities - agency		194		(2	)		2		1,392,769		(226,791	)		166		1,392,963		(226,793	)		168
Mortgage-backed securities - non-agency		415,934		(24,568	)		12		902,291		(63,081	)		35		1,318,225		(87,649	)		47
Commercial mortgage-backed securities - agency		—		—			—		64,788		(11,288	)		17		64,788		(11,288	)		17
Commercial mortgage-backed securities -<br>non-agency		—		—			—		507,044		(12,116	)		16		507,044		(12,116	)		16
Asset-backed securities		148,063		(9,723	)		4		69,307		(5,047	)		7		217,370		(14,770	)		11
Corporate bonds		61,031		(111	)		1		57,138		(2,058	)		8		118,169		(2,169	)		9
Total temporarily impaired securities	$	629,647	$	(34,481	)		21	$	3,770,658	$	(419,373	)		406	$	4,400,305	$	(453,854	)		427

Securities held to maturity	Less than 12 months							12 months or longer							Total
	Fair Value		UnrealizedLosses			Count		Fair Value		UnrealizedLosses			Count		Fair Value		UnrealizedLosses			Count
December 31, 2024
Obligations of states and political subdivisions	$	389,841	$	(17,516	)		90	$	335,751	$	(24,787	)		62	$	725,592	$	(42,303	)		152
Total temporarily impaired securities	$	389,841	$	(17,516	)		90	$	335,751	$	(24,787	)		62	$	725,592	$	(42,303	)		152
December 31, 2023
Obligations of states and political subdivisions	$	145,471	$	(3,706	)		23	$	569,691	$	(21,758	)		126	$	715,162	$	(25,464	)		149
Total temporarily impaired securities	$	145,471	$	(3,706	)		23	$	569,691	$	(21,758	)		126	$	715,162	$	(25,464	)		149

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, the financial condition of the issuer, as well as security and industry specific economic conditions. In addition, regarding 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 unrealized losses on HTLF’s mortgage and asset-backed securities are the result of changes in market interest rates or widening of market spreads after 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 years ended December 31, 2024 and December 31, 2023.

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 after 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 years ended December 31, 2024 and December 31, 2023.

In the first quarter of 2022, HTLF sold two obligations of states and political subdivisions securities from the held to maturity portfolio. Because the evaluation of the underlying credit quality of the individual securities indicated significant deterioration, it was unlikely HTLF would recover the remaining basis of the securities prior to maturity and therefore inconsistent with HTLF’s original intent upon purchase and classification of these held to maturity securities. The carrying value of these securities was $2.2 million, and the associated gross gains were $100,000.

The following table summarizes, in thousands, the carrying amount of HTLF’s held to maturity debt securities by investment rating as of December 31, 2024 and December 31, 2023, which are updated quarterly and used to monitor the credit quality of the securities:

	December 31, 2024		December 31, 2023
Rating
AAA	$	100,168	$	88,550
AA, AA+, AA-		544,644		583,816
A+, A, A-		145,330		139,658
BBB		41,443		20,133
Not Rated		5,805		6,084
Total	$	837,390	$	838,241

Included in other investments were shares of stock in Federal Home Loan Bank (the “FHLB”) at an amortized cost of $2.3 million at December 31, 2024 and $25.8 million at December 31, 2023.

HTLF Bank is required to maintain FHLB stock as a member of the FHLB. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, the FHLB stock is less liquid than other marketable equity securities and their 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 December 31, 2024, did not consider the investments to be other than temporarily impaired.

THREE

LOANS

Loans as of December 31, 2024, and December 31, 2023, were as follows, in thousands:

	December 31, 2024			December 31, 2023
Loans receivable held to maturity:
Commercial and industrial	$	3,452,002		$	3,652,047
Paycheck Protection Program (“PPP”)		1,278			2,777
Owner occupied commercial real estate		2,392,059			2,638,175
Non-owner occupied commercial real estate		2,303,467			2,553,711
Real estate construction		1,084,651			1,011,716
Agricultural and agricultural real estate		766,213			919,184
Residential real estate		684,487			797,829
Consumer		471,709			493,206
Total loans receivable held to maturity		11,155,866			12,068,645
Allowance for credit losses		(96,500	)		(122,566	)
Loans receivable, net	$	11,059,366		$	11,946,079

As of December 31, 2024, HTLF had $56.2 million compared to $65.4 million as of December 31, 2023, 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 as of December 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 with $500,000 or more of total exposure and are on nonaccrual are individually assessed using a collateral dependency calculation. All other loans are collectively evaluated for losses.

	Allowance For Credit Losses						Gross Loans Receivable Held to Maturity
	IndividuallyEvaluatedfor CreditLosses		CollectivelyEvaluatedfor CreditLosses		Total		LoansIndividuallyEvaluated forCredit Losses		LoansCollectivelyEvaluated forCredit Losses		Total
December 31, 2024
Commercial and industrial	$	4,439	$	20,210	$	24,649	$	16,230	$	3,435,772	$	3,452,002
PPP		—		—		—		—		1,278		1,278
Owner occupied commercial real estate		2		12,482		12,484		1,976		2,390,083		2,392,059
Non-owner occupied commercial real estate		—		11,393		11,393		54,372		2,249,095		2,303,467
Real estate construction		—		32,979		32,979		13,410		1,071,241		1,084,651
Agricultural and agricultural real estate		2,276		1,452		3,728		11,529		754,684		766,213
Residential real estate		—		4,086		4,086		727		683,760		684,487
Consumer		—		7,181		7,181		—		471,709		471,709
Total	$	6,717	$	89,783	$	96,500	$	98,244	$	11,057,622	$	11,155,866
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 construction		56		28,717		28,773		697		1,011,019		1,011,716
Agricultural and agricultural real estate		1,932		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 December 31, 2024 and December 31, 2023, of the loans modified during the year ended December 31, 2024 and December 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 Extension					Term Extension andInterest Only Payments					Term Extension andInterest Rate Reduction
For the Year Ended	Amortized		% of Loan			Amortized		% of Loan			Amortized		% of Loan
December 31, 2024	Cost Basis		Category			Cost Basis		Category			Cost Basis		Category
Commercial and industrial	$	549		0.02	%	$	—		—	%	$	—		—	%
Owner occupied commercial real estate		—		—		****	—		—			—		—
Non-owner occupied commercial real estate		614		0.03			—		—			—		—
Real estate construction		83		0.01		****	—		—			1,764		0.16
Agricultural and agricultural real estate		—		—			—		—			—		—
Residential real estate		1,348		0.20			—		—			—		—
Consumer		172		0.04			—		—			—		—
Total	$	2,766		0.02	%	$	—		—	%	$	1,764		0.02	%

	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Term Extension					Term Extension andInterest Only Payments					Term Extension andInterest Rate Reduction
For the Year Ended	Amortized		% of Loan			Amortized		% of Loan			Amortized		% of Loan
December 31, 2023	Cost Basis		Category			Cost Basis		Category			Cost Basis		Category
Commercial and industrial	$	4,088		0.11	%	$	—		—	%	$	—		—	%
Owner occupied commercial real estate	****	—		—			5,043		0.19			—		—
Non-owner occupied commercial real estate		—		—			—		—			—		—
Real estate construction	****	—		—			—		—			—		—
Agricultural and agricultural real estate		1,936		0.21			—		—			—		—
Residential real estate		741		0.09			—		—			—
Consumer		—		—			—		—			—		—
Total	$	6,765		0.06	%	$	5,043		0.04	%	$	—		—	%

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty in the year ended December 31, 2024 and December 31, 2023.

For the Year Ended<br> <br>December 31,2024	Weighted AverageTerm Extension(Months)		Weighted AverageTerm Extensionand Interest OnlyPayments(Months)		Weighted AverageTerm Extensionand Interest RateReduction(Months)
Commercial and industrial		3		0		0
Owner occupied commercial real estate		0		0		0
Non-owner occupied commercial real estate		13		0		14
Real estate construction		13		0		0
Agricultural and agricultural real estate		0		0		0
Residential real estate		4		0		0
Consumer		87		0		0
For the Year Ended<br> <br>December 31,2023	Weighted AverageTerm Extension(Months)		Weighted AverageTerm Extensionand Interest OnlyPayments(Months)		Weighted AverageTerm Extensionand Interest RateReduction(Months)
Commercial and industrial		7		0		0
Owner occupied commercial real estate		0		12		0
Non-owner occupied commercial real estate		0		0		0
Real estate construction		0		0		0
Agricultural and agricultural real estate		7		0		0
Residential real estate		12		0		0
Consumer		0		0		0

At December 31, 2024, there was $1.4 million in 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 year ended December 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 table shows the performance of loans that have been modified in the year ended December 31, 2024 and December 31, 2023, dollars in thousands.

	Accruing Loans
	30-59DaysPast Due		60-89DaysPast Due		90 Daysor<br>MorePast Due		TotalPast Due		Current		Nonaccrual
December 31, 2024
Commercial and industrial	$	—	$	—	$	—	$	—	$	424	$	125
Owner occupied commercial real estate		—		—		—		—		—		—
Non-owner occupied commercial real estate		—		614		—		614		—		—
Real estate construction		—		—		—		—		—		1,847
Agricultural and agricultural real estate		—		—		—		—		—		—
Residential real estate		—		1,348		—		1,348		—		—
Consumer		—		—		—		—		172		—
Total	$	—	$	1,962	$	—	$	1,962	$	596	$	1,972
	Accruing Loans
	30-59DaysPast Due		60-89DaysPast Due		90 Daysor<br>MorePast Due		TotalPast Due		Current		Nonaccrual
December 31, 2023
Commercial and industrial	$	—	$	—	$	—	$	—	$	3,986	$	102
Owner occupied commercial real estate		—		—		—		—		5,043		—
Non-owner occupied commercial real estate		—		—		—		—		—		—
Real estate construction		—		—		—		—		—		—
Agricultural and agricultural real estate		—		—		—		—		1,936		—
Residential real estate		—		—		—		—		—		741
Consumer		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	10,965	$	843

HTLF’s internal rating system is a series of grades reflecting management’s 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 categorized into 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.

The “nonpass” category consists of watch, substandard, doubtful and loss 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 the following weaknesses: deteriorating financial trends, lack of 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 the loan make collection or liquidation in full, based on existing facts, conditions and values, highly questionable and improbable. These borrowers are usually in default, lack liquidity and capital, as well as 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. As of December 31, 2024, and December 31, 2023, HTLF had no loans classified as doubtful and no loans classified as loss.

The following tables show the risk category of loans by loan category and year of origination as of December 31, 2024 and December 31, 2023, in thousands:

As of December 31, 2024	Amortized Cost Basis of Term Loans by Year of Origination
	2024		2023		2022		2021		2020		2019 andPrior		Revolving		Total
Commercial and industrial
Pass	$	564,871	$	383,962	$	511,268	$	224,442	$	140,383	$	309,292	$	1,025,074	$	3,159,292
Watch		13,933		25,803		43,575		11,768		7,328		657		109,093		212,157
Substandard		10,634		21,871		15,688		948		2,132		7,074		22,206		80,553
Commercial and industrial total	$	589,438	$	431,636	$	570,531	$	237,158	$	149,843	$	317,023	$	1,156,373	$	3,452,002
Commercial and industrial charge-offs		128		71		22,667		1,040		3,322		1,146		3,935		32,309
PPP
Pass	$	—	$	—	$	—	$	1,155	$	13	$	—	$	—	$	1,168
Watch		—		—		—		110		—		—		—		110
Substandard		—		—		—		—		—		—		—		—
PPP total	$	—	$	—	$	—	$	1,265	$	13	$	—	$	—	$	1,278
PPP charge-offs		—		—		—		—		—		—		—		—
Owner occupied commercial real estate
Pass	$	145,100	$	388,359	$	457,082	$	683,989	$	183,056	$	310,264	$	38,807	$	2,206,657
Watch		4,885		4,290		44,357		1,485		5,250		52,839		—		113,106
Substandard		2,739		24,471		30,332		250		9,153		2,005		3,346		72,296
Owner occupied commercial real estate total	$	152,724	$	417,120	$	531,771	$	685,724	$	197,459	$	365,108	$	42,153	$	2,392,059
Owner occupied commercial real estate charge- offs		—		—		87		—		270		88		—		445
Non-owner occupied commercial real estate
Pass	$	154,300	$	440,186	$	592,636	$	366,514	$	162,326	$	379,026	$	15,974	$	2,110,962
Watch		10,939		—		35,758		25,528		3,124		39,902		—		115,251
Substandard		736		26,016		14,470		8,112		203		27,717		—		77,254
Non-owner occupied commercial real estate total	$	165,975	$	466,202	$	642,864	$	400,154	$	165,653	$	446,645	$	15,974	$	2,303,467
Non-owner occupied commercial real estate<br>charge-offs		—		16,101		11,594		—		160		15,269		—		43,124
Real estate construction
Pass	$	190,659	$	307,325	$	306,009	$	74,457	$	11,566	$	3,074	$	5,129	$	898,219
Watch		14,333		35,410		34,955		39,538		164		—		—		124,400
Substandard		7,179		10,237		44,183		10		28		395		—		62,032
Real estate construction total	$	212,171	$	352,972	$	385,147	$	114,005	$	11,758	$	3,469	$	5,129	$	1,084,651
Real estate construction charge-offs		—		—		3,112		—		—		—		—		3,112
Agricultural and agricultural real estate
Pass	$	104,699	$	93,402	$	171,940	$	89,842	$	41,475	$	44,398	$	197,195	$	742,951
Watch		184		1,720		793		266		31		630		6,039		9,663
Substandard		731		1,096		6,462		1,474		121		3,664		51		13,599
Agricultural and agricultural real estate total	$	105,614	$	96,218	$	179,195	$	91,582	$	41,627	$	48,692	$	203,285	$	766,213
Agricultural and agricultural real estate charge- offs		—		12		9,321		17		13		167		647		10,177
Residential real estate

