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v3.25.3

Borrowed Funds | 9 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
Borrowed Funds | 7. Borrowed Funds The components of the Company’s borrowed funds are as follows (in thousands):
|  | September 30, 2025 |  |  | December 31, 2024 |
Long-term debt: |  |  |  |  |  |
Trust preferred securities |  | $ | 218,929 |  |  | $ | 76,782 |
Subordinated notes 3.70%, net of issuance costs |  |  | — |  |  |  | 199,681 |
Subordinated notes 6.25%, net of issuance costs |  |  | 109,148 |  |  |  | 108,829 |
Subordinated notes 2.75% |  |  | 143,254 |  |  |  | — |
Total long-term debt |  |  | 471,331 |  |  |  | 385,292 |
Total borrowed funds |  | $ | 471,331 |  |  | $ | 385,292 |
The following table presents details of outstanding trust preferred securities as of September 30, 2025 (in thousands):
|  | Amount Outstanding |  |  | Issuance Date |  | Interest Rate |  | Interest Rate as of September 30, 2025 |  |  | Maturity Date
Marquette Capital Trust I |  | $ | 19,205 |  |  | 12/28/2005 |  | 1.33% over 3-month term SOFR |  |  | 5.91 | % |  | 1/7/2036
Marquette Capital Trust II |  |  | 19,687 |  |  | 12/28/2005 |  | 1.33% over 3-month term SOFR |  |  | 5.91 |  |  | 1/7/2036
Marquette Capital Trust III |  |  | 7,730 |  |  | 5/30/2006 |  | 1.50% over 3-month term SOFR |  |  | 5.77 |  |  | 6/23/2036
Marquette Capital Trust IV |  |  | 31,184 |  |  | 6/30/2006 |  | 1.60% over 3-month term SOFR |  |  | 5.90 |  |  | 9/15/2036
Heartland Financial Statutory Trust IV |  |  | 9,622 |  |  | 3/17/2004 |  | 2.75% over 3-month term SOFR |  |  | 7.03 |  |  | 3/17/2034
Heartland Financial Statutory Trust V |  |  | 17,361 |  |  | 1/27/2006 |  | 1.33% over 3-month term SOFR |  |  | 5.91 |  |  | 4/7/2036
Heartland Financial Statutory Trust VI |  |  | 16,848 |  |  | 6/21/2007 |  | 1.48% over 3-month term SOFR |  |  | 5.78 |  |  | 9/15/2037
Heartland Financial Statutory Trust VII |  |  | 14,742 |  |  | 6/26/2007 |  | 1.48% over 3-month term SOFR |  |  | 5.91 |  |  | 9/1/2037
Morrill Statutory Trust I |  |  | 9,931 |  |  | 12/19/2002 |  | 3.25% over 3-month term SOFR |  |  | 7.51 |  |  | 12/26/2032
Morrill Statutory Trust II |  |  | 9,687 |  |  | 12/17/2003 |  | 2.85% over 3-month term SOFR |  |  | 7.13 |  |  | 12/17/2033
Sheboygan Statutory Trust I |  |  | 7,314 |  |  | 9/17/2003 |  | 2.95% over 3-month term SOFR |  |  | 7.23 |  |  | 9/17/2033
CBNM Capital Trust I |  |  | 4,833 |  |  | 9/10/2004 |  | 3.25% over 3-month term SOFR |  |  | 7.55 |  |  | 12/15/2034
Citywide Capital Trust III |  |  | 6,769 |  |  | 12/19/2003 |  | 2.80% over 3-month term SOFR |  |  | 7.37 |  |  | 12/19/2033
Citywide Capital Trust IV |  |  | 4,668 |  |  | 9/30/2004 |  | 2.20% over 3-month term SOFR |  |  | 6.66 |  |  | 9/30/2034
Citywide Capital Trust V |  |  | 13,041 |  |  | 5/31/2006 |  | 1.54% over 3-month term SOFR |  |  | 5.84 |  |  | 7/25/2036
OCGI Statutory Trust III |  |  | 3,011 |  |  | 6/27/2002 |  | 3.65% over 3-month term SOFR |  |  | 8.23 |  |  | 9/30/2032
OCGI Statutory Trust IV |  |  | 5,638 |  |  | 9/23/2004 |  | 2.50% over 3-month term SOFR |  |  | 6.80 |  |  | 12/15/2034
BVBC Capital Trust II |  |  | 7,420 |  |  | 4/10/2003 |  | 3.25% over 3-month term SOFR |  |  | 7.81 |  |  | 4/24/2033
BVBC Capital Trust III |  |  | 10,238 |  |  | 7/29/2005 |  | 1.60% over 3-month term SOFR |  |  | 5.86 |  |  | 9/30/2035
Total trust preferred securities |  | $ | 218,929 |  |  |  |  |  |  |  |  |  |
In September 2020, the Company issued $200.0 million of 3.70% fixed-to-fixed rate subordinated notes that were to mature on September 17, 2030. The notes bore interest at the rate of 3.70% per annum, payable semi-annually on each March 17 and September 17. Unamortized debt issuance costs related to these notes totaled $0.3 million as of December 31, 2024. Proceeds from the issuance of the notes were used for general corporate purposes, including contributing Tier 1 capital into the Bank. During the first quarter of 2025, the Company purchased and subsequently retired $11.1 million of its 2020 subordinated notes. During the third quarter of 2025, the Company redeemed the remainder of the outstanding 2020 subordinated notes. In September 2022, the Company issued $110.0 