About Heartland Financial USA

Heartland Financial USA, Inc. operates as a bank holding company holding company. The company provides commercial, small business and consumer banking services to businesses, including public sector and non-profit entities, and to individuals. The company operates under the brand name HTLF. The company conducts its banking business through multiple independently branded divisions of HTLF Bank (referred to herein collectively as the Banks Bank Markets, Bank Divisions) in the states of Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. Each Bank serves a separate state banking market except for Kansas and Missouri, which constitute a single banking market. HTLF Bank, Denver, Colorado, is chartered under the laws of the state of Colorado. The following brands operate as divisions of HTLF Bank: Arizona Bank & Trust, principal office located in Phoenix, Arizona, Bank of Blue Valley, principal office located in Overland Park, Kansas Citywide Banks, principal office located in Denver, Colorado, Dubuque Bank & Trust, principal office located in Dubuque, Iowa, First Bank & Trust, principal office located in Lubbock, Texas, Illinois Bank & Trust, principal office located in Rockford, Illinois, Minnesota Bank & Trust, principal office located in Minnetonka, Minnesota, New Mexico & Trust, principal office located in Albuquerque, New Mexico, Premier Valley Bank, principal office located in Fresno, California, Rocky Mountain Bank, principal office located in in Billings, Montana, and Wisconsin Bank & Trust, principal office located in Madison, Wisconsin. The company engages in the business of banking, with the expertise to serve a wide range of businesses and the scale to compete at many levels. The company also has access to a centralized team of middle-market lenders with expertise in specific industries and loan structures allowing it to retain growing customers and seek new attractive customer opportunities. The company has a broad and diverse customer base and do not depend upon a small number of customers. The company’s extensive customer base across its Bank Markets spans a multitude of diversified industries and geographies. The company provides multiple service delivery channels, including online banking, mobile/remote banking and telephone banking. The company’s Banks provide a comprehensive suite of banking products and services consists of competitively priced deposit and credit offerings, along with treasury management, wealth management and retirement plan services. The company’s bankers actively solicit new and established businesses in their respective business communities. As of December 31, 2023, the company had trust preferred securities issued through special purpose trust subsidiaries formed for the purpose of offering cumulative capital securities including 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 of the company’s subsidiaries were wholly owned as of December 31, 2023. The principal business of the company consists of making loans to and accepting deposits from businesses and consumers, while offering other related bank products and services. The company provides full service commercial and consumer banking in their communities. Both the company’s loans and its deposits are generated primarily through strong banking and market knowledge as well as customer relationships, guided by management that is actively involved in the community. The company’s lending and investment activities are funded primarily by core deposits. This stable source of funding is achieved by developing banking relationships with customers through value-added product offerings, competitive market pricing, convenience and high-touch personal service. Deposit products, which are insured by the FDIC to the full extent permitted by law, include checking and other demand deposit accounts, NOW accounts, savings accounts, money market accounts, certificates of deposit, individual retirement accounts and other time deposits. Loan products include commercial and industrial, commercial real estate, agricultural, small business, real estate mortgage, consumer, and credit cards for commercial business use. The company enhances the customer-centric local services in its Markets with a full complement of value-added services, including wealth management, investment and retirement plan services. The company provides technology solutions that provide its customers convenient electronic banking services and access to account information through business and personal online banking, mobile banking, bill payment, remote deposit capture, treasury management services, credit and debit cards and automated teller machines. Primary Business Lines The company’s bankers actively solicit new and established businesses in their respective business communities. HTLF Bank is successful in attracting new customers in their markets through knowledgeable and experienced bankers, professional high-touch service, a suite of comprehensive credit and non-credit banking products and services, competitive pricing, convenient locations and proactive communications. The company delivers the following products and services throughout its Bank Markets: Commercial Banking The company has a strong commercial loan base generated primarily through established longstanding reputations, business networks and personal relationships in the communities they serve. The current portfolios in each Bank Market reflect the businesses in those communities and include a wide range of business loans, including lines of credit for working capital and operational purposes. Commercial real estate loans, which include owner occupied and non-owner occupied real estate loans, are generally term loans originated for the acquisition of real estate and equipment. Although most loans are made on a secured basis, loans may be made