UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from _______ to _______

 Commission file number
 001-35968

 (Exact name of Registrant as specified in its charter)

 Iowa
 42-1206172

 (State or Other Jurisdiction of
 (I.R.S. Employer

 Incorporation or Organization)
 Identification Number)

 102 South Clinton Street, Iowa City, IA 52240
 (Address of principal executive offices, including zip code)

 ( 319) 356-5800
 (Registrant's telephone number, including area code)

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

 Title of each Class
 Trading Symbol(s)
 Name of each exchange on which registered

 Common Stock, $1.00 par value
 MOFG
 The Nasdaq Stock Market LLC

 Securities registered pursuant to Section 12(g) of the Act: None

 Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 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.
 Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to Section 240.10D-1(b)

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
 The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the last sales price quoted on the Nasdaq Global Select Market of $21.37 on the last business day of the registrant's most recently completed second fiscal quarter, was approximately $ 335.2 million.
 The number of shares outstanding of the registrant's common stock, par value $1.00 per share, as of March 6, 2024, was 15,750,471.

 DOCUMENTS INCORPORATED BY REFERENCE

 The information required by Part III is incorporated by reference to portions of the definitive proxy statement to be filed within 120 days after December 31, 2023, pursuant to Regulation 14A under the Securities Exchange Act of 1934 in connection with the annual meeting of stockholders to be held on April 25, 2024.

 Annual Report on Form 10-K

 Page No.

 Item 1.
 Business

 Item 1A.
 Risk Factors

 Item 1B.
 Unresolved Staff Comments

 Item 1C.
 Cybersecurity

 Item 2.
 Properties

 Item 3.
 Legal Proceedings

 Item 4.
 Mine Safety Disclosures

 Item 5.
 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.
 Reserved

 Item 7.
 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.
 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.
 Financial Statements and Supplementary Data

 Item 9.
 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.
 Controls and Procedures

 Item 9B.
 Other Information

 Item 9C.
 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 Item 10.
 Directors, Executive Officers and Corporate Governance

 Item 11.
 Executive Compensation

 Item 12.
 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.
 Certain Relationships and Related Transactions, and Director Independence

 Item 14.
 Principal Accountant Fees and Services (PCAOB ID: 49)

 Item 15.
 Exhibits and Financial Statement Schedules

 Item 16.
 Form 10-K Summary

 Glossary of Acronyms, Abbreviations, and Terms
 The acronyms, abbreviations, and terms listed below are used in various sections of this Form 10-K, including, "Cautionary Note Regarding Forward-Looking Statements," "Item 1. Business," "Item 1A. Risk Factors," "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," "Item 7A. Quantitative and Qualitative Disclosures About Market Risk," and "Item 8. Financial Statements and Supplemental Data."

 ACL
 FHLBDM
 Federal Home Loan Bank of Des Moines

 AFS
 FHLMC
 Federal Home Loan Mortgage Corporation

 AOCI
 Accumulated Other Comprehensive Income
 FNBF
 First National Bank in Fairfield

 ASC
 Accounting Standards Codification
 FNBM
 First National Bank of Muscatine

 ASU
 Accounting Standards Update
 FNMA
 Federal National Mortgage Association

 ATB
 ATBancorp
 FRB or Federal Reserve
 Board of Governors of the Federal Reserve System

 ATM
 Automated Teller Machine
 GAAP
 U.S. Generally Accepted Accounting Principles

 Basel III Rules
 A comprehensive capital framework and rules for U.S. banking organizations approved by the FRB and the FDIC in 2013
 GLBA
 Gramm-Leach-Bliley Act of 1999

 BHCA
 Bank Holding Company Act of 1956, as amended
 HTM

 BOD
 Bank of Denver
 IOFB
 Iowa First Bancshares Corp.

 BOLI
 Bank-Owned Life Insurance
 LIBOR
 The London Inter-bank Offered Rate

 BTFP
 Bank Term Funding Program
 MBEFD
 Loan Modification for Borrowers Experiencing Financial Difficulty

 CAA
 Consolidated Appropriations Act, 2021
 MBS
 Mortgage-Backed Securities

 CECL
 Current Expected Credit Loss
 PCD
 Purchased Financial Assets with Credit Deterioration

 CMO
 Collateralized Mortgage Obligations
 PPP
 Paycheck Protection Program

 COVID-19
 Coronavirus Disease 2019
 PRSUs
 Performance-Based Restricted Stock Unit Awards

 CRA
 Community Reinvestment Act
 ROU
 Right-of-Use

 CRE
 RPA
 Credit Risk Participation Agreement

 DNVB
 Denver Bankshares, Inc.
 RRE

 DCF
 Discounted Cash Flow Method
 SBA
 U.S. Small Business Administration

 Dodd-Frank Act
 Dodd-Frank Wall Street Reform and Consumer Protection Act
 SEC
 U.S. Securities and Exchange Commission

 ESOP
 Employee Stock Ownership Plan
 SOFR
 Secured Overnight Financing Rate

 EVE
 Economic Value of Equity
 TDR
 Troubled Debt Restructuring

 FASB
 Financial Accounting Standards Board
 TRSUs
 Time-Based Restricted Stock Unit Awards

 FDIC
 Federal Deposit Insurance Corporation

 FHLB
 Federal Home Loan Bank

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 This annual report on Form 10-K contains certain "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We and our representatives may, from time to time, make written or oral statements that are "forward-looking" and provide information other than historical information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These factors include, among other things, the factors listed below. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "should," "could," "would," "plans," "intend," "project," "estimate," "forecast," "may" or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Additionally, we undertake no obligation to update any statement in light of new information or future events, except as required under federal securities law.
 Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have an impact on our ability to achieve operating results, growth plan goals and future prospects include, but are not limited to, the following:
 • the risks of mergers or branch sales (including the sale of our Florida branches and the acquisition of Denver Bankshares, Inc.), including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions;
 • credit quality deterioration, pronounced and sustained reduction in real estate market values, or other uncertainties, including the impact of inflationary pressures on economic conditions and our business, resulting in an increase in the allowance for credit losses, an increase in the credit loss expense, and a reduction in net earnings;
 • the effects of recent and potential additional increases in inflation and interest rates, including on our net income and the value of our securities portfolio;
 • changes in the economic environment, competition, or other factors that may affect our ability to acquire loans or influence the anticipated growth rate of loans and deposits and the quality of the loan portfolio and loan and deposit pricing;
 • fluctuations in the value of our investment securities;
 • governmental monetary and fiscal policies;
 • changes in and uncertainty related to benchmark interest rates used to price loans and deposits;
 • legislative and regulatory changes, including changes in banking, securities, trade, and tax laws and regulations and their application by our regulators, including the new 1.0% excise tax on stock buybacks by publicly traded companies and any changes in response to the recent failures of other banks;
 • the ability to attract and retain key executives and employees experienced in banking and financial services;
 • the sufficiency of the allowance for credit losses to absorb the amount of actual losses inherent in our existing loan portfolio;
 • our ability to adapt successfully to technological changes to compete effectively in the marketplace;
 • credit risks and risks from concentrations (by geographic area and by industry) within our loan portfolio;
 • the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds, financial technology companies, and other financial institutions operating in our markets or elsewhere or providing similar services;
 • the failure of assumptions underlying the establishment of allowances for credit losses and estimation of values of collateral and various financial assets and liabilities;
 • volatility of rate-sensitive deposits;
 • operational risks, including data processing system failures or fraud;
 • asset/liability matching risks and liquidity risks;
 • the costs, effects and outcomes of existing or future litigation;
 • changes in general economic, political, or industry conditions, nationally, internationally or in the communities in which we conduct business, including the risk of a recession;
 • changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies and the FASB;
 • war or terrorist activities, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine, widespread disease or pandemic, or other adverse external events, which may cause deterioration in the economy or cause instability in credit markets;
 • the occurrence of fraudulent activity, breaches, or failures of our or our third-party vendors' information security controls or cyber-security related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools;
 • the imposition of tariffs or other domestic or international governmental policies impacting the value of the agricultural or other products of our borrowers;
 • potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election;
 • the concentration of large deposits from certain clients who have balances above current FDIC insurance limits;
 • the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at other banks that resulted in failure of those institutions; and
 • other factors and risks described under "Risk Factors" in this Form 10-K and in other reports we file with the SEC.

 We qualify all of our forward-looking statements by the foregoing cautionary statements. Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, our past results of operations are not necessarily indicative of our future results.

 ITEM 1. BUSINESS.
 General
 MidWestOne Financial Group, Inc., an Iowa corporation formed in 1983, is a bank holding company registered under the BHCA and a financial holding company under the GLBA, with our corporate headquarters in Iowa City, Iowa. Our principal business is to serve as the holding company for our wholly-owned subsidiary, MidWestOne Bank. References to the "Bank" refer to MidWestOne Bank. References to "MidWestOne," "we," "us," or the "Company," refer to MidWestOne Financial Group, Inc. together with its subsidiaries on a consolidated basis.
 The Bank is focused on delivering relationship-based business and personal banking products and services. The Bank provides commercial loans, real estate loans, agricultural loans, credit card loans, and consumer loans. The Bank also provides deposit products including demand and interest checking accounts, savings accounts, money market accounts, and time deposits. Complementary to our loan and deposit products, the Bank also provides products and services including treasury management, Zelle, online and mobile banking, debit cards, ATMs, and safe deposit boxes. The Bank offers its products and services primarily through its network of full-service banking offices, which includes, as of December 31, 2023, 35 banking offices located throughout central and eastern Iowa, 12 banking offices in the Minneapolis/St. Paul metropolitan area, 7 banking offices in southwestern Wisconsin, one banking office in each of Naples and Fort Myers, Florida, and one banking office in Denver, Colorado. The Bank also has wealth management services through which it offers the administration of estates, trusts, and conservatorships, as well as financial planning, investment advisory, and brokerage services.
 As of December 31, 2023, we had total assets of $6.43 billion, total loans, net of unearned income, of $4.13 billion, total deposits of $5.40 billion, and shareholders' equity of $524.4 million.
 Recent Developments
 On September 25, 2023, the Company announced the execution of a definitive purchase and assumption agreement for the sale of its Florida operations to DFCU Financial. The transaction is an all cash deal and is expected to close in the second quarter of 2024, subject to regulatory approvals.
 On January 31, 2024, the Company acquired DNVB, a bank holding company whose wholly-owned banking subsidiary was BOD, a community bank located in Denver, Colorado. Immediately following the completion of the acquisition, BOD merged with and into the Bank. As consideration for the merger, we paid cash in the amount of $32.6 million.
 Operating Strategy
 Our operating strategy is based upon a community banking model of delivering a comprehensive suite of financial products and services while following five operating principles: (1) generate impact for our stakeholders; (2) hire and retain excellent employees; (3) always conduct yourself with the utmost integrity; (4) work as one team; and (5) learn constantly so we can continually improve. Management believes the depth and breadth of the Company's products and services coupled with the personal and professional delivery of the same provides an appealing alternative to competitors.
 Lending Activities
 General
 We provide a range of commercial and retail lending services to businesses, including public sector and non-profit entities, and individuals. These credit activities include commercial and industrial loans, commercial and residential real estate loans, agricultural loans, and consumer loans.
 We market our services to qualified lending customers. Lending officers actively solicit the business of new companies entering their market areas as well as long-standing members of the business communities in which we operate. Through professional service, competitive pricing, and innovative structure, we have been successful in attracting new lending customers. We also actively pursue consumer lending opportunities. With convenient locations, advertising, customer communications, and competitive technology, we believe that we have been successful in capitalizing on the credit needs of our market areas.

 Our management emphasizes credit quality and seeks to avoid undue concentrations of loans to a single industry or based on a single class of collateral. We have established lending policies that include a number of underwriting factors to be considered in making a loan, including: location, loan-to-value ratio, cash flow, interest rate, and credit history of the borrower.
 Commercial and Industrial Loans
 We have a strong commercial loan base. We focus on, and tailor our commercial loan programs to, small- to mid-sized businesses in our market areas. Our loan portfolio includes loans to wholesalers, manufacturers, contractors, business services companies and retailers. We provide a wide range of business loans, including lines of credit for working capital and operational purposes and term loans for the acquisition of equipment. Although most loans are made on a secured basis, loans may be made on an unsecured basis where warranted by the overall financial condition of the borrower. Terms of commercial business loans generally range from one to five years.
 Our commercial and industrial loans are primarily made based on the reported cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The collateral support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any exists. The primary repayment risks of commercial loans are that the cash flows of the borrower may be unpredictable, and the collateral securing these loans may fluctuate in value. As of December 31, 2023, commercial and industrial loans comprised approximately 26.0% of our total loan portfolio.
 Commercial Real Estate Loans
 We also offer mortgage loans to our commercial and agricultural customers for the acquisition of real estate used in their businesses, such as offices, farmland, warehouses and production facilities, and to real estate investors for the acquisition of apartment buildings, retail centers, office buildings and other commercial buildings. In deciding whether to make a commercial real estate loan, we consider, among other things, the experience and qualifications of the borrower as well as the value and cash flow of the underlying property. Some factors considered are net operating income of the property before debt service and depreciation, the debt service coverage ratio (the ratio of the property's net cash flow to debt service requirements), the cash flows of the borrower, the ratio of the loan amount to the property value and the overall creditworthiness of the prospective borrower. The primary repayment risks of commercial real estate loans are that the cash flows of the borrower may be unpredictable, and the collateral securing these loans may fluctuate in value. As of December 31, 2023, commercial real estate loans constituted approximately 54.0% of our total loan portfolio.
 Construction and Development Loans. We offer loans both to individuals who are constructing personal residences and to real estate developers and building contractors for the acquisition of land for development and the construction of homes and commercial properties. These loans are generally in-market to known and established borrowers. Construction and development loans generally have a short term, such as one to two years. As of December 31, 2023, construction and development loans constituted approximately 7.8% of our total loan portfolio.
 Farmland. We offer agricultural mortgage loans to our agricultural customers for the acquisition of real estate used in their business, generally farmland. As of December 31, 2023, farmland loans represented approximately 4.5% of our total loan portfolio.
 Multifamily. We offer mortgage loans to real estate investors for the acquisition of multifamily (apartment) buildings. As of December 31, 2023, multifamily loans represented approximately 9.3% of our total loan portfolio.
 Commercial real estate-other. We offer commercial mortgage loans for the acquisition of real estate used in the customer's business, such as offices, warehouses, and production facilities. As of December 31, 2023, commercial real estate-other loans represented approximately 32.3% of our total loan portfolio.
 Residential Real Estate Loans
 Residential mortgage comprised approximately 15.5% of our total loan portfolio at December 31, 2023. Included in this category are home equity loans made to individuals. We generally retain short-term residential mortgage loans that we originate for our own portfolio and sell most long-term residential mortgage loans to other parties, while retaining servicing rights on the majority of such loans. At December 31, 2023, we serviced approximately $931.2 million in mortgage loans for others. We do not offer subprime mortgage loans and do not operate a wholesale mortgage business.

 Agricultural Loans
 Agricultural loans comprised approximately 2.9% of our total loan portfolio at December 31, 2023. Agricultural loans, most of which are secured by crops, livestock and machinery, are generally provided to finance capital improvements and farm operations as well as acquisitions of livestock and machinery. The ability of the borrower to repay may be affected by many factors outside of the borrower's control, including adverse weather conditions, loss of livestock due to disease or other factors, declines in market prices for agricultural products and the impact of government regulations. The ultimate repayment of agricultural loans is dependent upon the profitable operation or management of the agricultural entity.
 Our agricultural lenders work closely with our customers, including companies and individual farmers, and review the preparation of 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 once annually. We also work closely with governmental agencies to help agricultural customers obtain credit enhancement products such as loan guarantees or interest rate assistance.
 Consumer Lending
 Our consumer lending department provides many types of consumer loans, including personal loans (secured or unsecured) and automobile loans. Consumer loans typically have shorter terms, lower balances, higher yields and higher risks of default than one- to four-family residential real estate mortgage loans. Consumer loan collections are dependent on the borrower's continuing financial stability and are therefore more likely to be affected by adverse personal circumstances. As of December 31, 2023, consumer loans comprised 1.6% of our total loan portfolio.
 Other Products and Services
 Deposit Products
 We offer competitive deposit products and programs that address the needs of customers in each of the local markets that we serve. The deposit products are offered to individuals, nonprofit organizations, partnerships, small businesses, corporations and public entities. These products include noninterest bearing and interest bearing demand deposits, savings accounts, money market accounts and time deposits. Approximately 87.6% of our total deposits were considered "core" deposits as of December 31, 2023, compared to 88.5% at December 31, 2022. We consider core deposits to be the total of all deposits other than time deposits greater than $250k and brokered deposits.
 Trust and Investment Services
 We offer trust and investment services to help our business and individual clients in meeting their financial goals and preserving wealth. Our services include administering estates, trusts, and conservatorships, and providing property management, farm management, investment advisory, retail securities brokerage, financial planning and custodial services. Licensed brokers, who are registered representatives of a third-party registered broker-dealer, serve selected branches and provide investment-related services, such as investment management and financial planning.
 Liquidity and Funding
 We depend on deposits and external financing sources to fund our operations. We employ a variety of financing arrangements, including brokered deposits, term debt, subordinated debt, and equity. A discussion of our liquidity and funding programs has been included in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations under "Liquidity," and Item 7A. Quantitative and Qualitative Disclosures About Market Risk under " Liquidity Risk."
 Competition
 The banking business and related financial service providers operate in a highly competitive market. The Company competes with other commercial banks, thrifts, credit unions, stockbrokers, finance divisions of auto and farm equipment companies, agricultural suppliers, and other agriculture-related lenders. Some of these competitors are local, while others are statewide, regional or nationwide. In addition, financial technology companies and digital asset service providers are emerging in key areas of banking. We compete for deposits, loans, and other financial services through the range and quality of services we provide, with an emphasis on building long-lasting relationships.

 Human Capital Resources
 MidWestOne's mission statement, "Take care of our customers and those who should be" and our vision statement, "To be the preeminent relationship-driven community bank where our expertise and proactive approach generate meaningful impact for our stakeholders", are the foundation for everything we do. This includes striving to be a great place to work for our employees and providing exceptional service to our customers. To fulfill our mission and vision, we are focused on strategies for talent development, employee engagement & recognition, total compensation, and Diversity, Equity, Inclusion, and Belonging ("DEIB").
 Demographics: As of December 31, 2023, the Company employed 732 full-time equivalent employees. Our workforce is principally in the following geographic regions: Iowa; the Minneapolis/St. Paul metropolitan area; southwest Wisconsin; Denver, Colorado; and southwest Florida.
 Talent Development: A core part of our culture is to learn constantly so we can continually improve. Accordingly, we invest in a range of formal and informal development opportunities to cultivate a highly skilled workforce. We provide internally designed learning programs and commit resources to external professional education. The learning is reinforced with experience-based assignments, mentorship, project teams, and community involvement initiatives. Through effective coaching, performance management, mentoring, and succession planning programs, we continue to provide talented and well-deserving employees internal promotional opportunities that are aligned to their career aspirations.
 Engagement & Recognition: An important element of the Company's culture is recognizing and celebrating the success of our individual employees, teams, and the collective business. In 2023 our employees celebrated the eleventh consecutive year of being recognized as a Top Workplace in Iowa. This recognition is a result of employee feedback surveys that measure employee engagement, organizational health, and job satisfaction. While our engagement surveys provide a good opportunity to gather feedback, we are constantly listening and learning from our employees, including employee town halls and leadership forums. Peer to peer and leader recognition occurs regularly, including at our all-company monthly "One Call" and our annual "Rally Day" event.
 Total Compensation: The Company is committed to offering a competitive total compensation package based upon industry best practices and comparative market data. Our compensation programs include base salary and incentive compensation opportunities. We also offer a broad array of benefits including 401(k), medical, dental, vision, disability, life insurance plans, PTO plan, employee stock ownership program, health savings and flexible spending accounts, family leave options, employee assistance program, wellness program, and educational assistance. These programs are designed to attract and retain top talent, reward excellent performance, and motivate teams to drive the achievement of the Company's financial performance objectives and aligned performance goals in a balanced, risk-based manner.
 Diversity, Equity, Inclusion, and Belonging: The Company is committed to fostering a culture of DEIB. We voluntarily participate in the FDIC Diversity Self-Assessment and report our Affirmative Action Compliance Program results. We have a formal program that drives our commitment to achieving our workforce DEIB initiatives, and provides a framework for acquiring new talent and embracing the full potential of our workforce. Our Diversity & Inclusion Officer, DEIB leadership council, and DEIB employee advisory council help lead this journey and our current initiatives. We believe our DEIB efforts are critical to better understanding, serving, and supporting our colleagues, customers, and communities.
 Available Information

 We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other information with the SEC. The public may obtain copies of these reports and any amendments at the SEC's Internet site, www.sec.gov.

 Additionally, reports filed with the SEC can be obtained free of charge through our website at www.midwestone.com under "Investor Relations - SEC Filings". These reports are made available through our website as soon as reasonably practicable after they are filed electronically with, or furnished to, the SEC. Information on, or accessible through, our website is not part of, or incorporated by reference in, this Annual Report on Form 10-K.
 Supervision and Regulation
 General
 FDIC-insured institutions, like the Bank, their holding companies and their affiliates are extensively regulated under federal and state law. As a result, our growth and earnings performance may be affected not only by management decisions and general

 economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various bank regulatory agencies, including the Iowa Division of Banking (the "Iowa Division"), the Federal Reserve, the FDIC and the Consumer Financial Protection Bureau (the "CFPB"). Furthermore, taxation laws administered by the Internal Revenue Service and state taxing authorities, accounting rules developed by the FASB, securities laws administered by the SEC and state securities authorities, and anti-money laundering laws enforced by the U.S. Department of the Treasury ("Treasury") have an impact on our business. The effect of these statutes, regulations, regulatory policies and accounting rules are significant to our operations and results.

 Federal and state banking laws impose a comprehensive system of supervision, regulation and enforcement on the operations of FDIC-insured institutions, their holding companies and affiliates that is intended primarily for the protection of the FDIC-insured deposits and depositors of banks, rather than shareholders. These laws, and the regulations of the bank regulatory agencies issued under them, affect, among other things, the scope of our business, the kinds and amounts of investments the Company and the Bank may make, required capital levels relative to assets, the nature and amount of collateral for loans, the establishment of branches, the ability to merge, consolidate and acquire, dealings with our insiders and affiliates and the payment of dividends. In reaction to the global financial crisis and particularly following the passage of the Dodd-Frank Act, we experienced heightened regulatory requirements and scrutiny. Although the reforms primarily targeted systemically important financial service providers, their influence filtered down in varying degrees to community banks over time and caused our compliance and risk management processes, and the costs thereof, to increase. The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 ("Regulatory Relief Act") eliminated questions about the applicability of certain Dodd-Frank Act reforms to community bank systems, including relieving us of any requirement to engage in mandatory stress tests, maintain a risk committee or comply with the Volcker Rule's complicated prohibitions on proprietary trading and ownership of private funds. These reforms have been favorable to our operations.

 The supervisory framework for U.S. banking organizations subjects banks and bank holding companies to regular examination by their respective regulatory agencies, which results in examination reports and ratings that are not publicly available and that can impact the conduct and growth of their business. These examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management ability and performance, earnings, liquidity, and various other factors. The regulatory agencies generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine, among other things, that such operations are unsafe or unsound, fail to comply with applicable law or are otherwise inconsistent with laws and regulations.

 The following is a summary of the material elements of the supervisory and regulatory framework applicable to the Company and the Bank. It does not describe all of the statutes, regulations and regulatory policies that apply, nor does it restate all of the requirements of those that are described. The descriptions are qualified in their entirety by reference to the particular statutory and regulatory provision.

 The Role of Capital

 Regulatory capital represents the net assets of a banking organization available to absorb losses. Because of the risks attendant to their business, FDIC-insured institutions are required to hold capital, which directly affects our earnings capabilities. Although capital has historically been one of the key measures of the financial health of both bank holding companies and banks, its role became fundamentally more important in the wake of the global financial crisis, as the banking regulators recognized that the amount and quality of capital held by banks prior to the crisis was insufficient to absorb losses during periods of severe stress.

 Capital Levels. Banks have been required to hold minimum levels of capital based on guidelines established by the bank regulatory agencies since 1983. The minimums have been expressed in terms of ratios of "capital" divided by "total assets." The capital guidelines for U.S. banks beginning in 1989 have been based upon international capital accords (known as "Basel" rules) adopted by the Basel Committee on Banking Supervision, a committee of central banks and bank supervisors that acts as the primary global standard-setter for prudential regulation, as implemented by the U.S. bank regulatory agencies on an interagency basis. The accords recognized that bank assets for the purpose of the capital ratio calculations needed to be risk weighted (the theory being that riskier assets should require more capital) and that off-balance sheet exposures needed to be factored in the calculations. Following the global financial crisis, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced agreement on a strengthened set of capital requirements for banking organizations around the world, known as Basel III, to address deficiencies recognized in connection with the global financial crisis.

 The Basel III Rule. The Unites States bank regulatory agencies adopted the Basel III regulatory capital reforms, and, at the same time, effected changes required by the Dodd-Frank Act, in regulations that were effective (with certain phase-ins) in 2015. Basel III, or the Basel III Rule, established capital standards for banks and bank holding companies that are meaningfully more stringent than those in place previously: it increased the required quantity and quality of capital; and it required a more complex, detailed and calibrated assessment of risk in the calculation of risk weightings. The Basel III Rule is applicable to all banking organizations that are subject to minimum capital requirements, including federal and state banks and savings and loan

 associations, as well as to most bank and savings and loan holding companies. The Company and the Bank are each subject to the Basel III Rule as described below.

 Basel III also increased the required quantity and quality of capital. Not only did it increase most of the required minimum capital ratios in effect prior to January 1, 2015, but, in requiring that forms of capital be of higher quality to absorb loss, it introduced the concept of Common Equity Tier 1 Capital, which consists primarily of common stock, related surplus (net of Treasury stock), retained earnings, and Common Equity Tier 1 minority interests subject to certain regulatory adjustments. The Basel III Rule also changed the definition of capital by establishing more stringent criteria that instruments must meet to be considered Additional Tier 1 Capital (primarily non-cumulative perpetual preferred stock that meets certain requirements) and Tier 2 Capital (primarily other types of preferred stock and subordinated debt, subject to limitations). The Basel III Rule also constrained the inclusion of minority interests, mortgage-servicing assets, and deferred tax assets in capital and required deductions from Common Equity Tier 1 Capital if such assets exceeded a percentage of a banking institution's Common Equity Tier 1 Capital.

 The Basel III Rule required minimum capital ratios as of January 1, 2015, as follows:

 • A ratio of Common Equity Tier 1 Capital equal to 4.5% of risk-weighted assets;
 • A ratio of Tier 1 Capital equal to 6% of risk-weighted assets;
 • A continuation of the minimum required amount of Total Capital (Tier 1 plus Tier 2) at 8% of risk-weighted assets; and
 • A leverage ratio of Tier 1 Capital to total quarterly average assets equal to 4% in all circumstances.

 In addition, institutions that want to make capital distributions (including for dividends and repurchases of stock) and pay discretionary bonuses to executive officers without restriction must also maintain 2.5% in Common Equity Tier 1 Capital attributable to a capital conservation buffer. The purpose of the conservation buffer is to ensure that banking institutions maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress. Factoring in the conservation buffer increases the minimum ratios depicted above to 7% for Common Equity Tier 1 Capital, 8.5% for Tier 1 Capital and 10.5% for Total Capital.

 Well-Capitalized Requirements. The ratios described above are minimum standards in order for banking organizations to be considered "adequately capitalized." Bank regulatory agencies uniformly encourage banks to hold more capital and be "well-capitalized" and, to that end, federal law and regulations provide various incentives for banking organizations to maintain regulatory capital at levels in excess of minimum regulatory requirements. For example, a banking organization that is well-capitalized may: (i) qualify for exemptions from prior notice or application requirements otherwise applicable to certain types of activities; (ii) qualify for expedited processing of other required notices or applications; and (iii) accept, roll-over or renew brokered deposits. Higher capital levels could also be required if warranted by the particular circumstances or risk profiles of individual banking organizations. For example, the Federal Reserve's capital guidelines contemplate that additional capital may be required to take adequate account of, among other things, interest rate risk, or the risks posed by concentrations of credit, nontraditional activities or securities trading activities. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions (i.e., Tier 1 Capital less all intangible assets), well above the minimum levels.

 Under the capital regulations of the Federal Reserve for the Company and the FDIC for the Bank, in order to be well capitalized, we must maintain:

 • A Common Equity Tier 1 Capital ratio to risk-weighted assets of 6.5% or more;
 • A ratio of Tier 1 Capital to total risk-weighted assets of 8% or more;
 • A ratio of Total Capital to total risk-weighted assets of 10% or more; and
 • A leverage ratio of Tier 1 Capital to total adjusted average quarterly assets of 5% or greater.

 It is possible under the Basel III Rule to be well-capitalized while remaining out of compliance with the capital conservation buffer discussed above.

 As of December 31, 2023: (i) the Bank was not subject to a directive from the FDIC to increase its capital and (ii) the Bank was well-capitalized, as defined by FDIC regulations. As of December 31, 2023, the Company had regulatory capital in excess of the Federal Reserve's requirements and met the Basel III Rule requirements to be well-capitalized. We are also in compliance with the capital conservation buffer.
 Prompt Corrective Action. The concept of an institution being "well-capitalized" is part of a regulatory enforcement regime that provides the federal banking regulators with broad power to take "prompt corrective action" to resolve the problems of institutions based on the capital level of each particular institution. The extent of the regulators' powers depends on whether the institution in question is "adequately capitalized," "undercapitalized," "significantly undercapitalized" or "critically

 undercapitalized," in each case as defined by regulation. Depending upon the capital category to which an institution is assigned, the regulators' corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution's asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to sell itself; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate that the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution.

 Community Bank Capital Simplification. Community banks have long raised concerns with bank regulators about the regulatory burden, complexity, and costs associated with certain provisions of the Basel III Rule. In response, Congress provided an "off-ramp" for institutions, like us, with total consolidated assets of less than $10 billion. Section 201 of the Regulatory Relief Act instructed the federal banking regulators to establish a single "Community Bank Leverage Ratio" ("CBLR") of between 8 and 10%. Under the final rule, a community banking organization is eligible to elect the new framework if it has: less than $10 billion in total consolidated assets, limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9%. We have not elected to use the CBLR framework at this time.

 Supervision and Regulation of the Company
 General. The Company, as the sole shareholder of the Bank, is a bank holding company that has elected financial holding company status. As a bank holding company, we are registered with, and subject to regulation, supervision and enforcement by, the Federal Reserve under the BHCA. We are legally obligated to act as a source of financial and managerial strength to the Bank and to commit resources to support the Bank in circumstances where we might not otherwise do so. Under the BHCA, we are subject to periodic examination by the Federal Reserve and are required to file with the Federal Reserve periodic reports of our operations and such additional information regarding us and the Bank as the Federal Reserve may require.

 Acquisitions, Activities and Financial Holding Company Election. The primary purpose of a bank holding company is to control and manage banks. The BHCA generally requires the prior approval of the Federal Reserve for any merger involving a bank holding company or any acquisition by a bank holding company of another bank or bank holding company. Subject to certain conditions (including deposit concentration limits established by the BHCA), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the United States. In approving interstate acquisitions, the Federal Reserve is required to give effect to applicable state law limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its FDIC-insured institution affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state institutions or their holding companies) and state laws that require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company. Furthermore, in accordance with the Dodd-Frank Act, bank holding companies must be well-capitalized and well-managed in order to effect interstate mergers or acquisitions. For a discussion of the capital requirements, see "—The Role of Capital" above.

 The BHCA generally prohibits us from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries. This general prohibition is subject to a number of exceptions. The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to November 11, 1999 to be "so closely related to banking... as to be a proper incident thereto." This authority permits us to engage in a variety of banking-related businesses, including the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage services. The BHCA does not place territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.

 Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature or incidental to any such financial activity or that the Federal Reserve determines by order to be complementary to any such financial activity, as long as the activity does not pose a substantial risk to the safety or soundness of FDIC-insured institutions or the financial system generally. We have elected to operate as a financial holding company. In order to maintain our status as a financial holding company, the Company and the Bank must be well-capitalized, well-managed, and the Bank must have a least a satisfactory CRA rating. If the Federal Reserve determines that either the Company or the Bank is not well-capitalized or well-managed, the Federal Reserve will provide a period of time in which to achieve compliance, but during the period of noncompliance, the Federal Reserve may place any limitations on us that it deems appropriate. Furthermore, if non-compliance is based on the failure of the Bank to achieve a satisfactory CRA rating, we would not be able to commence any new financial activities or acquire a company that engages in such activities.

 Change in Control. Federal law also prohibits any person or company from acquiring "control" of an FDIC-insured depository institution or its holding company without prior notice to the appropriate federal bank regulator. "Control" is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company, but may arise under certain circumstances between 10% and 24.99% ownership.

 Capital Requirements. We are required to maintain consolidated capital in accordance with Federal Reserve capital adequacy requirements. For a discussion of capital requirements, see "—The Role of Capital" above.

 Dividend Payments. Our ability to pay dividends to our shareholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. As an Iowa corporation, we are subject to the limitations of Iowa law, which allows us to pay dividends unless, after such dividend, (i) we would not be able to pay our debts as they become due in the usual course of business or (ii) our total assets would be less than the sum of our total liabilities plus any amount that would be needed if we were to be dissolved at the time of the dividend payment, to satisfy the preferential rights upon dissolution of shareholders whose rights are superior to the rights of the shareholders receiving the distribution.

 As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends to shareholders if: (i) the company's net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the prospective rate of earnings retention is inconsistent with the company's capital needs and overall current and prospective financial condition; or (iii) the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. The Federal Reserve also possesses enforcement powers over bank holding companies and their nonbank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies. In addition, under the Basel III Rule, institutions that seek the freedom to pay dividends have to maintain 2.5% in Common Equity Tier 1 Capital attributable to the capital conservation buffer. See "—The Role of Capital" above.

 Incentive Compensation. There have been a number of developments in recent years focused on incentive compensation plans sponsored by bank holding companies and banks, reflecting recognition by the bank regulatory agencies and Congress that flawed incentive compensation practices in the financial industry were one of many factors contributing to the global financial crisis. The result is interagency guidance on sound incentive compensation practices.

 The interagency guidance recognized three core principles. Effective incentive plans should: (i) provide employees incentives that appropriately balance risk and reward; (ii) be compatible with effective controls and risk-management; and (iii) be supported by strong corporate governance, including active and effective oversight by the organization's board of directors. Much of the guidance addresses large banking organizations and, because of the size and complexity of their operations, the regulators expect those organizations to maintain systematic and formalized policies, procedures, and systems for ensuring that the incentive compensation arrangements for all executive and non-executive employees covered by this guidance are identified and reviewed, and appropriately balance risks and rewards. Smaller banking organizations like us that use incentive compensation arrangements are expected to be less extensive, formalized, and detailed than those of the larger banks.

 Monetary Policy. The monetary policy of the Federal Reserve has a significant effect on the operating results of financial or bank holding companies and their subsidiaries, and this is evidenced in its increases in the targeted federal funds rate throughout 2022 and 2023. Among the tools available to the Federal Reserve to affect the money supply are open market transactions in U.S. government securities and changes in the discount rate on bank borrowings. These means are used in varying combinations to influence overall growth and distribution of bank loans, investments and deposits, and their use may affect interest rates charged on loans or paid on deposits.

 Federal Securities Regulation. Our common stock is registered with the SEC under the Securities Act of 1933, as amended, and the Exchange Act. Consequently, we are subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act.

 Corporate Governance. The Dodd-Frank Act addressed many investor protection, corporate governance and executive compensation matters that will affect most U.S. publicly traded companies. It increased shareholder influence over boards of directors by requiring companies to give shareholders a nonbinding vote on executive compensation and so-called "golden parachute" payments, and authorizing the SEC to promulgate rules that would allow shareholders to nominate and solicit voters for their own candidates using a company's proxy materials. The legislation also directed the Federal Reserve to promulgate rules prohibiting excessive compensation paid to executives of bank holding companies, regardless of whether such companies are publicly traded.

 Supervision and Regulation of the Bank
 General. The Bank is an Iowa-chartered bank. The deposit accounts of the Bank are insured by the FDIC's Deposit Insurance

 Fund ("DIF") to the maximum extent provided under federal law and FDIC regulations, currently $250,000 per insured depositor category. As an Iowa-chartered FDIC-insured bank, the Bank is subject to the examination, supervision, reporting and enforcement requirements of the Iowa Division, the chartering authority for Iowa banks, and the FDIC, designated by federal law as the primary federal regulator of insured state banks that, like the Bank, are not members of the Federal Reserve System (nonmember banks).

 Deposit Insurance. As an FDIC-insured institution, the Bank is required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a risk-based assessment system whereby FDIC-insured institutions pay insurance premiums at rates based on their risk classification. For institutions like the Bank that are not considered large and highly complex banking organizations, assessments are now based on examination ratings and financial ratios. The total base assessment rates currently range from 2.5 basis points to 32 basis points.

 At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, increases or decreases the assessment rates, following notice and comment on proposed rulemaking. For this purpose, the reserve ratio is the DIF balance divided by estimated insured deposits. In response to the global financial crisis, the Dodd-Frank Act increased the minimum reserve ratio from 1.15% to 1.35% of the estimated amount of total insured deposits. In the semiannual update in June 2022, the FDIC projected that the reserve ratio was at risk of not reaching the statutory minimum of 1.35 % by September 30, 2028, the statutory deadline. Based on this update, the FDIC approved an increase in initial base deposit insurance assessment rate schedules by two basis points, applicable to all insured depository institutions. The increase was effective on January 1, 2023, applicable to the first quarterly assessment period of the 2023 assessment (January 1 through March 31, 2023).

 In addition, because the total cost of the failures of Silicon Valley Bank and Signature Bank was approximately $16.3 billion, the FDIC adopted a special assessment for banks having deposits above $5 billion, at an annual rate of 13.4 basis points beginning with the first quarterly assessment period of 2024 (January 1 through March 31, 2024) with an invoice payment date of June 28, 2024, and will continue to collect special assessments for an anticipated total of eight quarterly assessment periods. The base for the special assessment is equal to an insured depository institution's estimated uninsured deposits for the December 31, 2022 reporting period, adjusted to exclude the first $5 billion in estimated uninsured deposits.

 Supervisory Assessments. All Iowa banks are required to pay supervisory assessments to the Iowa Division to fund the operations of that agency. The amount of the assessment is calculated on the basis of the Bank's total assets. During the year ended December 31, 2023, the Bank paid supervisory assessments to the Iowa Division totaling approximately $195,000.

 Capital Requirements. Banks are generally required to maintain capital levels in excess of other businesses. For a discussion of capital requirements, see "—The Role of Capital" above.

 Liquidity Requirements. Liquidity is a measure of the ability and ease with which bank assets may be converted to meet financial obligations such as deposits or other funding sources. Banks are required to implement liquidity risk management frameworks that ensure they maintain sufficient liquidity, including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events. The level and speed of deposit outflows contributing to the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in the first half of 2023 was unprecedented and contributed to acute liquidity and funding strain. These events have further underscored the importance of liquidity risk management and contingency funding planning by insured depository institutions like the Bank.

 The primary role of liquidity risk management is to: (i) prospectively assess the need for funds to meet financial obligations; and (ii) ensure the availability of cash or collateral to fulfill those needs at the appropriate time by coordinating the various sources of funds available to the institution under normal and stressed conditions. Basel III includes a liquidity framework that requires the largest insured institutions to measure their liquidity against specific liquidity tests. One test, referred to as the Liquidity Coverage Ratio, or LCR, is designed to ensure that the banking entity has an adequate stock of unencumbered high-quality liquid assets that can be converted easily and immediately in private markets into cash to meet liquidity needs for a 30-calendar day liquidity stress scenario. The other test, known as the Net Stable Funding Ratio, or NSFR, is designed to promote more medium- and long-term funding of the assets and activities of FDIC-insured institutions over a one-year horizon. These tests provide an incentive for banks and holding companies to increase their holdings in Treasury securities and other sovereign debt as a component of assets, increase the use of long-term debt as a funding source and rely on stable funding like core deposits (in lieu of brokered deposits).

 Although these tests do not, and will not, apply to the Bank, we continue to review our liquidity risk management policies in light of regulatory requirements and industry developments.