As of December 31, 2024	Amortized Cost Basis of Term Loans by Year of Origination
	2024		2023		2022		2021		2020		2019 andPrior		Revolving		Total
Pass	$	46,045	$	53,568	$	139,749	$	195,793	$	59,419	$	149,744	$	16,331	$	660,649
Watch		112		769		1,415		6,957		2,325		4,178		—		15,756
Substandard		—		772		183		1,900		360		4,692		175		8,082
Residential real estate total	$	46,157	$	55,109	$	141,347	$	204,650	$	62,104	$	158,614	$	16,506	$	684,487
Residential real estate charge-offs		—		—		165		—		13		193		—		371
Consumer
Pass	$	36,968	$	30,527	$	46,096	$	25,925	$	2,625	$	5,772	$	315,480	$	463,393
Watch		337		722		184		129		12		823		2,411		4,618
Substandard		164		60		602		80		230		1,207		1,355		3,698
Consumer total	$	37,469	$	31,309	$	46,882	$	26,134	$	2,867	$	7,802	$	319,246	$	471,709
Consumer charge-offs		26		123		206		247		17		84		2,262		2,965
Total pass	$	1,242,642	$	1,697,329	$	2,224,780	$	1,662,117	$	600,863	$	1,201,570	$	1,613,990	$	10,243,291
Total watch		44,723		68,714		161,037		85,781		18,234		99,029		117,543		595,061
Total substandard		22,183		84,523		111,920		12,774		12,227		46,754		27,133		317,514
Total loans	$	1,309,548	$	1,850,566	$	2,497,737	$	1,760,672	$	631,324	$	1,347,353	$	1,758,666	$	11,155,866
Total Charge-offs	$	154	$	16,307	$	47,152	$	1,304	$	3,795	$	16,947	$	6,844	$	92,503
As of December 31, 2023	Amortized Cost Basis of Term Loans by Year of Origination
	2023		2022		2021		2020		2019		2018 andPrior		Revolving		Total
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	$	50.00	$	—	$	—	$	—	$	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
Watch		8,052		25,947		13,114		2,662		8,115		7,553		—		65,443
Substandard		31,904		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
Watch		71,400		34,651		8,237		3,834		27,345		57,083		—		202,550
Substandard		5,043		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<br>charge-offs		0		52		0		29		399		147		0		627

As of December 31, 2023	Amortized Cost Basis of Term Loans by Year of Origination
	2023		2022		2021		2020		2019		2018 andPrior		Revolving		Total
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		0		0		32		0		0		0		316
Agricultural and agricultural real estate
Pass	$	152,665	$	208,375	$	114,798	$	67,006	$	28,247	$	43,663	$	260,941	$	875,695
Watch		2,245		16,257		293		622		70		349		427		20,263
Substandard		12		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		0		0		0		9		0		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
Watch		171		973		945		659		158		4,845		—		7,751
Substandard		741		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		0		59		124		0		0		0		0		183
Consumer
Pass	$	45,595	$	62,900	$	35,459	$	7,731	$	3,663	$	6,109	$	324,218	$	485,675
Watch		730		84		694		21		41		644		2,060		4,274
Substandard		80		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 watch		103,921		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 HTLF’s nonpass loans at December 31, 2024 were $110,000 compared to $136,000 at December 31, 2023, 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% SBA guarantee.

As of December 31, 2024, HTLF had $1.0 million of loans secured by residential real estate property that were in the process of foreclosure.

The following table sets forth information regarding HTLF’s accruing and nonaccrual loans at December 31, 2024, and December 31, 2023, in thousands:

	Accruing Loans
	30-59DaysPast Due		60-89DaysPast Due		90 Daysor MorePast Due		TotalPast Due		Current		Nonaccrual		Total<br>Loans
December 31, 2024
Commercial and industrial	$	3,831	$	1,276	$	486	$	5,593	$	3,421,637	$	24,772	$	3,452,002
PPP		—		—		—		—		1,278		—		1,278
Owner occupied commercial real estate		261		631		—		892		2,388,464		2,703		2,392,059
Non-owner occupied commercial real estate		1,300		14,266		—		15,566		2,233,379		54,522		2,303,467
Real estate construction		329		901		330		1,560		1,069,522		13,569		1,084,651
Agricultural and agricultural real estate		3		—		—		3		752,738		13,472		766,213
Residential real estate		974		82		353		1,409		678,052		5,026		684,487
Consumer		2,111		863		—		2,974		467,396		1,339		471,709
Total loans receivable held to maturity	$	8,809	$	18,019	$	1,169	$	27,997	$	11,012,466	$	115,403	$	11,155,866
December 31, 2023
Commercial and industrial	$	1,738	$	126	$	2,203	$	4,067	$	3,601,165	$	46,815	$	3,652,047
PPP		94		53		—		147		2,630		—		2,777
Owner occupied commercial real estate		205		2,664		74		2,943		2,603,640		31,592		2,638,175
Non-owner occupied commercial real estate		875		—		—		875		2,552,469		367		2,553,711
Real estate construction		332		—		—		332		1,010,601		783		1,011,716
Agricultural and agricultural real estate		121		—		12		133		909,841		9,210		919,184
Residential real estate		2,082		273		21		2,376		790,367		5,086		797,829
Consumer		2,257		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 0.24% at December 31, 2024, compared to 0.09% at December 31, 2023. Changes in credit risk are monitored on a continuous basis and changes in risk ratings are made when identified. All individually assessed loans are reviewed at least semi-annually.

HTLF recognized $0 of interest income on nonaccrual loans during the years ended December 31, 2024 and December 31, 2023. As of December 31, 2024, HTLF had $53.1 million compared to $52.5 million at December 31, 2023, of nonaccrual loans with no related allowance.

FOUR

ALLOWANCE FOR CREDIT LOSSES

Changes in the allowance for credit losses for loans for the years ended December 31, 2024, 2023, and 2022 were as follows, in thousands:

	2024			2023			2022
Balance at beginning of year	$	122,566		$	109,483		$	110,088
Provision for credit losses		59,785			25,435			10,636
Recoveries on loans previously charged-off		6,652			7,262			7,055
Charge-offs on loans		(92,503	)		(19,614	)		(18,296	)
Balance at end of year	$	96,500		$	122,566		$	109,483

Changes in the allowance for credit losses for loans by loan category for the years ended December 31, 2024, and December 31, 2023, were as follows, in thousands:

	Balance at12/31/2023		Charge-offs			Recoveries		Provision(Benefit)			Balance at12/31/2024
Commercial and industrial	$	40,679	$	(32,309	)	$	1,896	$	14,383		$	24,649
Owner occupied commercial real estate		17,156		(445	)		2		(4,229	)		12,484
Non-owner occupied commercial real estate		17,249		(43,124	)		—		37,268			11,393
Real estate construction		28,773		(3,112	)		5		7,313			32,979
Agricultural and agricultural real estate		4,292		(10,177	)		144		9,469			3,728
Residential real estate		5,845		(371	)		105		(1,493	)		4,086
Consumer		8,572		(2,965	)		4,500		(2,926	)		7,181
Total	$	122,566	$	(92,503	)	$	6,652	$	59,785		$	96,500
	Balance at12/31/2022		Charge-offs			Recoveries		Provision(Benefit)			Balance at12/31/2023
Commercial and industrial	$	29,071	$	(8,622	)	$	5,069	$	15,161		$	40,679
Owner occupied commercial real estate		13,948		(870	)		113		3,965			17,156
Non-owner occupied commercial real estate		16,539		(627	)		268		1,069			17,249
Real estate construction		29,998		(316	)		26		(935	)		28,773
Agricultural and agricultural real estate		2,634		(5,319	)		11		6,966			4,292
Residential real estate		7,711		(183	)		19		(1,702	)		5,845
Consumer		9,582		(3,677	)		1,756		911			8,572
Total	$	109,483	$	(19,614	)	$	7,262	$	25,435		$	122,566

Changes in the allowance for credit losses on unfunded commitments for the years ended December 31, 2024 and December 31, 2023, were as follows:

	For the Years Ended December 31,
	2024			2023
Beginning balance	$	16,468		$	20,196
Provision benefit		(6,349	)		(3,728	)
Ending balance	$	10,119		$	16,468

Management allocates the allowance for credit losses by pools of risk within each loan portfolio. The total allowance for credit losses is available to absorb losses from any segment of the loan portfolio.

FIVE

PREMISES, FURNITURE AND EQUIPMENT

Premises, furniture and equipment, excluding those held for sale, as of December 31, 2024, and December 31, 2023, were as follows, in thousands:

	2024			2023
Land and land improvements	$	46,084		$	53,434
Buildings and building improvements		141,985			168,244
Furniture and equipment		48,119			56,378
Total		236,188			278,056
Less accumulated depreciation		(92,258	)		(101,055	)
Premises, furniture and equipment, net	$	143,930		$	177,001

Depreciation expense on premises, furniture and equipment was $10.6 million, $11.7 million and $13.2 million for 2024, 2023 and 2022, respectively. Depreciation expense on buildings and building improvements of $5.2 million, $6.0 million and $6.3 million for the years ended December 31, 2024, 2023, and 2022, respectively, is recorded in occupancy expense on the consolidated statements of income. Depreciation expense on furniture and equipment of $5.4 million, $5.7 million and $6.9 million for the years ended December 31, 2024, 2023, and 2022, respectively, is recorded in furniture and equipment expense on the consolidated statements of income.

SIX

GOODWILL AND CORE DEPOSIT INTANGIBLES ASSETS

HTLF had goodwill of $576.0 million at both December 31, 2024, and December 31, 2023. HTLF conducts its annual internal assessment of the goodwill both at the consolidated level and at the reporting unit level as of September 30, as well as when required due to triggering events related to the uncertainty of the value of the goodwill on HTLF’s balance sheet. HTLF conducted its annual internal assessment of the goodwill at HTLF or HTLF’s reporting units as of September 30. There was no goodwill impairment as of the most recent assessment.

The gross carrying amount of other intangible assets, which consisted of core deposit intangibles and the associated accumulated amortization at December 31, 2024, and December 31, 2023, are presented in the table below, in thousands:

	December 31, 2024						December 31, 2023
	GrossCarryingAmount		AccumulatedAmortization		NetCarryingAmount		GrossCarryingAmount		AccumulatedAmortization		NetCarryingAmount
Amortizing intangible assets:
Core deposit intangibles	$	101,185	$	88,362	$	12,823	$	101,185	$	82,770	$	18,415
Total	$	101,185	$	88,362	$	12,823	$	101,185	$	82,770	$	18,415

The following table shows the estimated future amortization expense for amortizable intangible assets, in thousands:

	Core Deposit Intangibles
Year ending December 31,
2025	$	4,700
2026		3,533
2027		2,601
2028		1,287
2029		465
Thereafter		237
Total	$	12,823

On March 31, 2023, First Bank & Trust, a division of HTLF Bank, sold its mortgage servicing rights portfolio, which contained loans with an unpaid principal balance of $698.5 million, to two unrelated third parties. The transaction qualified as a sale, and $7.7 million of mortgage servicing rights was derecognized on the consolidated balance sheet as of March 31, 2023.

The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the twelve months ended December 31, 2024, and December 31, 2023:

	2024		2023
Balance at January 1,	$	—	$	7,840
Originations		—		24
Amortization		—		(210	)
Sale of mortgage servicing rights		—		(7,654	)
Valuation adjustment		—		—
Balance at December 31,	$	—	$	—
Fair value of mortgage servicing rights	$	—	$	—

SEVEN

DEPOSITS

At December 31, 2024, the scheduled maturities of time certificates of deposit were as follows, in thousands:

2025	$	1,510,733
2026		73,885
2027		20,832
2028		4,221
2029		3,578
Thereafter		543
Total	$	1,613,792

The aggregate amount of time certificates of deposit in denominations of $250,000 or more as of December 31, 2024, and December 31, 2023 were $617.7 million and $1.80 billion, respectively.

