Loans and Leases (Tables)

12 Months Ended

Dec. 31, 2012

Loans and leases as of December 31, 2012, and December 31, 2011, were as follows, in thousands:



	December 31, 2012			December 31, 2011
Loans and leases receivable held to maturity:
Commercial	$	712,143		$	645,666
Commercial real estate	1,289,184			1,163,784
Agricultural and agricultural real estate	328,311			262,975
Residential real estate	249,689			194,436
Consumer	245,678			220,099
Gross loans receivable held to maturity	2,825,005			2,486,960
Net direct financing leases held to maturity	165			450
Gross loans and leases receivable held to maturity	2,825,170			2,487,410
Unearned discount	(676		)	(2,463		)
Deferred loan fees	(2,945		)	(3,663		)
Total net loans and leases receivable held to maturity	2,821,549			2,481,284
Loans covered under loss share agreements:
Commercial and commercial real estate	3,074			6,380
Agricultural and agricultural real estate	748			1,659
Residential real estate	2,645			4,158
Consumer	786			1,150
Total loans covered under loss share agreements	7,253			13,347
Allowance for loan and lease losses	(38,715		)	(36,808		)
Loans and leases receivable, net	$	2,790,087		$	2,457,823

Allowance for Loan and Lease Losses, Based on Impairment Methodology

All other loans are collectively evaluated for impairment under ASC 450-20. Heartland has made no changes to the accounting for the allowance for loan and lease losses policy during 2012.



	Allowance For Loan and Lease Losses						Gross Loans and Leases Receivable Held to Maturity
	Ending Balance Under ASC 310-10-35		Ending Balance Under ASC 450-20		Total		Ending Balance Evaluated for Impairment Under ASC 310-10-35		Ending Balance Evaluated for Impairment Under ASC 450-20		Total
December 31, 2012
Commercial	$	1,350	$	10,038	$	11,388	$	9,031	$	703,112	$	712,143
Commercial real estate	1,112		13,361		14,473		45,583		1,243,601		1,289,184
Agricultural and agricultural real estate	109		2,029		2,138		16,128		312,183		328,311
Residential real estate	783		2,760		3,543		7,443		242,246		249,689
Consumer	1,270		5,903		7,173		5,391		240,287		245,678
Lease financing	—		—		—		—		165		165
Total	$	4,624	$	34,091	$	38,715	$	83,576	$	2,741,594	$	2,825,170
December 31, 2011
Commercial	$	1,990	$	8,557	$	10,547	$	9,293	$	636,373	$	645,666
Commercial real estate	1,929		12,692		14,621		66,467		1,097,317		1,163,784
Agricultural and agricultural real estate	—		1,763		1,763		14,385		248,590		262,975
Residential real estate	464		2,537		3,001		5,905		188,531		194,436
Consumer	1,097		5,777		6,874		4,391		215,708		220,099
Lease financing	—		2		2		—		450		450
Total	$	5,480	$	31,328	$	36,808	$	100,441	$	2,386,969	$	2,487,410

Schedule of Financing Receivables, Non Accrual Status

The following table presents nonaccrual loans, accruing loans past due 90 days or more and troubled debt restructured loans not covered under loss share agreements at December 31, 2012, and December 31, 2011, in thousands. There were no nonaccrual leases, accruing leases past due 90 days or more or restructured leases at December 31, 2012, and December 31, 2011.



	December 31, 2012		December 31, 2011
Nonaccrual loans	$	38,675	$	48,587
Nonaccrual troubled debt restructured loans	4,481		8,848
Total nonaccrual loans	$	43,156	$	57,435
Accruing loans past due 90 days or more	—		—
Performing troubled debt restructured loans	$	21,121	$	25,704

Troubled Debt Restructurings on Financing Receivables

The following table provides information on troubled debt restructured loans that were modified during the years ended December 31, 2012, and December 31, 2011, in thousands:



	For the Years Ended
	December 31, 2012					December 31, 2011
	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Commercial	—	$	—	$	—	3	$	124	$	124
Commercial real estate	1	13		13		13	5,664		5,664
Total commercial and commercial real estate	1	13		13		16	5,788		5,788
Agricultural and agricultural real estate	2	256		256		7	2,994		2,994
Residential real estate	2	1,239		1,239		9	1,182		1,182
Consumer	—	—		—		—	—		—
Total	5	$	1,508	$	1,508	32	$	9,964	$	9,964