on an unsecured basis when warranted by the overall financial condition and cash flow of the borrower. Generally, terms of commercial and commercial real estate loans range from one to five years. Commercial bankers provide a consultative customer-centric approach utilizing the company’s comprehensive suite of banking products and services to deliver solutions designed to fit the objectives of the client in an organized and efficient manner. Bankers are knowledgeable and experienced in providing consultative solutions to clients to assist them in accomplishing their business strategies and objectives. The suite of banking products and services offered are highly competitive and can be tailored to fit the needs of the customer. Closely integrated with its lending activities is a significant emphasis on treasury management services that enhance the company’s business clients' ability to monitor, accumulate and disburse funds efficiently. The company’s treasury management services have five basic functions, such as collection, disbursement, management of cash, information reporting, and fraud prevention. The company’s Treasury and Payment Solutions Suite includes a full array of services designed to meet the needs of commercial clients. The company’s services include online banking with custom statement formatting and multiple delivery options, same day and prior day information reporting, bill payment, same day and next day automated clearing house (ACH) services, wire transfers, insured cash sweeps (ICS), zero balance accounts, lockbox, image cash letter, remote deposit capture, commercial cards for travel and entertainment purchasing, merchant services to receive credit card payments, investment sweep accounts, reconciliation services, online invoice processing, foreign exchange and positive pay fraud prevention services for checks and ACH payments. The company’s commercial and commercial real estate loans are primarily made based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The company values the collateral for most of these loans based upon its estimated fair market value and require personal guarantees in the majority of instances. The primary repayment risks of commercial and commercial real estate loans are that the cash flow of the borrowers may be unpredictable, and the collateral securing these loans may fluctuate in value. Many of the businesses in the communities the company serves are small to middle market businesses, and commercial lending to these businesses has been, and continues to be, an emphasis for HTLF Bank. Lenders in each Bank Market are complemented by HTLF Specialized Industries, a centralized team of highly experienced middle-market lenders focused on specific industries and more complex loan structures. This team includes specialized expertise in commercial real estate, healthcare, food and agribusiness, and franchise finance, as well as in customer interest rate swaps and loan syndications. HTLF Specialized Industries also selectively seeks out high quality lending and relationship opportunities within their specific areas of expertise outside the company’s bank markets. With the oversight of the company’s centralized credit administration group, its credit risk management process is governed by its commercial and consumer loan policies which establish the enterprise framework for credit and underwriting standards across the company. These policies are further governed and supported by the company’s credit risk appetite. The company’s loan policies establish underwriting standards in alignment with safe and sound credit decision making and in accordance with regulatory guidelines and expectations commensurate with the risk within its portfolio (e.g., Real Estate Lending Standards, Supervisory Loan-to-Value Limits). Centralized staff in credit administration assist the company’s commercial lending officers in the analysis, underwriting of credit, and facilitation of the credit approval process. In addition to the lending personnel of HTLF Bank, the company’s internal loan review department, which is overseen by the Chief Risk Officer, independently validates credit risk rating accuracy and analyzes credit risk. To reduce the risk of loss, the company has processes to help identify problem loans early, while working with customers and aggressively seeking resolution of credit problems. As part of Credit Administration, the company has a special assets group which focuses on providing guidance to its customers experiencing challenges and resolving problem assets. Loans in a workout status or default are assigned to the special assets group which is also responsible for marketing and disposing of repossessed properties. Agricultural Banking The company originates loans and build customer relationships in the food, agribusiness and agriculture businesses in its Bank Markets with operations in and around rural areas, including Dubuque Bank & Trust, Premier Valley Bank, Rocky Mountain Bank, Wisconsin Bank & Trust's Monroe and Platteville branches, New Mexico Bank & Trust’s Clovis banking offices, Bank of Blue Valley's northeast Kansas banking offices, and First Bank & Trust. The company also has a Food & Agribusiness specialized industry group, which consists of specialized lenders with expert knowledge who focus on loan opportunities to larger commercial agricultural growers, producers and food manufacturers within its Bank Markets, and provide expert knowledge to assist its commercial bankers with loan opportunities. On a selective basis, this specialized industry group seeks out high quality lending and relationship opportunities outside of the company’s bank markets. Agricultural loans constituted approximately 8% of the company’s total loan portfolio at December 31, 2023. In making agricultural loans, the company has policies designating a primary lending