 Dividend Payments. The primary source of funds for the Company is dividends from the Bank. Under the Iowa Banking Act, Iowa-chartered banks generally may pay dividends only out of undivided profits. The Iowa Division may restrict the declaration or payment of a dividend by an Iowa-chartered bank, such as the Bank. The payment of dividends by any FDIC-insured institution is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a FDIC-insured institution generally is prohibited from paying any dividends if, following payment thereof, the

 institution would be undercapitalized. As described above, the Bank exceeded its capital requirements under applicable guidelines as of December 31, 2023. Notwithstanding the availability of funds for dividends, however, the FDIC and the Iowa Division may prohibit the payment of dividends by the Bank if either or both determine such payment would constitute an unsafe or unsound practice. In addition, under the Basel III Rule, institutions that seek the freedom to pay dividends have to maintain 2.5% in Common Equity Tier 1 Capital attributable to the capital conservation buffer. See "—The Role of Capital" above.

 State Bank Investments and Activities. The Bank is permitted to make investments and engage in activities directly or through subsidiaries as authorized by Iowa law. 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 that the activity would not pose a significant risk to the DIF. These restrictions have not had, and are not currently expected to have, a material impact on the operations of the Bank.

 Insider Transactions. The Bank is subject to certain restrictions imposed by federal law on "covered transactions" between the Bank and its "affiliates." The Company is an affiliate of the Bank for purposes of these restrictions, and covered transactions subject to the restrictions include extensions of credit to the Company, investments in the stock or other securities of the Company and the acceptance of the stock or other securities of the Company as collateral for loans made by the Bank. The Dodd-Frank Act enhanced the requirements for certain transactions with affiliates, including an expansion of the definition of "covered transactions" and an increase in the amount of time for which collateral requirements regarding covered transactions must be maintained.

 Certain limitations and reporting requirements are also placed on extensions of credit by the Bank to its directors and officers, to directors and officers of the Company and its subsidiaries, to principal shareholders of the Company and to "related interests" of such directors, officers and principal shareholders. In addition, federal law and regulations may affect the terms on which any person who is a director or officer of the Company or the Bank, or a principal shareholder of the Company, may obtain credit from banks with which the Bank maintains a correspondent relationship.

 Safety and Soundness Standards/Risk Management. The federal banking agencies have adopted operational and managerial standards to promote the safety and soundness of FDIC-insured institutions. The standards apply to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, asset quality and earnings.

 In general, the safety and soundness standards prescribe the goals to be achieved in each area, and each institution is responsible for establishing its own procedures to achieve those goals. While regulatory standards do not have the force of law, if an institution operates in an unsafe and unsound manner, the FDIC-insured institution's primary federal regulator may require the institution to submit a plan for achieving and maintaining compliance. If an FDIC-insured institution fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator, the regulator is required to issue an order directing the institution to cure the deficiency. Until the deficiency cited in the regulator's order is cured, the regulator may restrict the FDIC-insured institution's rate of growth, require the FDIC-insured institution to increase its capital, restrict the rates that the institution pays on deposits or require the institution to take any action that the regulator deems appropriate under the circumstances. Noncompliance with safety and soundness may also constitute grounds for other enforcement action by the federal bank regulatory agencies, including cease and desist orders and civil money penalty assessments.

 During the past decade, the bank regulatory agencies have increasingly emphasized the importance of sound risk management processes and strong internal controls when evaluating the activities of the FDIC-insured institutions they supervise. Properly managing risk has been identified as critical to the conduct of safe and sound banking activities and has become even more important as new technologies, product innovation, and the size and speed of financial transactions have changed the nature of banking markets. The agencies have identified a spectrum of risks facing a banking institution including, but not limited to, credit, market, liquidity, operational, legal and reputational risk. The key risk themes identified for 2023 are discussed in "Item 1.A. Risk Factors" section. The Bank is expected to have active board and senior management oversight; adequate policies, procedures and limits; adequate risk measurement, monitoring and management information systems; and comprehensive internal controls.

 Privacy and Cybersecurity. The Bank is subject to many U.S. federal and state laws and regulations governing requirements for maintaining policies and procedures to protect non-public confidential information of their customers. These laws require the Bank to periodically disclose its privacy policies and practices relating to sharing such information and permit consumers to opt out of their ability to share information with unaffiliated third parties under certain circumstances. They also impact the Bank's ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers. In addition, the Bank is required to implement a comprehensive information security program

 that includes administrative, technical, and physical safeguards to ensure the security and confidentiality of customer records and information. These security and privacy policies and procedures are in effect across all businesses and geographic locations.

 Risks and exposures related to cybersecurity require financial institutions to design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institution. Bank management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution's operations after a cyber-attack involving destructive malware.

 Branching Authority. Iowa banks, such as the Bank, have the authority under Iowa law to establish branches anywhere in the State of Iowa, subject to receipt of all required regulatory approvals. The establishment of new interstate branches has historically been permitted only in those states the laws of which expressly authorize such expansion. The Dodd-Frank Act permits well-capitalized and well-managed banks to establish new interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) without impediments. Federal law permits state and national banks to merge with banks in other states subject to: (i) regulatory approval; (ii) federal and state deposit concentration limits; and (iii) state law limitations requiring the merging bank to have been in existence for a minimum period of time (not to exceed five years) prior to the merger.

 Community Reinvestment Act Requirements. The CRA requires the Bank to have a continuing and affirmative obligation in a safe and sound manner to help meet the credit needs of the entire community, including low- and moderate-income neighborhoods. Federal regulators regularly assess the Bank's record of meeting the credit needs of its communities. Applications for acquisitions would be affected by the evaluation of the Bank's effectiveness in meeting its CRA requirements.

 On October 24, 2023, the bank regulatory agencies issued a final rule to strengthen and modernize the CRA regulations (the "CRA Rule"), some of which is effective on April 1, 2024. The CRA Rule is designed to update how CRA activities qualify for consideration, where CRA activities are considered, and how CRA activities are evaluated. More specifically, the bank regulatory agencies described the goals of the CRA Rule as follows: (i) to expand access to credit, investment, and basic banking services in low and moderate income communities; (ii) to adapt to changes in the banking industry, including mobile and internet banking by modernizing assessment areas while maintaining a focus on branch based areas; (iii) to provide greater clarity, consistency, and transparency in the application of the regulations through the use of standardized metrics as part of CRA evaluation and clarifying eligible CRA activities focused on low and moderate income communities and underserved rural communities; (iv) to tailor CRA rules and data collection to bank size and business model; and (v) to maintain a unified approach among the regulators. Management of the Bank is assessing the impact of the CRA Rule on its CRA lending and investment activities in its markets.

 Anti-Money Laundering. The Bank Secrecy Act ("BSA") is the common name for a series of laws and regulations enacted in the United States to combat money laundering and the financing of terrorism. They are designed to deny terrorists and criminals the ability to obtain access to the U.S. financial system and have significant implications for FDIC-insured institutions and other businesses involved in the transfer of money. The so-called Anti-Money Laundering / Countering the Financing of Terrorism ("AML/CFT") regime under the BSA provides a foundation to promote financial transparency and deter and detect those who seek to misuse the U.S. financial system to launder criminal proceeds, finance terrorist acts, or move funds for other illicit purposes. The laws mandate financial services companies to have policies and procedures with respect to measures designed to address: (i) customer identification programs; (ii) money laundering; (iii) terrorist financing; (iv) identifying and reporting suspicious activities and currency transactions; (v) currency crimes; and (vi) cooperation between FDIC-insured institutions and law enforcement authorities.

 Concentrations in Commercial Real Estate. Concentration risk exists when FDIC-insured institutions deploy too many assets to any one industry or segment. A concentration in commercial real estate is one example of regulatory concern. The interagency Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices guidance ("CRE Guidance") provides supervisory criteria, including the following numerical indicators, to assist bank examiners in identifying banks with potentially significant commercial real estate loan concentrations that may warrant greater supervisory scrutiny: (i) commercial real estate loans exceeding 300% of capital and increasing 50% or more in the preceding three years; or (ii) construction and land development loans exceeding 100% of capital. The CRE Guidance does not limit banks' levels of commercial real estate lending activities, but rather guides institutions in developing risk management practices and levels of capital that are commensurate with the level and nature of their commercial real estate concentrations. On December 18, 2015, the federal banking agencies issued a statement to reinforce prudent risk-management practices related to CRE lending, having observed substantial growth in many CRE asset and lending markets, increased competitive pressures, rising CRE concentrations in banks, and an easing of CRE underwriting standards. The federal bank agencies reminded FDIC-insured institutions to maintain underwriting discipline and exercise prudent risk-management practices to identify, measure, monitor, and manage the risks arising from CRE lending. In addition, FDIC-insured institutions must maintain capital commensurate with the level and nature of their CRE concentration risk. As of December 31, 2023, the Bank did not exceed these guidelines.

 Consumer Financial Services. The historical structure of federal consumer protection regulation applicable to all providers of consumer financial products and services changed significantly on July 21, 2011, when the CFPB commenced operations to supervise and enforce consumer protection laws. The CFPB has broad rulemaking authority for a wide range of consumer protection laws that apply to all providers of consumer products and services, including the Bank, as well as the authority to prohibit "unfair, deceptive or abusive" acts and practices. The CFPB has examination and enforcement authority over providers with more than $10 billion in assets. FDIC-insured institutions with $10 billion or less in assets, like the Bank, continue to be examined by their applicable bank regulators.

 Because abuses in connection with residential mortgages were a significant factor contributing to the financial crisis, many rules issued by the CFPB, as required by the Dodd-Frank Act, addressed mortgage and mortgage-related products, their underwriting, origination, servicing and sales. The Dodd-Frank Act significantly expanded underwriting requirements applicable to loans secured by 1-4 family residential real property and augmented federal law combating predatory lending practices. In addition to numerous disclosure requirements, the Dodd Frank Act and the CFPB's rules imposed new standards for mortgage loan originations on all lenders, including banks and savings associations, in an effort to strongly encourage lenders to verify a borrower's ability to repay, while also establishing a presumption of compliance for certain "qualified mortgages." The CFPB's rules have not had a significant impact on the Bank's operations, except for higher compliance costs.

 ITEM 1A. RISK FACTORS.
 An investment in our securities is subject to risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this report. In addition to the risks and uncertainties described below, other risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and results of operations. The value or market price of our securities could decline due to any of these identified or other risks, and you could lose all or part of your investment.
 Economic and Market Risks

 Our business is concentrated in and largely dependent upon the continued growth and welfare of the Iowa and Minneapolis/St. Paul markets.

 We operate primarily in the central and eastern Iowa and Minneapolis/St. Paul, Minnesota markets and their surrounding communities in the upper-Midwest. As a result, our financial condition, results of operations and cash flows are significantly impacted by changes in the economic conditions in those areas. Our success depends to a significant extent upon the business activity, population, income levels, deposits and real estate activity in these markets. Although our customers' businesses and financial interests may extend well beyond these market areas, adverse economic conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans to us, affect the value of collateral underlying loans and generally affect our financial condition and results of operations. Unfavorable or uncertain economic and market conditions can be caused by declines in economic growth, business activity or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; uncertainty in U.S. trade policies, legislation, treaties and tariffs; natural disasters; acts of war or terrorism; widespread disease or pandemics; or a combination of these or other factors. Because of our geographic concentration, we are less able than other regional or national financial institutions to diversify our credit risks across multiple markets.
 We are subject to interest rate risk, which could adversely affect our financial condition and profitability.

 Shifts in short-term interest rates may reduce our net interest income, which is the principal component of our earnings. The impact on earnings can be adverse when the slope of the yield curve flattens, that is, when short-term interest rates increase more than long-term interest rates or when long-term interest rates decrease more than short-term interest rates.
 Changes in interest rates also can affect the value of loans, securities and other assets. An increase in interest rates that adversely affects the ability of borrowers to pay the principal or interest on loans may lead to an increase in nonperforming assets and a reduction of income recognized, which could have a material adverse effect on our results of operations and cash flows. Rising interest rates will likely result in a decline in fair value of our fixed-rate debt securities. Unrealized losses due to changes in interest rates on available for sale securities are recognized in other comprehensive income and reduce total shareholders' equity and do not negatively impact our regulatory capital ratios. However, tangible common equity and the associated ratios used by many investors would be reduced. Realized losses from debt securities sales reduce our regulatory capital ratios.

 We measure interest rate risk under various rate scenarios and using specific criteria and assumptions. A summary of this process, along with the results of our net interest income simulations, is included at Item 7A. Quantitative and Qualitative Disclosures About Market Risk under "Interest Rate Risk." Although we believe our current level of interest rate sensitivity is reasonable and effectively managed, significant fluctuations in interest rates may have an adverse effect on our business, financial condition and results of operations.
 Continued elevated levels of inflation could adversely impact our business, results of operations and financial condition.
 The United States has experienced elevated levels of inflation throughout 2022 and 2023. Continued levels of inflation could have complex effects on our business, results of operations and financial condition, some of which could be materially adverse. Inflation could adversely impact our net interest income, while inflation-driven increases in our levels of noninterest expense could negatively impact our results of operations. Continued elevated levels of inflation could also cause increased volatility and uncertainty in the business environment, which could adversely affect loan demand and our clients' ability to repay indebtedness. It is also possible that governmental responses to the current inflation environment, such as changes to monetary and fiscal policy that are too strict, or the imposition or threatened imposition of price controls, could adversely affect our business.

 Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.
 In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market operations in U.S. government securities, adjustments of the discount rate and changes in reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

 The Federal Reserve made a series of significant increases to the target Federal Funds rate throughout 2022 and 2023 as part of an effort to combat elevated levels of inflation affecting the U.S. economy, which is expected to continue in the near term. This has helped drive a significant increase in prevailing interest rates, which has impacted the value of our securities portfolio, which had $78.0 million in net unrealized losses from available-for-sale investment securities and $179.9 million in net unrealized losses from held-to-maturity securities at December 31, 2023. Higher interest rates can also negatively affect our customers' businesses and financial condition, and the value of collateral securing loans in our portfolio.

 Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments such as the conflicts between Israel and Palestine and between Russia and Ukraine and resulting disruptions in the global energy market, and tight labor market conditions and supply chain issues, there is a meaningful risk that the Federal Reserve and other central banks may raise interest rates too much, thereby limiting economic growth and potentially causing an economic recession or other political instability. This could decrease loan demand, harm the credit characteristics of our existing loan portfolio, impact our net interest income, impact our investment security valuation, and decrease the value of collateral securing loans in the portfolio.

 The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations cannot be predicted.

 We could recognize losses on securities held in our securities portfolio, particularly if interest rates remain at their current levels or economic and market conditions deteriorate.

 As of December 31, 2023, the fair value of our securities portfolio was approximately $1.69 billion. Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. For example, fixed-rate securities acquired by us are generally subject to decreases in market value when interest rates rise. Additional factors include, but are not limited to, rating agency downgrades of the securities, defaults by the issuer or individual mortgagors with respect to the underlying securities, and instability in the credit markets. Any of the foregoing factors could result in the recognition of a loss through earnings. Because of changing economic and market conditions affecting interest rates, the financial condition of issuers of the securities and the performance of the underlying collateral, we may recognize realized and/or unrealized losses in future periods, which could have an adverse effect on our financial condition and results of operations.

 At December 31, 2023, we had $78.0 million in net unrealized losses in our debt securities available for sale portfolio and $179.9 million in net unrealized losses in our held to maturity debt securities portfolio. If we are forced to liquidate any of those investments prior to maturity, including because of a lack of liquidity, we would recognize as a charge to earnings the losses

 attributable to those securities. Our securities portfolio has an average duration of 4.9 years, so we expect an increase in realized losses if interest rates continue to increase in 2024.

 Weather-related events and other natural disasters, as well as man-made disasters, could cause a disruption in our operations or other consequences that could have an adverse impact on financial results and condition.

 A significant portion of our operations are located in areas that are susceptible to floods, droughts, tornadoes and other severe weather events. Severe weather events, natural disasters and effects of climate change, could cause disruptions to our operations and could have a material adverse effect on our overall business, results of operations or financial condition. While we maintain insurance covering many of these weather-related events, including coverage for lost profits and extra expense, there is no insurance against the disruption that a severe weather event could produce to the markets that we serve and the resulting adverse impact on our borrowers to timely repay their loans and the value of any collateral held by us. The severity and impact of weather-related events are difficult to predict and may be exacerbated by global climate change.

 Risks arising from climate change, including physical risks and transition risks, could have an adverse impact on our business and results of operations.

 Climate change could present financial risks to us through changes in the physical climate that affect our operations directly or that impact our customer's operations or loan collateral. Climate change also could present financial risks to us as a result of transition risks, such as societal and/or technological responses to climate change, which could include changes in climate policy or in the regulation of financial institutions with respect to risks posed by climate change. These climate-related physical risks and transition risks could have an adverse impact on our business and results of operations due to the impact such risks may have on our operations and our customers, such as declines in asset values, reduced availability of insurance, significant interruptions to business operations, and negative consequences to business models and the need to make changes in response to those consequences. The risks of regulatory changes and compliance requirements related to climate change may impose operational burdens and increased compliance costs, capital requirements, or the risk of litigation, which could adversely affect the Company's businesses, results of operations and financial condition.

 Credit and Lending Risks

 We must manage our credit risk effectively.

 There are risks inherent in making any loan, including risks inherent in dealing with individual borrowers, risks of nonpayment, risks resulting from uncertainties as to the future value of collateral and cash flows available to service debt and risks resulting from changes in economic and industry conditions. Default risk may arise from events or circumstances that are difficult to detect, such as fraud, or difficult to predict, such as catastrophic events affecting certain industries. In addition, we primarily serve the banking and financial services needs of small to mid-sized businesses. These businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities, may be more vulnerable to economic downturns, may experience volatility in operating results, and may have elevated business continuity risk due to the limited size of the management group, any of which may impair a borrower's ability to repay a loan. We attempt to minimize our credit risk through prudent loan application approval procedures, careful monitoring of the concentration of our loans within specific industries and periodic independent reviews of outstanding loans by our credit review department. We periodically examine our credit process and implement changes to improve our procedures and standards. However, we cannot assure you that such approval and monitoring procedures will reduce these credit risks. If the overall economic climate in the United States, generally, or our market areas, specifically, declines, or even if it does not, our borrowers may experience difficulties in repaying their loans, and the level of nonperforming loans, charge-offs and delinquencies could rise and require increases in the provision for loan losses, which would cause our net income and return on equity to decrease.
 Our loan portfolio has a significant concentration of commercial real estate loans, which involve risks specific to real estate value.
 Commercial real estate lending comprises a significant portion of our lending business. Specifically, commercial real estate loans were approximately 54.0% of our total loan portfolio as of December 31, 2023. The market value of real estate securing our commercial real estate loans can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located. Although a significant portion of such loans is secured by real estate as a secondary form of repayment, adverse developments affecting real estate values in one or more of our markets could increase the credit risk associated with our loan portfolio. Additionally, commercial real estate lending typically involves higher loan principal amounts, and repayment is generally dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events, including decreases in office occupancy as a result of the shift to remote working environments following the COVID-19 pandemic, or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties.

 If problems develop in the commercial real estate sector, particularly within one or more of our markets, the value of collateral securing our commercial real estate loans could decline, which could adversely affect our operating results, financial condition and/or capital. In light of the continued general uncertainty that exists in the economy and credit markets nationally, we may experience deterioration in the performance of our commercial real estate loan customers.

 Commercial, industrial and agricultural loans make up a significant portion of our loan portfolio.
 Commercial, industrial, and agricultural loans were approximately 28.9% of our total loan portfolio as of December 31, 2023. Our commercial loans are primarily made based on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral is accounts receivable, inventory and equipment. Credit support provided by the borrower for most of these loans and the probability of repayment is based on the liquidation value of the pledged collateral and enforcement of a personal guarantee, if any exists. As a result, in the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The collateral securing these loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. In addition, if the U.S. economy declines, this could harm the businesses of our commercial and industrial customers and reduce the value of the collateral securing these loans.

 Payments on agricultural loans are dependent on the successful operation or management of the farm property. The success of the farm may be affected by many factors outside the control of the borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields, such as hail, drought and floods (although borrowers may attempt to mitigate this risk by purchasing crop insurance), loss of livestock due to disease or other factors, declines in market prices for agricultural products both domestically and internationally, and the impact of government regulations, including changes in price supports, subsidies, tariffs, trade agreements, and environmental regulations. In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower's ability to repay the loan may be impaired. The primary crops in our market areas are corn and soybeans. Accordingly, adverse circumstances affecting these crops could have an adverse effect on our agricultural portfolio. Likewise, agricultural operating loans involve a greater degree of risk than lending on residential properties, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets such as farm equipment or assets such as livestock or crops. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation.

 Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.

 We establish our allowance for credit losses at a level considered appropriate by management to absorb current expected credit losses based on an analysis of the portfolio, market environment and other factors we deem relevant. The allowance for credit losses represents our estimate of current expected losses in the portfolio at each balance sheet date and is based upon relevant information available to us. The allowance contains an allocation for loans specifically evaluated, as well as loans collectively evaluated. Additions to the allowance for credit losses, are estimated through the current expected credit loss model, which reflects current and forecasted conditions. The determination of the appropriate level of the allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes. Although management has established an allowance for credit losses it believes is adequate to absorb current expected credit losses, the allowance may not be adequate. We could sustain credit losses that are significantly higher than the amount of our allowance for credit losses. Higher loan losses could arise for a variety of reasons, including changes in economic, operating and other conditions within our markets, as well as changes in the financial condition, cash flows, and operations of our borrowers. At December 31, 2023, our allowance for credit losses as a percentage of total loans held for investment, net was 1.25% and as a percentage of nonaccrual loans was approximately 198.91%. An increase in the allowance for credit losses will result in a decrease in net income and, most likely, capital, and may have a material negative impact on our financial condition and results of operations.

 Nonperforming assets take significant time and resources to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future.
 As of December 31, 2023, our nonperforming loans, which includes nonaccrual loans and loans past due 90 days or more and still accruing interest, totaled $26.4 million, or 0.64% of our loan portfolio. Our nonperforming assets, which include nonperforming loans plus foreclosed assets, net, totaled $30.3 million, or 0.47% of total assets.

 Our nonperforming assets adversely affect our net income in various ways. We do not record interest income on nonaccrual loans or foreclosed assets, thereby adversely affecting our net income and returns on assets and equity, increasing our loan administration costs and adversely affecting our efficiency ratio. When we take collateral in foreclosure and similar proceedings, we are required to mark the collateral to its fair market value, which may result in a loss. These nonperforming loans and foreclosed assets also increase our risk profile and the capital our regulators believe is appropriate in light of such risks. The resolution of nonperforming assets requires significant time commitments from management and can be detrimental

 to the performance of their other responsibilities, and may also involve additional financial resources. If we experience increases in nonperforming loans and nonperforming assets, our net interest income may be negatively impacted and our loan administration costs could increase, each of which could have an adverse effect on our net income and related ratios, such as return on assets and equity.

 We may encounter issues with environmental law compliance if we take possession, through foreclosure or otherwise, of the real property that secures a loan.

 A significant portion of our loan portfolio is secured by real property. In the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require us to incur substantial expenses and may materially reduce the affected property's value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations.

 Capital & Liquidity Risks

 Liquidity risks could affect operations and jeopardize our business, financial condition and results of operations.

 Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our most important source of funds consists of customer deposits. Deposit balances can decrease when customers perceive alternative investments, such as money market funds, treasury securities, and certificates of deposit at other financial institutions as providing a better risk/return trade-off. If customers move money out of bank deposits and into other investments, we could lose a relatively low cost source of funds, which would require us to seek other, potentially higher cost funding alternatives. Other primary sources of funds consist of cash from operations, investment securities maturities and sales, and funds from sales of our stock. Additional liquidity is provided by brokered deposits, bank lines of credit, repurchase agreements and the ability to borrow from the Federal Reserve Bank and the FHLB. The Federal Reserve established the BTFP on March 12, 2023, offering qualifying banks loans of up to one year in length collateralized by qualifying assets, including U.S. securities valued at par, to serve as a source of additional liquidity against high-quality securities and reducing an institution's need to quickly sell high-quality securities to meet liquidity needs. The Federal Reserve has announced that it is ending the BTFP and will cease making new loans under this program on March 11, 2024. Our access to funding sources in amounts adequate to finance or capitalize our activities or on terms that are acceptable to us could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry.

 Additionally, uninsured deposits historically have been viewed by the FDIC as less stable than insured deposits. According to statements made by the FDIC staff and the leadership of the federal banking agencies, customers with larger uninsured deposit account balances often are small- and mid-sized businesses that rely upon deposit funds for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions. As a result, in the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits. If a significant portion of our deposits were to be withdrawn within a short period of time such that additional sources of funding would be required to meet withdrawal demands, the Company may be unable to obtain funding at favorable terms, which may have an adverse effect on our net interest margin. Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates, such as the present period. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits. This spread may be exacerbated by higher prevailing interest rates. In addition, because our AFS investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated. Under such circumstances, we may be required to access funding from sources such as the Federal Reserve's discount window in order to manage our liquidity risk.

 At December 31, 2023, our average borrowed funds increased to $425.2 million, compared to $372.1 million at December 31, 2022. As a result, our cost of funds increased, which resulted in a decline in our net interest margin in 2023 compared to 2022, that was partially offset by higher interest earning asset yields.

 Any decline in available funding could adversely impact our ability to originate loans, invest in securities, pay our expenses, pay dividends to our shareholders, or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

 We may desire or be required to raise additional capital in the future, but that capital may not be available.

 We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. We intend to grow our business organically and to explore opportunities to grow our business by taking advantage of attractive acquisition opportunities, and such growth plans may require us to raise additional capital to ensure that we have adequate levels of capital to support such growth on top of our current operations. In order to accommodate future capital needs, we maintain a universal shelf registration statement, which allows for future sale up to $100 million of securities. Our ability to raise additional capital will depend on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, and on our financial condition and performance. If we were required to raise additional capital in the current interest rate environment, we believe the pricing and other terms investors may require in such an offering may not be attractive to us. Accordingly, we cannot assure you of our ability to raise additional capital, if needed or desired, on terms acceptable to us. If we cannot raise additional capital when needed or desired, our ability to further expand our operations through internal growth or acquisitions could be materially impaired.

 Downgrades in the credit rating of one or more insurers that provide credit enhancement for our state and municipal securities portfolio may have an adverse impact on the market for, and valuation of, these types of securities.
 We invest in tax-exempt and taxable state and local municipal securities, some of which are insured by monoline insurers. As of December 31, 2023, we had $671.9 million of amortized cost of municipal securities, which represented 34.5% of our total securities portfolio based upon amortized cost. Following the onset of the financial crisis, several of these insurers came under scrutiny by rating agencies. Even though management generally purchases municipal securities on the overall credit strength of the issuer, the reduction in the credit rating of an insurer may negatively impact the market for and valuation of our investment securities. Such a downgrade could adversely affect our liquidity, financial condition and results of operations.

 Our ability to pay dividends is subject to certain limitations and restrictions, and there is no guarantee that we will be able to continue paying the same level of dividends in the future that we have paid in the past or that we will be able to pay future dividends at all.

 The ability of the Bank to pay dividends to us is limited by its obligations to maintain sufficient capital and liquidity and by other general restrictions on dividends that are applicable to the Bank, including the requirement under the Iowa Banking Act that the Bank may not pay dividends in excess of its undivided profits. If these regulatory requirements are not met, the Bank will not be able to pay dividends to us, and we may be unable to pay dividends on our common stock.

 In addition, as a bank holding company, our ability to declare and pay dividends is subject to the guidelines of the Federal Reserve regarding capital adequacy and dividends. The Federal Reserve guidelines generally require us to review the effects of the cash payment of dividends on common stock and other Tier 1 capital instruments (e.g. perpetual preferred stock and trust preferred debt) in light of our earnings, capital adequacy and financial condition. As a general matter, the Federal Reserve indicates that the board of directors of a bank holding company (including a financial holding company) should eliminate, defer or significantly reduce the company's dividends if:

 • the company's net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
 • the prospective rate of earnings retention is inconsistent with the company's capital needs and overall current and prospective financial condition; or
 • the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
 Also, banking institutions that do not maintain a capital conservation buffer, comprised of Common Equity Tier 1 Capital, of 2.5% above the regulatory minimum capital requirements will face constraints on the payment of dividends, stock repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall, unless prior regulatory approval is obtained. Accordingly, if the Bank fails to maintain the applicable minimum capital ratios and the capital conservation buffer, distributions to the Company may be prohibited or limited, and if the Company fails to maintain the applicable minimum capital ratios and the capital conservation buffer, distributions to or stock repurchases from the Company's shareholders may be prohibited or limited.

 As of December 31, 2023, we had $42.3 million of junior subordinated debentures held by five statutory business trusts that we control. Interest payments on the debentures, which totaled $3.5 million for the year ended December 31, 2023, must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock.

 We have counterparty risk, and therefore, we may be adversely affected by the soundness of other financial institutions.
 Our ability to engage in routine funding and other transactions could be negatively affected by the actions and the soundness of other financial institutions. Financial services institutions are generally interrelated as a result of trading, clearing, counterparty, credit, reputational, or other relationships. We have exposure to many different industries and counterparties and regularly engage in transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks and other institutional customers. Many of these transactions may expose us to credit or other risks if another financial institution experiences adverse circumstances. For example, certain community banks experienced deposit outflows following the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023. In certain circumstances, the collateral that we hold may be insufficient to fully cover the risk that a counterparty defaults on its obligations, which may cause us to experience losses that could have a material adverse effect on our business, financial condition and results of operations.

 Competitive and Strategic Risks
 We face intense competition in all phases of our business from banks, other financial institutions, and non-banks.

 The banking and financial services businesses in our markets are highly competitive. Our competitors include large regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, small local credit unions as well as large aggressive and expansion-minded credit unions, fintech companies, and other non-bank financial services providers. Many of these competitors are not subject to the same regulatory restrictions as we are. Many of our unregulated competitors compete across geographic boundaries and are able to provide customers with a competitive alternative to traditional banking services, including financial transaction processing, lending platforms, and maintenance of funds.

 While we do not offer products relating to digital assets, including cryptocurrencies, stablecoins and other similar assets, there has been a significant increase in digital asset adoption globally over the past several years. Certain characteristics of digital asset transactions, such as the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions. Accordingly, digital asset service providers—which, at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions—are becoming active competitors to more traditional financial institutions. The process of eliminating banks as intermediaries, known as "disintermediation," could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations. Potential partnerships with digital asset companies, moreover, could also entail significant investment.

 Increased competition in our markets may result in a decrease in the amounts of our loans and deposits, reduced spreads between loan rates and deposit rates, increased pressure on underwriting standards, or loan terms that are more favorable to the borrower. Any of these results could have a material adverse effect on our results, our financial condition, and our ability to grow and remain profitable. In addition, the diminishing role of banks as financial intermediaries has resulted and could continue to result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits.

 We have a continuing need for technological change, and we may not have the resources to effectively implement new technology.

 The financial services industry continues to undergo rapid technological changes with frequent introductions of new technology-driven products and services. In addition to enabling us to better serve our customers, the effective use of technology increases efficiency and the potential for cost reduction. Our future success will depend in part upon our ability, both internally and through our core processor, and other third party partners, to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow our market share. Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products to those that we will be able to offer, which could put us at a competitive disadvantage. Accordingly, we cannot provide you with assurance that we will be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers.

 The widespread adoption of new technologies, including internet services, artificial intelligence, cryptocurrencies and payment systems, could require us in the future to make substantial expenditures to modify or adapt our existing products and services as we grow and develop new products to satisfy our customers' expectations, remain competitive and comply with regulatory guidance.

 We may be adversely affected by risks associated with completed and potential acquisitions, including execution risks, failure to realize anticipated transaction benefits, and failure to overcome integration risks, which could adversely affect our growth and profitability.

 We plan to continue to grow our businesses organically, but remain open to considering potential bank or other acquisition opportunities, in addition to our recent acquisitions of DNVB and IOFB, that make financial and strategic sense. In the event that we do pursue strategic acquisitions, we may fail to realize some or all of the anticipated transaction benefits. Acquisition activities could be material to our business and involve a number of risks, including the following:

 • We may incur time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, resulting in our attention being diverted from the operation of our existing business.
 • We are exposed to potential asset and credit quality risks and unknown or contingent liabilities of the banks or businesses we acquire. If these issues or liabilities exceed our estimates, our earnings, capital and financial condition may be materially and adversely affected.
 • The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity. This integration process is complicated and time consuming and can also be disruptive to the customers and employees of the acquired business and our business. If the integration process is not conducted successfully, we may not realize the anticipated economic benefits of acquisitions within the expected time frame, or ever, and we may lose customers or employees of the acquired business. We may also experience greater than anticipated customer losses even if the integration process is successful.
 • To finance an acquisition, we may borrow funds or pursue other forms of financing, such as issuing convertible preferred stock, which may have high dividend rates or may be highly dilutive to holders of our common stock, thereby increasing our leverage and diminishing our liquidity, or issuing capital stock, which could dilute the interests of our existing shareholders.
 • We may be unsuccessful in realizing other anticipated benefits from acquisitions. For example, we may not be successful in realizing anticipated cost savings.

 In addition to the foregoing, we may face additional risks in acquisitions to the extent we acquire new lines of business, new products, or enter new geographic areas, in which we have little or no current experience, especially if we lose key employees of the acquired operations. We cannot assure you that we will be successful in overcoming these risks or any other problems encountered in connection with acquisitions. Our inability to overcome risks associated with acquisitions could have an adverse effect on our ability to successfully implement our acquisition growth strategy and grow our business and profitability.

 Accounting and Tax Risks

 Our accounting estimates and risk management processes rely on analytical and forecasting models.

 The processes that we use to estimate expected credit losses and to measure the fair value of assets carried on the balance sheet at fair value, as well as the processes used to estimate the effects of changing interest rates and other market measures on our financial condition and results of operations, depend upon the use of analytical and forecasting models. These models are complex and reflect assumptions that may not be accurate, particularly in times of market stress or other unforeseen circumstances, such as the COVID-19 pandemic. Although we have processes and procedures in place governing internal valuation models and their testing and calibration, such assumptions are complex as we must make judgments about the effect of matters that are inherently uncertain. Different assumptions could have resulted in significant changes in valuation, which in turn could have a material adverse effect on our financial condition and results of operations.

 The Company is subject to changes in tax law and may not realize tax benefits which could adversely affect our results of operations.

 Changes in tax laws at national or state levels, such as the new 1.0% excise tax on stock buybacks for publicly traded companies, could have an effect on the Company's short-term and long-term earnings. Changes in tax laws could affect the Company's earnings as well as its customers' financial positions, or both. Changes in tax laws could also require the revaluation of the Company's net deferred tax position, which could have a material adverse effect on our results of operations and financial condition. In addition, current portions of the Company's net deferred tax assets relate to tax-effected state net operating loss carry-forwards, the utilization of which may be further limited in the event of certain material changes in the Company's ownership.

 Operational Risks

 We face the risk of possible future goodwill impairment.
 We are required to perform additional goodwill impairment assessments on at least an annual basis, and perhaps more frequently, which could result in additional goodwill impairment charges. Any future goodwill impairment charge on the current goodwill balance, or future goodwill arising out of acquisitions that we are required to take, could have a material adverse effect on our results of operations by reducing our net income or increasing our net losses.

 Our ability to attract and retain management and key personnel may affect future growth and earnings.
 Much of our success and growth has been influenced by our ability to attract and retain management experienced in banking and financial services and familiar with the communities in our market areas. Our ability to attract and retain executive officers, management teams, branch managers and loan officers will continue to be important to the successful implementation of our strategy. The Dodd-Frank Act also directs the Federal Reserve to promulgate rules prohibiting excessive compensation paid to bank holding company executives. These rules, when adopted, may make it more difficult to attract and retain the people we need to operate our businesses and limit our ability to promote our objectives through our compensation and incentive programs. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, results of operations and financial condition.

 Labor shortages and a failure to attract and retain qualified employees could negatively impact our business, results of operations and financial condition.

 A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, decreased labor force size and participation rates. Although we have not experienced any material labor shortage to date, we continue to observe an overall tightening of and an increase in competition in local labor markets. A sustained labor shortage or increased turnover rates within our employee base and also within our third-party vendors could lead to increased costs, such as increased compensation expense to attract and retain employees, as well as decreased efficiency. In addition, if we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we take to respond to a decrease in labor availability have unintended negative effects, our business could be adversely affected. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, could have a material adverse impact on our business, results of operations and financial condition.

 The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

 As a bank, we are susceptible to fraudulent activity, information security breaches and cybersecurity-related incidents that may be committed against us, our third party partners, or our clients, which may result in financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation. Such fraudulent activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts. Information security breaches and cybersecurity-related incidents may include fraudulent or unauthorized access to systems used by us or our clients, denial or degradation of service attacks, ransomware, malware or other cyber-attacks.

 There continues to be a rise in electronic fraudulent activity, security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts, and as a result of increasingly sophisticated methods of conducting cyber attacks, including those employing artificial intelligence. Several large corporations, including financial institutions, vendors specializing in providing services to financial institutions and retail companies, have suffered major data breaches, in some cases exposing not only confidential and proprietary corporate information, but also sensitive financial and other personal information of their customers and employees and subjecting them to potential fraudulent activity. Some of our clients may have been affected by these breaches, which could increase their risks of identity theft and other fraudulent activity that could involve their accounts with us.

 Information pertaining to us and our clients is maintained, and transactions are executed, on networks and systems maintained by us and certain third party partners, such as our online banking, mobile banking or accounting systems. The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect us and our clients against fraud and security breaches and to maintain the confidence of our clients. Breaches of information security also may occur through intentional or unintentional acts by those having access to our systems or the confidential information of our clients, including employees. In addition, increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our clients and underlying transactions, as well as the technology used by our clients to access our systems. Our third party partners' inability to anticipate, or failure to adequately mitigate, breaches of security could result in a number of negative events, including losses to us or our clients, loss of business or clients, damage to our reputation, the incurrence of additional expenses, disruption to our business, additional regulatory scrutiny or penalties or our exposure to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. While we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses.

 Issues with the use of artificial intelligence in our marketplace may result in reputational harm or liability, or could otherwise adversely affect our business.

 Artificial intelligence, including generative artificial intelligence, is or may be enabled by or integrated into our products or those developed by our third party partners. As with many developing technologies, artificial intelligence presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. Artificial intelligence algorithms may be flawed, for example datasets may contain biased information or otherwise be insufficient, and inappropriate or controversial data practices could impair the acceptance of artificial intelligence solutions and result in burdensome new regulations. If the analyses that products incorporating artificial intelligence assist in producing for us or our third party partners are deficient, biased or inaccurate, we could be subject to competitive harm, potential legal liability and brand or reputational harm. The use of artificial intelligence may also present ethical issues. If we or our third party partners offer artificial intelligence enabled products that are controversial because of their purported or real impact on human rights, privacy, or other issues, we may experience competitive harm, potential legal liability and brand or reputational harm. In addition, we expect that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of our products and services and those developed by our third party partners.

 The Company is or may become involved from time to time in suits, legal proceedings, information-gathering requests, investigations and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences.

 Many aspects of our business and operations involve the risk of legal liability, and in some cases we or our subsidiaries have been named or threatened to be named as defendants in various lawsuits arising from our business activities. In addition, companies in our industry are frequently the subject of governmental and self-regulatory agency information-gathering requests, reviews, investigations and proceedings. The results of such proceedings could lead to significant civil or criminal penalties, including monetary penalties, damages, adverse judgments, settlements, fines, injunctions, restrictions on the way in which we conduct our business, or reputational harm.

 Although we establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, we do not have accruals for all legal proceedings where we face a risk of loss. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued may not represent the ultimate loss to us from the legal proceedings in question. Accordingly, our ultimate losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies, which could adversely affect our financial condition and results of operations.

 We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition.

 Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third party servicers, accounting systems, mobile and online banking platforms and financial intermediaries. We outsource to third parties many of our major systems, such as data processing and mobile and online banking. The failure of these systems, or the termination of a third party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third party systems, we could experience service denials if demand for such services exceeds capacity or such third party systems fail or experience interruptions. A system failure or service denial could result in a deterioration of our ability to process loans or gather deposits and provide customer service, compromise our ability to operate effectively, result in potential noncompliance with applicable laws or regulations, damage our reputation, result in a loss of customer business or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on business, financial condition, results of operations and growth prospects. In addition, failures of third parties to comply with applicable laws and regulations, or fraud or misconduct on the part of employees of any of these third parties, could disrupt our operations or adversely affect our reputation.