million of 6.25% fixed-to-fixed rate subordinated notes that mature on September 28, 2032. The notes bear interest at the rate of 6.25% per annum, payable semi-annually on each March 28 and September 28. The Company may redeem the notes, in whole or in part, on September 28, 2027, or on any interest payment date thereafter. Unamortized debt issuance costs related to these notes totaled $0.9 million and $1.2 million as of September 30, 2025 and December 31, 2024, respectively. Proceeds from the issuance of the notes were used for general corporate purposes, including contributing Tier 1 capital into the Bank. As part of the acquisition of HTLF, the Company acquired $150.0 million of 2.75% fixed-to-fixed rate subordinated notes that mature on September 15, 2031. The notes bear interest at the rate of 2.75% per annum, payable semi-annually on each March 15 and September 15. The Company may redeem the notes, in whole or in part, on September 15, 2026, or on any interest payment date thereafter. The subordinated notes had an acquired fair value of $138.8 million as of the Acquisition Date. The remainder of the Company’s long-term debt was assumed from the acquisitions of Marquette Financial Companies in 2015 and HTLF in 2025 and consists of debt obligations payable to 19 unconsolidated trusts that previously issued trust preferred securities, as summarized in the table above. These long-term debt obligations had an aggregate contractual balance of $262.9 million and a carrying value of $218.9 million as of September 30, 2025. As of December 31, 2024, the debt obligations related to the four unconsolidated trusts acquired from Marquette had an aggregate contractual balance of $103.1 million and had a carrying value of $76.8 million. The Company is a member bank of the FHLB and through this relationship, the Company owns FHLB stock and has access to additional liquidity and funding sources through FHLB advances. The Company’s borrowing capacity is dependent upon the amount of collateral the Company places at the FHLB. As of both September 30, 2025 and December 31, 2024, the Company owned $10.2 million of FHLB stock. As of September 30, 2025, the Company had six letters of credit outstanding with the FHLB of Des Moines to secure deposits. These letters of credit have an aggregate amount of $203.3 million and have various maturity dates through December 10, 2025. The Company’s remaining borrowing capacity with the FHLB was $1.8 billion as of September 30, 2025. The Company utilizes repurchase agreements to facilitate the needs of customers and to facilitate secured short-term funding needs. Repurchase agreements are stated at the amount of cash received in connection with the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with the Company’s safekeeping agents. The table below presents the remaining contractual maturities of repurchase agreements outstanding at September 30, 2025 and December 31, 2024, in addition to the various types of marketable securities that have been pledged as collateral for these borrowings (in thousands):
|  | As of September 30, 2025 |
|  | Remaining Contractual Maturities of the Agreements |
|  | Overnight |  |  | 2-29 Days |  |  | 30-90 Days |  |  | Over 90 Days |  |  | Total |
Repurchase agreements, secured by: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury |  | $ | 687,086 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 687,086 |
U.S. Agencies |  |  | 1,454,845 |  |  |  | 20,238 |  |  |  | 602,527 |  |  |  | 1,400 |  |  |  | 2,079,010 |
Total repurchase agreements |  | $ | 2,141,931 |  |  | $ | 20,238 |  |  | $ | 602,527 |  |  | $ | 1,400 |  |  | $ | 2,766,096 |
|  | As of December 31, 2024 |
|  | Remaining Contractual Maturities of the Agreements |
|  | 2-29 Days |  |  | 30-90 Days |  |  | Over 90 Days |  |  | Total |
Repurchase agreements, secured by: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury |  | $ | 608,836 |  |  | $ | — |  |  | $ | — |  |  | $ | 608,836 |
U.S. Agencies |  |  | 1,496,676 |  |  |  | 431,048 |  |  |  | 2,750 |  |  |  | 1,930,474 |
Total repurchase agreements |  | $ | 2,105,512 |  |  | $ | 431,048 |  |  | $ | 2,750 |  |  | $ | 2,539,310 |

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