Interest expense on deposits for the years ended December 31, 2024, 2023, and 2022, was as follows, in thousands:

	2024		2023		2022
Savings and money market accounts	$	231,180	$	182,179	$	46,623
Time deposits		96,173		137,509		10,257
Interest expense on deposits	$	327,353	$	319,688	$	56,880

EIGHT

BORROWINGS

Borrowings as of December 31, 2024, and 2023, were as follows, in thousands:

	2024		2023
Retail repurchase agreements	$	33,779	$	42,447
Advances from the FHLB		—		521,186
Advances from the federal discount window		—		—
Other borrowings		40,040		58,622
Total	$	73,819	$	622,255

HTLF Bank is a member of the FHLB of Topeka. At December 31, 2024, none of HTLF’s FHLB advances had call features. The advances from the FHLB are collateralized by HTLF Bank’s investments in FHLB stock of $2.3 million and $25.8 million at December 31, 2024 and 2023, respectively. In addition, the FHLB advances are collateralized with pledges of one- to four-family residential mortgages, commercial and agricultural mortgages and securities totaling $2.59 billion at December 31, 2024, and $2.07 billion at December 31, 2023. At December 31, 2024, HTLF Bank had $1.76 billion of remaining FHLB borrowing capacity.

HTLF extended its revolving credit line agreement with an unaffiliated bank on September 14, 2024, which provides $100.0 million of borrowing capacity. This revolving credit line agreement is included in borrowings, and the primary purpose of this credit line agreement is to provide liquidity to HTLF. HTLF had no advances on this line during 2024 and 2023, and there was no outstanding balance at both December 31, 2024, and December 31, 2023. The credit agreement contains specific financial covenants which HTLF complied with as of December 31, 2024, with the exception of the allowance to total loans covenant. The revolving credit line agreement was terminated on January 15, 2025.

All retail repurchase agreements as of December 31, 2024, and 2023, were due within twelve months.

Average and maximum balances and rates on aggregate borrowings outstanding during the years ended December 31, 2024, December 31, 2023, and December 31, 2022, were as follows, in thousands:

	2024			2023			2022
Maximum month-end balance	$	1,094,337		$	622,255		$	376,117
Average month-end balance		595,833			227,993			191,306
Weighted average interest rate for the year		4.87	%		5.04	%		1.61	%
Weighted average interest rate at year-end		3.82	%		5.28	%		4.07	%

HTLF Bank has availability to borrow funds under the Discount Window Program based upon pledged securities with an outstanding balance of $2.91 billion, which provided total borrowing capacity of $3.41 billion, of which $3.41 billion was available at December 31, 2024. There was no outstanding balance at December 31, 2024 and December 31, 2023.

NINE

TERM DEBT

Term debt outstanding at December 31, 2024 and 2023, are shown in the table below, net of unamortized discount and issuance costs, in thousands:

	2024		2023
Trust preferred securities		150,251		149,288
Contracts payable for purchase of real estate and other assets		—		80
Subordinated notes		148,410		223,028
Total	$	298,661	$	372,396

At December 31, 2024, HTLF had fifteen wholly-owned trust subsidiaries that were formed to issue trust preferred securities, which includes trust subsidiaries acquired in acquisitions since 2013. The proceeds from the offerings were used to purchase junior subordinated debentures from HTLF and were in turn used by HTLF or entities acquired by HTLF for general corporate purposes. HTLF has the option to shorten the maturity date to a date not earlier than the callable date. HTLF may not shorten the maturity date without prior approval of the Board of Governors of the Federal Reserve System, if required. Early redemption is permitted under certain circumstances, such as changes in tax or regulatory capital rules. The majority of the interest payments are due quarterly.

A schedule of HTLF’s trust preferred offerings outstanding, as of December 31, 2024, was as follows, in thousands:

	AmountIssued
Heartland Financial Statutory Trust IV	$	10,310	2.75% over SOFR	7.36	%	03/17/2034	03/17/2025
Heartland Financial Statutory Trust V		20,619	1.33% over SOFR	6.25		04/07/2036	04/07/2025
Heartland Financial Statutory Trust VI		20,619	1.48% over SOFR	6.10		09/15/2037	03/15/2025
Heartland Financial Statutory Trust VII		18,042	1.48% over SOFR	6.24		09/01/2037	03/01/2025
Morrill Statutory Trust I		9,558	3.25% over SOFR	7.84		12/26/2032	03/26/2025
Morrill Statutory Trust II		9,309	2.85% over SOFR	7.46		12/17/2033	03/17/2025
Sheboygan Statutory Trust I		6,966	2.95% over SOFR	7.56		09/17/2033	03/17/2025
CBNM Capital Trust I		4,657	3.25% over SOFR	7.87		12/15/2034	03/15/2025
Citywide Capital Trust III		6,716	2.80% over SOFR	7.65		12/19/2033	04/23/2025
Citywide Capital Trust IV		4,584	2.20% over SOFR	6.98		09/30/2034	05/23/2025
Citywide Capital Trust V		12,874	1.54% over SOFR	6.16		07/25/2036	03/15/2025
OCGI Statutory Trust III		3,035	3.65% over SOFR	8.21		09/30/2032	03/30/2025
OCGI Capital Trust IV		5,624	2.50% over SOFR	7.12		12/15/2034	03/15/2025
BVBC Capital Trust II		7,399	3.25% over SOFR	8.08		04/24/2033	04/24/2025
BVBC Capital Trust III		9,939	1.60% over SOFR	6.19		09/30/2035	03/30/2025
Total trust preferred offerings	$	150,251

On September 8, 2021, HTLF issued $150.0 million of Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2021 subordinated notes”), which were issued at par with an underwriting discount of $1.9 million. The 2021 subordinated notes have a fixed interest rate of 2.75% until September 15, 2026, at which time the interest rate will be reset quarterly to a benchmark interest rate, which is expected to be three-month term SOFR plus a spread of 210 basis points. Interest is payable quarterly. The 2021 subordinated notes mature on September 15, 2031, and become redeemable at HTLF’s option on September 15, 2026. In connection with the sale of the notes, the balance of deferred issuance costs included in term debt was $341,000 at December 31, 2024, and $392,000 at December 31,2023. These deferred costs are amortized on a straight-line basis over the life of the notes.

On December 24, 2024, HTLF paid off $75.0 million of subordinated notes that were issued on December 17, 2014. The notes held a maturity date of December 30, 2024 and were issued at par with an underwriting discount of $1.1 million. The interest rate on the notes was fixed at 5.75% per annum, payable semi-annually. In connection with the sale of the notes, the balance of deferred issuance costs included in term debt was $0 at December 31, 2024, and $38,000 at December 31, 2023. These deferred costs were amortized on a straight-line basis over the life of the notes.

For regulatory purposes, $148.4 million of the total $148.4 million of subordinated notes qualified as Tier 2 capital as of December 31, 2024.

Future payments, net of unamortized discount and issuance costs, at December 31, 2024, for term debt at their maturity date follow in the table below, in thousands.

2025	$	—
2026		—
2027		—
2028		—
2029		—
Thereafter		298,661
Total	$	298,661

TEN

DERIVATIVE FINANCIAL INSTRUMENTS

HTLF considers and uses derivative financial instruments as part of its interest rate risk management strategy, which may include interest rate swaps, fair value hedges, risk participation agreements, caps, floors, and collars. HTLF’s current strategy includes the use of interest rate swaps as well as back-to-back swaps to assist customers in managing their interest rate risk while executing offsetting interest rate swaps with dealer counterparties.

HTLF’s objectives are to add stability to its net interest margin and to manage its exposure to movements in interest rates. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. HTLF is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. HTLF minimizes this risk by entering into derivative contracts that contain collateral posting provisions with counterparties that meet HTLF’s credit standards. HTLF has not experienced any losses from nonperformance by these counterparties. HTLF monitors counterparty risk in accordance with the provisions of ASC 815. HTLF was required to post $1.8 million of collateral as of December 31, 2024, compared to $27.7 million as of December 31, 2023, related to derivative financial instruments. HTLF’s counterparties were required to pledge $40.0 million as of December 31, 2024, compared to $44.8 million as of December 31, 2023. HTLF records interest rate derivatives subject to master netting agreements at their gross value and does not offset derivative assets and liabilities on the consolidated balance sheets.

HTLF’s derivative and hedging instruments are recorded at fair value on the consolidated balance sheets. See Note Seventeen, “Fair Value,” for additional fair value information and disclosures.

Cash Flow Hedges

In 2021, one interest rate swap terminated, and the debt was converted to variable rate subordinated debentures. HTLF recognized all remaining cash payments related to the terminated derivatives in the first quarter of 2024 and reclassified the remaining cash payments from accumulated other comprehensive income (loss) to interest expense.

In the first quarter of 2023, HTLF terminated its interest rate swap agreement, which effectively converted $500.0 million of variable rate loans to fixed rate loans. HTLF estimates the remaining cash payments and reclassification from accumulated other comprehensive income (loss) to interest expense will total $821,000.

HTLF had no derivative instruments designated as cash flow hedges as of December 31, 2024.

The table below identifies the gains recognized on HTLF’s derivative instrument designated as a cash flow hedge for the years ended December 31, 2024, and December 31, 2023, in thousands:

	Recognized in OCI		Reclassified from AOCI into Income
	Amount of Gain (Loss)		Category		Amount of Gain (Loss)
For the Year Ended December 31, 2024
Interest rate swap	$	—		Interest income	$	705
For the Year Ended December 31, 2023
Interest rate swap	$	1,952		Interest income	$	(575	)

Fair Value Hedges

HTLF uses interest rate swaps to convert certain long term fixed rate loans to floating rates to hedge interest rate risk exposure. HTLF also uses interest rate swaps to mitigate the risk of changes in the fair market value of certain municipal and mortgage-backed securities. The changes in the fair values of derivatives that have been designated and qualify for fair value hedge accounting are recorded in the same line item in the consolidated statements of income as the changes in the fair value of the hedged items attributable to the risk being hedged.

HTLF uses statistical regression to assess hedge effectiveness, both at the inception of the hedge as well as on a continual basis. The regression analysis involves regressing the periodic change in the fair value of the hedging instrument against the periodic changes in the fair value of the asset being hedged due to changes in the hedge risk.

During 2023, HTLF entered into interest rate swaps designated as fair value hedges with initial notional amounts totaling $838.1 million primarily designed to provide protection for unrealized securities losses against the impact of higher mid-to-long term interest rates. HTLF also executed interest rate swaps designated as a fair value hedges with total original notional amounts of $2.50 billion to convert certain long-term fixed rate loans to floating rates to hedge interest rate risk exposure using the portfolio layer method, which allows HTLF to designate as the hedged item a stated amount of the assets that are not expected to be affected by prepayments, defaults and other factors that would affect the timing and amount of cash flow.

During the fourth quarter of 2024, HTLF terminated the interest rate swaps designated as fair value hedges. The $1.8 million net fair value basis will be amortized over the remaining life of the underlying assets. The remaining balance of net fair value basis to amortize is $366,000 as of December 31, 2024.

The table below identifies the fair value of the interest rate swaps designated as fair value hedges and the balance sheet category of the interest rate swaps at December 31, 2024, and December 31, 2023, in thousands:

	Fair Value
December 31, 2024
Interest rate swaps-loans receivable held to maturity	$	—	Other assets
Interest rate swaps-securities carried at fair value		—	Other assets
Interest rate swaps-loans receivable held to maturity		—	Other liabilities
December 31, 2023
Interest rate swaps-loans receivable held to maturity	$	5,027	Other assets
Interest rate swaps-securities carried at fair value		23,182	Other assets
Interest rate swaps-loans receivable held to maturity		27,554	Other liabilities

The table below identifies the carrying amount of the hedged assets and cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets that are designated as a fair value hedge accounting relationship at December 31, 2024, and December 31, 2023, in thousands:

	Location in the ConsolidatedBalanceSheet	Carrying Amount ofthe Hedged Assets		Cumulative Amount of Fair ValueHedging Adjustment Included inCarrying Amount of Hedged Assets
December 31, 2024
Interest rate swap	Loans receivable held to maturity	$	—	$	—
Interest rate swap	Securities carried at fair value		—		—
December 31, 2023
Interest rate swap	Loans receivable held to maturity	$	2,525,261	$	24,652
Interest rate swap	Securities carried at fair value		786,716	$	(20,979	)

The table below identifies the net impact to interest income recognized on HTLF’s fair value hedges specific to the fair value remeasurements and the income statement classification where it is recorded in comparison to the total amount of interest income presented on the consolidated statements of income for the years ended December 31, 2024, and December 31, 2023, in thousands:

	Year Ended December 31,
	2024			2023
Gain (loss) recognized in interest income and fees on loans	$	460		$	(386	)
Total amount of interest and fees on loans		764,516			697,997
Gain (loss) recognized in interest income on securities-taxable		(66	)		66
Total amount of interest on securities-taxable		187,877			223,521

The table below identifies the effect of fair value hedge accounting on the consolidated statements of income, in thousands:

	Year Ended December 31,
	2024			2023
Hedged item (loans receivable held to maturity)	$	(24,190	)	$	24,318
Hedged item (securities carried at fair value)		20,913			(20,913	)
Derivatives designated as hedging instruments on loans receivable held to maturity		24,650			(24,704	)
Derivatives designated as hedging instruments on securities carried at fair value		(20,979	)		20,979

Embedded Derivatives

HTLF has fixed rate loans with embedded derivatives. The loans contain terms that affect the cash flows or value of the loan similar to a derivative instrument, and therefore are considered to contain an embedded derivative. The embedded derivatives are bifurcated from the loans because the terms of the derivative instrument are not clearly and closely related to the loans. The embedded derivatives are recorded at fair value on the consolidated balance sheets as a part of other assets, and changes in the fair value are a component of noninterest income.