 It may be difficult for us to replace some of our third party vendors, particularly vendors providing our core banking and information services, in a timely manner if they are unwilling or unable to provide us with these services in the future for any reason, and even if we are able to replace them, it may be at higher cost or result in the loss of customers. Any such events could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

 Our operations rely heavily on the secure processing, storage and transmission of information and the monitoring of a large number of transactions on a minute-by-minute basis, and even a short interruption in service could have significant consequences. We also interact with and rely on retailers, for whom we process transactions, as well as financial counterparties and regulators. Each of these third parties may be targets of the same types of fraudulent activity, computer break-ins and other cybersecurity breaches described above, including those employing artificial intelligence, and the cybersecurity measures that they maintain to mitigate the risk of such activity may be different than our own and may be inadequate.

 As a result of financial entities and technology systems becoming more interdependent and complex, a cyber incident, information breach or loss, or technology failure that compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants, including ourselves. As a result of the foregoing, our

 ability to conduct business may be adversely affected by any significant disruptions to us or to third parties with whom we interact.

 We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.

 Employee errors and employee and customer misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence.

 We maintain a system of internal controls and insurance coverage to mitigate against operational risks, including data processing system failures and errors and customer or employee fraud. Should our internal controls fail to prevent or detect an occurrence, and if any resulting loss is not insured or exceeds applicable insurance limits, such failure could have a material adverse effect on our business, financial condition and results of operations.

 Our framework for managing risks may not be effective in mitigating risk and loss to us.

 Our risk management framework seeks to mitigate risk and loss to us. We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including liquidity risk, credit risk, market risk, interest rate risk, operational risk, compensation risk, legal and compliance risk, and reputational risk, among others. However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. If our risk management framework proves ineffective, we could suffer unexpected losses and could be materially adversely affected.

 Our internal controls may be ineffective.

 Management regularly reviews and updates our internal controls, disclosure controls and procedures and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our financial condition and results of operations.

 We depend on the accuracy and completeness of information provided by customers and counterparties.

 In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished to us by or on behalf of customers and counterparties, including financial statements and other financial information. We also may rely on representations of customers and counterparties as to the accuracy and completeness of that information. In deciding whether to extend credit, we may rely upon our customers' representations that their financial statements conform to GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer. We also may rely on customer representations and certifications, or other audit or accountants' reports, with respect to the business and financial condition of our clients. Our financial condition, results of operations, financial reporting and reputation could be negatively affected if we rely on materially misleading, false, inaccurate or fraudulent information.

 Regulatory Risks

 We operate in a highly regulated industry, and the laws and regulations to which we are subject, or changes in them, or our failure to comply with them, may adversely affect us.

 The Company and the Bank are subject to extensive regulation by multiple regulatory agencies. These regulations may affect the manner and terms of delivery of our services. If we do not comply with governmental regulations, we may be subject to fines, penalties, lawsuits or material restrictions on our businesses in the jurisdiction where the violation occurred, which may adversely affect our business operations. Changes in these regulations can significantly affect the services that we provide, as well as our costs of compliance with such regulations. In addition, political developments, including possible changes in law introduced by the new presidential administration or the appointment of new personnel in regulatory agencies, add uncertainty to the implementation, scope and timing of regulatory reforms. In addition, adverse publicity and damage to our reputation arising from the failure or perceived failure to comply with legal, regulatory or contractual requirements could affect our ability to attract and retain customers.

 The Company and the Bank are subject to stringent capital and liquidity requirements.

 As a result of the implementation of the Basel III Rules, we were required to meet new and increased capital requirements beginning on January 1, 2015. In addition, beginning in 2016, banking institutions that do not maintain a capital conservation

 buffer, comprised of Common Equity Tier 1 Capital, of 2.5% above the regulatory minimum capital requirements face constraints on the payment of dividends, stock repurchases and discretionary bonus payments to executive officers based on the amount of the shortfall, unless prior regulatory approval is obtained. Accordingly, if the Bank or the Company fails to maintain the applicable minimum capital ratios and the capital conservation buffer, distributions by the Bank to the Company, or dividends or stock repurchases by the Company, may be prohibited or limited.

 Future increases in minimum capital requirements could adversely affect our net income. Furthermore, if we fail to comply with the minimum capital requirements, our failure could result in our regulators taking formal or informal actions against us which could restrict our future growth or operations.

 Federal and state regulators periodically examine our business, and we may be required to remediate adverse examination findings.

 The Federal Reserve, the FDIC, and the Iowa Division periodically examine our business, including our compliance with laws and regulations. If, as a result of an examination, a banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. These actions include the power to enjoin "unsafe or unsound" practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place our bank into receivership or conservatorship. Any regulatory action against us could have an adverse effect on our business, financial condition and results of operations.

 We are subject to numerous laws designed to protect consumers, including the CRA and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

 The CRA requires the Bank, consistent with safe and sound operations, to ascertain and meet the credit needs of its entire community, including low and moderate income areas. The Bank's failure to comply with the CRA could, among other things, result in the denial or delay of certain corporate applications filed by us or the Bank, including applications for branch openings or relocations and applications to acquire, merge or consolidate with another banking institution or holding company. In addition, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations prohibit discriminatory lending practices by financial institutions. The U.S. Department of Justice, federal banking agencies, and other federal agencies are responsible for enforcing these laws and regulations. A challenge to an institution's compliance with fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also challenge an institution's performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

 Non-compliance with the Bank Secrecy Act or other laws and regulations could result in fines or sanctions against us.

 The Bank Secrecy Act require financial institutions to design and implement programs to prevent financial institutions from being used for money laundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the Financial Crimes Enforcement Network of the Treasury. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Federal and state bank regulators also have focused on compliance with Bank Secrecy Act and anti-money laundering regulations. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions or establishing new branches. In recent years, several banking institutions have received large fines for non-compliance with these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in preventing violations of these laws and regulations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us, which could have a material adverse effect on our business, financial condition or results of operations.

 Common Stock Risks

 There is a limited trading market for our common shares, and you may not be able to resell your shares at or above the price you paid for them.

 Although our common shares are listed for quotation on the Nasdaq Global Select Market, the trading in our common shares has substantially less liquidity than many other companies listed on Nasdaq. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the market of willing buyers and sellers of our common shares at any given time. This presence depends on the individual decisions of investors and general economic and

 market conditions over which we have no control. We cannot assure you that the volume of trading in our common shares will increase in the future.

 Certain shareholders own a significant interest in the Company and may exercise their control in a manner detrimental to your interests.
 Certain MidWestOne shareholders who are descendants of our founder collectively control approximately 17.9% of our outstanding common stock. In addition, certain MidWestOne shareholders that previously owned ATB collectively control approximately 19.2% of our outstanding common stock. These shareholders may have the opportunity to exert influence on the outcome of matters required to be submitted to shareholders for approval. In addition, the significant level of ownership by these shareholders may contribute to the rather limited liquidity of our common stock on the Nasdaq Global Select Market.

 ITEM 1B. UNRESOLVED STAFF COMMENTS.
 None.

 ITEM 1C. Cybersecurity.
 Cybersecurity Risk Management and Strategy

 The Company has established an information security program that uses a risk-based methodology to ensure the confidentiality, integrity, and availability of its information. The Board of Directors and the Enterprise Risk Management Committee set enterprise risk strategy and make risk-informed decisions, which includes assessment and response to cybersecurity risk. The Board has appointed an Information Security Officer ("ISO") to oversee the program. The program utilizes a combination of automated tools, manual processes, and third-party assessments to identify and assess potential cybersecurity threats. The program is supported by an organization structure that reflects support from across the business. Program objectives and results are regularly reported to the Enterprise Risk Management Committee, Audit Committee, and Board of Directors.

 The Company conducts risk assessments and compliance audits, both internally and by independent third parties for comparison against industry standards, including the National Institute of Standards and Technology ("NIST") cybersecurity framework and Federal Financial Institution Examination Council ("FFIEC") guidance. Risk assessment results are used to develop appropriate cybersecurity controls and risk mitigation strategies, which are implemented throughout the organization.

 We maintain a cybersecurity incident response plan to help ensure a timely, consistent, and effective response to actual or attempted cybersecurity incidents impacting the Company. The plan includes considerations for (1) detection, (2) analysis, which may include timely notice to our Board if deemed material or appropriate, (3) containment, (4) eradication, (5) recovery and (6) post-incident review. In addition, we also maintain a formal information security training program for all employees that includes training on topics such as phishing and email security best practices. Employees are also required to complete regular training on data privacy.

 While we have a cybersecurity program designed to protect and preserve the integrity of our information systems, the Company also maintains cybersecurity insurance to manage potential liabilities resulting from specific cyber-attacks. However, it's important to note that although we maintain cybersecurity insurance, there can be no guarantee that our insurance coverage limits will protect against any future claims or that such insurance proceeds will be paid to us in a timely manner. For further discussion of risks from cybersecurity threats, see the section captioned "Operational Risks" in Item 1A. Risk Factors.

 We use third party partners to audit, assess, and test our cybersecurity program governance and control effectiveness on an annual basis. These engagements include an IT general controls review, internal and external penetration testing, social engineering testing, and incident response exercises. Findings and recommendations from these engagements are reported to the Enterprise Risk Management and Audit Committees.

 We rely on our information technology systems and networks in connection with many of our business activities. Some of these networks and systems are managed by third-party service providers and are not under our direct control. The Company has implemented a third-party risk management program to manage the cybersecurity risks associated with its use of third-party service providers.

 Cybersecurity Incidents

 While we have no knowledge that we have experienced a cybersecurity incident that has had or is reasonably likely to have a material adverse impact on our operations or financial results as of the date of this Form 10-K, there can be no assurance that we will not encounter such an incident in the future, notwithstanding the cybersecurity measures and processes we have undertaken. Such incidents, whether or not successful, could result in our incurring significant costs related to, for example, remediating or restoring our internal systems or information, implementing additional threat protection measures, defending against litigation, responding to regulatory inquiries or actions, paying damages, providing customers with incentives to maintain a business relationship with us, or taking other remedial steps with respect to third parties, as well as incurring significant reputational harm. Further, there is increasing regulation regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. Cybersecurity threats are expected to continue to be persistent and severe.

 Cybersecurity Governance

 The Board and the Enterprise Risk Management Committee have oversight responsibility for our information security program and receive regular updates on the status of the program and any emerging threats or incidents with the potential to impact operations or financial performance. To ensure that the Board is fully informed about cybersecurity risks, the ISO provides regular reports to both the Board and the Enterprise Risk Management Committee. These regular reports include an overview of the Company's current cybersecurity risk assessment, key risk areas, and any significant cyber incidents that have occurred or are reasonably likely to occur. In addition, the Enterprise Risk Management Committee receives regular updates on cybersecurity trends and emerging threats from program management. Our Audit Committee also plays a role in overseeing the Company's cybersecurity and information security program. The Audit Committee reviews final reports from third-party engagements and receives presentations at its meetings concerning cybersecurity risk and related issues. All members of the Board receive copies of Audit Committee reports.

 Company management is responsible for assessing and administering the cybersecurity risk program. Specifically, the Chief Information Officer ("CIO") and the ISO are responsible for the prevention, mitigation, detection, and remediation of cybersecurity incidents. The ISO has relevant expertise in cybersecurity, with 18 years of experience managing components of the information technology and information security programs at the Company. The ISO has established expertise and proficiency in cybersecurity, and holds several cybersecurity certifications, including Certified Information Systems Security Professional (CISSP), Certified Information Security Manager (CISM), and Certified in Risk and Information Systems Control (CRISC). The ISO and CIO work closely with other management positions, including the Chief Risk Officer, Chief Financial Officer, General Counsel, President, and CEO to ensure that the Company has effective communication and understanding regarding its cybersecurity risk and related controls.

 The IT and Security teams monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through various processes. These processes include risk assessments, vulnerability assessments, penetration testing, program exercises, security incident and event management, continuous monitoring, and threat intelligence gathering.

 In 2023, the Board held an education session with outside experts on cybersecurity. The Company has also implemented a cybersecurity training and compliance program to ensure regular education for all employees. In addition, external parties are engaged to assess Company information security programs and practices, including incident management, service continuity, and information security compliance programs.

 ITEM 2. PROPERTIES.
 The Company's principal location is our corporate headquarters located at 102 South Clinton Street, Iowa City, Iowa. We own or lease other banking offices and operating facilities located throughout central and eastern Iowa, the Minneapolis / St. Paul metropolitan area, southwestern Wisconsin, Naples and Fort Myers Florida, and Denver, Colorado. The number of banking offices per state at December 31, 2023 is detailed in the following table:

 Number of Banking Offices

 Iowa banking offices

 Minnesota banking offices

 Wisconsin banking offices

 Florida banking offices

 Colorado banking offices

 Additional information with respect to premises and equipment is presented in Note 6. Premises and Equipment and Note 22. Leases to the consolidated financial statements in "Item 8. Financial Statements and Supplementary Data."

 ITEM 3. LEGAL PROCEEDINGS.
 We and our subsidiaries are from time to time parties to various legal actions arising in the normal course of business. We believe that there is no threatened or pending proceeding, other than ordinary routine litigation incidental to the Company's business, against us or our subsidiaries or of which our property is the subject, which, if determined adversely, would have a material adverse effect on our consolidated business or financial condition.

 ITEM 4. MINE SAFETY DISCLOSURES.
 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 Marketplace Designation and Holders
 Our common stock is listed on the Nasdaq Global Select Market under the symbol "MOFG." As of March 1, 2024, there were 15,750,471 shares of common stock outstanding held by approximately 421 holders of record. Additionally, there are an estimated 4,884 beneficial holders whose stock was held in street name by brokerage houses and other nominees as of that date.

 Dividends
 The Company paid quarterly cash dividends on common shares in 2023 and 2022 and anticipates continuing to pay comparable dividends. Total dividends paid on common shares were $0.97 in 2023 and $0.95 in in 2022. However, we have no obligation to pay dividends and we may change our dividend policy at any time without notice to our shareholders.
 The ability of the Company to pay dividends in the future will depend primarily upon the earnings of the Bank and its ability to pay dividends to the Company, as well as regulatory requirements of the Federal Reserve relating to the payment of dividends by bank holding companies. The ability of the Bank to pay dividends is governed by various statutes. These statutes provide that a bank may pay dividends only out of undivided profits. In addition, applicable bank regulatory authorities have the power to require any bank to suspend the payment of dividends until the bank complies with all requirements that may be imposed by such authorities.
 Issuer Purchases of Equity Securities
 The following table sets forth information about the Company's purchases of its common stock during the fourth quarter of 2023:

 Total Number of Shares Purchased(1)

 Average Price Paid per Share
 Total Number of Shares Purchased as Part of Publicly Announced Programs(2)

 Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program

 October 1 - 31, 2023
 —
 $
 —
 —
 $
 15,000,000

 November 1 - 30, 2023
 22.16
 —
 15,000,000

 December 1 - 31, 2023
 —
 —
 —
 15,000,000

 Total
 $
 22.16
 —
 $
 15,000,000

 (1) The Company repurchased no common shares during the three months ended December 31, 2023, while 58 shares were surrendered by employees of the Company to pay withholding taxes on vesting of restricted stock unit awards.

 (2) On June 22, 2021, the Board of Directors of the Company approved a share repurchase program, allowing for the repurchase of up to $15.0 million of the Company's common stock through December 31, 2023. This repurchase program replaced the Company's prior repurchase program, which was due to expire on December 31, 2021. Since June 23, 2021 and through April 27, 2023, the Company repurchased 403,368 shares of common stock for approximately $12.0 million, leaving $3.0 million available to be repurchased.

 On April 27, 2023, the Board of Directors of the Company approved a share repurchase program, allowing for the repurchase of up to $15.0 million of the Company's common stock through December 31, 2025. This repurchase program replaced the Company's prior repurchase program, adopted in June 2021, which was due to expire on December 31, 2023. Since April 28, 2023 and through December 31, 2023, the Company repurchased no shares of common stock, leaving $15.0 million available to be repurchased.

 Performance Graph
 The following table compares MidWestOne Financial Group, Inc's ("MOFG") performance, as measured by the change in price of its common stock plus reinvested dividends, with the Nasdaq Composite Index and the S&P U.S. BMI Banks - Midwest Region Index for the five years ended December 31, 2023.
 MidWestOne Financial Group, Inc.

 At

 12/31/2018
 12/31/2019
 12/31/2020
 12/31/2021
 12/31/2022
 12/31/2023

 MidWestOne Financial Group, Inc.

 $
 100.00
 $
 149.84
 $
 105.35
 $
 143.40
 $
 144.96
 $
 128.27

 Nasdaq Composite Index
 100.00
 136.69
 198.10
 242.03
 163.28
 236.17

 S&P U.S. BMI Banks - Midwest Region Index
 100.00
 130.10
 111.85
 147.78
 127.53
 130.20

 The companies in the custom peer group - S&P U.S. BMI Banks - Midwest Region Index - represents all banks, thrifts or financial service companies traded on a major exchange, headquartered in Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

 ITEM 6. Reserved.

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 This section should be read in conjunction with the following parts of this Form 10-K: Part I, Item 1 "Business.", Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," and Part II, Item 8 "Financial Statements and Supplementary Data." For a discussion on the comparison of results of operations for the years ended December 31, 2022 and 2021, refer to Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operation" in the Company's Annual Form 10-K filed with the SEC on March 13, 2023.

 In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under "Cautionary Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this report, may cause actual results to differ materially from those projected in the forward-looking statements. The Company assumes no obligation to update any of these forward-looking statements. Readers of the Company's Annual Report on Form 10-K should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on forward-looking statements.

 Overview

 We are headquartered in Iowa City, Iowa, and are a bank holding company under the BHCA that has elected to be a financial holding company. We are the holding company for MidWestOne Bank, an Iowa state non-member bank with its main office in Iowa City, Iowa.
 On January 31, 2024, the Company completed the acquisition of DNVB, parent company of the BOD. Immediately following completion of the acquisition, the BOD was merged with and into MidWestOne Bank. Under the terms of the merger agreement, DNVB shareholders received $462.42 in cash exchange for each share of DNVB stock. The value of the total deal consideration was $32.6 million.
 On September 25, 2023, the Company announced the execution of a definitive purchase and assumption agreement for the sale of its Florida operations to DFCU Financial. The transaction is an all cash deal and is expected to close in the second quarter of 2024 subject to regulatory approvals.
 On June 9, 2022, the Company acquired IOFB, a bank holding company whose wholly-owned banking subsidiaries were FNBM and FNBF, community banks located in Muscatine and Fairfield, Iowa, respectively.

 As of December 31, 2023, the Bank operated a total of 57 banking offices, which are located throughout central and eastern Iowa, the Minneapolis/St. Paul metropolitan area, southwestern Wisconsin, Naples and Fort Myers, Florida, and Denver, Colorado. The Bank is focused on delivering relationship-based business and personal banking products and services. The Bank provides commercial loans, real estate loans, agricultural loans, credit card loans, and consumer loans. The Bank also provides deposit products including demand and interest checking accounts, savings accounts, money market accounts, and time deposits. Complementary to our loan and deposit products, the Bank also provides products and services including treasury management, Zelle, online and mobile banking, credit and debit cards, ATMs, and safe deposit boxes. The Bank also has wealth management services through which it offers the administration of estates, trusts, and conservatorships, as well as financial planning, investment advisory, and brokerage services.

 Our results of operations are significantly affected by our net interest income. Results of operations are also affected by noninterest income and expense, credit loss expense and income tax expense. Significant external factors that impact our results of operations include general economic and competitive conditions, as well as changes in market interest rates, government policies, and actions of regulatory authorities.

 Financial Summary

 The Company reported net income for the year ended December 31, 2023 of $20.9 million, a decrease of $40.0 million, or 65.7%, compared to $60.8 million of net income for 2022, with diluted earnings per share of $1.33 and $3.87 for the respective annual periods.

 The period as of December 31, 2023 and for the year then ended was also highlighted by the following results:

 Balance Sheet:

 • Total assets decreased to $6.43 billion at December 31, 2023 from $6.58 billion at December 31, 2022, largely driven by securities sales transactions completed in 2023, as described in more detail below, which was partially offset by an increase in loans.
 • At December 31, 2023, total held to maturity debt securities were $1.08 billion and total debt securities available for sale were $795.1 million. At December 31, 2022, total held to maturity debt securities were $1.13 billion and total debt securities available for sale were $1.15 billion. The decrease in debt securities available for sale was due to the sale of $346 million of such securities in 2023, which resulted in pretax losses of $19.8 million. The securities sales were conducted to improve our liquidity and earnings profile and reduce the liability sensitive position of our balance sheet.
 • Gross loans held for investment increased $283.6 million from $3.85 billion at December 31, 2022 to $4.14 billion at December 31, 2023. This increase was primarily driven by new loan production.
 • The allowance for credit losses was $51.5 million, or 1.25% of total loans as of December 31, 2023, compared with $49.2 million, or 1.28% of total loans, at December 31, 2022.
 • Nonperforming assets increased $14.4 million from $15.9 million at December 31, 2022 to $30.3 million at December 31, 2023.
 • Total deposits decreased $73.3 million, from $5.47 billion at December 31, 2022 to $5.40 billion at December 31, 2023.
 • Short-term borrowings decreased to $300.3 million at December 31, 2023 from $391.9 million at December 31, 2022, while long-term debt decreased to $123.3 million at December 31, 2023 from $139.2 million at December 31, 2022.
 • The Company is well-capitalized with a total risk-based capital ratio of 12.53% at December 31, 2023.

 Income Statement:

 • Net interest income decreased $22.2 million, from $166.4 million for the year ended December 31, 2022, to $144.2 million for the year ended December 31, 2023. Tax equivalent net interest income (a non-GAAP financial measure - see the "Non-GAAP Presentations" section for a reconciliation to the most comparable GAAP equivalent) decreased $22.3 million, from $171.3 million for the year ended December 31, 2022, to $149.0 million for the year ended December 31, 2023. The decrease reflected increases in interest paid on interest bearing deposits and borrowed funds of $65.5 million and $9.5 million, respectively, due to higher costs and volumes, coupled with a decrease of $2.5 million in interest income earned from investment securities due to lower volumes. These decreases were offset by an increase of $54.4 million in loan interest income, which reflected higher loan volume stemming from new loan production, coupled with an increase in loan yield.
 • Credit loss expense was $5.8 million during 2023, compared with credit loss expense of $4.5 million in 2022, which was primarily attributable to loan growth.
 • Noninterest income decreased $29.1 million, from $47.5 million for the year ended December 31, 2022 to $18.4 million for the year ended December 31, 2023. The largest driver of the decrease was net investment securities losses of $18.8 million, attributable to balance sheet repositioning, coupled with $6.3 million and $5.8 million unfavorable changes in other revenue and loan revenue, respectively.
 • Noninterest expense decreased $0.9 million, from $132.8 million for the year ended December 31, 2022 to $131.9 million for the year ended December 31, 2023 primarily due to a decrease in merger-related expenses and compensation and employee benefits.

 Critical Accounting Policies
 We have identified the following critical accounting policies and practices relative to the reporting of our results of operations and financial condition. These accounting policies relate to the allowance for credit losses, fair value of assets acquired and liabilities assumed in a business combination, and the annual impairment testing of goodwill and other intangible assets.
 Loans Held for Investment
 Under the CECL model, the allowance for credit losses is a valuation account estimated at each balance sheet date and deducted from the amortized cost basis of loans held for investment to present the net amount expected to be collected.
 The Company estimates the ACL based on the underlying assets' amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for collection of cash and charge-offs, as well as applicable accretion or amortization of premium, discount, and net deferred fees or costs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL. The Company's estimate of the ACL reflects losses

 expected over the contractual life of the assets, adjusted for estimated prepayments or curtailments. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected MBEFD. A loan that has been modified or renewed is considered a MBEFD when the borrower is experiencing financial difficulty.

 Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgment to determine when a financial asset is deemed uncollectible; however, generally speaking, an asset will be considered uncollectible no later than when all efforts at collection have been exhausted. Subsequent recoveries, if any, are credited to the ACL when received.

 The Company measures expected credit losses of financial assets on a collective (pool) basis when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a DCF method or a loss-rate method to estimate expected credit losses.

 The Company's methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. Specifically, the economic forecast used by the Company is sensitive to changes in the following loss drivers: (1) Midwest unemployment, (2) year-to-year change in national retail sales, (3) year-to-year change in the CRE Index, (4) year-to-year change in U.S. GDP, (5) year-to-year change in the National Home Price Index ("HPI"), and (6) rental vacancy. General deterioration in these loss drivers, coupled with any changes to our modeling assumptions stemming from overall uncertainties in the current and future economic conditions, also impacts the Company's estimation of the ACL. The Company's economic forecast assumptions revert back to historical loss driver information on a straight-line basis over four quarters.

 Discounted Cash Flow Method

 The Company uses the DCF method to estimate expected credit losses for the agricultural, commercial and industrial, CRE - construction and development, CRE - farmland, CRE - multifamily, CRE - other, RRE - owner-occupied one-to-four family first liens, RRE - non-owner-occupied one-to-four family first liens, RRE - one-to-four family junior liens, and consumer loan pools. For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.

 The Company uses regression analysis of historical internal and peer data to determine which variables are best suited to be economic variables utilized when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the economic variables. For the loan pools utilizing the DCF method, management utilizes one or multiple of the following economic variables: Midwest unemployment, national retail sales, CRE index, US rental vacancy rate, US gross domestic product, and national home price index.

 For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.

 The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows ("NPV"). An ACL is established for the difference between the instrument's NPV and amortized cost basis. In addition, management utilizes qualitative factors to adjust the calculated ACL as appropriate. Qualitative factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 Loss-Rate Method

 The Company uses a loss-rate method to estimate expected credit losses for the credit card and overdraft pools. For each of these pools, the Company applies an expected loss ratio based on internal and peer historical losses, adjusted as appropriate for qualitative factors. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 Collateral Dependent Financial Assets

 Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell.

 Accounting for Business Combinations

 In June 2022, we completed the acquisition of IOFB, which generated significant amounts of fair value adjustments to assets and liabilities, such as: valuation of the acquired PCD and non-PCD loan portfolio, core deposit intangible, fixed-term deposits, and real property. The fair value adjustments assigned to assets and liabilities, as well as their related useful lives, are subject to judgment and estimation by our management. Valuation of intangible assets is generally based on the estimated cash flows related to those assets, while the initial value assigned to goodwill is the residual of the purchase price over the fair value of all identifiable assets acquired and liabilities assumed. When amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Useful lives are determined based on the expected future period of the benefit of the asset or liability, the assessment of which considers various characteristics of the asset or liability, including the historical cash flows. Due to the number of estimates involved, we have identified accounting for business combinations as a critical accounting policy.

 Goodwill and Other Intangible Assets
 Goodwill and intangible assets arise from business combinations. Goodwill represented $62.5 million of our $6.43 billion total assets at December 31, 2023. Under the Intangibles - Goodwill and Other topic of the FASB ASC, goodwill is tested at least annually for impairment. The Company's annual assessment is done at the reporting unit level, which the Company has concluded is at the consolidated level. We review goodwill for impairment annually during the fourth quarter and also test for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount. Such events and circumstances may include among others: a significant adverse change in legal factors or in the general business climate; significant decline in our stock price and market capitalization; unanticipated competition; the testing for recoverability of a significant asset group within the reporting unit; and an adverse action or assessment by a regulator. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on our consolidated financial statements. No goodwill impairment charge was recorded in 2023 and 2022 as a result of the Company's internal assessment.
 Other intangible assets represented $24.1 million of our $6.43 billion total assets at December 31, 2023. The accounting for a recognized intangible asset is based on its useful life to the Company. An intangible asset with a finite useful life is amortized over its estimated useful life to the Company; an intangible asset with an indefinite useful life is not amortized but rather is tested at least annually for impairment. The intangible assets with finite lives reflected on our financial statements relate to core deposit relationships, trade name, and customer lists. The initial and subsequent measurements of intangible assets involve the use of significant estimates and assumptions. These estimates and assumptions include, among other things, the estimated cost to service deposits acquired, discount rates, estimated attrition rates and useful lives, future economic and market conditions, comparison of our market value to book value and determination of appropriate market comparables. Periodically we evaluate the estimated useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. We also assess these intangible assets for impairment annually or more often if conditions indicate a possible impairment. If the asset is considered to be impaired, the amount of any impairment is measured as the

 difference between the carrying value and the fair value of the impaired asset. See Note 7. Goodwill and Intangible Assets to our consolidated financial statements for additional information related to our intangible assets.

 Results of Operations
 Summary

 As of or For the Years Ended December 31,

 (dollars in thousands, except per share amounts)
 2023
 2022
 2021

 Net Interest Income
 $
 144,172
 $
 166,358
 $
 156,281

 Noninterest Income
 18,423
 42,453

 Total Revenue, Net of Interest Expense
 162,595
 213,877
 198,734

 Credit Loss Expense (Benefit)
 5,849
 4,492
 (7,336)

 Noninterest Expense
 131,913
 116,592

 Income Before Income Tax Expense
 24,833
 76,597
 89,478

 Income Tax Expense
 3,974
 15,762
 19,992

 Net Income
 $
 $
 $

 Diluted Earnings Per Share
 $
 1.33
 $
 3.87
 $
 4.37

 Return on Average Assets
 0.32
 %
 0.97
 %
 1.20
 %

 Return on Average Equity
 4.12
 12.16
 13.18

 Return on Average Tangible Equity(1)

 6.14
 15.89
 16.63

 Efficiency Ratio(1)

 67.28
 56.98
 54.65

 Dividend Payout Ratio
 72.93
 24.42
 20.55

 Common Equity Ratio
 8.16
 7.49
 8.75

 Tangible Common Equity Ratio(1)

 6.90
 6.17
 7.49

 Book Value per Share
 $
 33.41
 $
 31.54
 $
 33.66

 Tangible Book Value per Share(1)

 $
 27.90
 $
 25.60
 $
 28.40

 (1)A non-GAAP financial measure - see the "Non-GAAP Presentations" section for a reconciliation to the most comparable GAAP equivalent.

 Net Interest Income

 Net interest income is the difference between interest income and fees earned on interest-earning assets, less interest expense incurred on interest-bearing liabilities. Tax equivalent net interest margin is the net interest income, on a tax equivalent basis, as a percentage of average interest-earning assets.

 Net Interest Income Summary

 The following table shows the consolidated average balance sheets, detailing the major categories of assets and liabilities, the interest income earned on interest-earning assets, the interest expense paid for interest-bearing liabilities, and the related interest yields and costs for the periods indicated.

 Year ended December 31,

 2023
 2022
 2021

 Average Balance
 Interest Income/ Expense
 Average Yield/Cost
 Average Balance
 Interest Income/Expense
 Average Yield/Cost
 Average Balance
 Interest Income/Expense
 Average Yield/Cost

 ASSETS

 Loans, including fees (1)(2)(3)

 $
 3,993,389
 $
 205,189
 5.14
 %
 $
 3,511,192
 $
 150,791
 4.29
 %
 $
 3,362,488
 $
 143,141
 4.26
 %

 Taxable investment securities
 1,684,360
 38,978
 2.31
 1,891,234
 39,019
 2.06
 1,577,146
 25,692
 1.63

 Tax-exempt investment securities (2)(4)

 355,454
 9,353
 2.63
 435,907
 11,788
 2.70
 463,526
 12,468
 2.69

 Total securities held for investment (2)

 2,039,814
 48,331
 2.37
 2,327,141
 50,807
 2.18
 2,040,672
 38,160
 1.87

 Other
 22,791
 4.02
 20,827
 0.37
 52,617
 0.17

 Total interest earning assets (2)

 $
 6,055,994
 $
 254,436
 4.20
 %
 $
 5,859,160
 $
 201,675
 3.44
 %
 $
 5,455,777
 $
 181,392
 3.32
 %

 419,366
 385,124
 324,779

 $
 6,475,360
 $
 6,244,284
 $
 5,780,556

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Interest checking deposits
 $
 1,398,538
 $
 8,990
 0.64
 %
 $
 1,640,303
 $
 5,416
 0.33
 %
 $
 1,440,585
 $
 4,208
 0.29
 %

 Money market deposits
 1,037,123
 23,924
 2.31
 992,390
 4,707
 0.47
 946,784
 2,006
 0.21

 624,990
 2,802
 0.45
 674,846
 1,169
 0.17
 594,543
 1,210
 0.20

 Time deposits
 1,443,770
 50,048
 3.47
 925,592
 8,953
 0.97
 882,271
 5,774
 0.65

 Total interest bearing deposits
 4,504,421
 85,764
 1.90
 4,233,131
 20,245
 0.48
 3,864,183
 13,198
 0.34

 Securities sold under agreements to repurchase
 94,563
 1.03
 152,466
 0.57
 176,606
 0.25

 Other short-term borrowings
 199,530
 10,144
 5.08
 70,729
 2,198
 3.11
 15,151
 0.76

 Total short-term borrowings
 294,093
 11,119
 3.78
 223,195
 3,070
 1.38
 191,757
 0.29

 131,137
 8,558
 6.53
 148,863
 7,086
 4.76
 178,395
 6,736
 3.78

 Total borrowed funds
 425,230
 19,677
 4.63
 372,058
 10,156
 2.73
 370,152
 7,287
 1.97

 Total interest-bearing liabilities
 $
 4,929,651
 $
 105,441
 2.14
 %
 $
 4,605,189
 $
 30,401
 0.66
 %
 $
 4,234,335
 $
 20,485
 0.48
 %

 951,188
 1,075,918
 974,044

 88,770
 62,706
 45,141

 Shareholders' equity
 505,751
 500,471
 527,036

 Total liabilities and shareholders' equity
 $
 6,475,360
 $
 6,244,284
 $
 5,780,556

 Net interest income (2)

 $
 148,995
 $
 171,274
 $
 160,907

 Net interest spread (2)

 2.06
 %
 2.78
 %
 2.84
 %

 Net interest margin (2)

 2.46
 %
 2.92
 %
 2.95
 %

 Total deposits (5)

 $
 5,455,609
 $
 85,764
 1.57
 %
 $
 5,309,049
 $
 20,245
 0.38
 %
 $
 4,838,227
 $
 13,198
 0.27
 %

 Cost of funds (6)

 1.79
 %
 0.54
 %
 0.39
 %

 (1)
 Average balance includes nonaccrual loans.

 (2)
 Tax equivalent.

 (3)
 Interest income includes net loan fees, loan purchase discount accretion and tax equivalent adjustments. Net loan fees were $522 thousand, $765 thousand, and $11.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Loan purchase discount accretion was $3.7 million, $4.6 million, and $3.3 million for the years ended December 31, 2023, 2022 and 2021. Tax equivalent adjustments were $3.0 million, $2.5 million and $2.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. The federal statutory tax rate utilized was 21%.

 (4)
 Interest income includes tax equivalent adjustments of $1.8 million, $2.4 million and $2.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. The federal statutory tax rate utilized was 21%.

 (5)
 Total deposits is the sum of total interest-bearing deposits and noninterest bearing deposits. The cost of total deposits is calculated as interest expense on deposits divided by average total deposits.

 (6)
 Cost of funds is calculated as total interest expense divided by the sum of average total deposits and borrowed funds.

 Changes in Net Interest Income

 Net interest income is impacted by changes in volume, interest rate, and the mix of interest earning assets and interest-bearing liabilities. The following table shows changes attributable to (1) changes in volume and (2) changes in rate. Changes attributable to both rate and volume have been allocated proportionately to the change due to volume and the change due to rate.

 Years Ended December 31, 2023, 2022, and 2021

 Year 2023 to 2022 Change due to

 Year 2022 to 2021 Change due to

 Volume
 Yield/Cost
 Net
 Volume
 Yield/Cost
 Net

 Increase (decrease) in interest income

 Loans, including fees(1)

 $
 22,382

 $
 32,016
 $
 54,398
 $
 6,377
 $
 1,273
 $
 7,650

 Taxable investment securities
 (4,514)

 4,473
 (41)
 5,700
 7,627
 13,327

 Tax-exempt investment securities (1)

 (2,125)

 (310)
 (2,435)
 (747)
 (680)

 Total securities held for investment (1)

 (6,639)

 4,163
 (2,476)
 4,953
 7,694
 12,647

 Other

 (77)
 (14)

 Change in interest income (1)

 15,751

 37,010
 52,761
 11,253
 9,030
 20,283

 Increase (decrease) in interest expense

 Interest checking deposits
 (900)

 4,474
 3,574
 1,208

 Money market deposits
 18,996
 19,217
 2,599
 2,701

 (92)
 1,725
 1,633
 (191)
 (41)

 Time deposits
 7,318

 33,777
 41,095
 2,882
 3,179

 Total interest bearing deposits
 6,547

 58,972
 65,519
 1,169
 5,878
 7,047

 Securities sold under agreements to repurchase
 (416)
 (67)

 Other short-term borrowings
 5,890
 2,056
 7,946
 1,130
 2,083

 Total short-term borrowings
 5,474

 2,575
 8,049
 1,063
 1,456
 2,519

 (920)

 2,392
 1,472
 (1,229)
 1,579

 Total borrowed funds
 4,554

 4,967
 9,521
 (166)
 3,035
 2,869

 Change in interest expense
 11,101

 63,939
 75,040
 1,003

 8,913
 9,916

 Change in net interest income (1)

 $
 4,650

 $
 (26,929)
 $
 (22,279)
 $
 10,250

 $
 $
 10,367

 Percentage increase (decrease) in net interest income over prior period
 (13.0)
 %
 6.4
 %

 (1) Tax equivalent

 When compared to the year ended December 31, 2022, our tax equivalent net interest income for the year ended December 31, 2023 decreased to $149.0 million from $171.3 million, due primarily to an increase of $75.0 million, or 247%, in interest expense, partially offset by an increase of $52.8 million, or 26%, in interest income. The change in interest expense reflected increases in interest paid on interest bearing deposits and borrowed funds of $65.5 million and $9.5 million, respectively, due to higher costs and volumes. The change in interest income reflected an increase of $54.4 million, or 36%, in loan interest income, which reflected higher loan volume from new loan production, coupled with an increase in loan yield. Partially offsetting the increase in interest income from loans, was a decrease of $2.5 million, or 5%, in interest income earned from investment securities, which stemmed from lower volume of securities, primarily as a result of the balance sheet repositioning that occurred in the first and fourth quarters of 2023, offset by higher yield on these securities.

 Tax equivalent net interest margin for the year ended December 31, 2023 declined to 2.46%, from 2.92% for the year ended December 31, 2022, driven by higher funding costs and volumes, partially offset by higher interest earning asset yields. The cost of interest bearing liabilities increased 148 basis points to 2.14%, due to interest bearing deposit costs of 1.90%, short-term borrowing costs of 3.78%, and long-term debt costs of 6.53%, which increased 142 basis points, 240 basis points and 177 basis points, respectively, from the prior year end. Total interest earning assets yield increased 76 basis points primarily as a result of an increase of 85 basis points and 19 basis points in loan and securities yields, respectively.
 Credit Loss Expense
 Credit loss expense of $5.8 million was recorded in 2023, as compared to a credit loss expense of $4.5 million in 2022, an increase of $1.4 million, or 30.2%, and was primarily attributable to loan growth and individually evaluated loans. Net loan charge-offs were $3.7 million in the year ended December 31, 2023 as compared to net loan charge-offs of $6.6 million in the year ended December 31, 2022. The economic forecasts utilized by the Company for its loan credit loss estimation process are: (1) Midwest unemployment, (2) year-to-year change in national retail sales, (3) year-to-year change in the CRE Index, (4) year-to-year change in U.S. GDP, (5) year-to-year change in the National HPI, and (6) rental vacancy. In addition, management utilized qualitative factors to adjust the calculated ACL as appropriate. Qualitative factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends

 relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.
 Noninterest Income
 The following table sets forth the various categories of noninterest income for the years ended December 31, 2023, 2022, and 2021.