area for each Bank, in which most of its agricultural operating and real estate loans are made. Agricultural loans, many of which are secured by crops, machinery, and real estate, are provided to finance capital improvements and farm operations as well as acquisitions of livestock and machinery. Agricultural loans present unique credit risks related to potentially adverse weather conditions, loss of livestock due to disease or other factors, declines in market prices for agricultural products, and the impact of local and federal government regulations. The repayment of agricultural loans also depends upon the profitable operation or management of the agricultural entity. The company has a centralized underwriting group with knowledge and expertise in various types of agricultural lending. The underwriters work closely with lending officers to evaluate credit requests and ensure that underwriting parameters are met in accordance with HTLF's Loan Policy. Further the lending officers of HTLF Bank work closely with their customers to review budgets and cash flow projections for the ensuing crop year. These budgets and cash flow projections are monitored closely during the year and reviewed with the customers at least annually. HTLF Bank also works closely with governmental agencies, including the United States Department of Agriculture (USDA) and the Farm Services Agency (FSA), to help agricultural customers obtain credit enhancement products such as loan guarantees, interest assistance and crop insurance. Small Business Banking The company’s HTLF's Small Business Lending Center is dedicated to serving the credit needs of small businesses with annual sales generally under $5 million. The Small Business Lending Center is designed to provide quick turnaround on small business customer credit requests related to a wide variety of credit products and services. HTLF Bank has designated business bankers and branch managers to serve the distinct banking needs of these customers. Residential Real Estate Mortgage Lending The company provides residential real estate mortgage loans to its customers for the purchase or refinancing of single family residential properties. Prior to March 31, 2023, the company originated residential mortgage loans through its wholly-owned subsidiary and sold them on the secondary market with servicing retained. On March 31, 2023, the company sold its mortgage servicing rights portfolio, which consisted of approximately 4,500 loans serviced for others with an unpaid principal balance of approximately $700 million. Pursuant to the terms of the sale, company’s subsidiary provided interim servicing of the loans until the transfer date in May 2023. Following the sale, and because of the decrease in customer demand the company elected to significantly scale back mortgage originations, and offers residential mortgage loans to its customers through the bank divisions and through a partnership with a third-party mortgage loan provider that began in 2022. Consumer Banking A wide variety of consumer banking services are delivered through the company’s branches and electronic banking platforms. Services include checking, savings, money market accounts, certificates of deposit, individual retirement accounts (IRAs), certificate of deposit registry service (CDARS) and debit cards. Consumer lending services include a broad array of consumer loans, including motor vehicle, home improvement, home equity lines of credit (HELOC), fixed rate home equity loans and personal lines of credit. The company continues to respond to customer preferences to enhance its consumer banking experience through the addition of secure electronic banking options, including online account opening and mobile banking. The company’s consumer banking customers receive high-touch service in its branches and further enjoy the convenience of online bill pay, 24-hour ATM availability, mobile deposit, and 24-hour access to account detail. As technology advances, the company is committed to offering its customers the convenience of online, ATM and mobile delivery channels in a secure manner. Wealth Management and Retirement Plan Services The company offers wealth management, trust services, brokerage services, and fixed rate annuity products. The company also provides retirement plan services to business clients, including 401(k), 403(b) and profit sharing plans. As of December 31, 2023, total trust assets under management were $3.92 billion. The company has contracted with LPL Financial Institution Services, a division of LPL Financial, to operate independent securities brokerage offices. Through the LPL Financial third-party arrangement, the company offers a full array of investment services including mutual funds, annuities, individual retirement products, education savings products, and brokerage services. Market Areas The company is a geographically diversified bank holding company operating through HTLF Bank in the Midwest, West and Southwest regions. Supervision and Regulation As a bank holding company, the company is regulated by the Board of Governors of the Federal Reserve System (the Federal Reserve). HTLF Bank is regulated by the FDIC as its principal federal regulator and the Colorado Department of Regulatory Agencies, Division of Banking (the Colorado Division of Banking) as its state regulator. Federal and state laws and regulations generally applicable to financial institutions regulate, among other things, the scope of business, the kinds and amounts of investments, reserve requirements, capital levels, the establishment of branches, mergers and consolidations, and the payment of dividends. This system of supervision and regulation establishes a comprehensive framework for the respective operations of the company and its subsidiaries and is intended primarily for the protection of the FDIC-insured deposits