During the fourth quarter of 2024, HTLF terminated its embedded derivatives.

The table below identifies the notional amount, fair value and balance sheet category of HTLF’s embedded derivatives as of December 31, 2024, and December 31, 2023, in thousands:

	Notional Amount		Fair Value
December 31, 2024
Embedded derivatives	$	—	$	—	Other Assets
December 31, 2023
Embedded derivatives	$	2,391	$	61	Other Assets

The table below identifies the gains and losses recognized on HTLF’s embedded derivatives for the years ended December 31, 2024 and December 31, 2023, in thousands:

	Year Ended December 31,
	2024			2023
Gain (loss) recognized in other noninterest income on embedded derivatives	$	(61	)	$	(74	)

Back-to-Back Loan Swaps

HTLF has loan interest rate swap relationships with customers to assist them in managing their interest rate risk. Upon entering into these loan swaps, HTLF enters into offsetting positions with counterparties in order to minimize interest rate risk to HTLF. These back-to-back loan swaps qualify as free-standing financial derivatives with the fair values reported in other assets and other liabilities on the consolidated balance sheets. Any gains and losses on these back-to-back swaps are recorded in noninterest income on the consolidated statements of income, and for the years ended December 31, 2024, and December 31, 2023, no gains or losses were recognized. HTLF recognized $5.8 million in fee income for the year ended December 31, 2024, compared to $7.7 million for the year ended December 31, 2023 related to these swaps.

The table below identifies the balance sheet category and fair values of HTLF’s derivative instruments designated as loan swaps at December 31, 2024 and 2023, in thousands:

	NotionalAmount		FairValue
December 31, 2024
Customer interest rate swaps	$	2,062,418	$	55,534		Other Assets
Customer interest rate swaps		2,062,418		(55,534	)	Other Liabilities
December 31, 2023
Customer interest rate swaps	$	1,672,729	$	56,634		Other Assets
Customer interest rate swaps		1,672,729		(56,634	)	Other Liabilities

Other Free-Standing Derivatives

HTLF acquired undesignated interest rate swaps in 2015. These swaps were entered into primarily for the benefit of customers seeking to manage their interest rate risk and are not designated against specific assets or liabilities on the consolidated balance sheet or forecasted transactions and therefore do not qualify for hedge accounting in accordance with ASC 815. These swaps are carried at fair value on the consolidated balance sheets as a component of other liabilities, with changes in the fair value recorded as a component of other noninterest income.

During the fourth quarter of 2024, HTLF terminated its other free standing derivative instruments not designated as hedging instruments.

The table below identifies the balance sheet category and fair values of HTLF’s other free standing derivative instruments not designated as hedging instruments at December 31, 2024, and December 31, 2023, in thousands:


December 31, 2024
Undesignated interest rate swaps	—	—		Other Liabilities
December 31, 2023
Undesignated interest rate swaps	2,391	(61	)	Other Liabilities

HTLF recognizes gains and losses on other free-standing derivatives in two separate income statement categories. Interest rate lock commitments and forward commitments are recognized in net gains on sale of loans held for sale and undesignated interest rate swaps are recognized in other noninterest income. The table below identifies the gains and losses recognized in income on HTLF’s other free standing derivative instruments not designated as hedging instruments for the years ended December 31, 2024, and December 31, 2023, in thousands:

	Year Ended December 31,
	2024		2023
Interest rate lock commitments (mortgage)	$	—	$	(291	)
Forward commitments		—		52
Undesignated interest rate swaps		61		74

ELEVEN

INCOME TAXES

The current income tax provision reflects the tax consequences of revenue and expenses currently taxable or deductible on various income tax returns for the year reported. The deferred income tax provision generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The components of the provision for income taxes for the years ended December 31, 2024, 2023, and 2022 were as follows, in thousands:

	2024		2023			2022
Current:
Federal	$	30,050	$	18,844		$	45,911
State		13,238		7,209			13,549
Total current expense	$	43,288	$	26,053		$	59,460
Deferred:
Federal	$	4,401	$	(7,442	)	$	(3,637	)
State		678		(1,754	)		(250	)
Total deferred expense (benefit)		5,079		(9,196	)		(3,887	)
Total income tax expense	$	48,367	$	16,857		$	55,573

Temporary differences between the amounts reported in the financial statements and the tax basis of assets and liabilities result in deferred taxes. Deferred tax assets and liabilities at December 31, 2024 and 2023, were as follows, in thousands:

	2024			2023
Deferred tax assets:
Net unrealized loss on securities carried at fair value reflected in stockholders’<br>equity	$	106,752		$	107,669
Net unrealized loss on derivatives reflected in stockholders’ equity		(200	)		(382	)
Net unrealized loss on securities transferred from carried at fair value to held to maturity<br>reflected in stockholders’ equity		40,732			42,541
Allowance for credit losses		27,147			34,527
Deferred compensation		13,610			13,055
Net operating loss carryforwards		13,426			14,789
Lease liability		5,649			7,241
Investments in partnerships		4,009			2,042
Other		6,435			7,971
Total deferred tax assets		217,560			229,453
Valuation allowance for deferred tax assets		(12,849	)		(13,000	)
Total deferred tax assets after valuation allowance	$	204,711		$	216,453
Deferred tax liabilities:
Premises, furniture and equipment	$	5,206		$	8,245
Purchase accounting		11,209			10,070
Lease right-of-use<br>asset		5,187			6,391
Deferred loan costs		5,556			6,031
Other		372			912
Total deferred tax liabilities		27,530			31,649
Net deferred tax assets	$	177,181	****	$	184,804	****

As a result of acquisitions, HTLF had net operating loss carryforwards for federal income tax purposes of approximately $10.9 million at December 31, 2024, and $14.0 million at December 31, 2023. The associated deferred tax asset was $2.3 million at December 31, 2024, and $2.9 million at December 31, 2023. These net carryforwards expire during the period from December 31, 2030, through December 31, 2035, and are subject to an annual limitation. Net operating loss carryforwards for state income tax purposes were approximately $173.7 million at December 31, 2024, and $191.9 million at December 31, 2023. The associated deferred tax asset, net of federal tax, was $9.3 million at December 31, 2024, and $9.9 million at December 31, 2023. These carryforwards have begun to expire and will continue to do so until December 31, 2043.

A valuation allowance against the deferred tax asset due to the uncertainty surrounding the utilization of these state net operating loss carryforwards was $9.1 million at December 31, 2024, and $9.4 million at December 31, 2023. During both 2024 and 2023, HTLF had book write-downs on investments that, for tax purposes, would generate capital losses upon disposal. Due to the uncertainty of HTLF’s ability to utilize the potential capital losses, a valuation allowance for these potential losses totaled $1.9 million at December 31, 2024, and $1.7 million at December 31, 2023. HTLF released valuation allowances of $0 and $0 in 2024 and 2023, respectively, on deferred tax assets for capital losses it expects to realize on the disposal of partnership investments.

Realization of the deferred tax asset over time is dependent upon the existence of taxable income in carryback periods or the ability to generate sufficient taxable income in future periods. In determining that realization of the deferred tax asset was more likely than not, HTLF considered a number of factors, including its taxable income during carryback periods, its recent earnings history, its expectations for earnings in the future and, where applicable, the expiration dates associated with its tax carryforwards.

The actual income tax expense from continuing operations differs from the expected amounts for the years ended December 31, 2024, 2023, and 2022, (computed by applying the U.S. federal corporate tax rate of 21% for 2024, 2023, and 2022 income before income taxes) are as follows, in thousands:

	2024			2023			2022
Computed “expected” tax on net income	$	46,193		$	20,323		$	56,228
Increase (decrease) resulting from:
Tax-exempt interest benefit		(2,100	)		(2,624	)		(5,804	)
State income taxes, net of federal tax benefit		10,993			4,310			10,523
Tax credits		(7,908	)		(6,966	)		(6,613	)
Partnership investments		(605	)		1,105			(351	)
Valuation allowance		142			214			13
Excess tax expense/(benefit) on stock compensation		151			107			(113	)
Other		1,501			388			1,690
Income taxes	$	48,367		$	16,857		$	55,573
Effective tax rates		22.0	%		17.4	%		20.8	%

HTLF’s income taxes included solar energy tax credits totaling $5.4 million, $4.2 million, and $4.2 million during 2024, 2023 and 2022, respectively. Federal historic rehabilitation tax credits included in HTLF’s income taxes totaled $1.1 million, $1.1 million, and $1.0 million in 2024, 2023, and 2022, respectively. Additionally, investments in certain low-income housing partnerships totaled $7.5 million at December 31, 2024, $9.3 million at December 31, 2023, and $10.4 million at December 31, 2022. These investments generated federal low-income housing tax credits of $1.0 million during 2024, $1.2 million at December 31, 2023, and $1.1 million at December 31, 2022. These investments are expected to generate federal low-income housing tax credits of approximately $790,000 for 2025, $740,000 for 2026 and $705,000 for 2027, and $705,000 for 2028. Additionally, HTLF had new markets tax credits of $360,000 and $360,000 in 2024 and 2023, respectively.

On December 31, 2024, the amount of unrecognized tax benefits was $786,000, including $177,000 of accrued interest and penalties. On December 31, 2023, the amount of unrecognized tax benefits was $709,000, including $129,000 of accrued interest and penalties. If recognized, the entire amount of the unrecognized tax benefits would affect the effective tax rate.

The tax years ended December 31, 2020, and later remain subject to examination by the Internal Revenue Service. For state purposes, the tax years ended December 31, 2019, and later remain open for examination. HTLF does not anticipate any significant increase or decrease in unrecognized tax benefits during the next twelve months.

TWELVE

EMPLOYEE BENEFIT PLANS

HTLF sponsors a defined contribution retirement plan covering substantially all employees. The plan includes matching contributions and non-elective contributions. Matching contributions and non-elective contributions are limited to a maximum amount of the participant’s wages as defined by federal law.

HTLF’s subsidiaries made matching contributions of up to 5% of participants’ wages in 2024, 5% of participants’ wages in 2023 and 3% of participants’ wages in 2022. Costs charged to operating expenses with respect to the matching contributions were $7.7 million, $7.9 million, and $5.3 million for 2024, 2023 and 2022, respectively.

Non-elective contributions to this plan are subject to approval by the HTLF Board of Directors. The HTLF subsidiaries fund and record as an expense all approved contributions. Costs of these contributions, charged to operating expenses, were $4.5 million, $3.1 million, and $5.8 million for 2024, 2023 and 2022, respectively.

In addition, HTLF has a non-qualified defined contribution plan that allows eligible employees to make voluntary contributions into a deferred compensation plan. Any non-elective contributions to this plan are subject to approval by the HTLF Board of Directors. For the years ended December 31, 2024, 2023 and 2022, the employer contributions to the non-qualified defined contribution plan were $323,000, $235,000 and $222,500, respectively, and are included in the matching contributions and non-elective contributions amounts noted above.

THIRTEEN

COMMITMENTS AND CONTINGENT LIABILITIES

HTLF utilizes a variety of financial instruments in the normal course of business to meet the financial needs of customers and to manage its exposure to fluctuations in interest rates. These financial instruments include lending related and other commitments as indicated below as well as derivative instruments shown in Note Ten, “Derivative Financial Instruments.” HTLF Bank makes various commitments and incurs certain contingent liabilities that are not presented in the accompanying consolidated financial statements. The commitments and contingent liabilities include various guarantees, commitments to extend credit and standby letters of credit.