 2023
 2022
 2022
 2021

 Investment services and trust activities
 $
 12,249

 $
 11,223
 $
 1,026
 9.1
 %
 $
 11,223
 $
 11,675
 $
 (452)
 (3.9)
 %

 Service charges and fees
 8,349

 7,477
 11.7
 7,477
 6,259
 1,218
 19.5

 Card revenue
 7,214

 7,210
 0.1
 7,210
 7,015
 2.8

 Loan revenue
 4,700

 10,504
 (5,804)
 (55.3)
 10,504
 12,948
 (2,444)
 (18.9)

 2,500
 2,305
 8.5
 2,305
 2,162
 6.6

 Investment securities (losses) gains, net
 (18,789)

 (19,060)
 (7,033.2)
 12.0

 Other
 2,200
 8,529
 (6,329)
 (74.2)
 8,529
 2,152
 6,377
 296.3

 Total noninterest income
 $
 18,423
 $
 $
 (29,096)
 (61.2)
 %
 $
 $
 42,453
 $
 5,066
 11.9
 %

 Noninterest income for the year ended December 31, 2023 decreased $29.1 million, or 61.2%, from $47.5 million during the same period of 2022, primarily due to investment securities losses, net of $18.8 million for the year ended December 31, 2023, coupled with a $6.3 million and $5.8 million unfavorable change in other revenue and loan revenue, respectively. Investment securities losses stemmed from balance sheet repositioning that occurred in the first and fourth quarters of 2023, in which approximately $347.0 million of available for sale and equity securities were sold and utilized to purchase higher yielding debt securities and reduce short-term borrowings. Loan revenue primarily reflected a decrease in the fair value of our MSR of $0.1 million in 2023, as compared to a $5.7 million increase in 2022, and a decline of $0.7 million in mortgage origination revenue. The decrease in other revenue primarily stemmed from a settlement in 2022 and the bargain purchase gain of $3.8 million recognized in connection with the IOFB acquisition in 2022, neither of which recurred in 2023. Partially offsetting these decreases was an increase of $1.0 million in investment services and trust activities revenue driven by higher assets under management.
 Noninterest Expense
 The following table sets forth the various categories of noninterest expense for the years ended December 31, 2023, 2022, and 2021.

 2023
 2022
 2022
 2021

 $
 76,410
 $
 78,103
 $
 (1,693)
 (2.2)
 %
 $
 78,103
 $
 69,937
 $
 8,166
 11.7
 %

 Occupancy expense of premises, net
 10,034
 10,272
 (238)
 (2.3)
 10,272
 9,274
 10.8

 9,195
 8,693
 5.8
 8,693
 7,816
 11.2

 Legal and professional
 7,365
 8,646
 (1,281)
 (14.8)
 8,646
 5,256
 3,390
 64.5

 Data processing
 5,799
 5,574
 4.0
 5,574
 5,216
 6.9

 Marketing
 3,610
 4,272
 (662)
 (15.5)
 4,272
 4,022
 6.2

 Amortization of intangibles
 6,247
 6,069
 2.9
 6,069
 5,357
 13.3

 FDIC insurance
 3,294
 1,660
 1,634
 98.4
 1,660
 1,572
 5.6

 Communications
 1,125
 (215)
 (19.1)
 1,125
 1,332
 (207)
 (15.5)

 (18)
 (172.2)
 (18)
 (251)
 (107.7)

 Other
 9,036
 8,392
 7.7
 8,392
 6,577
 1,815
 27.6

 Total noninterest expense
 $
 131,913
 $
 $
 (875)
 (0.7)
 %
 $
 $
 116,592
 $
 16,196
 13.9
 %

 2023
 2022
 2021

 Merger-related expenses:

 $
 $
 $
 —

 Occupancy expense of premises, net
 —
 —

 —

 Legal and professional

 Data processing
 —

 Marketing

 Communications
 —
 —

 Other

 Total impact of merger-related expenses to noninterest expense
 $
 $
 2,201
 $

 Noninterest expense for the year ended December 31, 2023 decreased $0.9 million, or 0.7%, from $132.8 million during the same period of 2022. The decline was primarily driven by a $1.8 million decline in merger-related expenses, as well as a decline in compensation and employee benefits. The largest offset to the decrease in noninterest expense was an increase in FDIC insurance expense, which was primarily driven by the increase in the assessment rate that was effective in the first quarterly assessment of 2023.
 Full-time equivalent employee levels were 732, 784, and 731 at December 31, 2023, 2022 and 2021, respectively.
 Income Tax Expense
 Our effective tax rate, or income taxes divided by income before taxes, was 16.0% for 2023 compared with 20.6% for 2022, which reflected lower taxable income and a larger benefit from tax exempt investment income. The effective income tax rate for 2024 is expected to be 20-22%.

 Financial Condition
 Following is a table that represents the major categories of the Company's balance sheet as of the dates indicated:

 Assets

 Cash and cash equivalents
 $
 $
 $
 (4,708)
 (5.4)
 %

 1,045
 70.8

 Debt securities available for sale at fair value
 (358,413)
 (31.1)

 Held to maturity securities at amortized cost
 (54,231)
 (4.8)

 286,423
 7.5

 (51,500)
 (49,200)
 (2,300)
 4.7

 Total loans held for investment, net
 4,075,447
 3,791,324
 284,123
 12.2

 398,997
 416,537
 (17,540)
 (4.2)

 $
 $
 $
 (150,336)
 (2.3)
 %

 Liabilities and Shareholders' Equity

 $
 5,395,673
 $
 5,468,942
 $
 (73,269)
 (1.3)
 %

 Total borrowings
 423,560
 531,083
 (107,523)
 (20.2)

 83,929
 85,058
 (1,129)
 (1.3)

 Total shareholders' equity
 31,585
 6.4

 Total liabilities and shareholders' equity
 $
 $
 $
 (150,336)
 (2.3)
 %

 Debt Securities
 The composition of debt securities available for sale and held to maturity was as follows:

 2023
 2022

 U.S. Government agencies and corporations
 $
 —
 —
 %
 $
 7,345
 0.6
 %

 States and political subdivisions
 130,139
 16.4
 285,356
 24.7

 5,311
 0.7
 5,944
 0.5

 6.3
 —
 —

 21.3
 12.8

 440,051
 55.3
 707,709
 61.4

 Fair value of debt securities available for sale
 $
 100.0
 %
 $
 100.0
 %

 States and political subdivisions
 $
 532,422
 49.5
 %
 $
 538,746
 47.7
 %

 74,904
 7.0
 81,032
 7.2
 %

 467,864
 43.5
 509,643
 45.1
 %

 Amortized cost of debt securities held to maturity
 $
 100.0
 %
 $
 100.0
 %

 The maturities, fair values and weighted average yields of held to maturity debt securities as of December 31, 2023 were as follows:

 Maturity

 After One but
 After Five but

 Within One Year
 Within Five Years
 Within Ten Years
 After Ten Years

 Yield
 Yield
 Yield
 Yield

 States and political subdivisions (1)(2)

 $
 2,502
 0.31
 %
 $
 133,315
 1.68
 %
 $
 200,270
 1.88
 %
 $
 130,403
 1.86
 %

 Mortgage-backed securities (2)

 —
 —
 1.74
 2.31
 62,367
 2.07

 Collateralized mortgage obligations (2)

 —
 —
 1,180
 1.32
 1.37
 363,967
 1.42

 Total held to maturity debt securities
 $
 2,502
 0.31
 %
 $
 134,907
 2.16
 %
 $
 201,117
 4.23
 %
 $
 556,737
 3.84
 %

 (1) Yield is on a tax-equivalent basis, assuming a federal income tax rate of 21%.

 (2) These securities are presented based upon contractual maturities.

 Our investment securities portfolio is managed to provide a source of both liquidity and earnings. The size of the portfolio varies along with fluctuations in levels of deposits and loans. We consider many factors in determining the composition of our investment portfolio including tax-equivalent yield, credit quality, duration, expected cash flows and prepayment risk, as well as the liquidity position and the interest rate risk profile of the Company.
 As of December 31, 2023 and 2022, the Company's mortgage-backed and collateralized mortgage obligations portfolios consisted of securities issued by government-sponsored enterprises ("GSEs") such as the Federal National Mortgage Corporation, Federal Home Loan Mortgage Corporation, Government National Mortgage Corporation and private entities. GSE issues are predominantly backed by one- to four-family mortgage loans and underwritten to the standards of and guaranteed by the issuer. The receipt of principal, at par, and interest on these securities is guaranteed by the respective GSE, and as such the Company believes exposure for credit-related losses from its mortgage-backed securities and collateralized mortgage obligations is reduced. Further, the Company owns several privately issued collateralized mortgage obligations. These securities are structured with high levels of credit enhancement and carry the highest ratings from the one or more of the major statistical credit rating agencies. The Company's holdings of corporate bonds are primarily comprised of securities that are rated in one of the three highest rating categories by at least one of the major statistical credit rating agencies. In evaluating corporate bonds, the company considers each issuers' financial performance, liquidity, capital position and other company fundamentals. Similarly, the majority of the Company's municipal holdings carry ratings in the top three ratings categories of one of the major statistical credit rating agencies. Relating to the Company's holdings of non-rated municipal bonds, these issuers are predominantly located in the Company's market area in the upper Midwest. In general, the small issue size of these bond offerings makes the cost obtaining a credit rating prohibitively expensive, which explains the lack of a credit rating.

 On January 1, 2022, the Company re-classified, at fair value, from available for sale to held to maturity, $1.25 billion of mortgage-backed securities, collateralized mortgage obligations, and securities issued by state and political subdivisions. The net unrealized after tax loss of $11.5 million associated with those re-classified securities remained in accumulated other comprehensive loss and will be amortized over the remaining life of the securities. No gains or losses were recognized in earnings at the time of the transfer.
 As of December 31, 2023, there were $0.2 million of gross unrealized gains and $78.2 million of gross unrealized losses in our debt securities available for sale portfolio for a net unrealized loss of $78.0 million. As of December 31, 2023 there were no gross unrealized gains and there was $179.9 million of gross unrealized losses in our held to maturity debt securities for a net unrealized loss of $179.9 million.
 During the first and fourth quarters of 2023, the Company undertook a balance sheet repositioning related to its debt securities portfolio. Specifically, the Company executed the sale of approximately $347.0 million in book value of its AFS debt securities and equity securities for a pre-tax realized loss of $18.9 million. Proceeds from the sale were utilized to purchase higher yielding debt securities and reduce short-term borrowings. The Company estimates the loss will be recouped within approximately two to three years. The impact to our Tier 1 leverage ratio was neutral.
 See Note 3. Debt Securities to our consolidated financial statements for additional information related to our debt securities portfolio.
 Loans
 The composition of our loan portfolio by type of loan was as follows:

 2023
 2022

 $
 2.9
 %
 $
 3.0
 %

 26.0
 27.5

 Commercial real estate
 54.0
 1,980,018
 51.6

 Residential real estate
 15.5
 614,428
 15.9

 1.6
 2.0

 $
 100.0
 %
 $
 100.0
 %

 $
 1,045
 $

 The composition of our commercial real estate loan portfolio as of December 31, 2023 was as follows:

 % of Total Loans

 Construction & Development
 $
 7.8
 %

 4.5

 9.3

 CRE Other:

 NOO CRE Office
 154,713
 3.8

 OO CRE Office
 82,741
 2.0

 Industrial and Warehouse
 380,517
 9.2

 Retail
 263,664
 6.4

 Hotel
 128,481
 3.1

 Other
 323,866
 7.8

 Total CRE
 $
 53.9
 %

 Loans held for investment, net of unearned income, increased $286.4 million, or 7.5%, from December 31, 2022 to $4.13 billion, driven primarily by new loan production. See Note 4. Loans Receivable and the Allowance for Credit Losses to our consolidated financial statements for additional information related to our loan portfolio.
 As of December 31, 2023, the amortized cost of non-owner occupied CRE office was $154.7 million and represented 3.8% of our total loan portfolio.

 Commitments under standby letters of credit, unused lines of credit and other conditionally approved credit lines totaled approximately $1.21 billion as of December 31, 2023 and December 31, 2022.
 Our loan to deposit ratio increased to 76.5% as of December 31, 2023 as compared to 70.2% as of December 31, 2022. The loan to deposit ratio increased when compared to the prior year-end due to organic loan growth, coupled with lower deposits.
 The following table sets forth remaining maturities and rate types of loans at December 31, 2023:

 Maturities Within
 Maturities After

 One Year
 One Year

 Due Within
 Due In
 Due In
 Due After
 Fixed
 Variable
 Fixed
 Variable

 1 Year
 1-5 Years
 5-15 Years
 15 Years
 Total
 Rates
 Rates
 Rates
 Rates

 $
 73,570
 $
 38,543
 $
 5,571
 $
 $
 $
 17,163
 $
 56,407
 $
 32,485
 $
 12,359

 142,651
 371,403
 364,872
 196,077
 29,564
 113,087
 598,055
 334,297

 Construction & development
 84,733
 180,194
 55,473
 2,795
 41,832
 42,901
 142,995
 95,467

 13,584
 89,903
 60,590
 20,878
 11,827
 1,757
 131,552
 39,819

 44,247
 230,369
 106,311
 2,251
 23,414
 20,833
 232,142
 106,789

 109,624
 761,498
 437,365
 25,495
 1,333,982
 77,841
 31,783
 772,261
 452,097

 252,188
 1,261,964
 659,739
 51,419
 154,914
 97,274
 1,278,950
 694,172

 16,508
 111,361
 78,538
 253,391
 459,798
 14,806
 1,702
 208,261
 235,029

 3,219
 29,048
 145,115
 3,257
 180,639
 1,424
 1,795
 88,216
 89,204

 19,727
 140,409
 223,653
 256,648
 16,230
 3,497
 296,477
 324,233

 9,539
 44,296
 13,948
 —
 3,666
 5,873
 57,734

 Total loans
 $
 497,675
 $
 1,856,615
 $
 1,267,783
 $
 504,874
 $
 $
 221,537
 $
 276,138
 $
 2,263,701
 $
 1,365,571

 Of the $1.64 billion of variable rate loans, approximately $892.8 million, or 54.4%, are subject to interest rate floors, with a weighted average floor rate of 4.04%.
 Nonperforming Assets
 The following table sets forth information concerning nonperforming assets as of the dates indicated:

 2023
 2022

 Nonaccrual loans held for investment
 $
 25,891
 $
 15,256

 Accruing loans contractually past due 90 days or more

 Total nonperforming loans
 26,359
 15,821

 3,929

 Total nonperforming assets
 $
 30,288
 $
 15,924

 Nonaccrual loans ratio(1)

 0.63
 %
 0.40
 %

 Nonperforming loans ratios(2)

 0.64
 %
 0.41
 %

 Nonperforming assets ratio(3)

 0.47
 %
 0.24
 %

 (1) Nonaccrual loans ratio is calculated as nonaccrual loans divided by loans held for investment, net of unearned income, at the end of the period.

 (2 Nonperforming loans ratio is calculated as total nonperforming loans divided by loans held for investment, net of unearned income, at the end of the period.

 (3) Nonperforming assets ratio is calculated as total nonperforming assets divided by total assets at the end of the period.

 When compared to December 31, 2022, the nonperforming loans and nonperforming assets ratios both increased 23 basis points from the prior year-end, to 0.64% and 0.47%, respectively.
 Loan Review and Classification Process for Agricultural, Commercial and Industrial, and Commercial Real Estate Loans:
 The Bank maintains a loan review and classification process which involves multiple officers of the Bank and is designed to assess the general quality of credit underwriting and to promote early identification of potential problem loans. All commercial

 and agricultural loan officers are charged with the responsibility of risk rating all loans in their portfolios and updating the ratings, positively or negatively, on an ongoing basis as conditions warrant. Risk ratings are selected from an 8-point scale with ratings as follows: ratings 1- 4 Satisfactory (pass), rating 5 Special Mention/Watch (potential weakness), rating 6 Substandard (well-defined weakness), rating 7 Doubtful, and rating 8 Loss.
 When a loan officer originates a new loan, based upon proper loan authorization, they document the credit file with an offering sheet summary, supplemental underwriting analysis, relevant financial information and collateral evaluations. This information is used in the determination of the initial loan risk rating. Segregation of owner-occupied and non-owner occupied residential real estate loans is made at the time of origination. The Bank's loan review department undertakes independent credit reviews of relationships based on either criteria established by loan policy, risk-focused sampling, or random sampling. Credit relationships with larger exposure may pose incrementally higher risks. As a result, the Bank's loan review department is required to review all credit relationships with total exposure of $5.0 million or more at least annually. In addition, the individual loan reviews consider such items as: loan type; nature, type and estimated value of collateral; borrower and/or guarantor estimated financial strength; most recently available financial information; related loans and total borrower exposure; and current and anticipated performance of the loan. The results of such reviews are presented to both executive management and the audit committee of the Company's board of directors.

 Through the review of delinquency reports, updated financial statements or other relevant information, the lending officer and/or loan review personnel may determine that a loan relationship has weakened to the point that a Special Mention/Watch (risk rating 5) or Classified (risk ratings 6 through 8) status is warranted. At least quarterly, the loan strategy committee will meet to discuss loan relationships with total exposure of $1.0 million or above that are Special Mention/Watch rated credits, loan relationships with total exposure of $500 thousand and above that are Substandard or worse rated credits, as well as loan relationships with total exposure of $250 thousand and above that are on non-accrual. Loan relationships outside these designated thresholds are reviewed upon request. The lending officer is charged with preparing a loan strategy summary worksheet that outlines the background of the credit problem, current repayment status of the loans, current collateral evaluation and a workout plan of action. This plan may include goals to improve the credit rating, assist the borrower in moving the loans to another institution and/or collateral liquidation. All such reports are presented to the loan strategy committee. The minutes of the loan strategy committee meetings are provided to the board of directors of the Bank.

 Depending upon the individual facts and circumstances and the result of the classified/watch review process, loan officers and/or loan review personnel may categorize a loan relationship as requiring an individual analysis. Once that determination has occurred, the credit analyst will complete an individually analyzed worksheet that contains an evaluation of the collateral (for collateral-dependent loans) based upon the estimated collateral value, adjusting for current market conditions and other local factors that may affect collateral value. Loan review personnel may also complete an independent individual analysis when deemed necessary. These judgmental evaluations may produce an initial specific allowance for recognition in the Company's allowance for credit losses calculation. An analysis for the underlying collateral value of each individually analyzed loan relationship is completed in the last month of the quarter. The individually analyzed worksheets are reviewed by the Credit Administration department prior to quarter-end. The board of directors of the Bank on a quarterly basis reviews the classified/watch reports including changes in credit grades of 5 or higher as well as all individually analyzed loans, the related allowances and foreclosed assets, net.

 The review process also provides for the upgrade of loans that show improvement since the last review. All requests for an upgrade of a credit are approved by the proper authority based upon the aggregate credit exposure before the rating can be changed.

 Loan Modifications for Borrowers Experiencing Financial Difficulty
 Infrequently, the Company makes modification to certain loans in order to alleviate temporary difficulties in the borrower's financial condition and/or constraints on the borrower's ability to repay a loan, and to minimize potential losses to the Company. GAAP requires that certain types of modifications be reported, including:
 • Principal forgiveness.
 • Interest rate reduction.
 • An other than-insignificant payment delay.
 • Term extension.

 During the year ended December 31, 2023, the amortized cost of the loans that were modified to borrowers in financial distress was $12.8 million, which represented 0.31% of total loans held for investment, net of unearned income for each respective period.

 The following table sets forth the allowance for credit losses by loan portfolio segments compared to the percentage of loans to total loans by loan portfolio segment for the periods indicated:

 2023
 2022

 % of Loans in Each Segment to Total Loans
 % of Loans in Each Segment to Total Loans

 $
 2.9
 %
 $
 3.0
 %

 21,743
 26.0
 22,855
 27.5

 Commercial real estate
 23,759
 54.0
 20,123
 51.5

 Residential real estate
 4,762
 15.5
 4,678
 16.0

 1.6
 2.0

 Total
 $
 51,500
 100.0
 %
 $
 49,200
 100.0
 %

 Allowance for credit losses ratio(1)

 1.25
 %
 1.28
 %

 Allowance for credit losses to nonaccrual loans ratio(2)

 198.91
 %
 322.50
 %

 (1) Allowance for credit losses ratio is calculated as allowance for credit losses divided by loans held for investment, net of unearned income at the end of the period.

 (2) Allowance for credit losses to nonaccrual loans ratio is calculated as allowance for credit losses divided by nonaccrual loans at the end of the period.

 The following table sets forth the net (charge-offs) recoveries by loan portfolio segments for the periods indicated:

 For the Years Ended December 31, 2023 and 2022

 Commercial and Industrial
 Total

 2023

 $
 (28)
 $
 (1,447)
 $
 (2,337)
 $
 (55)
 $
 (685)
 $
 (4,552)

 Net (charge-offs) recoveries
 $
 $
 (1,074)
 $
 (2,317)
 $
 (28)
 $
 (505)
 $
 (3,749)

 Net (charge-off) recovery ratio(1)

 —
 %
 (0.03)
 %
 (0.05)
 %
 —
 %
 (0.01)
 %
 (0.09)
 %

 2022

 $
 (326)
 $
 (2,051)
 $
 (4,328)
 $
 (195)
 $
 (756)
 $
 (7,656)

 1,093

 Net (charge-offs) recoveries
 $
 (315)
 $
 (1,369)
 $
 (4,168)
 $
 (109)
 $
 (602)
 $
 (6,563)

 Net (charge-off) recovery ratio(1)

 (0.01)
 %
 (0.04)
 %
 (0.12)
 %
 —
 %
 (0.02)
 %
 (0.19)
 %

 (1) Net (charge-off) recovery ratio is calculated as net (charge-offs) recoveries divided by average loans held for investment, net of unearned income and average loans held for sale, during the period.

 Actual Results: Our ACL as of December 31, 2023 was $51.5 million, which was 1.25% of loans held for investment, net of unearned income. This compares with an ACL of $49.2 million as of December 31, 2022, which was 1.28% of loans held for investment, net of unearned income. The increase in the ACL primarily reflected an additional reserve taken to support loan growth and related to individually evaluated loans. The liability for off-balance sheet credit exposures totaled $4.6 million as of December 31, 2023 and $4.8 million as of December 31, 2022, and is included in 'Other liabilities' on the balance sheet.
 The Company recorded a credit loss expense related to loans of $6.0 million for the year ended December 31, 2023 as compared to a credit loss expense of $3.7 million for the year ended December 31, 2022. Gross charge-offs for the year ended December 31, 2023 were $4.6 million, while there were $0.8 million in recoveries of previously charged-off loans. The ratio of net loan charge offs to average loans for the year ended December 31, 2023 was 0.09% compared to a net charge-off ratio of 0.19% for the year ended December 31, 2022.
 Economic Forecast: At December 31, 2023, the economic forecast used by the Company showed the following: (1) Midwest unemployment – increases over the next four forecasted quarters; (2) Year-to-year change in national retail sales - increases

 over the next four forecasted quarters; (3) Year-to-year change in CRE Index - decreases in the next four forecasted quarters; (4) Year-to-year change in U.S. GDP - increases over the next four forecasted quarters; (5) Year-to-year change in National Home Price Index – increases over the next two forecasted quarters, with declines in the third and fourth forecasted quarters; and (6) Rental Vacancy - increases over the next four forecasted quarters. In addition, management utilized qualitative factors to adjust the calculated ACL as appropriate. Qualitative factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.
 Loan Policy: We review all nonaccrual relationships greater than $250,000 individually on a quarterly basis to measure any amount to be recognized in the Company's allowance for credit losses by analyzing the borrower's ability to repay amounts owed, collateral deficiencies, and other relevant factors. We review loans 90 days or more past due that are still accruing interest no less than quarterly to determine if the asset is both well secured and in the process of collection. If not, such loans are placed on non-accrual status. Upon the Company's determination that a loan balance has been deemed uncollectible, the uncollectible balance is charged-off.

 Based on the inherent risk in the loan portfolio, management believed that as of December 31, 2023, the ACL was adequate; however, there is no assurance that loan credit losses will not exceed the ACL. In addition, growth in the loan portfolio or general economic deterioration may require the recognition of additional credit loss expense in future periods. See Note 4. Loans Receivable and the Allowance for Credit Losses for additional information related to the allowance for credit losses.
 The composition of deposits was as follows:

 $
 16.6
 %
 $
 19.3
 %

 Interest checking deposits
 1,320,435
 24.5
 1,624,278
 29.8

 Money market deposits
 1,105,493
 20.5
 937,340
 17.1

 650,655
 12.1
 664,169
 12.1

 Total non-maturity deposits
 3,973,636
 73.7
 4,279,237
 78.3

 Time deposits of $250 and under
 973,253
 18.0
 686,233
 12.6

 Time deposits of over $250
 448,784
 8.3
 503,472
 9.1

 Total time deposits
 $
 1,422,037
 26.3
 %
 $
 1,189,705
 21.7
 %

 $
 5,395,673
 100.0
 %
 $
 5,468,942
 100.0
 %

 Total deposits decreased $73.3 million from December 31, 2022, or 1.3%. Included within time deposits of $250 and under is $221.0 million of brokered deposits at December 31, 2023, which increased $94.3 million from December 31, 2022. Approximately 87.6% of our total deposits were considered "core" deposits as of December 31, 2023, compared to 88.5% at December 31, 2022. We consider core deposits to be the total of all deposits other than time deposits greater than $250k and brokered deposits. Total uninsured deposits, excluding collateralized municipal deposits, represent approximately 27% of total deposits at December 31, 2023. See Note 10. Deposits to our consolidated financial statements for additional information related to our deposits.
 The following table shows the composition and average balance of deposits for the indicated years:

 2023
 2022

 Average
 %
 Average
 Average
 %
 Average

 Total
 Rate
 Total
 Rate

 $
 951,188
 17.4
 %
 N/A
 $
 1,075,918
 20.3
 %
 N/A

 Interest checking and money market
 2,435,661
 44.6
 1.35
 %
 2,632,693
 49.6
 0.38
 %

 624,990
 11.5
 0.45
 674,846
 12.7
 0.17

 Time deposits
 1,443,770
 26.5
 3.47
 925,592
 17.4
 0.97

 $
 5,455,609
 100.0
 %
 1.57
 %
 $
 5,309,049
 100.0
 %
 0.37
 %

 Time deposits of $250,000 and over, which represents the U.S. time deposits in excess of the FDIC insurance limit and time deposits that are otherwise uninsured, had the following maturities:

 Three months or less
 $
 367,510
 $
 215,848

 Over three through six months
 102,017
 202,422

 Over six months through one year
 156,628
 133,142

 Over one year
 43,668
 78,827

 Total
 $
 669,823
 $
 630,239

 Short-Term Borrowings and Long-Term Debt
 The following table sets forth the composition of short-term borrowings and long-term debt for the periods presented.

 2023
 2022

 Securities sold under agreements to repurchase
 $
 5,064
 $
 156,373

 Federal home loan bank advances
 10,200
 235,500

 Federal reserve bank borrowings
 285,000
 —

 Total short-term borrowings
 $
 $

 Junior subordinated notes issued to capital trusts
 42,116

 Subordinated debentures
 64,137
 64,006

 Finance lease payable

 Federal home loan bank borrowings
 6,262
 17,301

 Other long-term debt

 Total long-term debt
 $
 123,296
 $
 139,210

 See Note 11. Short-Term Borrowings and Note 12. Long-Term Debt to our consolidated financial statements for additional information related to short-term borrowings and long-term debt.
 Off-Balance-Sheet Transactions
 During the normal course of business, we are a party to financial instruments with off-balance-sheet risk in order to meet the financing needs of our customers. These financial instruments include commitments to extend credit, commitments to sell loans, and standby letters of credit. We follow the same credit policy (including requiring collateral, if deemed appropriate) to make such commitments as is followed for those loans that are recorded in our financial statements.
 Our exposure to credit losses in the event of nonperformance is represented by the contractual amount of the commitments. Management does not expect any significant losses as a result of these commitments, and also expects to have sufficient liquidity available to cover these off-balance-sheet instruments. Off-balance-sheet transactions are more fully discussed in Note 18. Commitments and Contingencies to our consolidated financial statements.

 The following table summarizes the Bank's commitments by expiration period, as of December 31, 2023:

 Less than
 1 to 3
 3 to 5
 More than

 Total
 1 year
 years
 years
 5 years

 Commitments to extend credit
 $
 1,203,001
 $
 318,573
 $
 331,173
 $
 166,635
 $
 386,620

 Commitments to sell loans
 1,045
 1,045
 —
 —
 —

 Standby letters of credit
 7,795
 —
 6,329

 Total
 $
 1,211,841
 $
 319,618
 $
 337,502
 $
 167,140
 $
 387,581

 Capital Resources
 Contractual Obligations
 We are a party to many contractual financial obligations, including repayments of deposits and borrowings and payments for noncancellable operating lease and finance lease obligations. The table below summarizes certain future financial obligations of the Company due by period, as of December 31, 2023:

 Contractual Obligations
 Less than
 1 to 3
 3 to 5
 More than

 Total
 1 year
 years
 years
 5 years

 Time certificates of deposit
 $
 1,422,037
 $
 1,236,794
 $
 161,226
 $
 17,398
 $
 6,619

 Federal funds purchased, repurchase agreements, and FHLB overnight advances

 —
 —
 —

 6,262
 6,262
 —
 —
 —

 Junior subordinated notes issued to capital trusts
 —
 —
 —

 Subordinated debentures
 64,137
 —
 —
 —
 64,137

 Other long-term debt
 —
 —
 —

 Noncancellable operating leases and finance lease obligations
 4,761
 1,297
 1,424
 1,600

 Total
 $
 1,849,754
 $
 1,544,617
 $
 162,650
 $
 27,838
 $
 114,649

 Shareholders' Equity & Capital Adequacy
 The following table summarizes certain capital ratios and per share amounts of the Company for the periods presented:

 Total shareholders' equity to total assets ratio
 8.16
 %
 7.49
 %

 Tangible common equity ratio(1)

 6.90
 %
 6.17
 %

 Total risk-based capital ratio
 12.53
 %
 12.07
 %

 Tier 1 risk-based capital ratio
 10.38
 %
 10.05
 %

 Common equity tier 1 risk-based capital ratio
 9.59
 %
 9.28
 %

 Tier 1 leverage ratio
 8.58
 %
 8.35
 %

 Book value per share
 $
 33.41
 $
 31.54

 Tangible book value per share(1)

 $
 27.90
 $
 25.60

 (1)A non-GAAP financial measure - see the "Non-GAAP Presentations" section for a reconciliation to the most comparable GAAP equivalent.

 Shareholders' Equity: Total shareholders' equity was $524.4 million as of December 31, 2023, compared to $492.8 million as of December 31, 2022, an increase of $31.6 million, or 6.41%, driven by a decrease in AOCI and an increase in retained earnings.
 Capital Adequacy: The Federal Reserve uses capital adequacy guidelines in its examination and regulation of bank holding companies and their subsidiary banks. Risk-based capital ratios are established by allocating assets and certain off-balance-sheet commitments into four risk-weighted categories. These balances are then multiplied by the factor appropriate for that risk-weighted category. Pursuant to the Basel III Rules, the Company and the Bank, respectively, are subject to regulatory capital adequacy requirements promulgated by the Federal Reserve and the FDIC. Failure by the Company or the Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by our regulators that could have a material adverse effect on our consolidated financial statements. Under the capital requirements and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company's and the Bank's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's and the Bank's capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total risk-based capital, Tier 1 capital (as defined in the regulations) and Common Equity Tier 1 Capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations), and a leverage ratio consisting of Tier 1 capital (as defined in the regulations) to average assets (as defined in the regulations). As of December 31, 2023, the Company and the Bank exceeded federal regulatory minimum capital requirements to be classified as well-capitalized (including the capital conservation buffer). See Note 17. Regulatory Capital Requirements and Restrictions on Subsidiary Cash to our consolidated financial statements for additional information related to our regulatory capital ratios.

 In order to be a "well-capitalized" depository institution, the Company and the Bank must maintain a Common Equity Tier 1 capital ratio of 6.5% or more; a Tier 1 capital ratio of 8% or more; a total capital ratio of 10% or more; and a leverage ratio of 5% or more. A capital conservation buffer, comprised of 2.5% of Common Equity Tier 1 Capital, is also established above the regulatory minimum capital requirements.
 Stock Compensation
 On April 27, 2023, the Company's shareholders approved the MidWestOne Financial Group, Inc. 2023 Equity Incentive Plan (the "2023 Plan"). The 2023 Plan replaced the MidWestOne Financial Group, Inc. 2017 Equity Incentive Plan (the "2017 Plan").
 Restricted stock units were granted to certain officers and directors of the Company on February 15, 2023, May 15, 2023, and August 15, 2023, in the amounts of 75,331, 20,148, and 894, respectively. Additionally, during the year ended 2023, 90,665 whole restricted stock units were vested in connection with the vesting of previously awarded grants of restricted stock units, of which 20,336 shares were surrendered by grantees to satisfy tax requirements. There were 1,309 unvested restricted stock units forfeited. Additionally, officers and directors received cash in lieu of 138 fractional restricted stock units vested during 2023.
 See Note 15. Stock Compensation Plans to our consolidated financial statements for additional information related to our stock compensation program.
 Liquidity
 Liquidity Management
 Liquidity management involves meeting the cash flow requirements of depositors and borrowers. We conduct liquidity management on both a daily and long-term basis, and adjust our investments in liquid assets based on expected loan demand, projected loan maturities and payments, expected deposit flows, yields available on interest-bearing deposits, and the objectives of our asset/liability management program. Excess liquidity is invested generally in short-term U.S. government and agency securities, short- and medium-term state and political subdivision securities, and other investment securities. Our most liquid assets are cash and due from banks, interest-bearing bank deposits, and federal funds sold. The balances of these assets are dependent on our operating, investing, and financing activities during any given period.
 Cash and cash equivalents are summarized in the table below:

 2023
 2022

 Cash and due from banks
 $
 76,237
 $
 83,990

 Interest-bearing deposits
 5,479
 2,445

 Federal funds sold
 —

 Total
 $
 $

 Generally, our principal sources of funds are deposits, advances from the FHLB, principal repayments on loans, proceeds from the sale of loans, proceeds from the maturity and sale of investment securities, our federal funds lines, and funds provided by operations. While scheduled loan amortization and maturing interest-bearing deposits are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by economic conditions, the general level of interest rates, and competition. We utilized particular sources of funds based on comparative costs and availability. The Bank maintains unsecured lines of credit with several correspondent banks and secured lines with the Federal Reserve Bank of Chicago and the FHLB that would allow us to borrow funds on a short-term basis, if necessary. We also hold debt securities classified as available for sale that could be sold to meet liquidity needs if necessary.
 Net cash provided by operations was another major source of liquidity. The net cash provided by operating activities was $62.6 million for the year ended December 31, 2023 and $90.3 million for the year ended December 31, 2022.
 As of December 31, 2023, we had outstanding commitments to extend credit to borrowers of $1.20 billion, standby letters of credit of $7.8 million, and commitments to sell loans of $1.0 million. Certificates of deposit maturing in one year or less totaled $1.24 billion as of December 31, 2023. We believe that a significant portion of these deposits will remain with us upon maturity.

 Inflation
 The effects of price changes and inflation can vary substantially for most financial institutions. While management believes that inflation affects the growth of total assets, it is difficult to assess its overall impact on the Company. The price of one or more of the components of the Consumer Price Index may fluctuate considerably and thereby influence the overall Consumer Price Index without having a corresponding effect on interest rates or upon the cost of those goods and services normally purchased by us. Inflation and related increases in market rates by the Federal Reserve generally decrease the market value of investments and loans held and may adversely affect liquidity, earnings and shareholders' equity. Ongoing higher inflation levels and higher interest rates could have a negative impact on both our consumer and commercial borrowers. We anticipate our noninterest income may be adversely affected in future periods as a result of increasing interest rates and inflationary pressure, which has begun to and will continue to adversely affect mortgage originations and mortgage banking revenue. Additionally, the economic impact of the recent rise in inflation and rising interest rates could place increased demand on our liquidity if we experience significant credit deterioration and as we meet borrowers' needs. There is also a risk that interest rate increases to fight inflation could lead to a recession.

 Non-GAAP Presentations

 Certain ratios and amounts not in conformity with GAAP are provided to evaluate and measure the Company's operating performance and financial condition, including return on average tangible equity, tangible common equity, tangible book value per share, tangible common equity ratio, net interest margin (tax equivalent), core net interest margin, and the efficiency ratio. Management believes these ratios and amounts provide investors with useful information regarding the Company's profitability, financial condition and capital adequacy, consistent with how management evaluates the Company's financial performance. The following tables provide a reconciliation of each non-GAAP measure to the most comparable GAAP equivalent.

 Return on Average Tangible Equity

 (Dollars in thousands)
 2023
 2022
 2021

 $
 $
 $

 Intangible amortization, net of tax(1)

 4,685
 4,552
 4,018

 Tangible net income
 $
 25,544
 $
 65,387
 $
 73,504

 Average shareholders' equity
 $
 505,751
 $
 500,471
 $
 527,036

 Average intangible assets, net
 (89,539)
 (88,917)
 (84,927)

 Average tangible equity
 $
 416,212
 $
 411,554
 $
 442,109

 Return on average equity
 4.12
 %
 12.16
 %
 13.18
 %

 Return on average tangible equity(2)

 6.14
 %
 15.89
 %
 16.63
 %

 (1) Computed on a tax-equivalent basis, assuming an income tax rate of 25%.

 (2) Tangible net income divided by average tangible equity

 Tangible Common Equity / Tangible Book Value Per Share/ Tangible Common Equity Ratio

 (Dollars in thousands, except per share data)
 2023
 2022
 2021

 Total shareholders' equity
 $
 $
 $
 527,475

 Intangible assets, net
 (86,546)
 (92,792)
 (82,362)

 Tangible common equity
 $
 437,832
 $
 400,001
 $
 445,113

 $
 $
 $
 6,025,128

 Intangible assets, net
 (86,546)
 (92,792)
 (82,362)

 Tangible assets
 $
 6,340,994
 $
 6,485,084
 $
 5,942,766

 Book value per share
 $
 33.41
 $
 31.54
 $
 33.66

 Tangible book value per share(1)

 $
 27.90
 $
 25.60
 $
 28.40

 Shares outstanding
 15,694,306
 15,623,977
 15,671,147

 Common equity ratio
 8.16
 %
 7.49
 %
 8.75
 %

 Tangible common equity ratio(2)

 6.90
 %
 6.17
 %
 7.49
 %

 (1) Tangible common equity divided by shares outstanding.

 (2) Tangible common equity divided by tangible assets.

 Net Interest Margin, Tax Equivalent / Core Net Interest Margin

 (Dollars in thousands)
 2023
 2022
 2021

 Net interest income
 $
 144,172
 $
 166,358
 $
 156,281

 Tax equivalent adjustments:

 Loans(1)

 3,010
 2,507
 2,105

 Securities(1)

 1,813
 2,409
 2,521

 Net interest income, tax equivalent
 $
 148,995
 $
 171,274
 $
 160,907

 Loan purchase discount accretion
 (3,729)
 (4,561)
 (3,344)

 Core net interest income
 $
 145,266
 $
 166,713
 $
 157,563

 Net interest margin
 2.38
 %
 2.84
 %
 2.86
 %

 Net interest margin, tax equivalent(2)

 2.46
 %
 2.92
 %
 2.95
 %

 Core net interest margin(3)

 2.40
 %
 2.85
 %
 2.89
 %

 Average interest earning assets
 $
 6,055,994
 $
 5,859,160
 $
 5,455,777

 (1) The federal statutory tax rate utilized was 21%.

 (2) Tax equivalent net interest income divided by average interest earning assets.

 (3) Core net interest income divided by average interest earning assets.

 Efficiency Ratio

 (Dollars in thousands)
 2023
 2022
 2021

 Total noninterest expense
 $
 131,913
 $
 $
 116,592

 Amortization of intangibles
 (6,247)
 (6,069)
 (5,357)

 Merger-related expenses
 (392)
 (2,201)
 (224)

 Noninterest expense used for efficiency ratio
 $
 125,274
 $
 124,518
 $
 111,011

 Net interest income, tax equivalent(1)

 $
 148,995
 $
 171,274
 $
 160,907

 Plus: Noninterest income
 18,423
 42,453

 Less: Investment securities (losses) gains, net
 (18,789)

 Net revenues used for efficiency ratio
 $
 186,207
 $
 218,522
 $
 203,118

 Efficiency ratio(2)

 67.28
 %
 56.98
 %
 54.65
 %

 (1) Computed on a tax-equivalent basis, assuming a federal income tax rate of 21%.

 (2) Noninterest expense adjusted for amortization of intangibles, merger-related expenses, and goodwill impairment divided by the sum of tax equivalent net interest income, noninterest income and net investment securities gains.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 In general, market risk is the risk of change in asset values due to movements in underlying market rates and prices. Interest rate risk is the risk to earnings and capital arising from movements in interest rates. Interest rate risk is the most significant market risk affecting us as other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of our business activities.
 In addition to interest rate risk, economic conditions in recent years have made liquidity risk (namely, funding liquidity risk) a more prevalent concern among financial institutions. In general, liquidity risk is the risk of being unable to fund an entity's obligations to creditors (including, in the case of banks, obligations to depositors) as such obligations become due and/or fund its acquisition of assets.