Troubled Debt Restructured Loans with Payment Default

The following table provides information on troubled debt restructured loans for which there was a payment default during the years ended December 31, 2012, and December 31, 2011, in thousands, that had been modified during the 12-month period prior to the default:



	With Payment Defaults During the Following Periods
	For the Years Ended
	December 31, 2012			December 31, 2011
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	—	$	—	—	$	—
Commercial real estate	—	—		—	—
Total commercial and commercial real estate	—	—		—	—
Agricultural and agricultural real estate	—	—		—	—
Residential real estate	2	59		3	287
Consumer	—	—		—	—
Total	2	$	59	3	$	287

Financing Receivable Credit Quality Indicators

The following table presents loans and leases not covered by loss share agreements by credit quality indicator at December 31, 2012, and December 31, 2011, in thousands:



	Pass		Nonpass		Total
December 31, 2012
Commercial	$	660,953	$	51,190	$	712,143
Commercial real estate	1,134,784		154,400		1,289,184
Total commercial and commercial real estate	1,795,737		205,590		2,001,327
Agricultural and agricultural real estate	286,264		42,047		328,311
Residential real estate	227,925		21,764		249,689
Consumer	235,232		10,446		245,678
Lease financing	165		—		165
Total gross loans and leases receivable held to maturity	$	2,545,323	$	279,847	$	2,825,170

December 31, 2011
Commercial	$	596,759	$	48,907	$	645,666
Commercial real estate	988,906		174,878		1,163,784
Total commercial and commercial real estate	1,585,665		223,785		1,809,450
Agricultural and agricultural real estate	223,247		39,728		262,975
Residential real estate	177,128		17,308		194,436
Consumer	211,073		9,026		220,099
Lease financing	450		—		450
Total gross loans and leases receivable held to maturity	$	2,197,563	$	289,847	$	2,487,410

Past Due Financing Receivables

The following table sets forth information regarding Heartland's accruing and nonaccrual loans and leases not covered by loss share agreements at December 31, 2012, and December 31, 2011, in thousands:



	Accruing Loans and Leases
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Nonaccrual		Total Loans and Leases
December 31, 2012
Commercial	$	1,143	$	525	$	—	$	1,668	$	708,294	$	2,181	$	712,143
Commercial real estate	1,631		494		—		2,125		1,259,112		27,947		1,289,184
Total commercial and commercial real estate	2,774		1,019		—		3,793		1,967,406		30,128		2,001,327
Agricultural and agricultural real estate	687		—		—		687		324,545		3,079		328,311
Residential real estate	1,278		234		—		1,512		241,860		6,317		249,689
Consumer	2,434		803		—		3,237		238,809		3,632		245,678
Lease financing	—		—		—		—		165		—		165
Total gross loans and leases receivable held to maturity	$	7,173	$	2,056	$	—	$	9,229	$	2,772,785	$	43,156	$	2,825,170

December 31, 2011
Commercial	$	220	$	479	$	—	$	699	$	643,273	$	1,694	$	645,666
Commercial real estate	668		—		—		668		1,117,274		45,842		1,163,784
Total commercial and commercial real estate	888		479		—		1,367		1,760,547		47,536		1,809,450
Agricultural and agricultural real estate	32		—		—		32		262,409		534		262,975
Residential real estate	940		93		—		1,033		188,865		4,538		194,436
Consumer	2,176		555		—		2,731		212,541		4,827		220,099
Lease financing	—		—		—		—		450		—		450
Total gross loans and leases receivable held to maturity	$	4,036	$	1,127	$	—	$	5,163	$	2,424,812	$	57,435	$	2,487,410

Allowance for Credit Losses on Financing Receivables

The following tables present, for impaired loans not covered by loss share agreements and by category of loan, the unpaid balance that was contractually due at December 31, 2012, and December 31, 2011, the outstanding loan balance recorded on the consolidated balance sheets at December 31, 2012, and December 31, 2011, any related allowance recorded for those loans as of December 31, 2012, and December 31, 2011, the average outstanding loan balance recorded on the consolidated balance sheets during the years ended December 31, 2012 and December 31, 2011, and the interest income recognized on the impaired loans during the year ended December 31, 2012, and year ended December 31, 2011, in thousands:



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to-Date Avg. Loan Balance		Year-to-Date Interest Income Recognized
December 31, 2012
Impaired loans with a related allowance:
Commercial	$	2,904	$	2,904	$	1,350	$	5,082	$	88
Commercial real estate	6,403		6,384		1,112		12,671		813
Total commercial and commercial real estate	9,307		9,288		2,462		17,753		901
Agricultural and agricultural real estate	1,493		1,493		109		379		83
Residential real estate	3,197		3,170		783		2,737		89
Consumer	3,876		3,836		1,270		3,781		204
Total loans held to maturity	$	17,873	$	17,787	$	4,624	$	24,650	$	1,277
Impaired loans without a related allowance:
Commercial	$	6,596	$	6,127	$	—	$	3,813	$	186
Commercial real estate	48,967		39,199		—		41,814		689
Total commercial and commercial real estate	55,563		45,326		—		45,627		875
Agricultural and agricultural real estate	14,654		14,635		—		13,728		539
Residential real estate	4,741		4,273		—		3,861		65
Consumer	1,708		1,555		—		1,630		18
Total loans held to maturity	$	76,666	$	65,789	$	—	$	64,846	$	1,497
Total impaired loans held to maturity:
Commercial	$	9,500	$	9,031	$	1,350	$	8,895	$	274
Commercial real estate	55,370		45,583		1,112		54,485		1,502
Total commercial and commercial real estate	64,870		54,614		2,462		63,380		1,776
Agricultural and agricultural real estate	16,147		16,128		109		14,107		622
Residential real estate	7,938		7,443		783		6,598		154
Consumer	5,584		5,391		1,270		5,411		222
Total impaired loans held to maturity	$	94,539	$	83,576	$	4,624	$	89,496	$	2,774



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to-Date Avg. Loan Balance		Year-to-Date Interest Income Recognized
December 31, 2011
Impaired loans with a related allowance:
Commercial	$	8,433	$	8,397	$	1,990	$	9,395	$	434
Commercial real estate	13,558		13,558		1,929		32,471		412
Total commercial and commercial real estate	21,991		21,955		3,919		41,866		846
Agricultural and agricultural real estate	—		—		—		2,722		—
Residential real estate	1,776		1,775		464		1,854		57
Consumer	2,764		2,764		1,097		2,688		32
Total loans held to maturity	$	26,531	$	26,494	$	5,480	$	49,130	$	935
Impaired loans without a related allowance:
Commercial	$	1,737	$	896	$	—	$	2,221	$	2
Commercial real estate	79,876		52,909		—		54,657		804
Total commercial and commercial real estate	81,613		53,805		—		56,878		806
Agricultural and agricultural real estate	14,428		14,385		—		14,302		557
Residential real estate	4,324		4,130		—		4,293		46
Consumer	2,226		1,627		—		1,470		5
Total loans held to maturity	$	102,591	$	73,947	$	—	$	76,943	$	1,414
Total impaired loans held to maturity:
Commercial	$	10,170	$	9,293	$	1,990	$	11,616	$	436
Commercial real estate	93,434		66,467		1,929		87,128		1,216
Total commercial and commercial real estate	103,604		75,760		3,919		98,744		1,652
Agricultural and agricultural real estate	14,428		14,385		—		17,024		557
Residential real estate	6,100		5,905		464		6,147		103
Consumer	4,990		4,391		1,097		4,158		37
Total impaired loans held to maturity	$	129,122	$	100,441	$	5,480	$	126,073	$	2,349

Impaired Financing Receivables

The carrying amount of the loans covered by these loss share agreements at December 31, 2012, and December 31, 2011, consisted of purchased impaired and nonimpaired loans as summarized in the following table, in thousands:



	December 31, 2012						December 31, 2011
	Impaired Purchased Loans		Non Impaired Purchased Loans		Total Covered Loans		Impaired Purchased Loans		Non Impaired Purchased Loans		Total Covered Loans
Commercial and commercial real estate	$	598	$	2,476	$	3,074	$	2,553	$	3,827	$	6,380
Agricultural and agricultural real estate	—		748		748		—		1,659		1,659
Residential real estate	—		2,645		2,645		—		4,158		4,158
Consumer loans	89		697		786		503		647		1,150
Total Covered Loans	$	687	$	6,566	$	7,253	$	3,056	$	10,291	$	13,347

Loans and Leases Receivable, Related Parties Roll Forward

Loans are made in the normal course of business to directors, officers and principal holders of equity securities of Heartland. The terms of these loans, including interest rates and collateral, are similar to those prevailing for comparable transactions and do not involve more than a normal risk of collectibility. Changes in such loans during the years ended December 31, 2012 and 2011, were as follows, in thousands:



	2012			2011
Balance at beginning of year	$	68,749		$	75,565
Advances	41,989			15,606
Repayments	(13,127		)	(22,422		)
Balance at end of year	$	97,611		$	68,749