Commitments to extend credit are agreements to lend to a customer if there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. HTLF Bank evaluates the creditworthiness of customers to which they extend a credit commitment on a case-by-case basis and may require collateral to secure any credit extended. The amount of collateral obtained is based upon management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties. Standby letters of credit and financial guarantees are conditional commitments issued by HTLF Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. At December 31, 2024, and at December 31, 2023, commitments to extend credit aggregated $3.89 billion and $4.62 billion, respectively, and standby letters of credit aggregated $47.7 million and $56.4 million, respectively.

Previously, HTLF entered into commitments to sell mortgage loans to reduce interest rate risk on certain mortgage loans held for sale and loan commitments, which were recorded in the consolidated balance sheets at their fair values. HTLF does not anticipate any material loss as a result of the commitments and contingent liabilities. Residential mortgage loans sold to others were predominantly conventional residential first lien mortgages originated under HTLF’s usual underwriting procedures and were most often sold on a nonrecourse basis. HTLF’s agreements to sell residential mortgage loans in the normal course of business, primarily to GSE’s, which usually required certain representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently are untrue or breached, could require HTLF to repurchase certain loans affected. HTLF had no repurchase obligation at both December 31, 2024 and December 31, 2023. HTLF had no new requests for repurchases during 2024 and 2023.

There are certain legal proceedings pending against HTLF and its subsidiaries at December 31, 2024, that are ordinary routine litigation incidental to business. While the ultimate outcome of current legal proceedings cannot be predicted with certainty, it is the opinion of management that the resolution of these legal actions should not have a material effect on HTLF’s consolidated financial position or results of operation.

FOURTEEN

STOCK-BASED COMPENSATION

Under its 2024 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 was approved by stockholders in May 2024 and replaces the 2020 Long-Term Incentive Plan. The Plan has authorized a total of 2,460,000 shares of common stock for issuance, of which 1,484,189 shares of common stock were available as of December 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 $178,000 and $123,000 of tax expense for the years ended December 31, 2024 and 2023 respectively, related to the vesting and forfeiture of equity-based awards.

Restricted Stock Units

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

The time-based RSUs may also vest upon death or disability, upon a change in control or upon a “qualified retirement” (as defined in the RSU agreement), and the three-year performance-based RSUs vest to the extent that they are earned upon death or disability or upon a “qualified retirement” (as defined in the RSU agreement) after measurement of performance.

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 December 31, 2024, 2023 and 2022, and changes during the years ended December 31, 2024, 2023, and 2022, follows:

	2024					2023					2022
	Shares			Weighted-AverageGrant DateFair Value		Shares			Weighted-AverageGrant DateFair Value		Shares			Weighted-AverageGrant DateFair Value
Outstanding at January 1		466,105		$	47.22		424,086		$	46.15		389,885		$	44.19
Granted		341,983			34.68		278,999			44.94		242,718			48.38
Vested		(205,759	)		43.95		(183,511	)		41.39		(159,880	)		44.96
Forfeited		(76,701	)		45.16		(53,469	)		46.84		(48,637	)		45.49
Outstanding at December 31		525,628		$	40.63		466,105		$	47.22		424,086		$	46.15

Total compensation costs recorded for RSUs were $10.3 million, $9.0 million and $7.8 million, for 2024, 2023 and 2022, respectively. As of December 31, 2024, there were $8.2 million of total unrecognized compensation costs related to the Plan for RSUs which are expected to be recognized through 2027.

Stock Options

The plan provides the Compensation Committee the authority to grant stock options. There were no options granted in the years ended December 31, 2024 and 2023. During the year ended December 31, 2022, 64,518 options granted. Options granted generally vest over the first four years in equal installments on the anniversary date of the grant. The exercise price of the stock options granted is 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.

The stock options may also vest upon death or disability, upon a change in control or upon a “qualified retirement” as defined in the stock option agreement.

A summary of the status of the stock options as of December 31, 2024, 2023, and 2022, and changes during the years ended December 31, 2024, 2023, and 2022 follows:

	2024					2023					2022
	Shares			WeightedAverageExercisePrice		Shares			WeightedAverageExercisePrice		Shares		WeightedAverageExercisePrice
Outstanding at January 1,		58,066		$	48.79		64,518		$	48.79		—	$	—
Granted		—			—		—			—		64,518		48.79
Exercised		(2,418	)		48.79		—			—		—		—
Forfeited		(5,161	)		—		(6,452	)		—		—		—
Outstanding at December 31		50,487			48.79		58,066			48.79		64,518		48.79
Options exercisable at December 31,		24,030		$	48.79		—		$	—		—	$	—

At December 31, 2024, the vested options have a weighted average remaining contractual life of 7.92 years. The intrinsic value for the vested options as of December 31, 2024, was $301,000. The intrinsic value for the total of all options exercised during year ended December 31, 2024, was $34,000. The total fair value of shares under stock options that vested during the year ended December 31, 2024, was $145,000. Total compensation costs recorded for stock options were $198,000, $221,000, and $167,000 for 2024, 2023, and 2022, respectively. As of December 31, 2024, there was $233,000 of total unrecognized compensation costs related to the Plan for options that are expected to be recognized through 2026.

Employee Stock Purchase Plan

HTLF maintains an employee stock purchase plan (the “ESPP”), which was adopted in May 2016 and replaced the 2006 ESPP, that permits all eligible employees to purchase shares of HTLF common stock at a discounted price as determined by the Compensation Committee. Under ASC Topic 718, compensation expense related to the ESPP of $177,000 was recorded in 2024, $192,000 was recorded in 2023, and $214,000 was recorded in 2022.

A maximum of 500,000 shares is available for purchase under the ESPP, and as of December 31, 2024, 135,959 shares remain available for purchase. Beginning with the 2020 plan year, the Compensation Committee authorized HTLF to make ESPP purchases semi-annually, and the purchases are to be made as soon as practicable on or after June 30 and December 31. For employee deferrals made in the 2024 plan year, shares purchased in 2024 totaled 35,578. For employee deferrals made in the 2023 plan year, shares purchased in 2023 totaled 60,583. For employee deferrals made in the 2022 plan year, shares purchased in 2022 totaled 49,169.

FIFTEEN

CAPITALISSUANCES

Common Stock

For a description of the issuance of shares of HTLF common stock in connection with the 2024 Long-Term Incentive Plan and the 2016 ESPP, see Note Fourteen, “Stock-Based Compensation.”

Shelf Registration

HTLF filed a universal shelf registration with the SEC to register debt or equity securities on August 8, 2022, that expires on August 8, 2025. This registration statement, which was effective immediately, provides HTLF the ability to raise capital, subject to market conditions and SEC rules and limitations, if HTLF’s board of directors decides to do so. This registration statement permits HTLF, from time to time, in one or more public offerings, to offer debt securities, subordinated notes, common stock, preferred stock, depositary shares, warrants, rights, units or any combination of these securities. The amount of securities that may have been offered was not specified in the registration statement, and the terms of any future offerings were to be established at the time of the offering.

SIXTEEN

REGULATORY CAPITAL REQUIREMENTS AND RESTRICTIONS ON SUBSIDIARY DIVIDENDS

HTLF Bank is 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 HTLF Bank’s 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 HTLF Bank 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, 2024 and 2023, that HTLF Bank met all capital adequacy requirements to which it was subject.

As of December 31, 2024 and 2023, the FDIC categorized HTLF Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank 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, 2024, that management believes have changed each institution’s category.

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

	Actual					For CapitalAdequacy Purposes					To Be Well CapitalizedUnder PromptCorrective ActionProvisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2024
Total Capital (to Risk-Weighted Assets)
Consolidated	$	2,334,764		16.89	%	$	1,106,059		8.00	%	$	1,382,574		10.00	%
HTLF Bank		2,049,447		14.92			1,099,000		8.00			1,373,750		10.00
Tier 1 Capital (to Risk-Weighted Assets)
Consolidated	$	1,929,484		13.96	%	$	829,544		6.00	%	$	829,544		6.00	%
HTLF Bank		1,942,827		14.14			824,250		6.00			1,099,000		8.00
Common Equity Tier 1 (to Risk-Weighted Assets)
Consolidated	$	1,818,779		13.16	%	$	622,158		4.50	%		N/A
HTLF Bank		1,942,827		14.14			618,187		4.50		$	892,937		6.50	%
Tier 1 Capital (to Average Assets)
Consolidated	$	1,929,484		11.15	%	$	692,349		4.00	%		N/A
HTLF Bank		1,942,827		11.02			704,968		4.00		$	881,210		5.00	%

	Actual					For CapitalAdequacy Purposes					To Be Well CapitalizedUnder PromptCorrective ActionProvisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2023
Total Capital (to Risk-Weighted Assets)
Consolidated	$	2,237,035		14.53	%	$	1,231,972		8.00	%	$	1,539,965		10.00	%
HTLF Bank		1,969,006		12.85			1,225,669		8.00			1,532,087		10.00
Tier 1 Capital (to Risk-Weighted Assets)
Consolidated	$	1,800,542		11.69	%	$	923,979		6.00	%	$	923,979		6.00	%
HTLF Bank		1,829,972		11.94			919,252		6.00			1,225,669		8.00
Common Equity Tier 1 (to Risk-Weighted Assets)
Consolidated	$	1,689,837		10.97	%	$	692,984		4.50	%		N/A
HTLF Bank		1,829,972		11.94			689,439		4.50		$	995,856		6.50	%
Tier 1 Capital (to Average Assets)
Consolidated	$	1,800,542		9.44	%	$	763,309		4.00	%		N/A
HTLF Bank		1,829,972		9.26			790,709		4.00		$	988,386		5.00	%

The ability of HTLF to pay dividends to its stockholders is dependent upon dividends paid by its subsidiaries. HTLF Bank is subject to certain statutory and regulatory restrictions on the amount it may pay in dividends. To maintain acceptable capital ratios for the HTLF Bank, 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 $950.4 million as of December 31, 2024, under the most restrictive minimum capital requirements. Retained earnings that could be available for the payment of dividends to HTLF totaled approximately $675.7 million as of December 31, 2024, under the capital requirements to remain well capitalized.

SEVENTEEN

FAIR VALUE

HTLF utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities carried at fair value, which include available for sale, trading securities and equity securities with a readily determinable fair value, and derivatives are recorded in the consolidated balance sheets at fair value on a recurring basis. Additionally, from time to time, HTLF may be required to record at fair value other assets on a nonrecurring basis such as loans held for sale, loans held to maturity and certain other assets including, but not limited to, mortgage servicing rights and other real estate owned. These nonrecurring fair value adjustments typically involve application of lower of cost or fair value accounting or write-downs of individual assets.

Fair Value Hierarchy

Under ASC 820, assets and liabilities are grouped at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level**1 — Valuation is based upon quoted prices for identical instruments in active markets.

Level**2 — Valuation is based upon quoted prices for similar instruments in active markets, or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level**3 — Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring or non-recurring basis.

Assets

Securities Available for Sale and Held to Maturity

Securities available for sale are recorded at fair value on a recurring basis. Securities held to maturity are generally recorded at cost. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, as well as U.S. Treasury securities. Level 2 securities include U.S. government and agency securities, mortgage and asset-backed securities and private collateralized mortgage obligations, municipal bonds, equity securities and corporate debt securities. On a quarterly basis, a secondary independent pricing service is used for the securities portfolio to validate the pricing from HTLF’s primary pricing service.

Equity Securities with a Readily Determinable Fair Value

Equity securities with a readily determinable fair value generally include Community Reinvestment Act mutual funds and are classified as Level 2 due to the infrequent trading of these securities. The fair value is based on the price per share.

Loans Held for Sale

Loans held for sale are carried at the lower of cost or fair value on an aggregate basis. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, HTLF classifies loans held for sale subjected to nonrecurring fair value adjustments as Level 2.

Loans Held to Maturity

HTLF does not record loans held to maturity at fair value on a recurring basis. However, from time to time, certain loans are considered collateral dependent and an allowance for credit losses is established. The fair value of individually assessed loans is measured using the fair value of the collateral. In accordance with ASC 820, individually assessed loans measured at fair value are classified as nonrecurring Level 3 in the fair value hierarchy.

Premises, Furniture and Equipment Held for Sale

HTLF values premises, furniture and equipment held for sale based on third-party appraisals less estimated disposal costs. HTLF considers third-party appraisals, as well as independent fair value assessments from realtors or persons involved in selling bank premises, furniture and equipment, in determining the fair value of particular properties. Accordingly, the valuation of premises, furniture and equipment held for sale is subject to significant external and internal judgment. HTLF periodically reviews premises, furniture and equipment held for sale to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. Premises, furniture and equipment held for sale are measured at fair value and are classified as nonrecurring Level 3 in the fair value hierarchy.