 Liquidity Risk
 Liquidity refers to our ability to fund operations, to meet depositor withdrawals, to provide for our customers' credit needs, and to meet maturing obligations and existing commitments. Our liquidity principally depends on cash flows from operating activities, investment in and maturity of assets, changes in balances of deposits and borrowings, and our ability to borrow funds.
 Net cash inflows from operating activities were $62.6 million during the year ended December 31, 2023, compared with $90.3 million in the year ended December 31, 2022 and $111.6 million in the year ended December 31, 2021. Net cash inflows from investing activities were $129.7 million during the year ended December 31, 2023, compared with net cash outflows of $273.3 million in the year ended December 31, 2022 and net cash outflows of $428.3 million in the year ended December 31, 2021. Net cash outflows from financing activities were $197.0 million during the year ended December 31, 2023, compared with net cash inflows of $65.5 million in the year ended December 31, 2022, and net cash inflows of $437.9 million in the year ended December 31, 2021.

 To manage liquidity risk, the Bank has several sources of liquidity in place to maximize funding availability and increase the diversification of funding sources. The criteria for evaluating the use of these sources include volume concentration (percentage of liabilities), cost, volatility, and the fit with the current asset/liability management plan. These acceptable sources of liquidity include:
 • Federal Funds Lines
 • Federal Reserve Bank Discount Window/Bank Term Funding Program
 • Federal Home Loan Bank Advances
 • Brokered Deposits
 • Brokered Repurchase Agreements
 Federal Funds Lines: Federal funds positions provide a source of short-term liquidity funding for the Bank. Unsecured federal funds purchased lines are viewed as a volatile liability and are not used as a long-term funding solution, especially when used to fund long-term assets. The current federal funds purchased limit is 10% of total assets, or the amount of established federal funds lines, whichever is smaller. Currently, the Bank maintains several unsecured federal funds lines totaling $155.0 million, which are tested annually to ensure availability.
 Federal Reserve Bank Discount Window and Bank Term Funding Program: The Federal Reserve Bank Discount Window and the BTFP are additional sources of liquidity, particularly during periods of economic uncertainty or stress. The Bank has a borrowing capacity with the Federal Reserve Bank of Chicago limited by the amount of municipal securities pledged against the line. As of December 31, 2023, the Bank had municipal securities with an approximate market value of $797.6 million pledged for liquidity purposes, and had additional borrowing capacity of $428.8 million. There were no outstanding borrowings through the FRB Discount Window at December 31, 2023. There were $285.0 million of BTFP borrowings outstanding at December 31, 2023. The Federal Reserve has announced that it is ending the BTFP and will cease making new loans under this program on March 11, 2024.
 Federal Home Loan Bank Advances: FHLB advances provide both a source of liquidity and long-term funding for the Bank. All credit exposure, including advances and federal funds borrowings from the FHLBDM are collateralized primarily by one- to four-family residential, commercial and agricultural real estate first mortgages equal to various percentages of the total outstanding notes. The current credit limit established by the FHLBDM is equal to 45% of the Bank's total assets. This credit capacity limit includes short-term and long-term borrowings, federal funds, letters of credit, and other sources of credit exposure to the FHLB. As of December 31, 2023, the Bank had $10.2 million of short-term FHLB advances and $6.3 million in long-term FHLB borrowings and additional borrowing capacity of $795.9 million.
 Brokered Deposits and Reciprocal Deposits: The Bank has brokered time deposit and non-maturity deposit relationships available to diversify its funding sources. Brokered deposits offer several benefits relative to other funding sources, such as: maturity structures which cannot be duplicated in the current retail market, deposit gathering which does not cannibalize the existing deposit base, the unsecured nature of these liabilities, and the ability to quickly generate funds. The Bank's internal policy limits the use of brokered deposits as a funding source to no more than 20% of total assets. Board approval is required to exceed this limit. The Bank must maintain a "well capitalized" rating to access brokered deposits without FDIC waiver. An "adequately capitalized" rating requires an FDIC waiver to access brokered deposits and an "undercapitalized" rating prohibits the Bank from using brokered deposits. At December 31, 2023, the Company held $221.0 million of brokered deposits.
 Under a final rule that was issued by the FDIC in December 2018, financial institutions that are considered "well capitalized" qualify for the exemption of certain reciprocal deposits from being considered brokered deposits. Such exemption is limited to the lesser of 20 percent of total liabilities or $5.00 billion, with some exceptions for financial institutions that do not meet such criteria. At December 31, 2023, the Company had $15.2 million of reciprocal time deposits and $128.0 million of reciprocal interest bearing non-maturity deposits, and $58.0 million non-interest bearing non-maturity deposits that qualified for the brokered deposit exemption. These reciprocal deposits are part of the IntraFi Network Deposits program, which is used by financial institutions to spread deposits that exceed the FDIC insurance coverage limits out to numerous institutions in order to provide insurance coverage for all participating deposits.

 Brokered Repurchase Agreements: Brokered repurchase agreements may be established with approved brokerage firms and banks. Repurchase agreements create rollover risk (the risk that a broker will discontinue the relationship due to market factors) and are not used as a long-term funding solution, especially when used to fund long-term assets. Collateral requirements and availability are evaluated and monitored. The current policy limit for brokered repurchase agreements is 15% of total assets. There were no outstanding brokered repurchase agreements at December 31, 2023.

 Interest Rate Risk
 Interest rate risk is defined as the exposure of net interest income and fair value of financial instruments (interest-earning assets, deposits and borrowings) to movements in interest rates. The Company's results of operations depend to a large degree on its net interest income and its ability to manage interest rate risk. The Company considers interest rate risk to be a significant market risk. The major sources of the Company's interest rate risk are timing differences in the maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, changes in customer behavior and changes in relationships between rate indices (basis risk). Management measures these risks and their impact in various ways, including through the use of income simulation and valuation analyses. Multiple interest rate scenarios are used in this analysis which include changes in interest rates, spread narrowing and widening, yield curve twists and changes in assumptions about customer behavior in various interest rate scenarios. A mismatch between maturities, interest rate sensitivities and prepayment characteristics of assets and liabilities results in interest-rate risk. Like most financial institutions, we have material interest-rate risk exposure to changes in both short-term and long-term interest rates, as well as variable interest rate indices (e.g., the prime rate or SOFR).
 The Bank's asset and liability committee meets regularly and is responsible for reviewing its interest rate sensitivity position and establishing policies to monitor and limit exposure to interest rate risk. Our asset and liability committee seeks to manage interest rate risk under a variety of rate environments by structuring our balance sheet and off-balance-sheet positions in such a way that changes in interest rates do not have a large negative impact. The risk is monitored and managed within approved policy limits.

 We use a third-party service to model and measure our exposure to potential interest rate changes. For various assumed hypothetical changes in market interest rates, numerous other assumptions are made, such as prepayment speeds on loans and securities backed by mortgages, the slope of the Treasury yield-curve, the rates and volumes of our deposits, and the rates and volumes of our loans. There are two primary tools used to evaluate interest rate risk: net interest income simulation and economic value of equity ("EVE"). In addition, interest rate gap is reviewed to monitor asset and liability repricing over various time periods.

 Net Interest Income Simulation: Management utilizes net interest income simulation models to estimate the near-term effects of changing interest rates on its net interest income. Net interest income simulation involves projecting net interest income under a variety of scenarios, which include varying the level of interest rates and shifts in the shape of the yield curve. Management exercises its best judgment in making assumptions regarding events that management can influence, such as non-contractual deposit re-pricings, and events outside management's control, such as customer behavior on loan and deposit activity and the effect that competition has on both loan and deposit pricing. These assumptions are subjective and, as a result, net interest income simulation results will differ from actual results due to the timing, magnitude and frequency of interest rate changes, changes in market conditions, customer behavior and management strategies, among other factors. We perform various sensitivity analyses on assumptions of deposit attrition and deposit re-pricing.
 The following table presents the anticipated effect on net interest income over a twelve month period if short- and long-term interest rates were to sustain an immediate decrease of 100 basis points or 200 basis points, or an immediate increase of 100 basis points or 200 basis points:

 Immediate Change in Rates

 -200
 -100
 +100
 +200

 Dollar change
 $
 1,280
 $
 (347)
 $
 $

 Percent change
 0.9
 %
 (0.2)
 %
 0.2
 %
 0.1
 %

 Dollar change
 $
 8,398
 $
 5,637
 $
 (6,738)
 $
 (13,921)

 Percent change
 5.2
 %
 3.5
 %
 (4.2)
 %
 (8.7)
 %

 As of December 31, 2023, 32.9% of the Company's interest-earning asset balances will reprice or are expected to pay down in the next 12 months, and 41.1% of the Company's deposit balances are low cost or no cost deposits.

 Economic Value of Equity: Management also uses EVE to measure risk in the balance sheet that might not be taken into account in the net interest income simulation analysis. Net interest income simulation highlights exposure over a relatively short time period, while EVE analysis incorporates all cash flows over the estimated remaining life of all balance sheet positions. The valuation of the balance sheet, at a point in time, is defined as the discounted present value of asset cash flows minus the discounted present value of liability cash flows. EVE analysis addresses only the current balance sheet and does not incorporate

 the run-off replacement assumptions that are used in the net interest income simulation model. As with the net interest income simulation model, EVE analysis is based on key assumptions about the timing and variability of balance sheet cash flows and does not take into account any potential responses by management to anticipated changes in interest rates.
 Interest Rate Gap - The interest rate gap is the difference between interest-earning assets and interest-bearing liabilities re-pricing within a given period and represents the net asset or liability sensitivity at a point in time. An interest rate gap measure could be significantly affected by external factors such as loan prepayments, early withdrawals of deposits, changes in the correlation of various interest-bearing instruments, competition, or a rise or decline in interest rates.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 Report of Independent Registered Public Accounting Firm
 To the Shareholders and the Board of Directors of MidWestOne Financial Group, Inc.

 Opinion on the Financial Statements
 We have audited the accompanying consolidated balance sheets of MidWestOne Financial Group, Inc. (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
 We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 8, 2024, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.
 Basis for Opinion
 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
 Critical Audit Matters
 The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

 At December 31, 2023, the Company's total loans were $4.13 billion and the associated allowance for credit losses was $51.5 million. As explained in Note 1 of the consolidated financial statements, the allowance for credit losses consists of reserves for expected losses over the life of the loans that have been identified by management related to specific borrowing relationships that are collateral dependent financial assets evaluated for impairment (individual basis), as well as expected credit losses inherent in the loan portfolio that are not specifically identified (pool basis). The Company measures expected credit losses of financial assets on a collective (pool) basis when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a discounted cash flow (DCF) method or a loss-rate method to estimate expected credit losses which includes adjustments for forecast periods. In addition, management utilizes qualitative factors to adjust the calculated allowance for credit losses as appropriate. Qualitative factors are based on management's judgement of company, market, industry, or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 We identified the qualitative factors applied to the allowance for credit losses as a critical audit matter, because auditing this matter required significant auditor judgement due to the highly subjective nature of management's significant inputs and assumptions used in the allowance for credit losses model.

 Our audit procedures related to management's evaluation and establishment of the qualitative factors applied to the allowance for credit losses include the following, among others:

 • We obtained an understanding of the relevant controls related to the qualitative factors applied to the allowance for credit losses and tested such controls for design and operating effectiveness, including controls over management's establishment, review and approval of the qualitative factors and the data used in determining the qualitative factors.

 • We tested the completeness, accuracy and relevance of the data inputs used by management as a basis for the qualitative factors by agreeing them to internal and external data sources.

 • We tested management's process by evaluating the reasonableness of the overall qualitative factor adjustments based on the data inputs used by management.

 Goodwill
 The Company's goodwill balance on December 31, 2023 was $62.5 million. As explained in Note 1 of the consolidated financial statements, goodwill of a reporting unit is tested for impairment on an annual basis, or between annual tests if an event occurs or circumstances change that could reduce the fair value of a reporting unit below its carrying amount. The Company estimates the fair value of the single reporting unit by making significant estimates and assumptions related to the specific circumstances of the reporting unit, such as net interest income and net income projections, based on historical results and industry data, and the selection of an appropriate discount rate. During 2023, the Company identified a triggering event due to the volatility and overall decrease in the Company's stock price and performed an interim impairment test.

 We identified management's goodwill impairment assessments as a critical audit matter because of the complexity of the analyses and certain significant assumptions, including the projected cash flows, discount rate, control premium, transaction multiples and trading multiples of comparable companies. Auditing management's assumptions required significant auditor judgment and increased audit effort, including the use of our valuation specialists.

 Our audit procedures related to management's goodwill impairment assessments include the following, among others:

 • We obtained an understanding of the relevant controls related to the goodwill impairment assessments and tested such controls for design and operating effectiveness, including controls over management's preparation of cash flow projections, review of the significant assumptions, such as discount rate, control premium and transaction multiples of comparable market companies and review of the computations.

 • We utilized internal valuation specialists to assist in evaluating the reasonableness of significant assumptions by:

 –Reviewing publicly available market data and comparing it to management's estimate of the control premium used by management;

 –Comparing publicly available market transactions and trading multiples for comparable market companies to assumptions used in management's analysis; and

 –Testing the relevance and reliability of source information underlying the determination of the discount rates and testing the mathematical accuracy of the calculation.

 • We evaluated the reasonableness of management's cash flow projections by comparing forecasts to historical data and by comparison of current operating ratios, such as return on assets, loan to deposit and net interest margin to historical and peer group results.

 /s/ RSM US LLP
 We have served as the Company's auditor since 2013.
 Des Moines, Iowa

 CONSOLIDATED BALANCE SHEETS

 2023

 2022

 ASSETS

 Cash and due from banks
 $
 76,237
 $
 83,990

 Interest earning deposits in banks
 5,479
 2,445

 Federal funds sold
 —

 Total cash and cash equivalents

 Debt securities available for sale at fair value

 Held to maturity securities at amortized cost

 Total securities
 1,870,324
 2,282,968

 1,045

 Gross loans held for investment
 4,138,352
 3,854,791

 Unearned income, net
 ( 11,405)
 ( 14,267)

 ( 51,500)
 ( 49,200)

 Total loans held for investment, net
 4,075,447
 3,791,324

 Premises and equipment, net
 85,742
 87,125

 Goodwill
 62,477
 62,477

 Other intangible assets, net
 24,069
 30,315

 3,929

 222,780
 236,517

 $
 $

 LIABILITIES AND SHAREHOLDERS' EQUITY

 $
 $

 Interest bearing deposits
 4,498,620
 4,415,492

 5,395,673
 5,468,942

 123,296
 139,210

 83,929
 85,058

 Total liabilities
 5,903,162
 6,085,083

 Commitments and contingencies (Note 18)

 Shareholders' equity

 Preferred stock, no par value; authorized 500,000 shares; no shares issued and outstanding

 —
 —

 Common stock, $ 1.00 par value; authorized 30,000,000 shares; issued shares of 16,581,017 and 16,581,017; outstanding shares of 15,694,306 and 15,623,977

 Additional paid-in capital
 302,157
 302,085

 Retained earnings
 294,784
 289,289

 Treasury stock at cost, 886,711 and 957,040 shares

 ( 24,245)
 ( 26,115)

 Accumulated other comprehensive loss
 ( 64,899)
 ( 89,047)

 Total shareholders' equity

 Total liabilities and shareholders' equity
 $
 $

 CONSOLIDATED STATEMENTS OF INCOME

 Years ended December 31,

 (dollars in thousands, except per share amounts)
 2023
 2022
 2021

 Interest income

 Loans, including fees
 $
 202,179
 $
 148,284
 $
 141,036

 Taxable investment securities
 38,978
 39,019
 25,692

 Tax-exempt investment securities
 7,540
 9,379
 9,947

 Other

 Total interest income
 249,613
 196,759
 176,766

 85,764
 20,245
 13,198

 11,119
 3,070

 8,558
 7,086
 6,736

 Total interest expense
 105,441
 30,401
 20,485

 Net interest income
 144,172
 166,358
 156,281

 Credit loss expense (benefit)
 5,849
 4,492
 ( 7,336)

 Net interest income after credit loss expense (benefit)
 138,323
 161,866
 163,617

 Noninterest income

 Investment services and trust activities
 12,249
 11,223
 11,675

 Service charges and fees
 8,349
 7,477
 6,259

 Card revenue
 7,214
 7,210
 7,015

 Loan revenue
 4,700
 10,504
 12,948

 2,500
 2,305
 2,162

 Investment securities (losses) gains, net
 ( 18,789)

 Other
 2,200
 8,529
 2,152

 Total noninterest income
 18,423
 42,453

 Noninterest expense

 76,410
 78,103
 69,937

 Occupancy expense of premises, net
 10,034
 10,272
 9,274

 9,195
 8,693
 7,816

 Legal and professional
 7,365
 8,646
 5,256

 Data processing
 5,799
 5,574
 5,216

 Marketing
 3,610
 4,272
 4,022

 Amortization of intangibles
 6,247
 6,069
 5,357

 FDIC insurance
 3,294
 1,660
 1,572

 Communications
 1,125
 1,332

 ( 18)

 Other
 9,036
 8,392
 6,577

 Total noninterest expense
 131,913
 116,592

 Income before income tax expense
 24,833
 76,597
 89,478

 3,974
 15,762
 19,992

 $
 $
 $

 Per common share information

 Earnings - basic
 $
 1.33
 $
 3.89
 $
 4.38

 Earnings - diluted
 $
 1.33
 $
 3.87
 $
 4.37

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 2023

 2022
 2021

 $
 $
 $

 Other comprehensive income (loss), net of tax:

 Unrealized gain (loss) from AFS debt securities:

 Unrealized net gain (loss) on debt securities AFS
 10,421
 ( 111,667)
 ( 45,032)

 Reclassification adjustment for losses (gains) included in net income
 19,768
 ( 271)
 ( 242)

 Reclassification of the change in fair value of AFS debt securities attributable to change in hedged risk
 ( 819)
 —
 —

 Income tax (expense) benefit
 ( 7,433)
 28,951
 11,817

 Unrealized net gain (loss) on AFS debt securities, net of reclassification adjustments

 21,937
 ( 82,987)

 Reclassification of AFS debt securities to HTM:

 Amortization of the net unrealized loss from the reclassification of AFS debt securities to HTM
 2,284
 3,781
 —

 ( 578)
 ( 976)
 —

 Amortization of net unrealized loss from the reclassification of AFS debt securities to HTM, net
 1,706
 2,805
 —

 Unrealized gain from cash flow hedging instruments:

 Unrealized net gains in cash flow hedging instruments
 2,471
 —
 —

 Reclassification adjustment for net gain in cash flow hedging instruments included in income
 ( 1,795)
 —
 —

 ( 171)
 —
 —

 Unrealized net gains on cash flow hedge instruments, net of reclassification adjustment
 —
 —

 Other comprehensive income (loss), net of tax
 $
 24,148
 $
 ( 80,182)
 $

 Comprehensive income (loss)
 $
 45,007
 $
 ( 19,347)
 $
 36,029

 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

 Common Stock

 (dollars in thousands, except per share amounts)
 Par
Value
 Additional
Paid-in
Capital
 Retained
Earnings
 Treasury
Stock
 Accumulated Other
Comprehensive
Income (Loss)
 Total

 Balance at December 31, 2020
 $
 $
 300,137
 $
 188,191
 $
 ( 14,251)
 $
 24,592
 $
 515,250

 —
 —
 —
 —

 Other comprehensive loss
 —
 —
 —
 —

 Release/lapse of restriction on RSUs ( 49,907 shares, net)

 —
 ( 1,350)
 ( 30)
 1,259
 —
 ( 121)

 Repurchase of common stock ( 395,540 shares)

 —
 —
 —
 ( 11,554)
 —
 ( 11,554)

 —
 2,153
 —
 —
 —
 2,153

 Dividends paid on common stock ($ 0.9000 per share)

 —
 —
 ( 14,282)
 —
 —
 ( 14,282)

 Balance at December 31, 2021
 $
 $
 300,940
 $
 243,365
 $
 ( 24,546)
 $
 ( 8,865)
 $
 527,475

 —
 —
 —
 —

 Other comprehensive loss
 —
 —
 —
 —
 ( 80,182)
 ( 80,182)

 Release/lapse of restriction on RSUs ( 44,231 shares, net)

 —
 ( 1,396)
 ( 41)
 1,156
 —
 ( 281)

 Repurchase of common stock ( 91,401 shares)

 —
 —
 —
 ( 2,725)
 —
 ( 2,725)

 —
 2,541
 —
 —
 —
 2,541

 Dividends paid on common stock ($ 0.9500 per share)

 —
 —
 ( 14,870)
 —
 —
 ( 14,870)

 Balance at December 31, 2022
 $
 $
 302,085
 $
 289,289
 $
 ( 26,115)
 $
 ( 89,047)
 $

 —
 —
 —
 —

 Other comprehensive income
 —
 —
 —
 —
 24,148
 24,148

 Release/lapse of restriction on RSUs ( 70,329 shares, net)

 —
 ( 2,331)
 ( 148)
 1,870
 —
 ( 609)

 —
 2,403
 —
 —
 —
 2,403

 Dividends paid on common stock ($ 0.9700 per share)

 —
 —
 ( 15,216)
 —
 —
 ( 15,216)

 Balance at December 31, 2023
 $
 $
 302,157
 $
 294,784
 $
 ( 24,245)
 $
 ( 64,899)
 $

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 2023
 2022

 2021

 Operating Activities:

 $
 $
 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Credit loss expense (benefit)
 5,849
 4,492
 ( 7,336)

 Depreciation, amortization, and accretion
 12,572
 10,162
 1,566

 Net change in premises and equipment due to writedown or sale
 ( 92)

 2,403
 2,541
 2,153

 Net loss (gain) on sale or call of debt securities available for sale
 19,768
 ( 271)
 ( 242)

 Net gain on sale of equity securities
 ( 979)
 —
 —

 Net change in foreclosed assets due to writedown or sale
 ( 38)
 ( 31)

 Net gain on sale of loans held for sale
 ( 1,166)
 ( 1,842)
 ( 8,052)

 Origination and participations purchased of loans held for sale
 ( 49,166)
 ( 90,493)
 ( 293,235)

 Proceeds from sales of loans held for sale
 49,899
 104,640
 348,326

 Increase in cash surrender value of bank-owned life insurance
 ( 2,500)
 ( 2,305)
 ( 1,889)

 (Increase) decrease in deferred income taxes, net
 ( 330)
 4,326
 1,768

 Bargain purchase gain
 —
 ( 3,769)
 —

 Change in:

 6,420
 ( 37,206)
 6,615

 ( 929)
 38,525
 ( 8,032)

 Net cash provided by operating activities
 $
 62,570
 $
 90,328

 $
 111,554

 Investing Activities:

 Purchases of equity securities
 $
 ( 1,125)
 $
 ( 1,250)
 $
 —

 Proceeds from sales of equity securities
 2,011
 —
 —

 Proceeds from sales of debt securities available for sale
 326,179
 129,823
 52,183

 Proceeds from maturities and calls of debt securities available for sale
 130,740
 142,006
 404,894

 Purchases of debt securities available for sale
 ( 89,815)
 ( 386,278)
 ( 1,137,996)

 Proceeds from maturities and calls of debt securities held to maturity
 54,543
 125,456
 —

 Net (increase) decrease in loans held for investment
 ( 290,174)
 ( 312,562)
 251,856

 Purchases of premises and equipment
 ( 4,055)
 ( 2,663)
 ( 2,014)

 Proceeds from sale of foreclosed assets
 2,117

 Proceeds from sale of premises and equipment
 1,240

 Net cash acquired in business acquisition
 —
 31,375
 —

 Net cash provided by (used in) provided by investing activities
 $
 129,728
 $
 ( 273,269)

 $
 ( 428,318)

 Financing Activities:

 Net (decrease) increase in:

 $
 ( 73,389)
 $
 ( 109,378)
 $
 567,302

 ( 91,609)
 208,964
 ( 49,421)

 Payments of subordinated debt issuance costs
 —
 —
 ( 9)

 Redemption of subordinated debentures
 —
 —
 ( 10,835)

 Payments on finance lease liability
 ( 183)
 ( 164)
 ( 145)

 Payments of Federal Home Loan Bank borrowings
 ( 11,000)
 ( 31,000)
 ( 43,000)

 Proceeds from other long-term debt
 —
 25,000
 —

 Payments of other long-term debt
 ( 5,000)
 ( 10,000)
 —

 Taxes paid relating to the release/lapse of restriction on RSUs
 ( 609)
 ( 281)
 ( 121)

 Dividends paid
 ( 15,216)
 ( 14,870)
 ( 14,282)

 Repurchase of common stock
 —
 ( 2,725)
 ( 11,554)

 Net cash (used in) provided by financing activities
 $
 ( 197,006)
 $
 65,546
 $
 437,935

 Net change in cash and cash equivalents
 $
 ( 4,708)
 $
 ( 117,395)
 $
 121,171

 Cash and cash equivalents at beginning of year
 203,830
 82,659

 Cash and cash equivalents at end of year
 $
 $
 $
 203,830

 CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

 2023
 2022

 2021

 Supplemental disclosures of cash flow information:

 Cash paid during the period for interest

 $
 97,505
 $
 27,841
 $
 21,451

 Cash paid during the period for income taxes, net of refunds

 3,437
 13,222
 17,985

 Supplemental schedule of non-cash investing and financing activities:

 Transfer of loans to foreclosed assets

 $
 3,972
 $
 $

 Investment securities purchased but not settled
 —
 —
 2,480

 Transfer of premises and equipment to assets held for sale

 1,349
 —

 Transfer of debt securities available for sale to debt securities held to maturity
 —
 1,253,179
 —

 Supplemental Schedule of non-cash investing activities from acquisition:

 Non-cash assets acquired:

 Investment securities
 $
 —
 $
 119,820
 $
 —

 Total loans held for investment, net
 —
 281,326
 —

 Premises and equipment

 —
 7,363
 —

 Core deposit intangible

 —
 16,500
 —

 —
 7,862
 —

 —
 6,278
 —

 Total non-cash assets acquired
 —
 439,149
 —

 Liabilities assumed:

 —
 463,638
 —

 —
 1,541
 —

 —
 —

 —
 1,326
 —

 Total liabilities assumed

 $
 —
 $
 466,755
 $
 —

 Note 1. Nature of Business and Significant Accounting Policies

 Nature of business: MidWestOne Financial Group, Inc. (the "Company"), an Iowa Corporation formed in 1983, is a bank holding company under the BHCA and a financial holding company under the GLBA. Our principal executive offices are located at 102 South Clinton Street, Iowa City, Iowa 52240. The Company owns all of the outstanding common stock of MidWestOne Bank (the "Bank"), an Iowa state non-member bank chartered in 1934 with its main office in Iowa City, Iowa. We operate primarily through MidWestOne Bank, our bank subsidiary, and provide services to individuals, businesses, governmental units and institutional customers through a total of 57 banking offices as of December 31, 2023 in central and eastern Iowa, the Minneapolis/St. Paul metropolitan area in Minnesota, southwestern Wisconsin, Naples and Fort Myers, Florida, and Denver, Colorado. The Bank is actively engaged in many areas of commercial banking, including: acceptance of demand, savings and time deposits; making commercial, real estate, agricultural and consumer loans, and other banking services tailored for its individual customers. The wealth management area of the Bank administers estates, personal trusts, and conservatorship accounts along with providing other management services to customers.

 On June 9, 2022, the Company acquired Iowa First Bancshares Corp., a bank holding company whose wholly-owned banking subsidiaries were First National Bank of Muscatine and First National Bank in Fairfield, community banks located in Muscatine and Fairfield, Iowa, respectively. Immediately following the completion of the acquisition, First National Bank of Muscatine and First National Bank in Fairfield were merged with and into the Bank. As consideration for the merger, we paid cash in the amount of $ 46.7 million.

 Accounting Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect: (1) the reported amount of assets and liabilities, (2) the disclosure of contingent assets and liabilities at the date of the financial statements, and (3) the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available to management at the time the estimates are made. Actual results could differ from those estimates.

 Certain Significant Estimates: The allowance for credit losses, fair value of assets acquired and liabilities assumed in a business combination, and the annual impairment testing of goodwill and other intangible assets involve certain significant estimates made by management. These estimates are reviewed by management routinely, and it is reasonably possible that circumstances that exist may change in the near-term future and that the effect could be material to the consolidated financial statements.

 Principles of Consolidation: The consolidated financial statements include the accounts of MidWest One Financial Group, Inc., a bank holding company, and its wholly-owned subsidiary MidWestOne Bank, which is a state chartered bank whose primary federal regulator is the FDIC. All significant inter-company accounts and transactions have been eliminated in consolidation.

 Trust assets, other than cash deposits held by the Bank in a fiduciary or agency capacity for its customers, are not included in the accompanying consolidated financial statements because such accounts are not assets of the Bank.

 Presentation of Cash Flows: For purposes of reporting cash flows, cash and due from banks includes cash on hand, amounts due from banks, and federal funds sold. Cash flows from loans, deposits, and short-term borrowings are reported net. Cash receipts and cash payments resulting from originations and sales of loans held for sale are classified as operating cash flows on a gross basis in the consolidated statements of cash flows.

 The nature of the Company's business requires that it maintain amounts due from banks that, at times, may exceed federally insured limits. In the opinion of management, no material risk of loss exists due to the various correspondent banks' financial condition and the fact that they are well capitalized.

 Investment Securities: Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity and recorded at amortized cost. Debt securities not classified as held to maturity are classified as available for sale and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income. A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.

 The Company employs valuation techniques that utilize observable inputs when those inputs are available. These observable inputs reflect assumptions market participants would use in pricing the security, developed based on market data obtained from

 sources independent of the Company. When such information is not available, the Company employs valuation techniques which utilize unobservable inputs, or those which reflect the Company's own assumptions about assumptions that market participants would use, based on the best information available in the circumstances. These valuation methods typically involve cash flow and other financial modeling techniques. Changes in underlying factors, assumptions, estimates, or other inputs to the valuation techniques could have a material impact on the Company's future financial condition and results of operations. Fair value measurements are required to be classified as Level 1 (quoted prices), Level 2 (based on observable inputs) or Level 3 (based on unobservable inputs) discussed in more detail in Note 20. Estimated Fair Value of Financial Instruments and Fair Value Measurements to the consolidated financial statements.

 Purchase premiums and discounts are recognized in interest income using the interest method between the date of purchase and the first call date, or the maturity date of the security when there is no call date. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

 Held to Maturity Debt Securities - The Company evaluates debt securities held to maturity for current expected credit losses. Held-to-maturity securities are evaluated on a quarterly basis using historical probability of default and loss given default information specific to the investment category. If this evaluation determines that credit losses exist, an allowance for credit loss is recorded and included in earnings as a component of credit loss expense. The Company's mortgage-backed securities and collateralized mortgage obligations are issued by U.S. government agencies and U.S. government-sponsored enterprises and are implicitly guaranteed by the U.S. government, and as such are excluded from the credit loss evaluation. Accrued interest receivable on held to maturity debt securities is recorded within 'Other Assets,' and is excluded from the estimate of credit losses.

 Available for Sale Debt Securities - Available for sale debt securities are recorded at fair value. Realized gain or losses on sales of available for sale debt securities are included in earnings. Available for sale debt securities with unrealized gains are excluded from earnings and included in other comprehensive income as a separate component of shareholders' equity, net of tax. When the fair value of an available for sale debt security falls below the amortized cost basis, it is evaluated to determine if any of the decline in value is attributable to credit loss. Decreases in fair value attributable to credit loss would be recorded directly to earnings with a corresponding allowance for credit losses, limited by the amount that the fair value is less than the amortized cost basis. If the credit quality subsequently improves the allowance would be reversed up to a maximum of the previously recorded credit losses. If the Company intends to sell an impaired available for sale debt security, or if it is more likely than not that the Company will be required to sell the security prior to recovering the amortized cost basis, the entire fair value adjustment would be immediately recognized in earnings with no corresponding allowance for credit losses. Accrued interest receivable is excluded from the estimate of credit losses.

 Loans: Loans are stated at the principal amount outstanding, net of purchase premiums, purchase discounts and net deferred loan fees. Net deferred loan fees include nonrefundable loan origination fees less direct loan origination costs. Net deferred loan fees, purchase premiums and purchase discounts are amortized into interest income using either the interest method or straight-line method over the terms of the loans, adjusted for actual prepayments. The interest method is used for all loans except revolving loans, for which the straight-line method is used. Interest on loans is credited to income as earned based on the principal amount outstanding.

 The accrual of interest on agricultural, commercial, commercial real estate, non-owner occupied residential real estate, and consumer loan segments is discontinued at the time the loan is 90 days past due, and owner occupied residential real estate loan segments at 120 days past due, unless the credit is well secured and in process of collection. Credit card loans and other personal loans are typically charged off no later than 180 days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date, if collection of principal or interest is considered doubtful.

 All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is generally accounted for on the cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

 The Company requires a loan to be charged-off, in whole or in part, as soon as it becomes apparent that some loss will be incurred, or when its collectability is sufficiently questionable that it no longer is considered a bankable asset. The primary

 considerations when determining if and how much of a loan should be charged-off are as follows: (1) the potential for future cash flows; (2) the value of any collateral; and (3) the strength of any co-makers or guarantors.

 Acquired Loans - Acquired loans are separated into two categories based on the credit risk characteristics of the underlying borrowers as either PCD, for loans which have experienced more than insignificant credit deterioration since origination, or loans with no credit deterioration (non-PCD). At the date of acquisition, an ACL on PCD loans is determined and added to the amortized cost basis of the individual loans. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. The ACL on PCD loans is recorded in the acquisition accounting and no provision for credit losses is recognized at the acquisition date. Subsequent changes to the ACL are recorded through provision expense. For non-PCD loans, an ACL is established immediately after the acquisition through a charge to the provision for credit losses.

 The risk characteristics of each loan portfolio segment are as follows:

 Agricultural - Agricultural loans, most of which are secured by crops, livestock, and machinery, are provided to finance capital improvements and farm operations as well as acquisitions of livestock and machinery. The ability of the borrower to repay may be affected by many factors outside of the borrower's control including adverse weather conditions, loss of livestock due to disease or other factors, declines in market prices for agricultural products and the impact of government regulations. The ultimate repayment of agricultural loans is dependent upon the profitable operation or management of the agricultural entity. Collateral for these loans generally includes accounts receivable, inventory, equipment and real estate. However, depending on the overall financial condition of the borrower, some loans are made on an unsecured basis. The collateral securing these loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

 Commercial and Industrial - Commercial and industrial loans are primarily made based on the reported cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. The collateral support provided by the borrower for most of these loans and the probability of repayment are based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any exists. The primary repayment risks of commercial and industrial loans are that the cash flows of the borrower may be unpredictable, and the collateral securing these loans may fluctuate in value. The size of the loans the Company can offer to commercial customers is less than the size of the loans that competitors with larger lending limits can offer. This may limit the Company's ability to establish relationships with the largest businesses in the areas in which the Company operates. As a result, the Company may assume greater lending risks than financial institutions that have a lesser concentration of such loans and tend to make loans to larger businesses. Collateral for these loans generally includes accounts receivable, inventory, equipment and real estate. However, depending on the overall financial condition of the borrower, some loans are made on an unsecured basis. The collateral securing these loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. In addition, a decline in the U.S. economy could harm or continue to harm the businesses of the Company's commercial and industrial customers and reduce the value of the collateral securing these loans.

 Commercial Real Estate - The Company offers mortgage loans to commercial and agricultural customers for the acquisition of real estate used in their businesses, such as offices, warehouses and production facilities, and to real estate investors for the acquisition of apartment buildings, retail centers, office buildings and other commercial buildings. The market value of real estate securing commercial real estate loans can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located. Adverse developments affecting real estate values in one or more of the Company's markets could increase the credit risk associated with its loan portfolio. Additionally, real estate lending typically involves higher loan principal amounts than other loans, and the repayment of the loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events or governmental regulations outside of the Company's control or that of the borrower could negatively impact the future cash flow and market values of the affected properties.

 Residential Real Estate - The Company generally retains short-term residential mortgage loans that are originated for its own portfolio but sells most long-term loans to other parties while retaining servicing rights on the majority of those loans. The market value of real estate securing residential real estate loans can fluctuate as a result of market conditions in the geographic area in which the real estate is located. Adverse developments affecting real estate values in one or more of the Company's markets could increase the credit risk associated with its loan portfolio. Additionally, real estate lending typically involves higher loan principal amounts than other loans, and the repayment of the loans generally is dependent, in large part, on the borrower's continuing financial stability, and is therefore more likely to be affected by adverse personal circumstances.

 Consumer - Consumer loans typically have shorter terms, lower balances, higher yields and higher risks of default than real estate-related loans. Consumer loan collections are dependent on the borrower's continuing financial stability, and are therefore more likely to be affected by adverse personal circumstances. Collateral for these loans generally includes automobiles, boats, recreational vehicles, mobile homes, and real estate. However, depending on the overall financial condition of the borrower, some loans are made on an unsecured basis. The collateral securing these loans may depreciate over time, may be difficult to recover and may fluctuate in value based on condition. In addition, a decline in the United States economy could result in reduced employment, impacting the ability of customers to repay their obligations.

 Loan Modifications for Borrowers Experiencing Financial Difficulty: Infrequently, the Company makes modifications to certain loans in order to alleviate temporary difficulties in the borrower's financial condition and/or constraints on the borrower's ability to repay a loan, and to minimize potential losses to the Company. GAAP requires that certain types of modifications be reported, including:

 • Principal forgiveness.
 • Interest rate reduction.
 • An other than-insignificant payment delay.
 • Term extension.

 Loans Held for Sale: Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income.

 Mortgage loans held for sale are generally sold with the mortgage servicing rights retained. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price plus the value of servicing rights, less the carrying value of the related mortgage loans sold.

 Allowance for Credit Losses Related to Loans Held for Investment: Under the current expected credit loss model, the allowance for credit losses is a valuation account estimated at each balance sheet date and deducted from the amortized cost basis of loans held for investment to present the net amount expected to be collected.

 The Company estimates the ACL based on the underlying assets' amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for collection of cash and charge-offs, as well as applicable accretion or amortization of premium, discount, and net deferred fees or costs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

 Expected credit losses are reflected in the allowance for credit losses through a charge to credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. The Company applies judgment to determine when a financial asset is deemed uncollectible; however, generally speaking, an asset will be considered uncollectible no later than when all efforts at collection have been exhausted. Subsequent recoveries, if any, are credited to the ACL when received.

 The Company measures expected credit losses of financial assets on a collective (pool) basis when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a DCF method or a loss-rate method to estimate expected credit losses.

 The Company's methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company's economic forecast assumptions revert over four quarters to historical loss driver information on a straight-line basis after four quarters.

 Discounted Cash Flow Method
 The Company uses the DCF method to estimate expected credit losses for the agricultural, commercial and industrial, CRE - construction and development, CRE - farmland, CRE - multifamily, CRE - other, RRE - owner-occupied one-to-four family first liens, RRE - nonowner-occupied one-to-four family first liens, RRE - one-to-four family junior liens, and consumer loan pools. For each of these pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data.

 The Company uses regression analysis of historical internal and peer data to determine which variables are best suited to be economic variables utilized when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the economic variables. For the loan pools utilizing the DCF method, management utilizes one or multiple of the following economic variables: Midwest unemployment, national retail sales, CRE index, US rental vacancy rate, US gross domestic product, and HPI.

 For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.

 The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows ("NPV"). An ACL is established for the difference between the instrument's NPV and amortized cost basis. In addition, management utilizes qualitative factors to adjust the calculated ACL as appropriate. Qualitative factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 Loss-Rate Method
 The Company uses a loss-rate method to estimate expected credit losses for the credit card and overdraft pools. For each of these pools, the Company applies an expected loss ratio based on internal and peer historical losses, adjusted as appropriate for qualitative factors. Qualitative loss factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 Collateral Dependent Financial Assets
 Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell.

 The Company's estimate of the ACL reflects losses expected over the contractual life of the assets, adjusted for estimated prepayments or curtailments. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected MBEFD. A loan that has been modified or renewed is considered a MBEFD when the borrower is experiencing financial difficulty.

 Liability for Off-Balance Sheet Credit Losses: Financial instruments include off-balance sheet credit losses, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The Company's

 exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

 The Company recognizes a liability for off-balance sheet credit losses through a charge to credit loss expense for off-balance sheet credit losses, which is included in credit loss expense in the Company's consolidated statements of income, unless the commitments to extend credit are unconditionally cancellable. The liability for off-balance sheet credit losses is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in other liabilities on the Company's consolidated balance sheets.

 Transfers of Financial Assets: Revenue from the origination and sale of loans in the secondary market is recognized upon the transfer of financial assets and accounted for as sales when control over the assets has been surrendered. The Company also sells participation interests in some large loans originated to non-affiliated entities. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Company; (2) the transferee has the right to pledge or exchange the assets it received and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the transferor; and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

 Credit-Related Financial Instruments: In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under credit card arrangements, commitments to sell loans, commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded.