and depositors, consumers, the stability of the financial system in the United States, and the health of the national economy, rather than stockholders. Federal and state banking regulators regularly examine the company and HTLF Bank to evaluate their financial condition and monitor their compliance with laws and regulatory policies. Following those exams, the company and HTLF Bank are assigned supervisory ratings. The CFPB has broad rulemaking authority over a wide range of federal consumer protection laws applicable to the company’s business. The company is subject to CFPB examination and supervision relating to compliance with federal consumer protection laws and regulations. The company, as the sole shareholder of HTLF Bank, is a bank holding company. As a bank holding company, the company is registered with, and is subject to regulation, supervision and examination by, the Federal Reserve under the BHCA. In accordance with Federal Reserve policy, the company is expected to act as a source of financial and managerial strength to HTLF Bank and to commit resources to support HTLF Bank in circumstances where HTLF might not otherwise do so. Under the BHCA, the company is subject to examination by the Federal Reserve. Supervision and examinations are confidential, and the outcomes of these actions will not be made public. The company is also required to file periodic reports with the Federal Reserve of the company’s operations and such additional information regarding the company and its subsidiaries as the Federal Reserve may require. HTLF Bank is a Colorado state-chartered, non-member bank, which means it was formed under state law and is not a member of the Federal Reserve System. As a result, HTLF Bank is subject to the direct regulation, examination, supervision, and reporting and enforcement requirements of the Colorado Division of Banking, the chartering authority for Colorado banks, as well as by the FDIC as its primary federal banking regulator. The deposits of HTLF Bank are insured by the Depositors Insurance Fund (DIF) up to the standard maximum deposit insurance amount of $250,000 per depositor. As an FDIC-insured institution, HTLF Bank is required to pay deposit insurance premium assessments to the FDIC using a risk-based assessment system based upon average total consolidated assets minus tangible equity of the insured bank. The FDIC has authority to raise or lower assessment rates on insured deposits in order to achieve statutorily required reserve ratios in the DIF and to impose special additional assessments. HTLF Bank is required to pay supervisory assessments to the Colorado Division of Banking to fund the operations of that agency. In general, the amount of the assessment is calculated based on each institution's total assets. During 2023, HTLF Bank paid supervisory assessments totaling $954,000 to the Colorado Division of Banking and to the other state regulators prior to merging the company’s other banking subsidiaries into HTLF Bank. The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires the federal bank regulatory agencies to take prompt corrective action regarding FDIC-insured depository institutions that do not meet certain capital adequacy standards. A depository institution’s treatment for purposes of the prompt corrective action provisions depends upon its level of capitalization and certain other factors. A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the USA PATRIOT Act) and other related federal laws and regulations require financial institutions, including HTLF Bank, to implement policies and procedures relating to anti-money laundering, customer identification and due diligence requirements and the reporting of certain types of transactions and suspicious activity. HTLF Bank is a legal entity separate and distinct from the company. The primary source of funds for HTLF is dividends from HTLF Bank. The Federal Reserve regulates transactions among the company and its subsidiaries. Generally, the Federal Reserve Act and Regulation W, as amended by the Dodd-Frank Act, limit lending and certain other Covered Transactions, as well as other transactions between HTLF Bank and its affiliates, including the company, for the primary purpose of protecting the interests of HTLF Bank. Covered Transactions between HTLF Bank and its affiliates are also subject to collateralization requirements and must be conducted on arm’s length terms. HTLF Bank is subject to certain restrictions imposed by federal law on extensions of credit to HTLF and its subsidiaries, on investments in the stock or other securities of HTLF and its subsidiaries and the acceptance of the stock or other securities of HTLF or its subsidiaries as collateral for loans made by HTLF Bank. Certain limitations and reporting requirements are also placed on extensions of credit by HTLF Bank to its directors and officers, to directors and officers of HTLF and its subsidiaries, to principal stockholders of HTLF and to related interests of such directors, officers and principal stockholders. In addition, federal law and regulations provide certain restrictions on the terms upon which any person who is a director or officer of HTLF or any of its subsidiaries or a principal stockholder of HTLF that may obtain credit from banks with which HTLF Bank maintains correspondent relationships. HTLF Bank generally is permitted to make investments and engage in activities directly or through subsidiaries as authorized by the laws of the state of Colorado. However, under federal law and FDIC regulations, FDIC-insured state banks are prohibited, subject to certain exceptions, from making or retaining equity investments of a type, or in an amount, that are not permissible for a national bank. Federal law and FDIC regulations also prohibit FDIC-insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank, unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member. In