Derivative Financial Instruments

HTLF’s current interest rate risk strategy includes cash flow hedges and interest rate swaps. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, HTLF incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, HTLF has considered the impact of netting any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although HTLF has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2024, and December 31, 2023, HTLF has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, HTLF has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Interest Rate Lock Commitments

HTLF uses an internal valuation model that relies on internally developed inputs to estimate the fair value of its interest rate lock commitments which is based on unobservable inputs that reflect management’s assumptions and specific information about each borrower. Interest rate lock commitments are classified in Level 3 of the fair value hierarchy.

Forward Commitments

The fair value of forward commitments is estimated using an internal valuation model, which includes current trade pricing for similar financial instruments in active markets that HTLF has the ability to access and are classified in Level 2 of the fair value hierarchy.

Other Real Estate Owned

Other real estate owned (“OREO”) represents property acquired through foreclosures and settlements of loans. Property acquired is carried at the fair value of the property at the time of acquisition (representing the property’s cost basis), plus any acquisition costs, or the estimated fair value of the property, less disposal costs. HTLF considers third-party appraisals, as well as independent fair value assessments from realtors or persons involved in selling OREO, in determining the fair value of particular properties. Accordingly, the valuation of OREO is subject to significant external and internal judgment. HTLF periodically reviews OREO to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. OREO is classified as nonrecurring Level 3 of the fair value hierarchy.

The tables below present HTLF’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024, and December 31, 2023, in thousands, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Total FairValue		Level 1		Level 2		Level 3
December 31, 2024
Assets
Securities available for sale
U.S. treasuries	$	7,970	$	7,970	$	—	$	—
U.S. agencies		10,732		—		10,732		—
Obligations of states and political subdivisions		712,333		—		712,333		—
Mortgage-backed securities - agency		1,277,224		—		1,277,224		—
Mortgage-backed securities - non-agency		1,137,994		—		1,137,994		—
Commercial mortgage-backed securities - agency		58,019		—		58,019		—
Commercial mortgage-backed securities -<br>non-agency		120,537		—		120,537		—
Asset-backed securities		103,272		—		103,272		—
Corporate bonds		110,069		—		110,069		—
Equity securities with a readily determinable fair value		22,208		—		22,208		—
Derivative financial instruments^(1)^		55,534		—		55,534		—
Total assets at fair value	$	3,615,892	$	7,970	$	3,607,922	$	—
Liabilities
Derivative financial instruments^(1)^	$	55,534	$	—	$	55,534	$	—
Total liabilities at fair value	$	55,534	$	—	$	55,534	$	—
(1)	Includes back-to-back loan<br>swaps.
---	---

	Total FairValue		Level 1		Level 2		Level 3
December 31, 2023
Assets
Securities available for sale
U.S. treasuries	$	32,118	$	32,118	$	—	$	—
U.S. agencies		14,530		—		14,530		—
Obligations of states and political subdivisions		741,245		—		741,245		—
Mortgage-backed securities - agency		1,393,629		—		1,393,629		—
Mortgage-backed securities - non-agency		1,529,128		—		1,529,128		—
Commercial mortgage-backed securities - agency		64,788		—		64,788		—
Commercial mortgage-backed securities -<br>non-agency		514,858		—		514,858		—
Asset-backed securities		217,370		—		217,370		—
Corporate bonds		118,169		—		118,169		—
Equity securities		21,056		—		21,056		—
Derivative financial instruments^(1)^		84,904		—		84,904		—
Total assets at fair value	$	4,731,795	$	32,118	$	4,699,677	$	—
Liabilities
Derivative financial instruments^(2)^	$	84,249	$	—	$	84,249	$	—
Total liabilities at fair value	$	84,249	$	—	$	84,249	$	—
(1)	Includes embedded derivatives,<br>back-to-back loan swaps and cash flow hedges.
---	---
(2)	Includes cash flow hedges, fair value hedges,<br>back-to-back loan swaps and free-standing derivative instruments.
---	---

The tables below present HTLF’s assets that are measured at fair value on a nonrecurring basis, in thousands:

	Fair Value Measurements at December 31, 2024
	Total		QuotedPrices inActiveMarkets forIdenticalAssets(Level 1)		SignificantOtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)		(Gains)/Losses
Collateral dependent individually assessed loans:
Commercial and industrial	$	11,791	$	—	$	—	$	11,791	$	13,343
Owner occupied commercial real estate		1,974		—		—		1,974		—
Non-owner occupied commercial real estate		54,372		—		—		54,372		43,124
Real estate construction		13,410		—		—		13,410		3,112
Agricultural and agricultural real estate		9,253		—		—		9,253		9,269
Residential real estate		727		—		—		727		—
Total collateral dependent individually assessed loans	$	91,527	$	—	$	—	$	91,527	$	68,848
Loans held for sale	$	—	$	—	$	—	$	—	$	—
Other real estate owned		4,291		—		—		4,291		—
Premises, furniture and equipment held for sale		8,952		—		—		8,952		1,246

	Fair Value Measurements at December 31, 2023
	Total		QuotedPrices inActiveMarkets forIdenticalAssets(Level 1)		SignificantOtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)		(Gains)/Losses
Collateral dependent individually assessed loans:
Commercial and industrial	$	23,422	$	—	$	—	$	23,422	$	554
Owner occupied commercial real estate		30,400		—		—		30,400		—
Non-owner occupied commercial real estate		—		—		—		—		—
Real estate construction		642		—		—		642		—
Agricultural and agricultural real estate		4,768		—		—		4,768		5,309
Residential real estate		741		—		—		741		—
Total collateral dependent impaired loans	$	59,973	$	—	$	—	$	59,973	$	5,863
Loans held for sale	$	5,071	$	—	$	5,071	$	—	$	—
Other real estate owned		12,548		—		—		12,548		2,967
Premises, furniture and equipment held for sale		4,069		—		—		4,069		2,786

The following tables present additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which HTLF has utilized Level 3 inputs to determine fair value, in thousands:

	Fair Value at 12/31/24		Valuation Technique	Unobservable Input	Range (Weighted Average)
Premises, furniture and equipment held for sale	$	8,952	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Other real estate owned		4,291	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discounts	(1)<br>0-10%^(2)^
Collateral dependent individually assessed loans:
Commercial and industrial		11,791	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Owner occupied commercial real estate		1,974	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-15%^(2)^
Non-owner occupied commercial real estate		54,372	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Real estate construction		13,410	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Agricultural and agricultural real estate		9,253	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0%-15%^(2)^
Residential real estate		727	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
(1)	Third-party appraisals are obtained and updated at least annually to establish the value of the underlying<br>asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal.
---	---
(2)	Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of<br>the appraisal, changes in local market conditions and changes in the current condition of the collateral.
---	---

	Fair Value at 12/31/23		Valuation Technique	Unobservable Input	Range (Weighted Average)
Premises, furniture and equipment held for sale		4,069	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Other real estate owned		12,548	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discounts	(1)<br>0-10%^(2)^
Collateral dependent individually assessed loans:
Commercial and industrial		23,422	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-12%^(2)^
Owner occupied commercial real estate		30,400	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discounts	(1)<br>0-20%^(2)^
Non-owner occupied commercial real estate		—	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discounts	(1)<br>0-10%^(2)^
Real estate construction		642	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Agricultural and agricultural real estate		4,768	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
Residential real estate		741	Modified appraised value	Third-party appraisal<br><br><br>Appraisal discount	(1)<br>0-10%^(2)^
(1)	Third-party appraisals are obtained and updated at least annually to establish the value of the underlying<br>asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal.
---	---
(2)	Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of<br>the appraisal, changes in local market conditions and changes in the current condition of the collateral.
---	---

The changes in fair value of the interest rate lock commitments, which are Level 3 financial instruments and are measured on a recurring basis, are summarized in the following table, in thousands:

	For the Years Ended
	December 31, 2024		December 31, 2023
Balance at January 1,	$	—	$	174
Total losses, net, included in earnings		—		(290	)
Issuances		—		1,864
Settlements		—		(1,748	)
Balance at period end	$	—	$	—

Gains included in net gains on sale of loans held for sale attributable to interest rate lock commitments held were $0 at both December 31, 2024, and December 31, 2023.

EIGHTEEN

REVENUE

ASC 606, Revenue from Contracts withCustomers, requires revenue to be recognized at an amount that reflects the consideration to which HTLF expects to be entitled in exchange for transferring goods or services to a customer. ASC 606 applies to all contracts with customers to provide goods or services in the ordinary course of business, except for contracts that are specifically excluded from its scope. The majority of HTLF’s revenue streams including interest income, loan servicing income, net securities gain and losses, net unrealized gains and losses on equity securities, net gains on sale of loans held for sale, valuation adjustment on servicing rights, income from bank owned life insurance and other noninterest income are outside the scope of ASC 606. Revenue streams including service charges and fees, interchange fees on credit and debit cards, trust fees and brokerage and insurance commissions are within the scope of ASC 606.

Service Charges and Fees

Service charges and fees consist of revenue generated from deposit account related service charges and fees, overdraft fees, customer service fees and other service charges, credit card fee income, debit card income and other service charges and fees.

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders and other deposit account related fees. HTLF’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees, including overdraft fees, are largely transaction based, and therefore, the performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Customer service fees and other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. HTLF’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

Credit card fee income and debit card income are comprised of interchange fees, ATM fees, and merchant services income. Credit card fee income and debit card income are earned whenever HTLF Bank’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Bank cardholder uses an ATM that is not owned by one of HTLF’s Banks or a non-bank cardholder uses HTLF-owned ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees.

Trust Fees

Trust fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. HTLF’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the average daily market value or month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days before or after month end through a direct charge to customers’ accounts. HTLF does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. HTLF’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

Brokerage and Insurance Commissions

Brokerage commission primarily consists of commissions related to broker-dealer contracts. The contracts are between the customer and the broker-dealer, and HTLF satisfies its performance obligation and earns commission when the transactions are completed. The recognition of revenue is based on a defined fee schedule and does not require significant judgment. Payment is received shortly after services are rendered. Insurance commissions are related to commissions received directly from the insurance carrier. HTLF acts as an insurance agent between the customer and the insurance carrier. HTLF’s performance obligations and associated fee and commission income are defined with each insurance product with the insurance company. When insurance payments are received from customers, a portion of the payment is recognized as commission revenue.

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the year ended December 31, 2024, 2023, and 2022, in thousands:

	For the Years Ended December 31,
	2024			2023			2022
In-scope of Topic 606
Service charges and fees
Service charges and fees on deposit accounts	$	23,796		$	21,037		$	18,625
Overdraft fees		3,589			11,878			12,136
Customer service and other service fees		325			358			375
Credit card fee income		29,868			31,102			27,560
Debit card income		9,675			9,649			9,335
Total service charges and fees		67,253			74,024			68,031
Trust fees		21,213			20,715			22,570
Brokerage and insurance commissions		3,318			2,794			2,986
Total noninterest income in-scope of Topic 606	$	91,784		$	97,533		$	93,587
Out-of-scope ofTopic 606
Loan servicing income	$	456		$	1,561		$	2,741
Capital markets fees		6,887			10,007			11,543
Securities losses, net		(21,144	)		(141,539	)		(425	)
Unrealized gain (loss) on equity securities, net		539			240			(622	)
Net gains on sale of loans held for sale		104			3,880			9,032
Valuation adjustment on servicing rights		—			—			1,658
Income on bank owned life insurance		4,837			3,771			2,341
Other noninterest income		9,490			3,621			8,409
Total noninterest income<br>out-of-scope of Topic 606		1,169			(118,459	)		34,677
Total noninterest income	$	92,953		$	(20,926	)	$	128,264

Contract Balances

HTLF does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2024, 2023, and 2022, HTLF did not have any significant contract balances or capitalized contract acquisition costs.