 Derivatives and Hedging Instruments: As part of its asset and liability management strategy, the Company uses derivative financial instruments to mitigate exposure to interest rate risks. The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

 In accordance with the FASB's fair value measurement guidance, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

 Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. The estimated useful lives and primary method of depreciation for the principal items are as follows:

 Years

 Type of Assets
 Minimum
 Maximum
 Depreciation Method

 Buildings and leasehold improvements
 -
 Straight-line

 Furniture and equipment
 -
 Straight-line

 Charges for maintenance and repairs are expensed as incurred. When assets are retired or disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is recorded.

 Leases: The Company determines if a lease is present at the inception of an agreement. Operating leases are capitalized at commencement and operating lease ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term and are reported in "Other assets" and "Other liabilities," respectively, on the Company's

 consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Leases with original terms of less than 12 months are not capitalized. If at lease inception, the Company considers exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability.

 Foreclosed Assets, Net: Real estate properties and other assets acquired through or in lieu of foreclosure are initially recorded at fair value less estimated selling cost at the date of foreclosure, establishing a new cost basis. Fair value is determined by management by obtaining appraisals or other market value information at least annually. Any write-downs in value at the date of acquisition are charged to the allowance for credit losses. After foreclosure, valuations are periodically performed by management by obtaining updated appraisals or other market value information. Any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to the updated fair value less estimated selling cost. Net costs related to the holding of properties are included in noninterest expense.

 Goodwill and Other Intangibles: Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations accounted for as acquisitions. Under ASC Topic 350, goodwill of a reporting unit is tested for impairment on an annual basis, or between annual tests if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying amount. The Company's annual assessment is done at the reporting unit level, which the Company has concluded is at the consolidated level.

 In 2023, due to the volatility and overall decrease in the Company's stock price, management concluded that these factors led to the occurrence of a triggering event and therefore an interim impairment test over goodwill was performed as of June 30, 2023. The Company concluded based upon the results of the interim assessment that the fair value of goodwill exceeded the book value on that date, and as such goodwill was not impaired. Based upon the Company's annual assessment, the Company also concluded that goodwill was not impaired and therefore did not recognize any impairment losses during the year ended December 31, 2023 and December 31, 2022.

 Certain other intangible assets that have finite lives are amortized on an accelerated basis over the estimated life of the assets. Such assets are evaluated for impairment if events and circumstances indicate a possible impairment. See Note 7. Goodwill and Intangible Assets for additional information.

 Federal Home Loan Bank Stock: The Bank is a member of the FHLB of Des Moines and ownership of FHLB stock is a requirement for such membership. The amount of FHLB stock the Bank is required to hold is directly related to the amount of FHLB advances borrowed. This security is redeemable at par by the FHLB, and is, therefore, carried at cost. Redemption of this investment is at the option of the FHLB.

 Mortgage Servicing Rights: Mortgage servicing rights are recorded at fair value based on assumptions through a third-party valuation service. The valuation model incorporates assumptions that are observable in the marketplace and that market participants would use in estimating future net servicing income, such as the servicing cost per loan, the discount rate, the escrow float rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses.

 Bank-Owned Life Insurance: BOLI represents life insurance policies on the lives of certain Company officers and directors or former officers and directors for which the Company is the beneficiary. Bank-owned life insurance is carried at cash surrender value, net of surrender and other charges, with increases/decreases reflected as noninterest income/expense in the consolidated statements of income.

 Employee Benefit Plans: Deferred benefits under a salary continuation plan are charged to expense during the period in which the participating employees attain full eligibility.

 Stock-Based Compensation: Compensation expense for share based awards is recorded over the vesting period at the fair value of the award at the time of grant. The exercise price of options or fair value of nonvested shares granted under the Company's incentive plans is equal to the fair market value of the underlying stock at the grant date. The Company assumes no projected forfeitures on its stock based compensation, since actual historical forfeiture rates on its stock-based incentive awards have been negligible.

 Income Taxes: The Company and/or its subsidiaries file tax returns in all states and local taxing jurisdictions which impose corporate income, franchise or other taxes where it operates. The methods of filing and the methods for calculating taxable and

 apportionable income vary depending upon the laws of the taxing jurisdiction. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date of such change. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 In accordance with ASC 740, Income Taxes, the Company recognizes a tax position as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. There were no material unrecognized tax benefits or any interest or penalties on any unrecognized tax benefits as of December 31, 2023 and 2022.

 Common Stock: On August 20, 2019, the Board of Directors of the Company approved a share repurchase program, allowing for the repurchase of up to $ 10.0 million of common stock through December 31, 2021. The repurchase program replaced the Company's prior repurchase program that was announced in October 2018. Since the plan was announced on August 20, 2019, the Company repurchased 297,158 shares of common stock for approximately $ 7.9 million, leaving $ 2.1 million available to be repurchased under that repurchase program as of June 22, 2021, the end of such program.

 On June 22, 2021, the Board of Directors of the Company approved a share repurchase program, allowing for the repurchase of up to $ 15.0 million of the Company's common stock through December 31, 2023. The repurchase program replaced the Company's prior repurchase program, which was due to expire on December 31, 2021. Since June 23, 2021 and through April 27, 2023, the Company repurchased 403,368 shares of common stock for approximately $ 12.0 million, leaving $ 3.0 million available to be repurchased.

 On April 27, 2023, the Board of Directors of the Company approved a new share repurchase program, allowing for the repurchase of up to $ 15.0 million of the Company's common stock through December 31, 2025. This new repurchase program replaced the Company's prior repurchase program, adopted in June 2021, which was due to expire on December 31, 2023. Since April 28, 2023 and through December 31, 2023, the Company repurchased no shares of common stock, leaving $ 15.0 million available to be repurchased.

 Comprehensive Income: Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of shareholders' equity on the consolidated balance sheets, and are disclosed in the consolidated statements of comprehensive income.

 Effect of New Financial Accounting Standards

 Accounting Guidance Pending Adoption in 2023
 On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASC 848 contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. Certain optional expedients and exceptions for contract modifications and hedging relationships were amended in ASU 2021-01, Reference Rate Reform (Topic 848): Scope Refinement, issued on January 7, 2021. In addition, ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which time entities will no longer be permitted to apply the relief in Topic 848. The adoption of ASU 2020-04 is not expected to have a material impact on the Company's consolidated financial statements.

 On March 29, 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. Under this ASU, if certain conditions are met, a reporting entity may elect to account for its tax equity investments by using the proportional amortization method regardless of the program from which it receives income tax credits. The amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with an option to early adopt. The amendments must be applied on either a modified retrospective or a

 retrospective basis, with certain exceptions for low-income-housing tax credit structures that aren't accounted for using the proportional amortization method. The Company is currently evaluating the impact of ASU 2023-02.

 On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. Enhanced disclosures about significant segment expenses are included within this ASU. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with an option to early adopt. The amendments should be applied retrospectively to all prior periods presented in the financial statements, with the segment expense categories and amounts disclosed in prior periods being based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the impact of ASU 2023-07.

 On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. Additional transparency about income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information, will be required. The amendments are effective for annual periods beginning after December 15, 2024, with an option to early adopt. The amendments should be applied on a prospective basis, with retrospective application being permitted. The Company is currently evaluating the impact of ASU 2023-09.

 Accounting Guidance Adopted in 2023
 On March 31, 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For creditors that have adopted the CECL accounting guidance within ASU 2016-13, the amendments eliminate the accounting guidance for TDRs within ASC 310-40, while also enhancing the disclosure requirements for certain loan refinancings and restructurings when a borrower is experiencing financial difficulty. In addition, public business entities must also disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC 326-20. The amendments are effective for fiscal years beginning after December 15, 2022 and should be applied prospectively, with an option to apply a modified retrospective transition approach for the recognition and measurement of TDRs. The adoption of ASU 2022-02 was applied prospectively and did not have a material impact on the Company's consolidated financial statements.

 Note 2. Business Combinations

 Iowa First Bancshares Corp.
 On June 9, 2022, the Company acquired 100 % of the equity of IOFB through a merger and acquired its wholly-owned subsidiaries FNBM and FNBF for cash consideration of $ 46.7 million. The primary reasons for the acquisition were to enter the Muscatine, Iowa market and increase the Company's presence in Fairfield, Iowa. Immediately following the completion of the acquisition, FNBM and FNBF were merged with and into the Bank.

 The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of the June 9, 2022 acquisition date, net of any applicable tax effects using a methodology similar to the Company's legacy assets and liabilities (refer to Note 20. Estimated Fair Value of Financial Instruments and Fair Value Measurements for additional information regarding the fair value methodology). The bargain purchase gain, which is recorded in 'Other' noninterest income, was generated as a result of the estimated fair value of identifiable net assets acquired exceeding the merger consideration. Bargain purchase gains are recorded net of deferred taxes and are treated as permanent differences, resulting in a lower effective tax rate in the period recorded. The revenue and earnings amount specific to IOFB since the acquisition date that are included in the consolidated results for the year ended December 31, 2022 are not readily determinable. The disclosures of these amounts are impracticable due to the merging of certain processes and systems at the acquisition date.
 The table below summarizes the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed.

 June 9, 2022

 Merger consideration

 Cash consideration

 $
 46,672

 Identifiable net assets acquired, at fair value

 Assets acquired

 Cash and due from banks
 $
 10,192

 Interest earning deposits in banks
 67,855

 Debt securities
 119,820

 Loans held for investment
 281,326

 Premises and equipment
 7,363

 Core deposit intangible
 16,500

 14,140

 Total assets acquired

 517,196

 Liabilities assumed

 $
 ( 463,638)

 ( 3,117)

 Total liabilities assumed

 ( 466,755)

 Identifiable net assets acquired, at fair value
 50,441

 Bargain Purchase Gain
 $
 3,769

 Of the $ 281.3 million net loans acquired, $ 11.0 million exhibited credit deterioration on the date of purchase. The following table provides a summary of these PCD loans at acquisition:

 June 9, 2022

 Par value of PCD loans acquired

 $
 15,396

 PCD ACL at acquisition

 ( 3,371)

 Non-credit discount on PCD loans

 ( 1,005)

 Purchase price of PCD loans

 $
 11,020

 For illustrative purposes only, the following table presents certain unaudited pro forma information for the years ended December 31, 2022 and 2021. This unaudited, estimated pro forma information was calculated as if IOFB had been acquired as of the beginning of the year prior to the date of acquisition. This unaudited pro forma information combines the historical results of IOFB and the Company and includes adjustments for the estimated impact of certain fair value purchase accounting, interest expense, acquisition-related expenses, and income tax expense for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. Additionally, MidWestOne expects to achieve further operating cost savings and other business synergies, including revenue growth as a result of the acquisition, which are not reflected in the pro forma amounts that follow. As a result, actual amounts would have differed from the unaudited pro forma information presented.

 Unaudited Pro Forma for the

 (in thousands, except per share amounts)
 2022
 2021

 Total revenues
 $
 217,157
 $
 223,317

 Net Income
 $
 61,451
 $
 71,376

 EPS - basic
 $
 3.93
 $
 4.50

 EPS - diluted
 $
 3.91
 $
 4.49

 The following table summarizes DNVB acquisition-related expenses incurred in the year ended December 31, 2023, and IOFB acquisition-related expenses incurred in the years ended December 31, 2022 and December 30, 2021:

 Years Ended

 2023
 2022
 2021

 Noninterest Expense

 $
 $
 $
 —

 Occupancy expense of premises, net
 —
 —

 —

 Legal and professional

 Data processing
 —

 Marketing

 Communications
 —
 —

 Other

 Total acquisition-related expenses
 $
 $
 2,201
 $

 Note 3. Debt Securities

 On January 1, 2022, the Company transferred, at fair value, $ 1.25 billion of mortgage-backed securities, collateralized mortgage obligations, and securities issued by state and political subdivisions from the available for sale classification to the held to maturity classification. The net unrealized after tax loss of $ 11.5 million associated with those re-classified securities remained in accumulated other comprehensive loss and will be amortized over the remaining life of the securities. At December 31, 2023, there was $ 7.0 million of net unrealized after tax loss remaining in accumulated other comprehensive loss. No gains or losses were recognized in earnings at the time of the transfer.

 The following tables summarize the amortized cost, gross unrealized gains and losses and the resulting fair value of debt securities as of the dates indicated:

 Amortized Cost(1)

 Gross Unrealized Gains
 Gross Unrealized Losses
 Allowance for Credit Loss related to Debt Securities

 $
 139,482
 $
 $
 9,345
 $
 —
 $
 130,139

 5,448
 —
 5,311

 50,541
 —

 190,304
 —
 21,108
 —

 487,361
 47,367
 —
 440,051

 Total available for sale debt securities
 $
 873,136
 $
 $
 78,201
 $
 —
 $

 $
 532,422
 $
 —
 $
 65,932
 $
 —
 $
 466,490

 74,904
 —
 11,635
 —
 63,269

 467,864
 —
 102,360
 —
 365,504

 Total held to maturity debt securities
 $
 $
 —
 $
 179,927
 $
 —
 $
 895,263

 (1) Amortized cost for the held to maturity securities includes $ 0.2 million of unamortized gain in state and political subdivisions, $ 58.0 thousand of unamortized gains in mortgage-backed securities and $ 9.7 million of unamortized losses in collateralized mortgage obligations related to the re-classification of securities from available for sale to held to maturity on January 1, 2022.

 Amortized Cost(1)

 Gross Unrealized Gains
 Gross Unrealized Losses
 Allowance for Credit Loss related to Debt Securities

 U.S. Government agencies and corporations
 $
 7,598
 $
 —
 $
 $
 —
 $
 7,345

 303,573
 18,244
 —
 285,356

 6,165
 —
 5,944

 172,568
 —
 25,375
 —

 771,836
 64,252
 —
 707,709

 Total debt securities
 $
 1,261,740
 $
 $
 108,356
 $
 —
 $

 $
 538,746
 $
 —
 $
 88,349
 $
 —
 $
 450,397

 81,032
 —
 12,851
 —
 68,181

 509,643
 —
 103,327
 —
 406,316

 Total held to maturity debt securities
 $
 $
 —
 $
 204,527
 $
 —
 $
 924,894

 (1) Amortized cost for the held to maturity securities includes $ 0.2 million of unamortized gain in state and political subdivisions, $ 36 thousand of unamortized losses in mortgage-backed securities and $ 11.9 million of unamortized losses in collateralized mortgage obligations related to the re-classification of securities from available for sale to held to maturity on January 1, 2022.

 Investment securities with a fair value of $ 1.16 billion and $ 690.2 million at December 31, 2023 and December 31, 2022, respectively, were pledged on public deposits, securities sold under agreements to repurchase and for other purposes, as required or permitted by law.

 Accrued interest receivable on available for sale debt securities and held to maturity debt securities is recorded within 'Other Assets,' and is excluded from the estimate of credit losses. At December 31, 2023 the accrued interest receivable on available for sale debt securities and held to maturity debt securities totaled $ 5.5 million and $ 3.7 million, respectively. At December 31, 2022 the accrued interest receivable on available for sale and held to maturity debt securities totaled $ 7.6 million and $ 3.7 million, respectively.

 The following table presents debt securities AFS in an unrealized loss position for which an allowance for credit losses has not been recorded at December 31, 2023, aggregated by investment category and length of time in a continuous loss position:

 Number of
Securities
 Less than 12 Months
 12 Months or More
 Total

 (in thousands, except number of securities)

 $
 8,417
 $
 $
 114,713
 $
 8,853
 $
 123,130
 $
 9,345

 —
 —
 4,906
 4,906

 17,696
 —
 —
 17,696

 6,278
 127,792
 21,018
 134,070
 21,108

 2,377
 429,222
 47,287
 431,599
 47,367

 Total
 $
 34,768
 $
 $
 676,633
 $
 77,300
 $
 711,401
 $
 78,201

 As of December 31, 2023, 149 state and political subdivisions securities with total unrealized losses of $ 9.3 million were held by the Company. Management evaluated these securities through a process that included consideration of credit agency ratings and payment history. In addition, management evaluated securities by considering the yield spread to treasury securities and the most recent financial information available. Based on this evaluation, management concluded that the decline in fair value was not attributable to credit losses.

 As of December 31, 2023, 19 mortgage-backed securities and 20 collateralized mortgage obligations with unrealized losses totaling $ 21.3 million were held by the Company. Management evaluated the payment history of these securities. In addition, management considered the implied U.S. government guarantee of these agency securities, the level of credit enhancement, and credit agency ratings for non-agency securities. Based on this evaluation, management concluded that the decline in fair value was not attributable to credit losses.
 As of December 31, 2023, 2 collateralized loan obligations with unrealized losses of $ 239 thousand were held by the Company. Management evaluated these securities through a process that included consideration of credit agency ratings, priority of cash flows and the amount of over-collateralization. In addition, management may evaluate securities by considering the yield spread to treasury securities and the most recent financial information available. Based on this evaluation, management concluded that the decline in fair value was not attributable to credit losses.
 As of December 31, 2023, 133 corporate debt securities with total unrealized losses of $ 47.4 million were held by the Company. Management evaluated these securities by considering credit agency ratings and payment history. In addition, management evaluated securities by considering the yield spread to treasury securities and the most recent financial information available. Based on this evaluation, management concluded that the decline in fair value was not attributable to credit losses.

 The following table presents debt securities AFS in an unrealized loss position for which an allowance for credit losses has not been recorded as of December 31, 2022, aggregated by investment category and length of time in a continuous loss position.

of
Securities
 Less than 12 Months
 12 Months or More
 Total

 (in thousands, except number of securities)

 U.S. Government agencies and corporations
 $
 7,345
 $
 $
 —
 $
 —
 $
 7,345
 $

 248,339
 14,553
 20,631
 3,691
 268,970
 18,244

 5,323
 5,368

 75,041
 7,121
 72,152
 18,254

 25,375

 369,441
 21,679
 288,329
 42,573
 657,770
 64,252

 Total
 $
 705,489
 $
 43,837
 $
 381,157
 $
 64,519
 $
 1,086,646
 $
 108,356

 The Company evaluates debt securities held to maturity for current expected credit losses. There were no debt securities held to maturity classified as nonaccrual or past due as of December 31, 2023. Held-to-maturity securities are evaluated on a quarterly basis using historical probability of default and loss given default information specific to the investment category. If this evaluation determines that credit losses exist, an allowance for credit loss is recorded and included in earnings as a component of credit loss expense. Based on this evaluation, management concluded that no allowance for credit loss for these securities was required.

 Proceeds and gross realized gains and losses on debt securities available for sale for the years ended December 31, 2023, 2022 and 2021, were as follows:

 2023
 2022
 2021

 Proceeds from sales of debt securities available for sale
 $
 326,179

 $
 129,823
 $
 52,183

 Gross realized gains from sales of debt securities available for sale
 —
 —

 Gross realized losses from sales of debt securities available for sale
 ( 19,844)
 ( 167)
 ( 791)

 Net realized (loss) gain from sales of debt securities available for sale(1)

 $
 ( 19,844)

 $
 ( 167)
 $

 (1) The difference in investment security (losses) gains, net reported herein as compared to the Consolidated Statements of Income is associated with the net realized gain from the call or maturity of debt securities of $ 76 thousand, $ 438 thousand and $ 93 thousand for the years ended December 31, 2023, 2022, and 2021, respectively, and net realized gain from the sale of equity securities of $ 979 thousand for the year ended December 31, 2023.

 The contractual maturity distribution of investment debt securities at December 31, 2023, is shown below. Expected maturities of MBS, CLO, and CMO may differ from contractual maturities because the mortgages underlying the securities may be called or prepaid without any penalties. Therefore, these securities are not included in the maturity categories in the following summary.

 Available For Sale

 Amortized Cost
 Amortized Cost

 Due in one year or less
 $
 65,818
 $
 64,730
 $
 2,537
 $
 2,502

 Due after one year through five years
 383,566
 353,730
 146,159
 133,315

 Due after five years through ten years
 149,458
 127,771
 231,104
 200,270

 Due after ten years
 28,001
 23,959
 152,622
 130,403

 $
 626,843
 $
 570,190
 $
 532,422
 $
 466,490

 5,448
 5,311
 74,904
 63,269

 50,541
 —
 —

 190,304
 467,864
 365,504

 Total
 $
 873,136
 $
 $
 $
 895,263

 Note 4. Loans Receivable and the Allowance for Credit Losses

 The composition of loans by class of receivable was as follows:

 2023
 2022

 $
 $

 Construction & development
 270,991

 183,913

 252,129

 1,333,982
 1,272,985

 1,980,018

 459,798
 451,210

 180,639
 163,218

 614,428

 ( 51,500)
 ( 49,200)

 Total loans held for investment, net
 $
 4,075,447
 $
 3,791,324

 Loans with unpaid principal in the amount of $ 1.13 billion and $ 1.01 billion at December 31, 2023 and December 31, 2022, respectively, were pledged to the FHLB as collateral for borrowings.

 Non-accrual and Delinquent Status
 Loans are placed on non-accrual when (1) payment in full of principal and interest is no longer expected or (2) principal or interest has been in default for 90 days or more for all loan types, except owner occupied residential real estate, which are moved to non-accrual at 120 days or more past due, unless the loan is both well secured with marketable collateral and in the process of collection. All loans rated doubtful or worse, and certain loans rated substandard, are placed on non-accrual.
 A non-accrual loan may be restored to an accrual status when (1) all past due principal and interest has been paid (excluding renewals and modifications that involve the capitalizing of interest) or (2) the loan becomes well secured with marketable collateral and is in the process of collection. An established track record of performance is also considered when determining accrual status.

 Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payment.

 The following tables present the amortized cost basis of loans based on delinquency status:

 Age Analysis of Past-Due Financial Assets

 Current
 30 - 59 Days Past Due
 60 - 89 Days Past Due
 90 Days or More Past Due
 Total
 90 Days or More Past Due and Accruing

 $
 117,852
 $
 $
 —
 $
 $
 $
 —

 1,058,301
 15,861
 —

 Construction & development
 323,165
 —
 —
 —

 182,759
 1,167
 —

 —
 —
 —
 —

 1,327,727
 2,129
 1,290
 2,836
 1,333,982
 —

 2,216,829
 2,836
 1,642
 4,003
 —

 453,212
 3,572
 1,741
 1,273
 459,798

 179,339
 180,639
 —

 632,551
 3,928
 2,431
 1,527

 67,622
 —

 Total
 $
 4,093,155
 $
 7,660
 $
 4,502
 $
 21,630
 $
 $

 $
 114,922
 $
 $
 —
 $
 $
 $
 —

 1,052,406
 1,723
 —

 Construction & development
 270,905
 —
 —
 270,991
 —

 182,115
 —
 1,069
 183,913
 —

 252,129
 —
 —
 —
 252,129
 —

 1,266,874
 5,574
 1,272,985
 —

 1,972,023
 6,389
 1,561
 1,980,018
 —

 446,066
 3,177
 1,013
 451,210

 161,989
 163,218
 —

 608,055
 3,478
 1,032
 1,863
 614,428

 75,443
 —

 Total
 $
 3,822,849
 $
 10,999
 $
 1,205
 $
 5,471
 $
 $

 The following table presents the amortized cost basis of loans on non-accrual status, amortized cost basis of loans on non-accrual status with no allowance for credit losses recorded, and loans past due 90 days or more and still accruing by class of loan:

 Nonaccrual
 Nonaccrual with no Allowance for Credit Losses
 90 Days or More Past Due And Accruing

 $
 $
 $
 $
 $
 —
 $
 —

 17,770
 2,728
 12,549
 1,049
 —
 —

 Construction and development

 —
 —
 —
 —
 —
 —

 1,654
 2,278
 1,490
 1,997
 —
 —

 —
 —
 —
 —
 —
 —

 3,441
 6,397
 5,647
 —
 —

 5,095
 8,675
 2,343
 7,644
 —
 —

 1,888
 2,275

 1,165
 —
 —
 —
 —

 2,764
 3,440

 —
 —
 —
 —

 Total

 $
 25,891
 $
 15,256
 $
 15,359
 $
 9,902
 $
 $

 The interest income recognized on loans that were on nonaccrual for the years ended December 31, 2023 and December 31, 2022 is $ 0.7 million and $ 0.5 million, respectively.

 Credit Quality Information
 The Company aggregates loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, and other factors. The Company analyzes loans individually to classify the loans as to credit risk. This analysis includes non-homogenous loans, such as agricultural, commercial and industrial, commercial real estate and non-owner occupied residential real estate loans. Loans not meeting the criteria described below that are analyzed individually are considered to be pass-rated. The Company uses the following definitions for risk ratings:
 Special Mention/Watch - A special mention/watch asset has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date. Special mention/watch assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
 Substandard - Substandard loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
 Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable.
 Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.
 Homogenous loans, including owner occupied residential real estate and consumer loans, are not individually risk rated. Instead, these loans are categorized based on performance: performing and nonperforming. Nonperforming loans include those loans on nonaccrual and loans greater than 90 days past due and on accrual.

 The following table sets forth the amortized cost basis of loans by class of receivable by credit quality indicator, and vintage, in addition to the current period gross write-offs by class of receivable and vintage, based on the most recent analysis performed, as of December 31, 2023. As of December 31, 2023, there were no 'loss' rated credits.

 Term Loans by Origination Year
 Revolving Loans

 2023
 2022
 2021
 2020
 2019
 Prior
 Total

 Pass
 $
 11,859
 $
 12,149
 $
 8,352
 $
 2,752
 $
 $
 1,139
 $
 71,680
 $
 108,620

 3,705
 5,809

 —
 2,349
 3,985

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 12,834
 $
 12,892
 $
 9,324
 $
 3,051
 $
 $
 1,885
 $
 77,734
 $

 Pass
 $
 176,021
 $
 224,924
 $
 193,011
 $
 117,326
 $
 25,555
 $
 116,661
 $
 147,690
 $
 1,001,188

 2,541
 3,209
 3,385
 14,692
 24,708

 2,921
 2,010
 8,507
 29,432
 4,779
 49,107

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 179,459
 $
 228,261
 $
 198,230
 $
 121,272
 $
 34,255
 $
 146,365
 $
 167,161
 $

 Pass
 $
 99,803
 $
 163,126
 $
 43,189
 $
 3,393
 $
 $
 $
 9,552
 $
 320,584

 1,097
 —
 —
 —
 —
 2,028

 —
 —
 —
 —
 —

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 101,243
 $
 163,366
 $
 43,653
 $
 3,393
 $
 $
 $
 10,019
 $

 Pass
 $
 25,666
 $
 44,907
 $
 47,068
 $
 18,863
 $
 6,587
 $
 14,845
 $
 1,642
 $
 159,578

 1,229
 6,898
 2,409
 5,982
 —
 17,759

 1,830
 1,542
 1,052
 2,029
 7,618

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 28,725
 $
 52,015
 $
 51,019
 $
 25,897
 $
 7,513
 $
 17,839
 $
 1,947
 $

 Pass
 $
 32,077
 $
 96,969
 $
 111,032
 $
 77,532
 $
 8,701
 $
 6,508
 $
 4,208
 $
 337,027

 5,318
 1,237
 18,984
 7,850
 4,586
 —
 38,252

 —
 —
 7,572
 —
 —
 —
 7,899

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 37,395
 $
 98,206
 $
 118,881
 $
 96,843
 $
 16,551
 $
 11,094
 $
 4,208
 $

 Pass
 $
 199,698
 $
 295,066
 $
 256,718
 $
 250,676
 $
 77,509
 $
 90,170
 $
 51,827
 $
 1,221,664

 1,306
 3,300
 4,823
 4,282
 2,395
 3,856
 20,326

 26,555
 19,253
 19,103
 8,242
 17,876
 91,992

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 200,387
 $
 322,927
 $
 279,271
 $
 274,602
 $
 90,033
 $
 110,441
 $
 56,321
 $
 1,333,982

 Pass/Performing
 $
 62,644
 $
 125,777
 $
 92,767
 $
 54,028
 $
 19,674
 $
 81,660
 $
 13,283
 $
 449,833

 1,827
 —
 4,147

 Substandard/Nonperforming
 1,156
 3,404
 —
 5,818

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 64,429
 $
 126,684
 $
 93,541
 $
 54,813
 $
 21,665
 $
 85,383
 $
 13,283
 $
 459,798

 $
 23,551
 $
 29,919
 $
 18,733
 $
 7,292
 $
 2,590
 $
 7,867
 $
 89,810
 $
 179,762

 —
 —
 —

 Total
 $
 23,551
 $
 30,111
 $
 18,733
 $
 7,317
 $
 2,613
 $
 8,504
 $
 89,810
 $
 180,639

 $
 26,028
 $
 14,319
 $
 10,042
 $
 4,421
 $
 1,451
 $
 7,350
 $
 4,145
 $
 67,756

 —
 —
 —
 —

 Total
 $
 26,028
 $
 14,341
 $
 10,042
 $
 4,421
 $
 1,454
 $
 7,352
 $
 4,145
 $

 Term Loans by Origination Year
 Revolving Loans

 2023
 2022
 2021
 2020
 2019
 Prior
 Total

 Total by Credit Quality Indicator Category

 Pass
 $
 607,768
 $
 962,918
 $
 752,137
 $
 524,570
 $
 139,536
 $
 311,683
 $
 299,882
 $
 3,598,494

 11,444
 11,123
 10,365
 33,885
 14,157
 9,059
 22,996
 113,029

 5,260
 30,310
 31,417
 21,416
 17,839
 52,965
 7,795
 167,002

 —
 —
 —
 —
 —
 —
 —
 —

 49,579
 44,238
 28,775
 11,713
 4,041
 15,217
 93,955
 247,518

 —
 —
 —

 Total
 $
 674,051
 $
 1,048,803
 $
 822,694
 $
 591,609
 $
 175,599
 $
 389,563
 $
 424,628
 $

 Term Loans by Origination Year
 Revolving Loans

 2023
 2022
 2021
 2020
 2019
 Prior
 Total

 Year-to-date Current Period Gross Write-offs

 $
 —
 $
 $
 $
 $
 $
 —
 $
 —
 $

 —
 1,447

 —
 —
 —
 —
 —
 —
 —
 —

 —
 —
 —
 —
 —
 —
 —
 —

 —
 —
 —
 —
 —
 —
 —
 —

 —
 —
 —
 —
 —
 2,337
 —
 2,337

 RRE - One-to-four-family first liens
 —
 —
 —
 —
 —
 —

 RRE - One-to-four-family junior liens
 —
 —
 —
 —
 —
 —

 —

 Total Current Period Gross Write-offs
 $
 $
 $
 $
 $
 $
 2,428
 $
 —
 $
 4,552

 The following table sets forth the amortized cost basis of loans by class of receivable by credit quality indicator and vintage based on the most recent analysis performed, as of December 31, 2022. As of December 31, 2022, there were no 'loss' rated credits.

 Term Loans by Origination Year
 Revolving Loans

 2022
 2021
 2020
 2019
 2018
 Prior
 Total

 Pass
 $
 20,279
 $
 12,511
 $
 5,398
 $
 2,883
 $
 $
 1,063
 $
 65,395
 $
 108,468

 1,012
 —
 1,655
 3,565

 1,914
 3,287

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 20,470
 $
 14,169
 $
 5,879
 $
 2,923
 $
 $
 1,969
 $
 68,964
 $

 Pass
 $
 262,500
 $
 232,263
 $
 151,567
 $
 48,199
 $
 27,680
 $
 115,877
 $
 163,205
 $
 1,001,291

 3,975
 3,574
 5,465
 3,299
 1,864
 12,299
 31,068

 1,172
 18,585
 1,012
 22,803

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 267,031
 $
 236,003
 $
 158,204
 $
 49,547
 $
 31,535
 $
 136,326
 $
 176,516
 $

 Pass
 $
 144,597
 $
 73,832
 $
 19,324
 $
 $
 1,058
 $
 $
 28,069
 $
 268,418

 1,787
 —
 —
 —
 —
 —
 2,286

 —
 —
 —
 —
 —

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 146,665
 $
 74,331
 $
 19,324
 $
 $
 1,058
 $
 $
 28,069
 $
 270,991

 Pass
 $
 55,251
 $
 52,802
 $
 28,744
 $
 7,266
 $
 8,406
 $
 12,895
 $
 1,946
 $
 167,310

 3,058
 2,229
 1,470
 —
 1,693
 8,696

 1,974
 1,192
 1,136
 1,459
 1,998
 —
 7,907

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 58,457
 $
 57,005
 $
 31,406
 $
 8,402
 $
 10,090
 $
 14,914
 $
 3,639
 $
 183,913

 Pass
 $
 31,018
 $
 93,907
 $
 84,573
 $
 17,137
 $
 2,549
 $
 5,161
 $
 $
 234,394

 1,000
 —
 1,567
 —
 5,931
 1,178
 —
 9,676

 —
 7,725
 —
 —
 —
 —
 8,059

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 32,018
 $
 101,632
 $
 86,474
 $
 17,137
 $
 8,480
 $
 6,339
 $
 $
 252,129

 Pass
 $
 322,753
 $
 314,376
 $
 296,368
 $
 79,408
 $
 31,041
 $
 81,708
 $
 51,064
 $
 1,176,718

 8,858
 3,399
 13,245
 10,365
 1,137
 8,122
 2,518
 47,644

 19,702
 13,294
 10,197
 4,089
 —
 48,623

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 332,363
 $
 318,364
 $
 329,315
 $
 103,067
 $
 42,375
 $
 93,919
 $
 53,582
 $
 1,272,985

 Pass/ performing
 $
 139,289
 $
 103,534
 $
 63,627
 $
 23,831
 $
 21,868
 $
 77,967
 $
 11,438
 441,554

 1,074
 1,920
 —
 5,129

 Substandard/ nonperforming
 2,891
 —
 4,527

 —
 —
 —
 —
 —
 —
 —
 —

 Total
 $
 140,538
 $
 104,583
 $
 64,473
 $
 25,926
 $
 22,692
 $
 81,560
 $
 11,438
 $
 451,210

 $
 37,296
 $
 22,908
 $
 8,906
 $
 3,058
 $
 3,757
 $
 6,330
 $
 79,798
 $
 162,053

 —
 1,165

 Total
 $
 37,296
 $
 22,931
 $
 8,937
 $
 3,237
 $
 4,513
 $
 6,406
 $
 79,898
 $
 163,218

 $
 32,584
 $
 18,979
 $
 7,966
 $
 3,489
 $
 1,646
 $
 6,641
 $
 4,255
 $
 75,560

 —
 —

 Total
 $
 32,584
 $
 18,981
 $
 7,982
 $
 3,498
 $
 1,650
 $
 6,646
 $
 4,255
 $

 Total by Credit Quality Indicator Category

 Pass
 $
 975,687
 $
 883,225
 $
 649,601
 $
 179,713
 $
 93,541
 $
 295,220
 $
 321,166
 $
 3,398,153

 19,895
 11,324
 22,534
 12,913
 10,742
 12,491
 18,165
 108,064

 1,960
 11,538
 22,940
 15,365
 12,893
 27,871
 2,926
 95,493

 —
 —
 —
 —
 —
 —
 —
 —

 69,880
 41,887
 16,872
 6,547
 5,403
 12,971
 84,053
 237,613

 —
 1,201

 Total
 $
 1,067,422
 $
 947,999
 $
 711,994
 $
 214,726
 $
 123,339
 $
 348,634
 $
 426,410
 $

 The following are the economic factors utilized by the Company for its loan credit loss estimation process at December 31, 2023, and the forecast for each factor at that date: (1) Midwest unemployment – increases over the next four forecasted quarters; (2) Year-to-year change in national retail sales - increases over the next four forecasted quarters; (3) Year-to-year change in CRE Index - decreases in the next four forecasted quarters; (4) Year-to-year change in U.S. GDP - increases over the next four forecasted quarters; (5) Year-to-year change in National Home Price Index – increases over the next two forecasted quarters, with declines in the third and fourth forecasted quarters; and (6) rental vacancy - increases over the next four forecasted quarters. In addition, management utilized qualitative factors to adjust the calculated ACL as appropriate. Qualitative factors are based on management's judgment of company, market, industry or business specific data, changes in underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, non-performing and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 The increase in the ACL between the years ended December 31, 2022 and December 31, 2023 was driven by loan growth, as well as reserves related to loans individually evaluated for impairment. Net loan charge-offs were $ 3.7 million for the year ended December 31, 2023, as compared to net loan charge-offs of $ 6.6 million for the year ended December 31, 2022.

 We have made a policy election to report interest receivable as a separate line on the balance sheet. Accrued interest receivable, which is recorded within 'Other Assets' totaled $ 19.7 million and $ 15.3 million at December 31, 2023 and December 31, 2022, respectively and is excluded from the estimate of credit losses.

 The changes in the allowance for credit losses by portfolio segment were as follows:

 For the Years Ended December 31, 2023, 2022 and 2021

 Commercial and Industrial
 Total

 2023

 Beginning balance
 $
 $
 22,855
 $
 20,123
 $
 4,678
 $
 $
 49,200

 ( 28)
 ( 1,447)
 ( 2,337)
 ( 55)
 ( 685)
 ( 4,552)

 Credit loss expense (benefit)(1)

 ( 485)
 ( 38)
 5,953
 6,049

 Ending balance
 $
 $
 21,743
 $
 23,759
 $
 4,762
 $
 $
 51,500

 2022

 Beginning balance
 $
 $
 17,294
 $
 26,120
 $
 4,010
 $
 $
 48,700

 PCD allowance established in acquisition
 1,473
 1,227
 —
 $
 3,371

 ( 326)
 ( 2,051)
 ( 4,328)
 ( 195)
 ( 756)
 ( 7,656)

 1,093

 Credit loss expense (benefit)(1)

 5,457
 ( 3,056)
 3,692

 Ending balance
 $
 $
 22,855
 $
 20,123
 $
 4,678
 $
 $
 49,200

 2021

 Beginning balance
 $
 1,346
 $
 15,689
 $
 32,640
 $
 4,882
 $
 $
 55,500

 ( 170)
 ( 1,015)
 ( 602)
 ( 107)
 ( 438)
 ( 2,332)

 1,604
 2,768

 Credit loss expense (benefit)(1)

 ( 658)
 1,016
 ( 6,660)
 ( 853)
 ( 81)
 ( 7,236)

 Ending balance
 $
 $
 17,294
 $
 26,120
 $
 4,010
 $
 $
 48,700

 (1)The difference in the credit loss expense reported herein as compared to the Consolidated Statements of Income is associated with the credit loss benefit of $ 0.2 million, credit loss expense of $ 0.8 million, and credit loss benefit of $ 0.1 million related to off-balance sheet credit exposures for the years ended December 31, 2023, December 31, 2022, and December 30, 2021, respectively.

 The composition of allowance for credit losses by portfolio segment based on evaluation method was as follows:

 Commercial and Industrial
 Total

 Individually evaluated for impairment
 $
 $
 17,231
 $
 10,932
 $
 $
 —
 $
 29,157

 Collectively evaluated for impairment
 118,403
 1,057,772
 2,214,378
 639,454
 4,097,790

 Total
 $
 $
 $
 $
 $
 $

 Individually evaluated for impairment
 $
 —
 $
 2,616
 $
 $
 $
 —
 $
 3,337

 Collectively evaluated for impairment
 19,127
 23,054
 4,746
 48,163

 Total
 $
 $
 21,743
 $
 23,759
 $
 4,762
 $
 $
 51,500

 Commercial and Industrial
 Total

 Individually evaluated for impairment
 $
 2,531
 $
 2,184
 $
 15,768
 $
 1,650
 $
 —
 $
 22,133

 Collectively evaluated for impairment
 112,789
 1,052,978
 1,964,250
 612,778
 3,818,391

 Total
 $
 $
 $
 1,980,018
 $
 614,428
 $
 $

 Allowance for loan losses

 Individually evaluated for impairment
 $
 $
 $
 $
 $
 —
 $
 1,985

 Collectively evaluated for impairment
 22,255
 19,418
 4,498
 47,215

 Total
 $
 $
 22,855
 $
 20,123
 $
 4,678
 $
 $
 49,200

 The following tables present the amortized cost basis of collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans:

 Primary Type of Collateral

 Real Estate
 Other
 Total
 ACL Allocation

 $
 $
 —
 $
 —
 $
 $
 —

 15,991
 —
 1,240
 17,231
 2,616

 Construction and development
 —
 —
 —
 —
 —

 5,403
 —
 —
 5,403
 —

 —
 —
 —
 —
 —

 5,350
 —
 5,529

 —
 —
 —

 —
 —

 —
 —
 —
 —
 —

 Total
 $
 27,236
 $
 —
 $
 1,921
 $
 29,157
 $
 3,337

 Primary Type of Collateral

 Real Estate
 Other
 Total
 ACL Allocation

 $
 $
 2,463
 $
 —
 $
 2,531
 $

 2,184

 Construction and development
 —
 —
 —
 —
 —

 4,515
 —
 —
 4,515
 —

 —
 —
 —
 —
 —

 11,006
 —
 11,253

 —
 —
 —

 —
 —

 —
 —
 —
 —
 —

 Total
 $
 17,374
 $
 3,199
 $
 1,560
 $
 22,133
 $
 1,985

 Loan Modifications to Borrowers Experiencing Financial Difficulty
 Occasionally, the Company may modify loans to borrowers who are experiencing financial difficulty. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction, or combination thereof.