addition, the Dodd-Frank Act requires the federal banking agencies and the SEC to issue regulations and guidelines requiring covered banking organizations such as HTLF and HTLF Bank, to prohibit incentive-based compensation payment arrangements that encourage inappropriate risk taking by providing compensation that is excessive or that could lead to material financial loss to the organization. Proposed joint rules were issued in 2011 and 2016, and the SEC has indicated that they intend to complete the rulemaking process in 2024. In 2023, the SEC approved Nasdaq's listing standard requiring listed companies to implement clawback policies to recover incentive-based compensation from current or former executive officers in the event of certain financial restatements and would also require companies to disclose their clawback policies and their actions under those policies. Pursuant to this listing standard, listed companies had until December 1, 2023 to adopt compliant clawback policies. The company and HTLF Bank are prohibited under the Volcker Rule from engaging in short-term proprietary trading for their own accounts, and having certain ownership interests in and relationships with hedge funds or private equity funds. The fundamental prohibitions of the Volcker Rule apply to banking entities of any size, including HTLF and HTLF Bank. The Volcker Rule regulations contain exemptions for market-making, hedging, underwriting, trading in U.S. government and agency obligations and also permit certain ownership interests in certain types of funds to be retained. They also permit the offering and sponsoring of funds under certain conditions. The Volcker Rule regulations impose compliance and reporting obligations on banking entities. The Community Reinvestment Act (CRA) imposes a continuing and affirmative obligation on HTLF Bank to help meet the credit needs of the communities in which it does business, including low- and moderate-income neighborhoods, in a safe and sound manner. The FDIC and the state regulators regularly assess the record of HTLF Bank in meeting the credit needs of the communities in which it does business. Applications for additional acquisitions are subject to evaluation of the effectiveness of HTLF Bank in meeting its CRA requirements. HTLF Bank is subject to a variety of federal and state statutes and regulations designed to protect consumers and is also under the supervision of the Consumer Financial Protection Bureau (CFPB), a federal agency responsible for implementing, examining, and enforcing compliance with federal consumer protection laws. The CFPB has broad rulemaking authority over a wide range of federal consumer protection laws that apply to banks and other providers of financial products and services, including among other things fair lending laws and the authority to prohibit unfair, deceptive or abusive acts and practices. In addition, deposit operations are subject to, among others: the Truth in Savings Act and Regulation DD issued by the CFPB, which require disclosure of deposit terms to consumers; Regulation CC issued by the Federal Reserve Board, which relates to the availability of deposit funds to consumers; the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and the Electronic Fund Transfer Act and Regulation E issued by the CFPB, which governs automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. Mortgage loans originated by or held at HTLF Bank are subject to a number of laws and rules affecting residential mortgages, including the Home Mortgage Disclosure Act (HMDA) and Regulation C and the Real Estate Settlement Procedures Act (RESPA), Regulation X and rules regarding the mandatory purchase of flood insurance, including those issued pursuant to the Biggert-Waters Flood Insurance Reform Act. In recent years, the CFPB and other federal agencies have proposed and finalized a number of rules affecting residential mortgages. These rules implement the Dodd-Frank Act amendments to the Equal Credit Opportunity Act, Truth in Lending Act (TILA) and RESPA. Additionally, like other lenders, HTLF Bank uses credit bureau data in their underwriting activities. Use of such data is regulated under the Fair Credit Reporting Act (FCRA), and the FCRA also regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. HTLF is also subject to the rules and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy and cybersecurity. Various state laws and regulations apply, or may apply in the future, to HTLF’S operations and may impose additional requirements on HTLF and its subsidiaries or otherwise impact HTLF’s ability to share certain personal information with affiliates and non-affiliates. For example, the California Consumer Protection Act of 2018 (the CCPA) gives California residents the right to, among other things, request disclosure of information collected about them and whether that information has been sold to others, request deletion of personal information (subject to certain exceptions), opt out of the sale of their personal information, and not be discriminated against for exercising these rights. In addition, the California Privacy Rights Act (CPRA), which became effective in most material respects on January 1, 2023, expands California residents’ rights with respect to certain sensitive personal information. The California Privacy Protection Agency, which was created to enforce the CCPA and CPRA, is also in the process of finalizing regulations under the CCPA regarding the use of automated decision making. Other states, including Colorado, have adopted or are considering adopting similar laws. In addition, laws in all 50 U.S. states generally require businesses to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach. History Heartland Financial USA, Inc. was founded in the state of Iowa in 1981.