NINETEEN

PARENT COMPANY ONLY FINANCIAL INFORMATION

Condensed financial information for Heartland Financial USA, Inc. is as follows:

BALANCE SHEETS (Dollars in thousands)

	December 31,
	2024			2023
Assets:
Cash and interest-bearing deposits	$	213,838		$	288,203
Investment in subsidiaries		2,098,977			1,971,014
Other assets		85,639			72,501
Total assets	$	2,398,454		$	2,331,718
Liabilities and Stockholders’ equity:
Borrowings	$	298,661		$	372,316
Accrued expenses and other liabilities		21,998			26,285
Total liabilities		320,659			398,601
Stockholders’ equity:
Preferred stock		110,705			110,705
Common stock		42,901			42,688
Capital surplus		1,102,084			1,090,740
Retained earnings		1,253,255			1,141,501
Accumulated other comprehensive loss		(431,150	)		(452,517	)
Total stockholders’ equity		2,077,795			1,933,117
Total liabilities and stockholders’ equity	$	2,398,454		$	2,331,718

INCOME STATEMENTS (Dollars in thousands)

	For the Years Ended December 31,
	2024			2023			2022
Operating revenues:
Dividends from subsidiaries	$	90,000		$	50,000		$	142,500
Other		6,373			1,486			1,200
Total operating revenues		96,373			51,486			143,700
Operating expenses:
Interest		22,429			22,637			16,886
Salaries and employee benefits		5,016			4,610			7,225
Professional fees		11,556			8,807			11,594
Other operating expenses		7,383			9,287			10,474
Total operating expenses		46,384			45,341			46,179
Equity in undistributed earnings		106,817			57,799			98,983
Income before income tax benefit		156,806			63,944			196,504
Income tax benefit		14,795			15,976			15,676
Net income		171,601			79,920			212,180
Preferred dividends		(8,050	)		(8,050	)		(8,050	)
Net income available to common stockholders	$	163,551		$	71,870		$	204,130

STATEMENTS OF CASH FLOWS (Dollars in thousands)

	For the Years Ended December 31,
	2024			2023			2022
Cash flows from operating activities:
Net income	$	171,601		$	79,920		$	212,180
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings of subsidiaries		(106,817	)		(57,799	)		(98,983	)
Decrease in accrued expenses and other liabilities		(4,633	)		(17,090	)		(8,946	)
(Decrease) increase in other assets		(13,138	)		23,335			(13,933	)
Excess tax (expense) benefit from stock-based compensation		(178	)		(123	)		131
Other, net		12,398			11,537			9,958
Net cash provided by operating activities		59,233			39,780			100,407
Cash flows from investing activities:
Capital contributions to subsidiaries		—			—			—
Net cash used by investing activities		—			—			—
Cash flows from financing activities:
Proceeds from borrowings		—			—			—
Repayments of borrowings		(75,000	)		—			—
Cash dividends paid		(59,501	)		(59,151	)		(54,249	)
Proceeds from issuance of common stock		903			548			1,038
Net cash used in financing activities		(133,598	)		(58,603	)		(53,211	)
Net (decrease) increase in cash and cash equivalents		(74,365	)		(18,823	)		47,196
Cash and cash equivalents at beginning of year		288,203			307,026			259,830
Cash and cash equivalents at end of year	$	213,838		$	288,203		$	307,026
Supplemental disclosure:
Dividends declared, not paid		2,551			2,013			2,013
Net assets from dissolved subsidiary		—			883			—

TWENTY

LEASES

HTLF, as lessee, leases certain assets for use in its operations. Leased assets primarily include real estate property for retail branches, ATM locations and operations centers with terms extending through 2031. All HTLF’s leases are classified as operating leases. HTLF excludes leases with an original term of twelve months or less and equipment leases (deemed immaterial) on the consolidated balance sheets. HTLF leases some of its facilities to third parties and receives rental income from such lease agreements which is not significant.

The table below presents HTLF’s right-of-use (“ROU”) assets and lease liabilities as of December 31, 2024 and December 31, 2023, in thousands:

		As of December 31,
	Classification	2024		2023
Operating lease<br>right-of-use assets	Other assets	$	20,504	$	25,859
Operating lease liabilities	Accrued expenses and other liabilities		22,322		29,333

The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. HTLF’s lease agreements often include one or more options to renew at HTLF’s discretion. If at lease inception, HTLF considers the exercising of a renewal option to be reasonably certain, HTLF will include the extended term in the calculation of the ROU asset and lease liability. HTLF utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. The variable lease cost primarily represents variable payments such as common area maintenance and utilities.

The table below presents the lease costs and supplemental information as of December 31, 2024, 2023, and 2022, in thousands:

			As of December 31,
Lease Cost	Income Statement Category		2024		2023		2022
Operating lease cost		Occupancy expense	$	6,791	$	7,768	$	7,256
Variable lease cost		Occupancy expense		48		11		16
Total lease cost			$	6,839	$	7,779	$	7,272
Supplemental Information
Noncash reduction of ROU assets		Occupancy expense	$	254	$	1,164	$	32
Noncash reduction lease liabilities		Occupancy expense		—		—		10
Supplemental balance sheet information	As of December 31, 2024
---	---	---	---
Weighted-average remaining operating lease term (in years)		4.84
Weighted-average discount rate for operating leases		3.13	%

Included in the noncash reduction of ROU assets in 2024 and 2023 are expenses related to lease modifications and ROU acceleration related to lease abandonments.

HTLF did not record any impairment on leases in 2024. HTLF recorded $63,000 of impairment on one lease in 2023, and $360,000 of impairment on one lease in 2022.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities as of December 31, 2024 is as follows, in thousands:

Year ending December 31,
2025	$	5,664
2026		4,986
2027		4,332
2028		3,958
2029		3,424
Thereafter		1,700
Total lease payments	$	24,064
Less interest		(1,742	)
Present value of lease liabilities	$	22,322

EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

Introduction

UMB Financial Corporation (“UMB” or the “Company”) is providing the following unaudited pro forma condensed combined financial data to aid stockholders in their analysis of the financial aspects of (i) the merger (the “Merger”) between UMB and Heartland Financial USA, Inc. (“HTLF”), pursuant to the Agreement and Plan of Merger, dated as of April 28, 2024, by and among UMB, HTLF and Blue Sky Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of UMB and (ii) the forward sale agreement by and between UMB and Bank of America, N.A. (the “forward purchaser”), dated as of April 28, 2024 and the additional forward sale agreement by and between UMB and the forward purchaser, dated as of April 30, 2024 (together, the “forward sale agreement”). The unaudited pro forma condensed combined financial data has been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the accompanying notes.

The unaudited pro forma condensed combined balance sheet as of December 31, 2024 combines the audited consolidated balance sheet of UMB as of December 31, 2024 with the audited consolidated balance sheet of HTLF as of December 31, 2024, giving effect to the Merger and the forward sale agreement as if the Merger had been consummated and the forward sale agreement had been fully physically settled on December 31, 2024.

The unaudited pro forma condensed combined statement of income for the year ended December 31, 2024 combines the audited consolidated statement of income of UMB for the year ended December 31, 2024 with the audited consolidated statement of income of HTLF for the year ended December 31, 2024, giving effect to the Merger and forward sale agreement as if the Merger had been consummated and the forward sale agreement had been fully physically settled on January 1, 2024.

The unaudited pro forma condensed combined financial data was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes:

•	The historical audited consolidated financial statements of UMB as of and for the year ended December 31,<br>2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024; and
•	The historical audited consolidated financial statements of HTLF as of and for the year ended December 31,<br>2024 filed as Exhibit 99.1 to this Current Report on Form 8-K/A.
---	---

The foregoing historical financial statements have been prepared in accordance with GAAP. The unaudited pro forma condensed combined financial data has been prepared based on the aforementioned historical financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial data. The pro forma adjustments reflect transaction accounting adjustments related to the Merger and the forward sale agreement, both of which are discussed in further detail below. Amounts presented reflect the accounting for the acquisition of HTLF by UMB. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent the combined company’s consolidated results of operations or consolidated financial position that would actually have occurred had the Merger been consummated and the forward sale agreement been fully physically settled on the dates assumed or to project the combined company’s consolidated results of operations or consolidated financial position for any future date or period.

The unaudited pro forma condensed combined financial data appearing below also does not consider any potential effects of changes in market conditions on revenues or expense efficiencies, among other factors. In addition, as explained in more detail in the accompanying notes, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial data is subject to adjustment and may vary significantly from the actual purchase price allocation that will be recorded upon completion of the Merger.

Accounting for the Merger

The acquisition of HTLF has been accounted for using the purchase method of accounting. The total purchase price has been allocated to the tangible and intangible assets and liabilities acquired based on their respective fair values.

Forward sale agreement

On April 28, 2024, the Company entered into an underwriting agreement (the “underwriting agreement”) with BofA Securities, Inc. and Morgan Stanley & Co. LLC, as representatives for the underwriters named therein (collectively, the “underwriters”), the forward purchaser, and BofA Securities, Inc. as forward seller (the “forward seller”), relating to the registered public offering and sale by the forward seller of 2,800,000 shares of the Company’s common stock, par value $1.00 per share (“common stock”). On April 30, 2024, the underwriters exercised in full their option to purchase an additional 420,000 shares of common stock pursuant to the underwriting agreement. In connection with the forward sale agreement, the forward purchaser or its affiliate borrowed from third parties an aggregate of 3,220,000 shares of common stock. Such borrowed shares of common stock were delivered by the forward seller for sale by the underwriters in the offering.

The Company did not receive any proceeds from the sale of the shares of common stock sold by the forward seller to the underwriters. On March 14, 2025, the Company physically settled the forward sale agreement (by the delivery of shares of common stock) and received proceeds, before expenses, of approximately $235.1 million.

Basis of Pro Forma Presentation

The historical financial data of UMB and HTLF has been adjusted to give pro forma effect to the transaction accounting required for the Merger and the forward sale agreement. The adjustments in the unaudited pro forma condensed combined financial data have been identified and presented to provide relevant information necessary to evaluate the financial overview of the combined company upon closing of the Merger and full physical settlement of the forward sale agreement for approximately $235.1 million.

The unaudited pro forma condensed combined financial data is not necessarily indicative of what the combined company’s balance sheet or statement of income would have been had the Merger been completed and the forward sale agreement been fully physically settled as of the dates indicated, nor do they purport to project the future financial position or operating results of the combined company. The unaudited pro forma condensed combined financial data is presented for illustrative purposes only and does not reflect the costs of any integration activities or cost savings or synergies that may be achieved as a result of the Merger. HTLF and UMB have not had any historical material relationship prior to the Merger. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2024

(in thousands)

			HTLF Historical			TransactionAdjustments			Combined ProFormas
ASSETS
Loans	25,642,301			11,155,866			(1,357,646	) (A)		35,440,521
Allowance for credit losses on loans	(259,089	)		(96,500	)		34,374	(A)		(383,252	)
							(62,037	) (D)
Net loans	25,383,212	****	****	11,059,366	****	****	(1,385,309	)	****	35,057,269	****
Loans held for sale	2,756			—						2,756
Securities:
Available for sale	7,774,334			3,560,358						11,334,692
Held to maturity, net of allowance for credit losses	5,376,267			837,390			(381,048	) (A)		5,832,609
Trading securities	28,533									28,533
Other securities / Other investments at cost	471,018			67,890						538,908
Total securities	13,650,152	****	****	4,465,638	****	****	(381,048	)	****	17,734,742	****
Federal funds sold and securities purchased under agreements to resell	545,000									545,000
Interest-bearing due from banks	7,986,270									7,986,270
Interest bearing deposits with other banks and other short-term investments	—			206,138						206,138
Cash and due from banks	573,175			174,686			235,141	(B)		768,002
							(215,000	) (C)
Time deposits in other financial institutions	—			800						800
Premises and equipment, net	221,773			143,930			25,328	(A)		391,031
Premises and equipment held for sale	—			8,952						8,952
Other real estate, net	—			4,291						4,291
Accrued income	246,095									246,095
Goodwill	207,385			576,005			1,609,339	(A)		2,392,729
Other intangibles, net	63,647			12,823			511,021	(A)		587,491
Cash surrender value on life insurance	—			201,298						201,298
Deferred tax assets	—						240,204	(A)		240,204
Other assets	1,530,199			436,490						1,966,689
Total assets	50,409,664	****	****	17,290,417	****	****	639,676	****	****	68,339,757	****
LIABILITIES
Deposits
Noninterest-bearing demand	13,617,167			3,773,753						17,390,920
Interest-bearing demand and savings	27,397,195			9,249,071						36,646,266
Time deposits under 250,000	969,132									969,132
Time deposits of 250,000 or more	1,158,535									1,158,535
Time deposits	—			1,613,792			(3,502	) (A)		1,610,290
Total deposits	43,142,029	****	****	14,636,616	****	****	(3,502	)	****	57,775,143	****
Federal funds purchased and repurchase agreements	2,609,715									2,609,715
Borrowings	—			73,819						73,819
Short-term debt	—									—
Long-term debt	385,292			298,661			(20,643	) (A)		663,310
Accrued expenses and taxes	368,457									368,457
Deposits held for sale	—			—						—
Other liabilities	437,630									437,630
Accrued expenses and other liabilities	—			203,526						203,526
Total liabilities	46,943,123	****	****	15,212,622	****	****	(24,145	)	****	62,131,600	****
SHAREHOLDER’S EQUITY
Series E Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock	—			110,705						110,705
Common stock	55,057			42,901			(19,292	) (A)		78,666
Capital surplus	1,145,638			1,102,084			1,547,114	(A)		3,861,892
							67,056	(B)
Retained earnings	3,174,948			1,253,255			(1,253,255	) (A)		2,897,911
							(215,000	) (C)
							(62,037	) (D)
Accumulated other comprehensive loss, net	(573,050	)		(431,150	)		431,150	(A)		(573,050	)
Treasury stock, at cost	(336,052	)					168,085	(B)		(167,967	)
Total shareholder’s equity	3,466,541	****	****	2,077,795	****	****	663,821	****	****	6,208,157	****
Total liabilities and stockholders’ equity	50,409,664	****	****	17,290,417	****	****	639,676	****	****	68,339,757	****

All values are in US Dollars.