 The following table presents the amortized cost basis of loans as of December 31, 2023 that were modified during the year ended December 31, 2023 and experiencing financial difficulty at the time of the modification by class and by type of modification:

 Combination:

 Principal Forgiveness
 Payment Delay
 Term Extension
 Interest Rate Reduction
 Term Extension & Interest Rate Reduction
 Principal Forgiveness & Term Extension
 Principal Forgiveness, Term Extension, & Interest Rate Reduction
 Payment Delay & Term Extension
 Total Class of Financing Receivable

 $
 —
 $
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 $
 —
 0.01
 %

 —
 2,888
 —
 —
 0.35
 %

 —
 —
 —
 —
 —
 —
 —
 0.18
 %

 —
 —
 1,823
 —
 —
 —
 —
 —
 0.99
 %

 —
 —
 —
 —
 —
 —
 —
 —
 —
 %

 —
 5,468
 1,165
 —
 —
 —
 —
 —
 0.50
 %

 —
 —
 —
 —
 —
 —
 —
 —
 —
 %

 —
 —
 —
 —
 —
 —
 —
 0.01
 %

 —
 —
 —
 —
 —
 —
 —
 —
 —
 %

 Total
 $
 —
 $
 5,738
 $
 6,473
 $
 —
 $
 $
 $
 —
 $

 The Company has no additional commitment to lend amounts to the borrowers included in the previous table as of December 31, 2023. For the year ended December 31, 2023, the Company had 17 modified loans totaling $ 1.4 million to borrowers experiencing financial difficulty that redefaulted within 12 months subsequent to the modification.

 The following table presents the performance as of December 31, 2023 of loans that were modified while the borrower was experiencing financial difficulty at the time of modification in the last 12 months:

 Current
 30 - 59 Days Past Due
 60 - 89 Days Past Due
 90 Days or More Past Due
 Total

 $
 —
 $
 $
 —
 $
 —
 $

 3,653
 —
 —
 3,728

 —
 —
 —

 1,471
 —
 —
 1,823

 —
 —
 —
 —
 —

 6,633
 —
 —
 —
 6,633

 —
 —
 —
 —
 —

 —
 —
 —

 —
 —
 —
 —
 —

 Total

 $
 12,354
 $
 $
 $
 $
 12,791

 The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023:

 Principal Forgiveness
 Weighted Average Interest Rate Reduction
 Weighted Average Term Extension (Months)

 $
 1.25
 %
 7.4

 —
 —
 %
 15.9

 —
 —
 %
 1.3

 —
 %
 5.6

 —
 —
 %
 3.9

 —
 —
 %
 49.8

 Total

 $
 1.25
 %
 5.3

 Note 5. Derivatives, Hedging Activities and Balance Sheet Offsetting

 The following table presents the total notional amounts and gross fair values of the Company's derivatives as of the dates indicated. The derivative asset and liability balances are presented on a gross basis, prior to the application of master netting agreements, as included in other assets and other liabilities, respectively, on the consolidated balance sheets. The fair values of the Company's derivative instrument assets and liabilities are summarized as follows:

 Notional
 Notional

 Assets
 Liabilities
 Assets
 Liabilities

 Designated as hedging instruments:

 Fair value hedges:

 Interest rate swaps - loans
 $
 41,101
 $
 2,071
 $
 $
 24,018
 $
 2,556
 $
 —

 Interest rate swaps - securities
 150,000
 —
 —
 —
 —

 Cash flow hedges

 Interest rate swaps

 200,000
 —
 —
 —

 Total
 $
 391,101
 $
 3,011
 $
 1,987
 $
 24,018
 $
 2,556
 $
 —

 Not designated as hedging instruments:

 Interest rate swaps
 $
 432,648
 $
 22,028
 $
 22,038
 $
 331,197
 $
 21,084
 $

 RPAs - protection sold
 18,778
 —
 —
 —
 —

 RPAs - protection purchased

 31,145
 —
 9,421
 —
 —

 Interest rate lock commitments
 1,461
 —
 1,372
 —

 Interest rate forward loan sales contracts
 2,075
 —
 1,400
 —

 Total
 $
 486,107
 $
 22,082
 $
 22,070
 $
 343,390
 $
 21,099
 $

 Derivatives Designated as Hedging Instruments
 The Company uses derivative instruments to hedge its exposure to economic risks. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP as fair value or cash flow hedges.
 Fair Value Hedges - Derivatives are designated as fair value hedges to limit the Company's exposure to changes in the fair value of assets or liabilities due to movements in interest rates. The Company entered into pay-fixed receive-floating interest rate swaps to manage its exposure to changes in fair value in certain fixed-rate assets, including AFS debt securities and loans. The gain or loss on the loan fair value hedge derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income. The change in the fair value of the available for sale securities attributable to changes in the hedged risk is recorded in accumulated other comprehensive income and subsequently reclassified into interest income, as applicable, in the same period(s) to offset the changes in the fair value of the swap, which is also recognized in interest income.
 Cash Flow Hedges - Derivatives are designated as cash flow hedges in order to minimize the variability in cash flows of earning assets or forecasted transactions caused by movement in interest rates. The Company entered into pay-fixed receive-variable interest rate swaps to hedge against adverse fluctuations in interest rates by reducing exposure to variability in cash flows relating to interest payments on the Company's variable rate debt, including brokered deposits. The gain or loss on the derivatives is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense, as applicable, in the same period(s) during which the hedged transaction affects earnings. During the next 12 months, the Company estimates that an additional $ 1.6 million of income will be reclassified into interest expense.
 The table below presents the effect of cash flow hedge accounting on AOCI for the years ended December 31, 2023 and 2022.

 Amount of Gain (Loss) Recognized in AOCI on Derivative
 Location of Gain (Loss) Reclassified from AOCI into Income
 Amount of Gain (Loss) Reclassified from AOCI into Income

 2023
 2022
 2023
 2022

 Interest rate swaps
 $
 2,471
 $
 —
 Interest Expense
 $
 1,795
 $
 —

 The table below presents the effect of the Company's derivative financial instruments designated as hedging instruments on the consolidated statements of income for the periods indicated:

 Location and Amount of Gain or Loss Recognized in Income on Hedging Relationships

 For the Years Ended December 31,

 2023
 2022
 2021

 Interest Income
 Other Income
 Interest Income
 Other Income
 Interest Income
 Other Income

 Income and expense included in the consolidated statements of income related to the effects of fair value or cash flow hedges are recorded

 $
 1,106
 $
 —
 $
 ( 36)
 $
 —
 $
 ( 439)
 $
 —

 The effects of fair value and cash flow hedging:

 Gain (loss) on fair value hedging relationships in subtopic 815-20:

 Interest contracts - loans:

 Hedged items

 1,836
 —
 ( 3,536)
 —
 ( 1,441)
 —

 Derivative designated as hedging instruments

 ( 563)
 —
 3,500
 —
 1,052
 —

 Interest contracts - securities:

 Hedged items

 —
 —
 —
 —
 —

 Derivative designated as hedging instruments

 ( 530)
 —
 —
 —
 —
 —

 Income statement effect of cash flow hedging relationship in subtopic 815-20:

 Interest contracts:

 Amount reclassified from AOCI into income

 1,795
 —
 —
 —
 —
 —

 As of December 31, 2023, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:

 Line Item in the Balance Sheet in Which the Hedged Item is Included
 Carrying Amount of the
Hedged Assets
 Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset

 Loans
 $
 39,976
 $
 ( 1,163)

 Securities
 $
 150,819
 $

 Derivatives Not Designated as Hedging Instruments
 Interest Rate Swaps - The Company periodically enters into commercial loan interest rate swap agreements in order to provide commercial loan customers with the ability to convert from variable to fixed interest rates. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer, while simultaneously entering into an offsetting interest rate swap with an institutional counterparty.

 Credit Risk Participation Agreements - The Company enters into RPAs to manage the credit exposure on interest rate contracts associated with a syndicated loan or participation agreement. The Company may enter into protection purchased RPAs with institutional counterparties to decrease or increase its exposure to a borrower. Under the RPA, the Company will receive or make payment if a borrower defaults on the related interest rate contract. The notional amount of the RPAs reflects the Company's pro-rata share of the derivative instrument.

 Interest Rate Forward Loan Sales Contracts & Interest Rate Lock Commitments - The Company enters into forward delivery contracts to sell residential mortgage loans at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage interest rate lock commitments.

 The following table presents the net gains (losses) recognized on the consolidated statements of income related to the derivatives not designated as hedging instruments for the periods indicated:

 Location in the Consolidated Statements of Income
 For the Years Ended December 31,

 2023
 2022
 2021

 Interest rate swaps
 Other income
 $
 ( 8)
 $
 $

 RPAs
 Other income

 Interest rate lock commitments
 Loan revenue
 ( 323)

 Interest rate forward loan sales contracts
 Loan revenue
 ( 31)
 ( 15)

 Total
 $
 $
 ( 328)
 $

 Offsetting of Derivatives
 The Company has entered into agreements with certain counterparty financial institutions, which include master netting agreements. However, the Company has elected to account for all derivatives with counterparty institutions on a gross basis. The Company manages the risk of default by its borrower counterparties through its normal loan underwriting and credit monitoring policies and procedures.

 The table below presents gross derivatives and the respective collateral received or pledged in the form of other financial instruments as of December 31, 2023 and December 31, 2022, which are generally marketable securities and/or cash. The collateral amounts in the table below are limited to the outstanding balances of the related asset or liability (after netting is applied); thus instances of over-collateralization are not shown. Further, the net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets.

 Gross Amounts Recognized
 Gross Amounts Offset in the Balance Sheet
 Net Amounts presented in the Balance Sheet
 Gross Amounts Not Offset in the Balance Sheet
 Net Assets / Liabilities

 Financial Instruments
 Cash Collateral Received / Paid

 Asset Derivatives
 $
 $
 —
 $
 $
 —
 $
 15,549
 $
 9,544

 Liability Derivatives
 —
 —
 2,420
 21,637

 Asset Derivatives
 $
 $
 —
 $
 $
 —
 $
 18,858
 $
 4,797

 Liability Derivatives
 —
 —
 3,460
 17,627

 Credit-Risk-Related Contingent Features
 The Company has an unsecured federal funds line with its institutional derivative counterparties. The Company has an agreement with its institutional derivative counterparties that contains a provision under which if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has an agreement with its derivative counterparties that contains a provision under which the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of December 31, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 7.4 million.

 Note 6. Premises and Equipment

 Premises and equipment as of December 31, 2023 and 2022 were as follows:

 2023
 2022

 Land
 $
 14,998
 $
 15,068

 Buildings and leasehold improvements
 93,685
 93,627

 Furniture and equipment
 23,057
 22,614

 Construction in process
 1,119

 Premises and equipment
 132,859
 131,812

 Accumulated depreciation and amortization
 47,117
 44,687

 Premises and equipment, net
 $
 85,742
 $
 87,125

 Premises and equipment depreciation and amortization expense for the years ended December 31, 2023, 2022 and 2021 was $ 5.1 million, $ 5.1 million and $ 4.8 million, respectively.

 Note 7. Goodwill and Intangible Assets

 The carrying amount of goodwill was $ 62.5 million at December 31, 2023 and December 31, 2022.

 As indicated in Note 2. Business Combinations, the Company acquired a core deposit intangible from IOFB on June 9, 2022 with an estimated fair value of $ 16.5 million, which will be amortized over its estimated useful life of 10 years. The following table presents the gross carrying amount, accumulated amortization, and net carrying amount of other intangible assets as of the dates indicated:

 Gross Carrying Amount
 Accumulated Amortization
 Net Carrying Amount
 Gross Carrying Amount
 Accumulated Amortization
 Net Carrying Amount

 Core deposit intangible
 $
 58,245
 $
 ( 41,499)
 $
 16,746
 $
 58,245
 $
 ( 35,822)
 $
 22,423

 Customer relationship intangible
 5,265
 ( 5,008)
 5,265
 ( 4,490)

 Other
 2,700
 ( 2,674)
 2,700
 ( 2,623)

 $
 66,210
 $
 ( 49,181)
 $
 17,029
 $
 66,210
 $
 ( 42,935)
 $
 23,275

 Indefinite-lived trade name intangible
 7,040
 7,040

 Total other intangible assets, net
 $
 24,069
 $
 30,315

 The following table provides the estimated future amortization expense of intangible assets:

 Core Deposit Intangible
 Customer Relationship Intangible
 Other
 Total

 Year ending December 31,

 2024
 $
 4,705
 $
 $
 $
 4,968

 2025
 3,751
 3,771

 2026
 2,797
 —
 —
 2,797

 2027
 1,843
 —
 —
 1,843

 2028
 1,325
 —
 —
 1,325

 Thereafter
 2,325
 —
 —
 2,325

 Total
 $
 16,746
 $
 $
 $
 17,029

 Note 8. Other Assets

 The components of the Company's other assets as of December 31, 2023 and December 31, 2022 were as follows:

 2023
 2022

 $
 98,039
 $
 95,539

 Interest receivable
 29,768
 27,090

 FHLB stock
 5,806
 19,248

 Mortgage servicing rights
 13,333
 13,421

 Operating lease right-of-use assets, net
 2,337
 2,492

 Federal and state taxes, current
 1,556
 2,366

 Federal and state taxes, deferred
 31,218
 39,071

 Other receivables/assets
 15,630
 13,635

 $
 222,780
 $
 236,517

 Note 9. Loans Serviced for Others

 Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage and other loans serviced for others were $ 1.20 billion at December 31, 2023 and $ 1.25 billion at December 31, 2022. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights.

 Note 10. Deposits

 The following table presents the composition of our deposits as of the dates indicated:

 2023
 2022

 $
 $

 Interest checking deposits
 1,320,435
 1,624,278

 Money market deposits
 1,105,493
 937,340

 650,655
 664,169

 Time deposits of $250 and under
 973,253
 686,233

 Time deposits over $250
 448,784
 503,472

 $
 5,395,673
 $
 5,468,942

 At December 31, 2023, the scheduled maturities of certificates of deposits were as follows:

 2024
 $
 1,236,794

 2025
 130,541

 2026
 30,685

 2027
 10,185

 2028
 7,213

 Thereafter
 6,619

 Total
 $
 1,422,037

 The Company had $ 15.2 million and $ 4.3 million in reciprocal time deposits as of December 31, 2023 and December 31, 2022, respectively. Included in money market deposits at December 31, 2023 and December 31, 2022 were $ 128.0 million and $ 40.0 million, respectively, of interest-bearing reciprocal deposits. Included in noninterest bearing deposits at December 31, 2023 were $ 58.0 million of noninterest-bearing reciprocal deposits, with no noninterest-bearing reciprocal deposits at December 31, 2022. These reciprocal deposits are part of the IntraFi Network Deposits program, which is used by financial institutions to spread deposits that exceed the FDIC insurance coverage limits out to numerous institutions in order to provide insurance

 coverage for all participating deposits. In addition, included within the time deposits of $250 and under was $ 221.0 million of brokered deposits as of December 31, 2023 and $ 126.8 million of brokered deposits as of December 31, 2022.

 As of December 31, 2023 and December 31, 2022, the Company had public entity deposits that were collateralized by investment securities of $ 183.4 million and $ 387.8 million, respectively.

 Note 11. Short-Term Borrowings

 The following table summarizes our short-term borrowings as of the dates indicated:

 Securities sold under agreements to repurchase
 0.72
 %
 $
 5,064
 1.32
 %
 $
 156,373

 Federal Home Loan Bank advances
 5.64
 10,200
 4.48
 235,500

 Federal Reserve Bank borrowings
 4.82
 285,000
 —
 —

 Total

 4.78
 %
 $
 3.22
 %
 $

 Securities Sold Under an Agreement to Repurchase: Securities sold under agreements to repurchase are agreements in which the Company acquires funds by selling assets to another party under a simultaneous agreement to repurchase the same assets at a specified price and date. The Company enters into repurchase agreements and also offers a demand deposit account product to customers that sweeps their balances in excess of an agreed upon target amount into overnight repurchase agreements. All securities sold under agreements to repurchase are recorded on the face of the balance sheet.

 Federal Home Loan Bank Advances: The Bank has a secured line of credit with the FHLBDM. Advances from the FHLBDM are collateralized primarily by one- to four-family residential, commercial and agricultural real estate first mortgages equal to various percentages of the total outstanding notes. See Note 4. Loans Receivable and the Allowance for Credit Losses of the notes to the consolidated financial statements.

 Federal Funds Purchased: The Bank has unsecured federal funds lines totaling $ 155.0 million from multiple correspondent banking relationships. There were no borrowings from such lines at either December 31, 2023 or December 31, 2022.

 Federal Reserve Bank Borrowings: At December 31, 2023 and December 31, 2022, the Company had no Federal Reserve Discount Window borrowings, while the financing capacity was $ 428.8 million as of December 31, 2023 and $ 105.6 million as of December 31, 2022. At December 31, 2023, the Company had $ 285.0 million BTFP borrowings, with additional borrowing capacity of $ 155.9 million as of December 31, 2023. As of December 31, 2023 and December 31, 2022, the Bank had pledged municipal securities with a market value of $ 797.6 million and $ 115.2 million, respectively.

 Other: The Company has a credit agreement with a correspondent bank with a revolving commitment of $ 25.0 million. The credit agreement was amended on September 19, 2023 such that the revolving commitment matures on September 30, 2024, with no updates made to the fee structure or the interest rate. Fees are paid on the average daily unused revolving commitment in the amount of 0.30 % per annum. Interest is payable at a rate equal to the monthly reset term SOFR rate plus 1.55 %. The Company had no balance outstanding under this revolving credit facility as of both December 31, 2023 and December 31, 2022.

 Note 12. Long-Term Debt

 Junior Subordinated Notes Issued to Capital Trusts
 The table below summarizes the terms of each issuance of junior subordinated notes outstanding as of the dates indicated:

 Face Value
 Book Value
 Interest Rate
 Rate
 Maturity Date
 Callable Date

 ATBancorp Statutory Trust I
 $
 7,732
 $
 6,970
 Three-month CME Term SOFR + 0.26 % Spread + 1.68 % Margin

 7.33
 %
 06/15/2036
 06/15/2011

 ATBancorp Statutory Trust II
 12,372
 11,034
 Three-month CME Term SOFR + 0.26 % Spread + 1.65 %

 7.30
 %
 09/15/2037
 06/15/2012

 Barron Investment Capital Trust I
 2,062
 1,861
 Three-month CME Term SOFR + 0.26 % Spread + 2.15 %

 7.77
 %
 09/23/2036
 09/23/2011

 Central Bancshares Capital Trust II
 7,217
 6,964
 Three-month CME Term SOFR + 0.26 % Spread + 3.50 %

 9.15
 %
 03/15/2038
 03/15/2013

 MidWestOne Statutory Trust II
 15,464
 15,464
 Three-month CME Term SOFR + 0.26 % Spread + 1.59 %

 7.24
 %
 12/15/2037
 12/15/2012

 Total
 $
 44,847
 $

 ATBancorp Statutory Trust I
 $
 7,732
 $
 6,928
 Three-month LIBOR + 1.68 %

 6.45
 %
 06/15/2036
 06/15/2011

 ATBancorp Statutory Trust II
 12,372
 10,969
 Three-month LIBOR + 1.65 %

 6.42
 %
 09/15/2037
 06/15/2012

 Barron Investment Capital Trust I
 2,062
 1,832
 Three-month LIBOR + 2.15 %

 6.88
 %
 09/23/2036
 09/23/2011

 Central Bancshares Capital Trust II
 7,217
 6,923
 Three-month LIBOR + 3.50 %

 8.27
 %
 03/15/2038
 03/15/2013

 MidWestOne Statutory Trust II
 15,464
 15,464
 Three-month LIBOR + 1.59 %

 6.36
 %
 12/15/2037
 12/15/2012

 Total
 $
 44,847
 $
 42,116

 The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated notes at the stated maturity date or upon redemption of the junior subordinated notes. Each trust's ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated notes. The Company's obligation under the junior subordinated notes and other relevant trust agreements, in aggregate, constitutes a full and unconditional guarantee by the Company of each trust's obligations under the trust preferred securities issued by each trust. The Company has the right to defer payment of interest on the junior subordinated notes and, therefore, distributions on the trust preferred securities, for up to five years, but not beyond the stated maturity date in the table above. During any such deferral period the Company may not pay cash dividends on its stock and generally may not repurchase its stock.

 Subordinated Debentures
 On July 28, 2020, the Company completed the private placement offering of $ 65.0 million of its subordinated notes, of which $ 63.75 million have been exchanged for subordinated notes registered under the Securities Act of 1933. The 5.75 % fixed-to-floating rate subordinated notes are due July 30, 2030. At December 31, 2023, 100 % of the subordinated notes qualified as Tier 2 capital. Per applicable Federal Reserve rules and regulations, the amount of the subordinated notes qualifying as Tier 2 regulatory capital will be phased-out by 20 % of the amount of the subordinated notes in each of the five years beginning on the fifth anniversary preceding the maturity date of the subordinated notes.

 Other Long-Term Debt
 Other long-term borrowings were as follows as of December 31, 2023 and December 31, 2022:

 Finance lease payable
 8.89
 %
 $
 8.89
 %
 $

 3.11
 6,262
 2.91
 17,301

 Notes payable to unaffiliated bank
 6.89
 5.67

 Total

 5.56
 %
 $
 16,866
 4.30
 %
 $
 33,088

 On June 7, 2022, pursuant to a credit agreement with a correspondent bank, the Company entered into a $ 35.0 million term note payable maturing on June 30, 2027. Principal and interest are payable quarterly and began on September 30, 2022. Interest accrues at the monthly reset term SOFR rate plus 1.55 %. As customary, the credit agreement includes covenants requiring the Company to, among other things, maintain minimum levels of both regulatory capital and certain financial ratios; the Company certifies compliance with the covenants on a quarterly basis. For the reporting period ended December 31, 2023, the Company's fixed charge coverage ratio, as defined in the credit agreement, was below the minimum allowed. The violation was due primarily to investment securities losses in the first and fourth quarters of 2023 recognized in connection with the Company's balance sheet repositioning. The Company requested from the lender a waiver of default, which was granted on January 26, 2024. On February 12, 2024, the credit agreement, including certain covenants, was amended. We do not expect to be in violation of the covenants.

 As a member of the FHLBDM, the Bank may borrow funds from the FHLB, provided the Bank is able to pledge an adequate amount of qualified assets to secure the borrowings. In addition, the FHLB has established a maximum credit capacity to the Bank that is equal to 45 % of the Bank's total assets. This credit capacity limit includes short-term and long-term borrowings, federal funds, letters of credit and other sources of credit exposure to the FHLB. Advances from the FHLB are collateralized primarily by one- to four-family residential, commercial and agricultural real estate first mortgages equal to various percentages of the total outstanding notes. See Note 4. Loans Receivable and the Allowance for Credit Losses of the notes to the consolidated financial statements. See Note 3. Debt Securities of the notes to the consolidated financial statements.

 As of December 31, 2023, FHLB borrowings were as follows:

 Due in 2024
 3.11
 %
 $
 6,250

 Valuation adjustment from acquisition accounting

 Total
 $
 6,262

 Note 13. Income Taxes

 Income taxes for the years ended December 31, 2023, 2022 and 2021 are summarized as follows:

 2023
 2022
 2021

 Current:

 Federal tax expense
 $
 2,438
 $
 7,204
 $
 12,675

 State tax expense
 1,866
 4,232
 5,549

 Deferred:

 Deferred income tax expense
 ( 330)
 4,326
 1,768

 Total income tax provision
 $
 3,974
 $
 15,762
 $
 19,992

 Income tax expense (benefit) based on statutory rate for the year ended December 31, 2023, 2022 and 2021 varied from the amount computed by applying the maximum effective federal income tax rate of 21 %, to the income before income taxes, because of the following items:

 Year ended December 31,

 2023
 2022
 2021

 % of Pretax Income
 % of Pretax Income
 % of Pretax Income

 Income tax based on statutory rate
 $
 5,215
 21.0
 %
 $
 16,085
 21.0
 %
 $
 18,790
 21.0
 %

 Tax-exempt interest
 ( 2,391)
 ( 9.6)
 ( 3,505)
 ( 4.6)
 ( 3,500)
 ( 3.9)

 ( 525)
 ( 2.1)
 ( 484)
 ( 0.6)
 ( 451)
 ( 0.5)

 State income taxes, net of federal income tax benefit
 1,476
 5.9
 3,805
 5.0
 4,624
 5.2

 Bargain purchase gain
 —
 —
 ( 792)
 ( 1.0)
 —
 —

 Non-deductible acquisition expenses
 0.2
 0.1
 —

 General business credits
 ( 40)
 ( 0.2)
 ( 60)
 ( 0.1)
 —

 State tax reduction
 —
 —
 1.1
 —
 —

 Other
 0.8
 ( 177)
 ( 0.3)
 0.5

 Total income tax expense
 $
 3,974
 16.0
 %
 $
 15,762
 20.6
 %
 $
 19,992
 22.3
 %

 Net deferred tax assets as of December 31, 2023 and December 31, 2022 consisted of the following components:

 2023
 2022

 Deferred income tax assets:

 $
 14,232
 $
 13,693

 Deferred compensation
 3,441
 3,299

 Net operating losses (state and federal)
 8,407
 7,707

 Unrealized losses on investment securities
 22,172
 30,355

 Accrued compensation
 1,189
 1,565

 ROU liabilities

 Other
 1,975
 2,474

 Gross deferred tax assets
 52,197
 59,945

 Deferred income tax liabilities:

 Premises and equipment depreciation and amortization
 5,272
 5,020

 Purchase accounting adjustments
 2,674
 3,220

 Mortgage servicing rights
 3,382
 3,403

 ROU assets

 Other
 1,237

 Gross deferred tax liabilities
 12,838
 13,684

 Net deferred income tax asset
 39,359
 46,261

 Valuation allowance
 8,141
 7,190

 Net deferred tax asset
 $
 31,218
 $
 39,071

 The Company has recorded a deferred tax asset for the future tax benefits of Iowa net operating loss carryforwards. The Iowa net operating loss carryforwards amounting to approximately $ 74.1 million will expire in various amounts from 2024 to 2044. As of December 31, 2023 and 2022, the Company believed it was more likely than not that all temporary differences associated with the Iowa corporate tax return would not be fully realized. Accordingly, the Company has recorded a valuation allowance to reduce the net operating loss carryforward and the temporary differences associated with the Iowa corporate income tax return. A valuation allowance related to the remaining deferred tax assets has not been provided because management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

 The Company had no material unrecognized tax benefits as of December 31, 2023 and December 31, 2022.

 Note 14. Employee Benefit Plans

 The Company has a salary reduction profit-sharing 401(k) plan covering all employees fulfilling minimum age and service requirements. Employee contributions to the plan are optional. Employer contributions are discretionary and may be made to the plan in an amount equal to a percentage of each participating employee's salary. For the period through July 31, 2023, the Company matched 100 % of the first 3 % of employee contributions, and 50 % of the next 2 % of employee contributions, up to a maximum amount of 4 % of an employee's compensation. Effective August 1, 2023, the Company matches 100 % of the first 4 % of employee contributions, and 50 % of the next 2 % of employee contributions, up to a maximum amount of 5 % of an employee's compensation. Company matching contributions for the years ended December 31, 2023, 2022 and 2021 were $ 2.3 million, $ 2.0 million, and $ 1.9 million, respectively.

 The Company has an ESOP covering all employees fulfilling minimum age and service requirements. Employer contributions are discretionary and may be made to the plan in an amount equal to a percentage of each participating employee's salary. For the year ended December 31, 2023, financial performance did not meet the threshold for contributions to the ESOP, and as such no contributions were made. For the years ended December 31, 2022 and December 31, 2021, total ESOP contribution expense was $ 1.7 million and $ 2.0 million, respectively.

 The Company provides Health Savings Account contributions to its employees enrolled in high deductible plans. Company contributions for the years ended December 31, 2023, 2022 and 2021 were $ 0.3 million each year.

 Supplemental Executive Retirement Plans: The Company has entered into nonqualified supplemental executive retirement plans (SERPs) with certain executive officers. The SERPs allow certain executives to accumulate retirement benefits beyond those provided by the qualified plans. Changes in the liability related to the SERPs, included in other liabilities, were as follows for the years ended December 31, 2023, 2022 and 2021:

 2023
 2022
 2021

 $
 1,087
 $
 1,246
 $
 1,395

 Company contributions and interest
 ( 12)

 Cash payments made
 ( 137)
 ( 147)
 ( 228)

 $
 1,030
 $
 1,087
 $
 1,246

 Salary Continuation Plans: The Company has salary continuation plans for several officers and directors. These plans provide payments of various amounts upon retirement or death. There are no employee compensation deferrals to these plans. The Company accrues the expense for these benefits by charges to operating expense during the period the respective officer or director attains full eligibility. Changes in the salary continuation agreements, included in other liabilities, were as follows for the years ended December 31, 2023, 2022 and 2021:

 2023
 2022
 2021

 $
 3,597
 $
 4,289
 $
 4,771

 Company paid interest

 Cash payments made
 ( 418)
 ( 795)
 ( 619)

 $
 3,269
 $
 3,597
 $
 4,289

 Deferred Compensation Plans: The Company has entered into deferred compensation agreements with certain executive officers. Under the provisions of the agreements, the officers may defer compensation. Interest on the deferred amounts is earned at The Wall Street Journal's prime rate plus one percent. The Company also maintains deferred compensation agreements with certain other officers and directors, under which deferrals are no longer permitted, and the interest rate is fixed at 4 %. In 2019 the Company also acquired deferred compensations plans as a result of the merger with ATBancorp. Under the provisions of the agreements, interest on the deferred amounts is earned at an annual interest rate equal to either the Bank's or Company's return on equity and deferrals are no longer permitted. Upon retirement, participants will generally receive the deferral balance in equal monthly installments over periods no longer that 180 months.

 Changes in the deferred compensation agreements, included in other liabilities, were as follows for the years ended December 31, 2023, 2022 and 2021:

 2023
 2022
 2021

 $
 6,156
 $
 5,880
 $
 6,159

 Employee deferrals

 Company paid interest

 Cash payments made
 ( 559)
 ( 747)
 ( 644)

 $
 6,922
 $
 6,156
 $
 5,880

 Post-retirement Death Benefit Plan: The Company has an insurance benefit plan for several officers that provides a life insurance benefit upon retirement from the Company. Changes in the accrued balance, included in other liabilities, were as follows for the years ended December 31, 2023, 2022 and 2021:

 2023
 2022
 2021

 $
 2,205
 $
 1,991
 $
 1,905

 Company deferral expense

 $
 2,382
 $
 2,205
 $
 1,991

 To provide the retirement benefits for the aforementioned SERPs, salary continuation plans, deferred compensation plans, and post-retirement death benefit plan, the Company carries life insurance policies which had cash values totaling $ 85.5 million, $ 83.3 million and $ 81.2 million at December 31, 2023, 2022 and 2021, respectively.

 Note 15. Stock Compensation Plans

 Under the Company's 2017 Equity Incentive Plan (the "2017 Plan"), the Company was permitted to grant a total of 500,000 shares of the Company's common stock as stock options, stock appreciation rights, and stock awards, and also to grant cash incentive awards to eligible individuals. On April 27, 2023, the 2023 Equity Incentive Plan (the "2023 Plan") was approved by the Company's shareholders. The 2023 Plan replaces the 2017 Plan, and allows the Company to grant a total of 700,000 shares of the Company's common stock as stock options, stock appreciation rights, and stock awards, and also to grant cash incentive awards to eligible individuals. As of December 31, 2023, 670,462 shares of the Company's common stock remained available for future awards under the 2023 Plan.

 During 2023, the Company recognized $ 2.4 million of stock based compensation expense related to restricted stock unit grants. In comparison, during 2022 and 2021, the Company recognized $ 2.5 million and $ 2.2 million, respectively, related to restricted stock unit grants.

 Under the 2017 Plan and the 2023 Plan, the Company may grant restricted stock unit awards that vest upon the completion of future service requirements or specified performance criteria. Generally, all restricted stock units vest upon death, disability, or in connection with a change in control. In addition, both TRSUs and PRSUs receive forfeitable dividend equivalents. To the extent there is a financial restatement, any performance-based or incentive-based compensation that has been paid is subject to clawback.

 For TRSUs granted prior to 2020, the restricted stock units vest 25 % per year over four years. Beginning with the TRSUs granted in 2020, each restricted stock unit award now vests 1/3rd per year over 3 years, with the first vesting date being the one-year anniversary of the grant date. Awards granted to directors vest 100 % one year from the grant date.

 The PRSUs cliff vest 3 years from the grant date based on certain performance conditions, which are weighted equally. The three-year performance measurement period commences at the beginning of the defined period. Upon retirement, PRSU awards remain eligible to vest at the conclusion of the performance period.

 The Company recognizes stock-based compensation expense for TRSUs over the vesting period, using the straight-line method, based upon the number of awards ultimately expected to vest. The fair value of the TRSUs is equal to the market price of the common stock at the grant date. Stock-based compensation expense for PRSUs is based upon the fair value of the underlying stock on the grant date, and is amortized over the vesting period using the straight-line method unless it is determined that: (1)

 attainment of the financial metrics is less than probable, in which case a portion of the amortization is suspended, or (2) attainment of the financial metrics is improbable, in which case a portion of the previously recognized amortization is reversed and also suspended.

 The following is a summary of non-vested restricted stock unit activity for the year ended December 31, 2023:

 Weighted-Average

 Shares
 Grant-Date Fair Value

 Non-vested at December 31, 2022

 187,115
 $
 30.19

 Granted based upon satisfaction of a performance factor
 5,971
 30.32

 Granted
 96,373
 28.29

 Vested
 ( 90,803)
 30.12

 Forfeited
 ( 1,309)
 31.18

 Reinvested
 8,495
 29.52

 Non-vested at December 31, 2023

 205,842
 $
 29.30

 The fair value of restricted stock unit awards that vested during 2023 was $ 2.6 million, compared to $ 1.7 million and $ 1.6 million during the years ended December 31, 2022 and 2021, respectively. As of December 31, 2023, the total compensation costs related to non-vested restricted stock units that have not yet been recognized totaled $ 2.4 million, and the weighted average period over which these costs are expected to be recognized is approximately 1.7 years

 Note 16. Earnings per Share

 Basic per-share amounts are computed by dividing net income by the weighted average number of common shares outstanding. Diluted per-share amounts assume issuance of all common stock issuable upon conversion or exercise of other securities, unless the effect is to reduce the loss or increase the income per common share from continuing operations.

 The following table presents the computation of basic and diluted earnings per common share for the periods indicated:

 (dollars in thousands, except per share amounts)

 2023
 2022
 2021

 Basic Earnings Per Share:

 $
 $
 $

 Weighted average shares outstanding
 15,678,045
 15,649,247
 15,876,727

 Basic earnings per common share
 $
 1.33
 $
 3.89
 $
 4.38

 Diluted Earnings Per Share:

 $
 $
 $

 Weighted average shares outstanding, included all dilutive potential shares
 15,724,842
 15,700,607
 15,905,035

 Diluted earnings per common share
 $
 1.33
 $
 3.87
 $
 4.37

 Note 17. Regulatory Capital Requirements and Restrictions on Subsidiary Cash

 Regulatory Capital and Reserve Requirement: The Company (on a consolidated basis) and the Bank are 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 the Company's consolidated financial statements. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

 The ability of the Company to pay dividends to its shareholders is dependent upon dividends paid by the Bank to the Company. The Bank is subject to certain statutory and regulatory restrictions on the amount of dividends it may pay. In addition, as previously disclosed, subsequent to December 31, 2008, the Bank's board of directors adopted a capital policy requiring it to maintain a ratio of Tier 1 capital to total assets of at least 8% and a ratio of total capital to risk-based capital of at least 10%. Failure to maintain these ratios also could limit the ability of the Bank to pay dividends to the Company.

 As of December 31, 2023, the most recent notification from the FDIC categorized the Bank as "well capitalized" under the regulatory framework for prompt corrective action then in effect. There are no conditions or events since this date that

 management believes have changed the Bank's category. In order to be a "well-capitalized" depository institution, a bank must maintain a Common Equity Tier 1 capital ratio of 6.5% or more; a Tier 1 capital ratio of 8% or more; a total capital ratio of 10% or more; and a leverage ratio of 5% or more. A capital conservation buffer of 2.5%, comprised of Common Equity Tier 1 capital, is also established above the regulatory minimum capital requirements.

 As of December 31, 2023 and December 31, 2022, the Bank was not required to maintain reserve balances in cash on hand or on deposit with Federal Reserve Banks, and therefore no amounts were held in reserve for each of these periods.

 A comparison of the Company's and the Bank's capital with the corresponding minimum regulatory requirements in effect as of December 31, 2023 and December 31, 2022, is presented below:

 Actual
 For Capital Adequacy Purposes With Capital Conservation Buffer(1)
 To Be Well Capitalized Under Prompt Corrective Action Provisions

 Ratio
 Ratio(1)

 Ratio

 At December 31, 2023:

 Consolidated:

 Total capital/risk weighted assets
 $
 668,748
 12.53
 %
 $
 560,596
 10.50
 %
 N/A
 N/A

 Tier 1 capital/risk weighted assets
 554,177
 10.38
 453,816
 8.50
 N/A
 N/A

 Common equity tier 1 capital/risk weighted assets
 511,884
 9.59
 373,731
 7.00
 N/A
 N/A

 Tier 1 leverage capital/average assets
 554,177
 8.58
 258,487
 4.00
 N/A
 N/A

 MidWestOne Bank:

 Total capital/risk weighted assets
 $
 656,027
 12.49
 %
 $
 551,658
 10.50
 %
 $
 525,388
 10.00
 %

 Tier 1 capital/risk weighted assets
 606,456
 11.54
 446,580
 8.50
 420,310
 8.00

 Common equity tier 1 capital/risk weighted assets
 606,456
 11.54
 367,772
 7.00
 341,502
 6.50

 Tier 1 leverage capital/average assets
 606,456
 9.39
 258,339
 4.00
 322,924
 5.00

 At December 31, 2022:

 Consolidated:

 Total capital/risk weighted assets
 $
 653,380
 12.07
 %
 $
 568,452
 10.50
 %
 N/A
 N/A

 Tier 1 capital/risk weighted assets
 544,300
 10.05
 460,175
 8.50
 N/A
 N/A

 Common equity tier 1 capital/risk weighted assets
 502,184
 9.28
 378,968
 7.00
 N/A
 N/A

 Tier 1 leverage capital/average assets
 544,300
 8.35
 260,891
 4.00
 N/A
 N/A

 MidWestOne Bank:

 Total capital/risk weighted assets
 $
 654,297
 12.10
 %
 $
 567,684
 10.50
 %
 $
 540,652
 10.00
 %

 Tier 1 capital/risk weighted assets
 610,217
 11.29
 459,554
 8.50
 432,522
 8.00

 Common equity tier 1 capital/risk weighted assets
 610,217
 11.29
 378,456
 7.00
 351,424
 6.50

 Tier 1 leverage capital/average assets
 610,217
 9.36
 260,776
 4.00
 325,970
 5.00

 (1) Includes the capital conservation buffer of 2.50 %.

 Note 18. Commitments and Contingencies

 Credit-related Financial Instruments: The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, commitments to sell loans, and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheets.

 The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. The following table summarizes the Bank's commitments as of the dates indicated:

 2023
 2022

 Commitments to extend credit
 $
 1,203,001
 $
 1,190,607

 Commitments to sell loans
 1,045

 Standby letters of credit
 7,795
 18,398

 Total
 $
 1,211,841
 $
 1,209,617

 The Bank's exposure to credit loss in the event of nonperformance by the counterparty to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation of the party. Collateral held varies, but may include accounts receivable, crops, livestock, inventory, property and equipment, residential real estate and income-producing commercial properties.
 Commitments to sell loans are agreements to sell loans held for sale to third parties at an agreed upon price.

 Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements and, generally, have terms of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds collateral, which may include accounts receivable, inventory, property, equipment and income-producing properties, that support those commitments, if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Bank would be required to fund the commitment. The maximum potential amount of future payments the Bank could be required to make is represented by the contractual amount shown in the summary above. If the commitment is funded, the Bank would be entitled to seek recovery from the customer.

 Liability for Off-Balance Sheet Credit Losses: The Company records a liability for off-balance sheet credit losses through a charge to credit loss expense (or a reversal of credit loss expense) on the Company's consolidated statements of income and other liabilities on the Company's consolidated balance sheets. At December 31, 2023, the liability for off-balance-sheet credit losses totaled $ 4.6 million, whereas the total amount of the liability as of December 31, 2022 was $ 4.8 million. The total amount recorded in credit loss expense for the years ended December 31, 2023 and December 31, 2022, was a benefit of $ 0.2 million and an expense of $ 0.8 million, respectively.

 Litigation: In the normal course of business, the Company and its subsidiaries have been named, from time to time, as defendants in various legal actions. Certain of the actual or threatened legal actions may include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the financial statements of the Company.

 Concentrations of Credit Risk: Substantially all of the Bank's loans, commitments to extend credit and standby letters of credit have been granted to customers in the Bank's market areas. Although the loan portfolio of the Bank is diversified, approximately 65 % of the loans are real estate loans and approximately 7 % are agriculturally related. The concentrations of credit by type of loan are set forth in Note 4. Loans Receivable and the Allowance for Credit Losses. Commitments to extend credit are primarily related to commercial loans and home equity loans. Standby letters of credit were granted primarily to commercial borrowers. Investments in securities issued by state and political subdivisions involve certain governmental entities within Iowa, California, and Minnesota. The carrying value of investment securities of Iowa, California and Minnesota political subdivisions totaled 13 %, 12 %, and 10 %, respectively, as of December 31, 2023.

 Note 19. Related Party Transactions

 Certain directors of the Company and certain principal officers are customers of, and have banking transactions with, the Bank in the ordinary course of business. Such indebtedness has been incurred on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons.

 The following is an analysis of the changes in the loans to related parties during the years ended December 31, 2023 and 2022:

 2023
 2022

 $
 15,603
 $
 14,584

 Advances
 17,729
 6,001

 Change due to collections, loans sold, or changes in related parties
 ( 18,692)
 ( 4,982)

 $
 14,640
 $
 15,603

 Available credit
 $
 14,836
 $
 8,716

 None of these loans are past due, nonaccrual or restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. Deposits from these related parties totaled $ 10.6 million and $ 14.4 million as of December 31, 2023 and December 31, 2022, respectively. Deposits from related parties are accepted subject to the same interest rates and terms as those from non-related parties.

 Note 20. Estimated Fair Value of Financial Instruments and Fair Value Measurements

 Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:
 • Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
 • Level 2 – Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
 • Level 3 – Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

 The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily available for sale debt securities, derivatives and mortgage servicing rights. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period, and such measurements are therefore considered "nonrecurring" for purposes of disclosing the Company's fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for collateral dependent individually analyzed loans and foreclosed assets.
 Recurring Basis
 The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:
 Investment Securities - The fair value for investment securities are determined by quoted market prices, if available (Level 1). The Company utilizes an independent pricing service to obtain the fair value of debt securities. Debt securities issued by the U.S. Treasury and other U.S. Government agencies and corporations, mortgage-backed securities, collateralized loan obligations, and collateralized mortgage obligations are priced utilizing industry-standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace (Level 2). Municipal securities are valued using a type of matrix, or grid, pricing in which securities are benchmarked against the treasury rate based on credit rating (Level 2).
 Derivatives - Interest rate swaps are valued by using cash flow valuation techniques with observable market data inputs (Level 2). The Company has entered into collateral agreements with its swap dealers which entitle it to receive collateral to cover market values on derivatives which are in asset position, thus a credit risk adjustment on interest rate swaps is not warranted. RPAs are entered into by the Company with institutional counterparties, under which the Company assumes its pro-rata share of the credit exposure associated with a borrower's performance related to interest rate derivative contracts. The fair value of

 RPAs is calculated by determining the total expected asset or liability exposure using observable inputs, such as yield curves and volatilities, of the derivatives to the borrowers and applying the borrowers' credit spread to that exposure (Level 2). The fair values of the interest rate lock commitments and interest rate forward loan sales contracts are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. The pull-through rate assumptions are considered Level 3 valuation inputs and are significant to the interest rate lock commitments valuation; as such, the interest rate lock commitments are classified as Level 3.
 Mortgage Servicing Rights (MSR) - MSRs are recorded at fair value based on assumptions through a third-party valuation service. The valuation model incorporates assumptions that are observable in the marketplace and that market participants would use in estimating future net servicing income, such as servicing cost per loan, the discount rate, the escrow float rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses (Level 2).
 The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022 by level within the fair value hierarchy:

 Fair Value Measurement at December 31, 2023 Using

 Total

 Assets:

 Available for sale debt securities:

 $
 130,139

 $
 —

 $
 130,139

 $
 —

 5,311

 —

 5,311

 —

 —
 —

 —
 —

 440,051

 —

 440,051

 —

 —
 25,043

 Mortgage servicing rights
 13,333
 —
 13,333
 —

 Liabilities:

 Derivative liabilities
 $
 $
 —
 $
 $
 —

 Fair Value Measurement at December 31, 2022 Using

 Total

 Assets:

 Available for sale debt securities:

 U.S. Government agencies and corporations
 $
 7,345

 $
 —

 $
 7,345

 $
 —

 285,356

 —

 285,356

 —

 5,944

 —

 5,944

 —

 —
 —

 707,709

 —

 707,709

 —

 —
 23,648

 Mortgage servicing rights
 13,421
 —
 13,421
 —

 Liabilities:

 Derivative liabilities
 $
 $
 —
 $
 $
 —

 There were no transfers of assets between Level 3 and other levels of the fair value hierarchy during the years ended December 31, 2023 or December 31, 2022. Changes in the fair value of available for sale debt securities, including the changes attributable to the hedged risk, are included in other comprehensive income.

 The following table presents the valuation technique, significant unobservable inputs, and quantitative information about the unobservable inputs used for fair value measurements of the financial instruments held by the Company and categorized within Level 3 of the fair value hierarchy as of the dates indicated:

 Fair Value at

 Valuation Techniques(s)
 Unobservable Input
 Range of Inputs
 Weighted Average

 Interest rate lock commitments
 $
 $
 Quoted or published market prices of similar instruments, adjusted for factors such as pull-through rate assumptions
 Pull-through rate
 %
 -
 %
 %

 Nonrecurring Basis

 The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:
 Collateral Dependent Individually Analyzed Loans - Collateral dependent individually analyzed loans are valued based on the fair value of the collateral less estimated costs to sell. These estimates are based on the most recently available appraisals by qualified licensed appraisers with certain adjustment made based on the type of property, age of appraisal, current status of the property, and other related factors to estimate the current value of the collateral (Level 3).
 Foreclosed Assets, Net - Foreclosed assets are measured at fair value less costs to sell. These estimates are based on the most recently available appraisals by qualified licensed appraisers with certain adjustment made based on the type of property, age of appraisal, current status of the property, and other related factors to estimate the current value of the collateral (Level 3).
 The following table presents assets measured at fair value on a nonrecurring basis as of the dates indicated:

 Fair Value Measurement at December 31, 2023 Using

 Total

 Collateral dependent individually analyzed loans
 $
 6,524
 $
 —
 $
 —
 $
 6,524

 3,929
 —
 —
 3,929

 Fair Value Measurement at December 31, 2022 Using

 Total

 Collateral dependent individually analyzed loans
 $
 3,159
 $
 —
 $
 —
 $
 3,159

 —

 —

 The following presents the valuation technique(s), unobservable inputs, and quantitative information about the unobservable inputs used for fair value measurements of the financial instruments held by the Company and categorized within Level 3 of the fair value hierarchy as of the date indicated:

 Fair Value at

 Valuation Techniques(s)
 Unobservable Input
 Range of Inputs
 Weighted Average

 Collateral dependent individually analyzed loans
 $
 6,524
 $
 3,159
 Fair value of collateral
 Valuation adjustments
 —
 %
 %
 %

 3,929
 Fair value of collateral
 Valuation adjustments
 %
 %
 %

 Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values.

 Other Fair Value Methods

 Cash and Cash Equivalents, Interest Receivable, Short-term Borrowings, Finance Lease Payable, and Other Long-Term Debt - The carrying amounts of these financial instruments approximate their fair values.

 Loans Held for Sale - Loans held for sale are carried at the lower of cost or fair value, with fair value being based on binding contracts from third party investors (Level 2). The portfolio has historically consisted primarily of residential real estate loans.

 Loans Held for Investment, Net - The estimated fair value of loans, net, was performed using the income approach, with the market approach used for certain nonperforming loans, resulting in a Level 3 fair value classification.
 FHLB stock - Investments in FHLB stock are recorded at cost and measured for impairment quarterly. Ownership of FHLB stock is restricted to member banks and the securities do not have a readily determinable market value. Purchases and sales of these securities are at par value with the issuer. The fair value of investments in FHLB stock is equal to the carrying amount.

 Deposits - Deposits are carried at historical cost. The fair values of deposits with no stated maturity (defined as noninterest-bearing demand, interest checking, money market, and savings accounts) are equal to the amount payable on demand as of the balance sheet date and considered Level 1. The fair value of time deposits is based on the discounted value of contractual cash flows and considered Level 2. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

 FHLB Borrowings - Borrowings are carried at amortized cost. The fair value of FHLB borrowings is calculated by discounting scheduled cash flows through the maturity dates or call dates, if applicable, using estimated market discount rates that reflect current rates offered for borrowings with similar remaining maturities and characteristics and are considered Level 2.

 Junior Subordinated Notes Issued to Capital Trusts - Junior subordinated notes issued to capital trusts are carried at amortized cost. The fair value of these junior subordinated notes with variable rates is determined using a market discount rate on the expected cash flows and are considered Level 2.

 Subordinated Debentures - Subordinated debentures are carried at amortized cost. The fair value of subordinated debentures is based on discounted cash flows on current borrowing rates being offered for similar subordinated debenture deals and considered Level 2.

 The carrying amount and estimated fair value of financial instruments at December 31, 2023 and December 31, 2022 were as follows:

 Carrying
 Estimated

 Financial assets:

 Cash and cash equivalents

 $
 $
 $
 $
 —
 $
 —

 Debt securities available for sale

 —
 —

 Debt securities held to maturity
 895,263
 —
 895,263
 —

 1,045
 1,083
 —
 1,083
 —

 Loans held for investment, net

 4,075,447
 3,953,368
 —
 —
 3,953,368

 Interest receivable

 29,768
 29,768
 —
 29,768
 —

 FHLB stock
 5,806
 5,806
 —
 5,806
 —

 —
 25,043

 Financial liabilities:

 —
 —

 Interest bearing deposits
 4,498,620
 4,489,322
 3,076,582
 1,412,740
 —

 —
 —

 Finance leases payable

 —
 —

 6,262
 6,199
 —
 6,199
 —

 Junior subordinated notes issued to capital trusts

 37,938
 —
 37,938
 —

 Subordinated debentures

 64,137
 61,940
 —
 61,940
 —

 Other long-term debt

 —
 —

 Derivative liabilities

 —
 —

 Carrying
 Estimated

 Financial assets:

 Cash and cash equivalents

 $
 $
 $
 $
 —
 $
 —

 Debt securities available for sale

 —
 —

 Debt securities held to maturity

 924,894
 —
 924,894
 —

 —
 —

 Loans held for investment, net

 3,791,324
 3,702,527
 —
 —
 3,702,527

 Interest receivable

 27,090
 27,090
 —
 27,090
 —

 FHLB stock
 19,248
 19,248
 —
 19,248
 —

 —
 23,648

 Financial liabilities:

 —
 —

 Interest bearing deposits
 4,415,492
 4,393,315
 3,225,787
 1,167,528
 —

 —
 —

 Finance leases payable

 —
 —

 17,301
 17,032
 —
 17,032
 —

 Junior subordinated notes issued to capital trusts

 42,116
 39,023
 —
 39,023
 —

 Subordinated debentures

 64,006
 64,004
 —
 64,004
 —

 Other long-term debt

 —
 —

 Derivative liabilities

 —
 —

 Note 21. Revenue Recognition

 Substantially all of the Company's revenue is generated from contracts with customers. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in the scope of Topic 606. Noninterest revenue streams in-scope of Topic 606 are discussed below.

 Trust and Asset Management
 Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company's performance obligation is generally satisfied over time, and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers' accounts. The Company does not earn performance-based incentives. Optional services such as real estate property management and tax return preparation services are also available to existing trust and asset management customers. The Company'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.

 Service Charges on Deposit Accounts
 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. The Company'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 are largely transactional based, and therefore, the Company's 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.

 Fees, Exchange, and Other Service Charges
 Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company's debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service,

 cashier's checks, and other services. The Company'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.

 Gains/Losses on Sales of Foreclosed Assets
 Gain or loss from the sale of foreclosed assets occurs when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of foreclosed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the foreclosed assets are derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

 Other
 Other noninterest income consists of other recurring revenue streams such as safe deposit box rental fees, and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation.

 Contract Balances
 A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity's obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company's noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of December 31, 2023 and December 31, 2022, the Company did not have any significant contract balances.

 Contract Acquisition Costs
 In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition cost.

 Note 22. Leases

 The Company's lease commitments consist primarily of real estate property for banking offices and office space with terms extending through 2030. Substantially all of our leases are classified as operating leases, with the Company holding one finance lease for a banking office with a lease term of 2025.

 Classification

 Operating lease right-of-use assets

 $
 2,337
 $
 2,492

 Finance lease right-of-use asset
 Premises and equipment, net

 Total right-of-use assets
 $
 2,592
 $
 2,842

 Operating lease liability

 $
 3,078
 $
 3,359

 Finance lease liability

 Total lease liabilities
 $
 3,682
 $
 4,146

 Weighted-average remaining lease term:
 Operating leases

 10.20 years
 9.23 years

 Finance lease

 2.67 years
 3.67 years

 Weighted-average discount rate:
 Operating leases

 4.43
 %
 4.23
 %

 Finance lease

 8.89
 %
 8.89
 %

 The following table represents lease costs and other lease information. As the Company elected, for all classes of underlying assets, not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities.

 2023

 2022
 2021

 Lease Costs

 Operating lease cost

 $
 1,182
 $
 1,165
 $
 1,194

 Variable lease cost

 Interest on lease liabilities (1)

 Amortization of right-of-use assets

 Net lease cost

 $
 1,367
 $
 1,393
 $
 1,486

 Other Information

 Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases

 $
 1,265
 $
 1,186
 $
 1,177

 Operating cash flows from finance lease

 Finance cash flows from finance lease

 Supplemental non-cash information on lease liabilities:

 Right-of-use assets obtained in exchange for new operating lease liabilities

 (1) Included in long-term debt interest expense in the Company's consolidated statements of income. All other lease costs in this table are included in occupancy expense of premises, net.
 Future minimum payments for finance leases and operating leases with initial or remaining terms of one year or more as of December 31, 2023 were as follows:

 Finance Leases
 Operating Leases

 Twelve Months Ended:

 December 31, 2024
 $
 $
 1,047

 December 31, 2025

 December 31, 2026

 December 31, 2027
 —

 December 31, 2028
 —

 Thereafter
 —
 1,600

 Total undiscounted lease payment
 $
 $
 4,085

 Amounts representing interest
 ( 72)
 ( 1,007)

 Lease liability
 $
 $
 3,078

 Note 23. Accumulated Other Comprehensive Income (Loss)

 The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax:

 Unrealized Gain (Loss) from AFS Debt Securities
 Reclassificationof AFS Debt Securities to HTM
 Unrealized Gain from Cash Flow Hedging Instruments
 Total

 Balance, December 31, 2020
 $
 24,592
 $
 —
 $
 —
 $
 24,592

 Other comprehensive loss before reclassifications
 ( 33,278)
 —
 —
 ( 33,278)

 Amounts reclassified from AOCI
 ( 179)
 —
 —
 ( 179)

 Net current-period other comprehensive loss
 —
 —

 Balance, December 31, 2021
 $
 ( 8,865)
 $
 —
 $
 —
 $
 ( 8,865)

 Other comprehensive (loss) income before reclassifications
 ( 82,788)
 2,805
 —
 ( 79,983)

 Amounts reclassified from AOCI
 ( 199)
 —
 —
 ( 199)

 Net current-period other comprehensive (loss) income
 ( 82,987)
 2,805
 —
 ( 80,182)

 Balance, December 31, 2022
 $
 ( 91,852)
 $
 2,805
 $
 —
 $
 ( 89,047)

 Other comprehensive income before reclassifications
 7,782
 1,706
 1,846
 11,334

 Amounts reclassified from AOCI
 14,155
 —
 ( 1,341)
 12,814

 Net current-period other comprehensive income
 21,937
 1,706
 24,148

 Balance, December 31, 2023
 $
 ( 69,915)
 $
 4,511
 $
 $
 ( 64,899)

 The following table presents reclassifications out of AOCI:

 2023

 2022
 2021

 Investment securities losses (gains), net
 $
 19,768
 $
 ( 271)
 $
 ( 242)

 Interest income
 ( 819)
 —
 —

 ( 1,795)
 —
 —

 ( 4,340)

 Net of tax
 $
 12,814
 $
 ( 199)
 $
 ( 179)

 Note 24. Operating Segments

 The Company's activities are considered to be one reportable segment for financial reporting purposes. The Company is engaged in the business of commercial and retail banking and trust and investment management services with operations throughout central and eastern Iowa, the Minneapolis/St. Paul metropolitan area of Minnesota, southwestern Wisconsin, Naples and Fort Myers Florida, and Denver, Colorado. Substantially all income is derived from a diverse base of commercial, mortgage and retail lending activities, and investments.

 Note 25. Parent Company Only Financial Information

 The following are condensed balance sheets of MidWestOne Financial Group, Inc. as of December 31, 2023 and December 31, 2022 (parent company only):

 2023
 2022

 Assets

 Cash
 $
 19,818
 $
 11,749

 Investment in subsidiaries
 618,950
 600,826

 4,094
 3,364

 $
 642,862
 $
 615,939

 Liabilities and Shareholders' Equity

 $
 116,430
 $
 121,122

 2,054
 2,024

 Total liabilities
 118,484
 123,146

 Total shareholders' equity

 Total liabilities and shareholders' equity
 $
 642,862
 $
 615,939

 The following are condensed statements of income of MidWestOne Financial Group, Inc. for the years ended December 31, 2023, 2022, and 2021 (parent company only):

 2023
 2022
 2021

 Income

 Dividends received from subsidiaries
 $
 36,500
 $
 36,000
 $
 40,750

 Interest and other income
 3,349

 Total income
 36,653
 39,349
 40,997

 Expense

 ( 8,268)
 ( 6,342)
 ( 5,306)

 ( 2,860)
 ( 2,976)
 ( 2,523)

 Other
 ( 1,214)
 ( 2,960)
 ( 1,139)

 Total expenses
 ( 12,342)
 ( 12,278)
 ( 8,968)

 Income before income taxes and equity in subsidiaries' undistributed income
 24,311
 27,071
 32,029

 Income tax benefit
 2,573
 1,768
 1,764

 Equity in subsidiaries' undistributed income
 ( 6,025)
 31,996
 35,693

 $
 $
 $

 The following are condensed statements of cash flows of MidWestOne Financial Group, Inc. for the years ended December 31, 2023, 2022, and 2021 (parent company only):

 2023
 2022
 2021

 Operating Activities:

 $
 $
 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Equity in undistributed earnings of subsidiary
 6,025
 ( 31,996)
 ( 35,693)

 2,403
 2,541
 2,153

 Net change in other assets and other liabilities
 ( 433)

 Net cash provided by operating activities
 $
 30,019
 $
 30,947
 $
 36,273

 Investing Activities:

 Proceeds from sales of equity securities
 $
 —
 $
 $

 Purchases of equity securities
 ( 1,125)
 ( 1,250)
 ( 3)

 Proceeds from intercompany sale of bank-owned life insurance
 —
 —
 5,252

 Net cash paid in business acquisition
 —
 ( 44,955)
 —

 Net cash (used in) provided by investing activities
 $
 ( 1,125)
 $
 ( 46,191)
 $
 5,319

 Financing Activities:

 Payments of subordinated debt issuance costs
 $
 —
 $
 —
 $
 ( 9)

 Redemption of subordinated debentures
 —
 —
 ( 10,835)

 Proceeds from other long-term debt
 —
 25,000
 —

 Payments of other long-term debt
 ( 5,000)
 ( 10,000)
 —

 Taxes paid relating to the release/lapse of restriction on RSUs
 ( 609)
 ( 281)
 ( 121)

 Dividends paid
 ( 15,216)
 ( 14,870)
 ( 14,282)

 Repurchase of common stock
 —
 ( 2,725)
 ( 11,554)

 Net cash used in by financing activities
 $
 ( 20,825)
 $
 ( 2,876)
 $
 ( 36,801)

 Net (decrease) increase in cash
 $
 8,069
 $
 ( 18,120)
 $
 4,791

 Cash and cash equivalents at beginning of year
 11,749
 29,869
 25,078

 Cash and cash equivalents at end of year
 $
 19,818
 $
 11,749
 $
 29,869

 Note 26. Subsequent Events

 Management evaluated subsequent events through the date the consolidated financial statements were issued. Events or transactions occurring after December 31, 2023, but prior to the date the consolidated financial statements were issued, that provided additional evidence about conditions that existed at December 31, 2023 have been recognized in the consolidated financial statements for the period ended December 31, 2023. Events or transactions that provided evidence about conditions that did not exist at December 31, 2023, but arose before the consolidated financial statements were issued, have not been recognized in the consolidated financial statements for the period ended December 31, 2023.

 On January 23, 2024, the board of directors of the Company declared a cash dividend of $ 0.2425 per share payable on March 15, 2024 to shareholders of record as of the close of business on March 1, 2024.

 On January 31, 2024, the Company completed the acquisition of DNVB, parent company of the BOD. Immediately following completion of the acquisition, the BOD was merged with and into MidWestOne Bank. Under the terms of the merger agreement, DNVB shareholders received $ 462.42 in cash exchange for each share of DNVB stock. The value of the total deal consideration was $ 32.6 million. The acquisition is not considered significant under SEC regulations.

 Note 27. Quarterly Results of Operations (unaudited)

 Three Months Ended

 December 31
 September 30
 June 30
 March 31

 (in thousands, except per share amounts)

 2023

 Interest income
 $
 65,386
 $
 63,572
 $
 61,350
 $
 59,305

 32,827
 28,997
 24,388
 19,229

 Net interest income
 32,559
 34,575
 36,962
 40,076

 Credit loss expense
 1,768
 1,551
 1,597

 Noninterest income (loss)
 3,862
 9,861
 8,746
 ( 4,046)

 Noninterest expense
 32,131
 31,544
 34,919
 33,319

 Income before income taxes
 2,522
 11,341
 9,192
 1,778

 Income tax (benefit) expense
 ( 208)
 2,203
 1,598

 $
 2,730
 $
 9,138
 $
 7,594
 $
 1,397

 Earnings per common share

 Basic
 $
 0.17
 $
 0.58
 $
 0.48
 $
 0.09

 Diluted
 $
 0.17
 $
 0.58
 $
 0.48
 $
 0.09

 2022

 Interest income
 $
 56,757
 $
 53,421
 $
 44,729
 $
 41,852

 13,193
 7,688
 5,004
 4,516

 Net interest income
 43,564
 45,733
 39,725
 37,336

 Credit loss expense
 3,282
 —

 Noninterest income
 10,940
 12,588
 12,347
 11,644

 Noninterest expense
 34,440
 34,623
 32,082
 31,643

 Income before income tax expense
 19,492
 23,060
 16,708
 17,337

 3,490
 4,743
 4,087
 3,442

 $
 16,002
 $
 18,317
 $
 12,621
 $
 13,895

 Earnings per common share

 Basic
 $
 1.02
 $
 1.17
 $
 0.81
 $
 0.89

 Diluted
 $
 1.02
 $
 1.17
 $
 0.80
 $
 0.88

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 None.

 ITEM 9A. CONTROLS AND PROCEDURES.

 Disclosure Controls and Procedures
 The Company's management, including the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, have concluded that the Company's disclosure controls and procedures were effective as of December 31, 2023.
 Changes in Internal Control over Financial Reporting
 There were no changes in the Company's internal controls over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2023 that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.
 Management's Annual Report on Internal Control over Financial Reporting
 Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance to the Company's management and board of directors regarding the preparation of reliable published financial statements. Internal control over financial reporting includes self-monitoring mechanisms and taking action to correct deficiencies as they are identified. Because of inherent limitations in any system of internal control, no matter how well designed, misstatements due to error or fraud may occur and not be detected, including the possibility of the circumvention or overriding of controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, internal control effectiveness may vary over time.
 Management assessed the Company's internal control over financial reporting as of December 31, 2023. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this assessment, the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, assert that the Company maintained effective internal control over financial reporting as of December 31, 2023 based on the specified criteria.

 The effectiveness of the Company's internal control over financial reporting as of December 31, 2023, has been audited by RSM US LLP, the independent registered public accounting firm who also has audited the Company's consolidated financial statements included in this Annual Report on Form 10-K. RSM US LLP's attestation report on the Company's internal control over financial reporting appears on the following page.

 Report of Independent Registered Public Accounting Firm
 To the Shareholders and the Board of Directors of MidWestOne Financial Group, Inc.

 Opinion on the Internal Control Over Financial Reporting
 We have audited MidWestOne Financial Group, Inc.'s (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
 We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2023 and 2022, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes to the consolidated financial statements of the Company and our report dated March 8, 2024 expressed an unqualified opinion.
 Basis for Opinion
 The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management's Assessment on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
 Definition and Limitations of Internal Control Over Financial Reporting
 A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 /s/ RSM US LLP
 Des Moines, Iowa

 ITEM 9B. OTHER INFORMATION.
 Insider Trading Policy and Guidelines with Respect to Certain Transactions in Company Securities

 On January 23, 2024, the Board of Directors approved the amended Insider Trading Policy and corresponding Guidelines with Respect to Certain Transactions in Company Securities of MidWestOne Financial Group, Inc, governing the purchase, sale and/or other dispositions of its securities by directors, officers and employees, as well as by the Company iteself, that is designed to promote compliance with insider trading laws, rules and regulations and any applicable listing standards. This amended policy is filed herewith as Exhibit 19.1.

 Rule 10b5-1 Trading Plans

 During the fiscal quarter ended December 31, 2023, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not Applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
 The information required by this Item 10 will be included in the Company's Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders under the headings "Proposal 1: Election of Directors," "Information About Nominees, Continuing Directors and Named Executive Officers," "Corporate Governance and Board Matters," "Section 16(a) Reports," and "Shareholder Communications with the Board and Nomination and Proposal Procedures" and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the Company's 2023 fiscal year.

 ITEM 11. EXECUTIVE COMPENSATION.
 The information required by this Item 11 will be included in the Company's Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders under the headings "Compensation Discussion and Analysis," "Compensation Committee Report," "Executive Compensation" and "Director Compensation" and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the Company's 2023 fiscal year.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 The information required by this Item 12 will be included in the Company's Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Equity Compensation Plan Information" and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the Company's 2023 fiscal year.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
 The information required by this Item 13 will be included in the Company's Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders under the headings "Corporate Governance and Board Matters" and "Certain Relationships and Related-Person Transactions" and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the Company's 2023 fiscal year.

 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES (PCAOB ID: 49).
 The information required by this Item 14 will be included in the Company's Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders under the caption "Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm" and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC pursuant to Regulation 14A within 120 days of the end of the Company's 2023 fiscal year.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 (a) The following documents are filed as part of this report:
 (1) Financial Statements: The following consolidated financial statements of the registrant are filed as part of this document under "Item 8. Financial Statements and Supplementary Data."
 Report of Independent Registered Accounting Firm (PCAOB ID: 49)
 Consolidated Balance Sheets - December 31, 2023 and 2022
 Consolidated Statements of Income - Years Ended December 31, 2023, 2022, and 2021
 Consolidated Statements of Comprehensive Income - Years Ended December 31, 2023, 2022, and 2021
 Consolidated Statements of Shareholders' Equity - Years Ended December 31, 2023, 2022, and 2021
 Consolidated Statements of Cash Flows - Years Ended December 31, 2023, 2022, and 2021
 Notes to Consolidated Financial Statements
 (2) Financial Statement Schedules:
 All schedules are omitted as such information is inapplicable or is included in the financial statements.
 (3) Exhibits:
 The exhibits are filed as part of this report and exhibits incorporated herein by reference to other documents are as follows:

 Exhibit

 Description
 Incorporated by Reference to:

 2.1

 Agreement and Plan of Merger dated November 1, 2021,
 Exhibit 2.1 to the Company's Current Report on Form 8-K

 by and among MidWestOne Financial Group, Inc., IFBC

 filed with the SEC on November 1, 2021

 Acquisition Corp., and Iowa First Bancshares Corp.^

 3.1

 Amended and Restated Articles of Incorporation of
 Exhibit 3.3 to the Company's Amendment No. 1 to

 MidWestOne Financial Group, Inc. filed with the

 Registration Statement on Form S-4 (File No. 333-147628)

 Secretary of State of the State of Iowa on March 14, 2008
 filed with the SEC on January 14, 2008

 3.2

 Articles of Amendment (First Amendment) to the
 Exhibit 3.1 to the Company's Current Report on Form 8-K

 Amended and Restated Articles of Incorporation of
 filed with the SEC on January 23, 2009

 MidWestOne Financial Group, Inc. filed with the

 Secretary of State of the State of Iowa on

 January 23, 2009

 3.3

 Articles of Amendment (Second Amendment) to the
 Exhibit 3.1 to the Company's Current Report on Form 8-K

 Amended and Restated Articles of Incorporation of
 filed with the SEC on February 6, 2009

 MidWestOne Financial Group, Inc. filed with the

 Secretary of State of the State of Iowa on

 February 4, 2009 (containing the Certificate of

 Designations for the Company's Fixed Rate

 Cumulative Perpetual Preferred Stock, Series A)

 3.4

 Articles of Amendment (Third Amendment) to the
 Exhibit 3.1 to the Company's Form 10-Q for the quarter

 Amended and Restated Articles of Incorporation of
 ended March 31, 2017, filed with the SEC on May 4, 2017

 MidWestOne Financial Group, Inc., filed with the Secretary

 of State of the State of Iowa on April 21, 2017

 3.5

 Third Amended and Restated Bylaws, as Amended of
 Exhibit 3.1 to the Company's Current Report on Form 8-K

 MidWestOne Financial Group, Inc. as of October 18, 2022

 filed with the SEC on October 19, 2022

 4.1
 Reference is made to Exhibits 3.1 through 3.5 hereof
 N/A

 4.2

 Description of the Company's Securities Registered
 Exhibit 4.2 to the Company's Form 10-K for the year ended

 Pursuant to Section 12 of the Securities Exchange Act of
 December 31, 2022, filed with the SEC on March 13, 2023

 1934

 Exhibit

 Description
 Incorporated by Reference to:

 4.3

 Indenture, dated July 28, 2020, by and between
 Exhibit 4.1 to the Company's Current Report on Form 8-K

 MidWestOne Financial Group, Inc. and U.S. Bank

 filed with the SEC on July 29, 2020

 National Association, as trustee

 4.4

 Forms of 5.75% Fixed-to-Floating Rate Subordinated Note
 Exhibit 4.1 to the Company's Current Report on Form 8-K

 due 2030 (included as Exhibit A-1 and Exhibit A-2 to the
 filed with the SEC on July 29, 2020

 Indenture filed as Exhibit 4.3 hereto)

 10.1

 MidWestOne Financial Group, Inc. Employee Stock

 Exhibit 10.1 to the Company's Annual Report on Form 10-K

 Ownership Plan and Trust (Restated as of January 1,
 filed with the SEC on March 6, 2020

 2013)*

 10.2

 MidWestOne Financial Group, Inc. 2017 Equity

 Appendix A of the Company's Definitive Proxy Statement on

 Incentive Plan*
 Schedule 14A filed with the SEC on March 10, 2017

 10.3

 Form of MidWestOne Financial Group, Inc. 2017 Equity

 Exhibit 10.4 to the Company's Annual Report on Form 10-K

 Incentive Plan Restricted Stock Unit Award Agreement*
 filed with the SEC on March 11, 2021

 10.4

 Form of MidWestOne Financial Group, Inc. 2017 Equity

 Exhibit 10.5 to the Company's Annual Report on Form 10-K

 Incentive Plan Performance-Based Restricted Stock Unit
 filed with the SEC on March 11, 2021

 Award Agreement*

 10.5

 Exhibit 10.1 to the Company's Current Report on

 Group, Inc. and Charles N. Funk, dated October 18, 2017*
 Form 8-K filed with the SEC on October 18, 2017

 10.6

 Supplemental Retirement Agreement between Iowa State
 Exhibit 10.13 of the Company's Registration Statement on

 Bank & Trust Company (now known as MidWestOne

 Form S-4 (File No. 333-147628) filed with the SEC on

 Bank) and Charles N. Funk, dated November 1, 2001*
 November 27, 2007

 10.7

 Exhibit 10.5 to the Company's Current Report on

 Group, Inc. and James M. Cantrell, dated October 18,
 Form 8-K filed with the SEC on October 18, 2017

 2017*

 10.8

 Credit Agreement by and between MidWestOne

 Financial Group, Inc. and U.S. Bank National Association

 dated June 7, 2022

 10.9

 First Amendment to the Credit Agreement by and

 between MidWestOne Financial Group, Inc. and U.S. Bank

 National Association dated September 30, 2022

 10.10

 Second Amendment to the Credit Agreement by and

 between MidWestOne Financial Group, Inc. and U.S. Bank

 National Association dated September 19, 2023

 10.11

 Third Amendment to the Credit Agreement by and

 between MidWestOne Financial Group, Inc. and U.S. Bank

 National Association dated February 12, 2024

 10.12

 Exhibit 10.1 to the Company's Current Report on

 Group, Inc. and Barry S. Ray, effective June 4, 2018*
 Form 8-K filed with the SEC on May 4, 2018

 10.13

 Exhibit 10.1 to the Company's Current Report on

 Group, Inc. and Gary L. Sims, effective June 25, 2018*
 Form 8-K filed with the SEC on June 11, 2018

 Exhibit

 Description
 Incorporated by Reference to:

 10.14

 Change in Control Agreement between MidWestOne

 Exhibit 10.23 to the Company's Annual Report on Form 10-K

 Financial Group, Inc. and David Lindstrom, effective
 filed with the SEC on March 8, 2019

 February 21, 2018*

 10.15

 Change in Control Agreement between MidWestOne

 Exhibit 10.13 to the Company's Annual Report on Form 10-K

 Financial Group, Inc. and Gregory W. Turner, effective
 filed with the SEC on March 6, 2020

 October 13, 2017*

 10.16

 Amended and Restated MidWestOne Financial Group, Inc.

 Exhibit 10.16 to the Company's Annual Report on Form 10-K

 Executive Deferred Compensation Plan, effective
 filed with the SEC on March 11, 2021

 December 15, 2020*

 10.17

 Amended and Restated Employment Agreement between
 Exhibit 10.18 to the Company's Annual Report on Form 10-K

 MidWestOne Financial Group, Inc. and Len D. Devaisher,

 filed with the SEC on March 10, 2022

 dated March 8, 2022*

 10.18

 Letter Agreement which revises the Amended and Restated
 Exhibit 10.1 to the Company's Current Report on Form 8-K

 filed with the SEC on September 29, 2022

 Group, Inc. and Len D. Devaisher, dated September 27, 2022*

 10.19

 Exhibit 10.1 to the Company's Current Report on Form 8-K

 Group, Inc. and Charles N. Reeves, dated November 1, 2022*
 filed with the SEC on October 19, 2022

 10.20

 Letter Agreement, dated January 24, 2023, from the
 Exhibit 10.1 to the Company's Current Report on Form 8-K

 Compensation Committee of the Board of Directors
 filed with the SEC on January 26, 2023

 of MidWestOne Financial Group, Inc., to Charles N. Funk

 regarding compensation matters*

 10.21

 MidWestOne Financial Group, Inc. 2023 Equity Incentive Plan*

 Exhibit 4.6 to the Company's Form S-8 filed with the SEC on

 May 5, 2023

 10.22

 Form of MidWestOne Financial Group, Inc. 2023 Equity

 Exhibit 4.7 to the Company's Form S-8 filed with the SEC on

 Incentive Plan Restricted Stock Unit Award Agreement*
 May 5, 2023

 10.23

 Form of MidWestOne Financial Group, Inc. 2023 Equity

 Exhibit 4.8 to the Company's Form S-8 filed with the SEC on

 Incentive Plan Performance-Based Restricted Stock Unit
 May 5, 2023

 Award Agreement*

 19.1

 Insider Trading Policy and Guidelines with Respect to

 Certain Transactions in Company Securities of

 MidWestOne Financial Group, Inc., as amended

 January 23, 2024

 21.1

 Subsidiaries of MidWestOne Financial Group, Inc.

 23.1

 Consent of RSM US LLP

 31.1

 Certification of Principal Executive Officer pursuant to

 Rule 13a-14(a) and Rule 15d-14(a)

 31.2

 Certification of Principal Financial Officer pursuant to

 Rule 13a-14(a) and Rule 15d-14(a)

 Exhibit

 Description
 Incorporated by Reference to:

 31.3

 Certification of Principal Accounting Officer pursuant to

 Rule 13a-14(a) and Rule 15d-14(a)

 32.1

 Certification of Principal Executive Officer pursuant to

 18 U.S.C. Section 1350, as adopted pursuant to

 Section 906 of the Sarbanes-Oxley Act of 2002

 32.2

 Certification of Principal Financial Officer pursuant to

 18 U.S.C. Section 1350, as adopted pursuant to

 Section 906 of the Sarbanes-Oxley Act of 2002

 32.3

 Certification of Principal Accounting Officer pursuant to

 18 U.S.C. Section 1350, as adopted pursuant to

 Section 906 of the Sarbanes-Oxley Act of 2002

 97.1

 MidWestOne Financial Group, Inc. Clawback Policy

 The following financial statements from the Company's

 Annual Report on Form 10-K for the year ended

 (i) Consolidated Balance Sheets, (ii) Consolidated

 Statements of Income (iii) Consolidated Statements of

 Comprehensive Income, (iv) Consolidated Statements of

 Shareholders' Equity, (v) Consolidated Statements of Cash

 Flows, and (vi) Notes to Consolidated Financial Statements,

 tagged as blocks of text and including detailed tags.

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 101.INS

 * Indicates management contract or compensatory plan or arrangement.

 ^ The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the SEC upon request.

 ITEM 16. FORM 10-K SUMMARY.
 None.

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Dated:
 By:

 /s/ CHARLES N. REEVES

 Charles N. Reeves

 Chief Executive Officer

 (Principal Executive Officer)

 By:
 /s/ BARRY S. RAY

 Barry S. Ray

 Chief Financial Officer

 (Principal Financial Officer)

 By:

 /s/ JOHN J. RUPPEL

 John J. Ruppel

 Chief Accounting Officer

 (Principal Accounting Officer)

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 Signature
 Title
 Date

 /s/ CHARLES N. REEVES
 Chief Executive Officer; Director

 Charles N. Reeves
 (Principal Executive Officer)

 /s/ BARRY S. RAY
 Chief Financial Officer

 Barry S. Ray
 (Principal Financial Officer)

 /s/ JOHN J. RUPPEL
 Chief Accounting Officer

 John J. Ruppel
 (Principal Accounting Officer)

 /s/ KEVIN W. MONSON
 Chairman of the Board

 Kevin W. Monson

 /s/ LARRY D. ALBERT

 Larry D. Albert

 /s/ RICHARD R. DONOHUE

 Richard R. Donohue

 /s/ CHARLES N. FUNK

 Charles N. Funk

 /s/ JANET E. GODWIN

 Janet E. Godwin

 /s/ DOUGLAS H. GREEFF

 Douglas H. Greeff

 /s/ RICHARD J. HARTIG

 Richard J. Hartig

 /s/ JENNIFER L. HAUSCHILDT

 Jennifer L. Hauschildt

 /s/ MATTHEW J. HAYEK

 Matthew J. Hayek

 /s/ RUTH E. HEINONEN

 Ruth E. Heinonen

 /s/ NATHANIEL J. KAEDING

 Nathaniel J. Kaeding

 /s/ TRACY S. MCCORMICK

 Tracy S. McCormick