Please refer to the notes to the unaudited pro forma condensed combined financial data.

Unaudited Pro Forma Condensed Combined Statement of Income

For the Twelve Months Ended December 31, 2024

(in thousands except share and per share data)


INTEREST INCOME
Loans	1,612,948	764,516		120,115	(AA)	2,497,579
Securities:
Taxable interest	257,562	187,877				445,439
Tax-exempt interest	99,375	23,179				122,554
Total securities income	356,937	211,056		—		567,993
Federal funds and resell agreements	17,628	—				17,628
Interest-bearing due from banks	182,145					182,145
Interest on interest bearing deposits in other financial	—	16,136				16,136
Trading securities	1,351					1,351
Total interest income	2,171,009	991,708		120,115		3,282,832
INTEREST EXPENSE
Deposits	982,302	327,353		3,502	(AA)	1,313,157
Federal funds and repurchase agreements	106,558					106,558
Borrowings	—	28,820				28,820
Term debt	—	22,328		2,325	(AA)	24,653
Other	81,257					81,257
Total interest expense	1,170,117	378,501		5,827		1,554,445
Net interest income	1,000,892	613,207		114,288		1,728,387
Provision for credit losses	61,050	53,436		62,037	(CC)	176,523
Net interest income after provision for credit losses	939,842	559,771		52,251		1,551,864
NONINTEREST INCOME
Trust and securities processing	290,571					290,571
Trading and investment banking	24,226					24,226
Service charges on deposit accounts	84,512	67,253				151,765
Loan servicing income	—	456				456
Trust fees	—	21,213				21,213
Insurance fees and commissions	1,257					1,257
Brokerage fees	61,564					61,564
Brokerage fees and insurance commissions	—	3,318				3,318
Capital market fee	—	6,887				6,887
Bankcard fees	87,797					87,797
Investment securities (losses) gains, net	10,720	(21,144	)			(10,424	)
Unrealized (loss) gain on equity securities, net	—	539				539
Net gains on sale of loans held for sale	—	104				104
Income on bank owned life insurance	—	4,837				4,837
Other	67,470	9,490				76,960
Total noninterest income	628,117	92,953		—		721,070
NONINTEREST EXPENSE
Salaries and employee benefits	593,913	253,337		4,206	(DD)	851,456
Occupancy, net	47,539	25,949				73,488
Equipment	63,406	8,674				72,080
Supplies and services	14,845					14,845
Marketing and business development / Advertising expense	28,439	7,050				35,489
Processing Fees	117,899					117,899
Legal and consulting	46,207					46,207
Bankcard	44,265					44,265
Amortization and other intangible assets	7,705	5,591		93,554	(AA)	106,850
Regulatory fees	31,904					31,904
Professional fees	—	67,457				67,457
FDIC insurance assessments	—	14,741				14,741
Other real estate and loan collection expenses	—	1,493				1,493
(Gain) on sales/valuations of assets, net	—	(25,171	)			(25,171	)
Acquisition, integration and restructuring costs	—	10,227		215,000	(BB)	225,227
Partnership investment in tax credit projects	—	6,148				6,148
Other	30,564	57,260				87,824
Total noninterest expense	1,026,686	432,756		312,760		1,772,202
Income before income taxes	541,273	219,968		(260,509	)	500,732
Income tax expense	100,030	48,367		(54,707	) (EE)	93,690
NET INCOME	441,243	171,601		(205,802	)	407,042
Preferred dividends	—	(8,050	)			(8,050	)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	441,243	163,551		(205,802	)	398,992
PER SHARE DATA
Net income - basic	9.05	3.81				5.28
Net income - diluted	8.99	3.79				5.25
Dividends	1.57	1.20				2.77
Weighted average shares outstanding – basic	48,747,814	42,942,000				75,576,893
Weighted average shares outstanding – diluted	49,056,956	43,149,000				75,999,885

Please refer to the notes to the unaudited pro forma condensed combined financial data.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The pro forma adjustments have been prepared as if the Merger had been consummated and the forward sale agreement had been fully physically settled for approximately $235.1 million on December 31, 2024, in the case of the unaudited pro forma condensed combined balance sheet, and, in the case of the unaudited pro forma condensed combined statement of income, as if the Merger had been consummated and the forward sale agreement had been fully physically settled on January 1, 2024, the beginning of the earliest period presented in the unaudited pro forma condensed combined statement of income.

The unaudited pro forma condensed combined financial data has been prepared assuming the purchase method of accounting in accordance with GAAP. Under this method, HTLF’s assets and liabilities as of the date of the Merger are recorded at their respective fair values and added to those of UMB. Any difference between the purchase price for HTLF and the fair value of the identifiable net assets acquired (including intangibles) will be recorded as goodwill. The goodwill resulting from the acquisition will not be amortized to expense, but instead will be reviewed for impairment at least annually. The pro formas are based on preliminary accounting conclusions and are subject to potential revisions with further analysis.

The pro forma adjustments represent management’s estimates based on information available as of the date of this filing and are subject to change as additional information becomes available and additional analyses are performed. UMB management considers this basis of presentation to be reasonable under the circumstances.

One-time direct and incremental transaction costs anticipated to be incurred prior to, or concurrent with, the closing of the Merger will be expensed as incurred under ASC 805 and are assumed to be cash settled.

UMB has performed a preliminary review of HTLF’s and UMB’s accounting policies, and no material impacts are expected to be required as a result of the review performed.

2. Adjustments to theUnaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2024

The adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2024 are as follows:

(A)	Reflects the purchase price allocation adjustments to record HTLF’s assets and liabilities at estimated<br>fair value based on the consideration conveyed.

The preliminary purchase price was allocated among the identified assets to be acquired, based on a preliminary analysis. Goodwill is expected to be recognized as a result of the acquisition, which represents the excess fair value of consideration over the fair value of the underlying net assets of HTLF. This was considered appropriate based on the determination that the Merger would be accounted for as a business acquisition under ASC 805. The deferred tax assets represent the deferred tax impact associated with the incremental differences in book and tax basis created from the preliminary purchase price allocation. Deferred taxes associated with estimated fair value adjustments were calculated using an estimated tax rate of 21%. The estimates of fair value are based upon preliminary valuation assumptions believed to be reasonable but which are inherently uncertain and unpredictable; and, as a result, actual results may differ from estimates and the difference may be material.

Net Assets Identified	Fair Value<br>(in thousands)
Loans		9,798,220
Allowance for credit losses on loans		(62,126	)
Available for sale		3,560,358
Held to maturity, net of allowance for credit losses		456,342
Other securities / Other investments at cost		67,890
Interest bearing deposits with other banks and other short-term investments		206,138
Cash and due from banks		174,686
Time deposits in other financial institutions		800
Premises and equipment, net		169,258
Premises and equipment held for sale		8,952
Other real estate, net		4,291
Goodwill		2,185,344
Other intangibles, net ^(2)^		523,844
Cash surrender value on life insurance		201,298
Deferred tax assets		240,204
Other assets		436,490
Noninterest-bearing demand		(3,773,753	)
Interest-bearing demand and savings		(9,249,071	)
Time deposits		(1,610,290	)
Borrowings		(73,819	)
Long-term debt		(278,018	)
Accrued expenses and other liabilities		(203,526	)
Total Fair Value		2,783,510
Consideration Conveyed	(in thousands<br>except exchange<br>ratio and stockprice)
---	---	---	---
Shares to HTLF common stockholders		23,609,079
UMB stock price		117.90	^(1)^
Total preliminary purchase price consideration		2,783,510
(1)	Reflects closing price of UMB’s common stock as of January 31, 2025.
---	---
(2)	Other intangible assets were comprised of the following:
---	---
Asset type	Fairvalue		Useful Life		Valuation methodology
---	---	---	---	---	---	---
Wealth customer relationships	$	26.0		7 years		Multi-period excess earnings
Core deposit intangible (“CDI”)		474.1		10 years		Net cost savings
Purchased credit card relationships (“PCCR”)		10.9		3 years		Multi-period excess earnings
Total other intangible assets	$	511.0
(B)	Represents the receipt of approximately $235.1 million from the forward purchaser and the issuance of 3,220,000<br>shares, in accordance with the terms of the forward sale agreement.
---	---
(C)	Reflects nonrecurring transaction costs of $215.0 million expected to be incurred as a result of the<br>Merger and the forward sale agreement. This amount is comprised of investment banking fees, technology conversion fees, severance and related costs, contract breakage fees, legal fees, issuance costs, accounting and audit fees, and other related<br>costs. The nonrecurring expense is reflected at adjustment (BB).
---	---
(D)	Reflects the recognition of an allowance for loan losses on HTLF’s loans; this adjustment relates to loans<br>that are not considered to be purchase credit deteriorated (“PCD”) assets. The nonrecurring expense is reflected at adjustment (CC).
---	---

3. Adjustments and Assumptions to the Unaudited Pro Forma Condensed Combined Statement of Income for theYear ended December 31, 2024

(AA)	Reflects the pro forma impacts related to the purchase price allocation discussed at adjustment (A). This<br>includes the following impacts:
1)	Interest income related to Loans. Reflects an increase in interest income related to loans due to the reduced<br>fair value of loans per the purchase price allocation.
---	---
2)	Interest expense related to Time deposits. Reflects an increase in interest expense related to time deposits<br>due to the increase in fair value of this liability per the purchase price allocation.
---	---
3)	Interest expense related to Long-term debt. Reflects an increase in interest expense related to long-term debt<br>due to the reduced fair value of this liability per the purchase price allocation.
---	---
4)	Amortization expense. Reflects an increase in amortization expense related to CDI, calculated using the sum of<br>years’ digits method and an amortization period of 10 years, and customer relationships and PCCR, calculated using the straight line method and an amortization period of 7 years and 3 years, respectively.
---	---
(BB)	Reflects the recognition of nonrecurring expenses related to estimated transaction costs in the amount of<br>$215.0 million, which are primarily comprised of investment banking fees, technology conversion fees, severance and related costs, contract breakage fees, legal fees, issuance costs, accounting and audit fees, and other related costs. The related<br>balance sheet adjustment is reflected at adjustment (C).
---	---
(CC)	Reflects the recognition of nonrecurring expenses related to the provision for credit losses. The related<br>balance sheet adjustment is reflected at adjustment (D).
---	---
(DD)	Reflects stock compensation expense expected to be recorded on a recurring basis over the two years following<br>the closing of the Merger. The stock compensation expense was calculated on a straight-line basis. These awards vest over two years following issuance; thus, the issuance of these awards did not result in any new dilutive or antidilutive shares as<br>of closing.
---	---
(EE)	Reflects the tax impact of all pro forma adjustments for the year ended December 31, 2024, calculated<br>using the statutory rate of 21%.
---	---

4. Earnings per Share Information

The pro forma weighted average shares calculations have been performed for the year ended December 31, 2024 using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Merger and the forward sale agreement, assuming they occurred, and the forward sale agreement was fully physically settled, on January 1, 2024. As the Merger and the forward sale agreement are being reflected as if they had occurred, and the forward sale agreement was fully physically settled, at the beginning of the period presented, the calculation of weighted average shares outstanding for both basic and diluted earnings per share assumes that the shares issuable relating to the Merger and the forward sale agreement have been outstanding for the entire periods presented.

Pro forma net income per share—basic and diluted

(in thousands except share and per share amounts)

	For the Year Ended
	December 31, 2024
Numerator
Pro forma net income		407,042
Less: Preferred dividends		(8,050	)
Net earnings available to common stockholders		398,992
Denominator
Pro forma weighted average shares of common stock outstanding - basic		75,576,893
Pro forma basic earnings per share	****	5.28	****
Add: Dilutive effect of stock options and restricted stock		422,992
Pro forma weighted average shares of common stock outstanding -		75,999,885
Pro forma diluted earnings per share	****	5.25	****

The above calculations exclude the following potential common stock from the computation of diluted net earnings per share attributable to common shareholders of the combined company for the period indicated because including them would have had an antidilutive effect:

	As of December 31, 2024
Outstanding stock options and RSUs of UMB		0
Stock units of HTLF		0	^(1)^
Stock options of HTLF		29,150	^(1)^
(1)	HTLF stock units are presented as adjusted using the Exchange Ratio.
---	---