Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2013

Loans and leases as of March 31, 2013, and December 31, 2012, were as follows, in thousands:



	March 31, 2013			December 31, 2012
Loans and leases receivable held to maturity:
Commercial	$	693,235		$	712,308
Commercial real estate	1,297,583			1,289,184
Agricultural and agricultural real estate	314,606			328,311
Residential real estate	240,453			249,689
Consumer	246,996			245,678
Gross loans and leases receivable held to maturity	2,792,873			2,825,170
Unearned discount	(479		)	(676		)
Deferred loan fees	(2,501		)	(2,945		)
Total net loans and leases receivable held to maturity	2,789,893			2,821,549
Loans covered under loss share agreements:
Commercial and commercial real estate	2,738			3,074
Agricultural and agricultural real estate	453			748
Residential real estate	2,722			2,645
Consumer	828			786
Total loans covered under loss share agreements	6,741			7,253
Allowance for loan and lease losses	(37,528		)	(38,715		)
Loans and leases receivable, net	$	2,759,106		$	2,790,087

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 2013.



	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
March 31, 2013
Commercial	$	1,026	$	8,273	$	9,299	$	8,457	$	684,778	$	693,235
Commercial real estate	964		14,226		15,190		37,194		1,260,389		1,297,583
Agricultural and agricultural real estate	176		2,019		2,195		13,222		301,384		314,606
Residential real estate	796		2,470		3,266		7,305		233,148		240,453
Consumer	1,530		6,048		7,578		5,055		241,941		246,996
Total	$	4,492	$	33,036	$	37,528	$	71,233	$	2,721,640	$	2,792,873
December 31, 2012
Commercial	$	1,350	$	10,038	$	11,388	$	9,031	$	703,277	$	712,308
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
Total	$	4,624	$	34,091	$	38,715	$	83,576	$	2,741,594	$	2,825,170

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 March 31, 2013, and December 31, 2012, in thousands. There were no nonaccrual leases, accruing leases past due 90 days or more or restructured leases at March 31, 2013, and December 31, 2012.



	March 31, 2013		December 31, 2012
Nonaccrual loans	$	30,282	$	38,675
Nonaccrual troubled debt restructured loans	2,074		4,481
Total nonaccrual loans	$	32,356	$	43,156
Accruing loans past due 90 days or more	454		—
Performing troubled debt restructured loans	$	24,473	$	21,121

Troubled Debt Restructurings on Financing Receivables

The following tables provide information on troubled debt restructured loans that were modified during the three months ended March 31, 2013, and March 31, 2012, in thousands:



	Three Months Ended March 31, 2013					Three Months Ended March 31, 2012
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Commercial	2	$	4,670	$	4,670	—	$	—	$	—
Commercial real estate	—	—		—		—	—		—
Total commercial and commercial real estate	2	4,670		4,670		—	—		—
Agricultural and agricultural real estate	3	2,576		2,576		—	—		—
Residential real estate	2	646		646		1	19		19
Consumer	—	—		—		—	—		—
Total	7	$	7,892	$	7,892	1	$	19	$	19

Troubeld debt restructed loans with payment default

The following tables provide information on troubled debt restructured loans for which there was a payment default during the three months ended March 31, 2013, and March 31, 2012, in thousands, that had been modified during the twelve-month period prior to the default:



	With Payment Defaults During the Following Periods
	Three Months Ended March 31, 2013			Three Months Ended March 31, 2012
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	—	$	—	—	$	—
Commercial real estate	—	—		1	640
Total commercial and commercial real estate	—	—		1	640
Agricultural and agricultural real estate	—	—		—	—
Residential real estate	—	—		—	—
Consumer	—	—		—	—
Total	—	$	—	1	$	640

Financing Receivable Credit Quality Indicators

The following table presents loans and leases not covered by loss share agreements by credit quality indicator at March 31, 2013, and December 31, 2012, in thousands:



	Pass		Nonpass		Total
March 31, 2013
Commercial	$	644,980	$	48,255	$	693,235
Commercial real estate	1,139,334		158,249		1,297,583
Total commercial and commercial real estate	1,784,314		206,504		1,990,818
Agricultural and agricultural real estate	271,019		43,587		314,606
Residential real estate	222,487		17,966		240,453
Consumer	236,793		10,203		246,996
Total gross loans and leases receivable held to maturity	$	2,514,613	$	278,260	$	2,792,873
December 31, 2012
Commercial	$	661,118	$	51,190	$	712,308
Commercial real estate	1,134,784		154,400		1,289,184
Total commercial and commercial real estate	1,795,902		205,590		2,001,492
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
Total gross loans and leases receivable held to maturity	$	2,545,323	$	279,847	$	2,825,170

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 March 31, 2013, and December 31, 2012, 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
March 31, 2013
Commercial	$	5,245	$	624	$	—	$	5,869	$	685,082	$	2,284	$	693,235
Commercial real estate	1,781		350		404		2,535		1,274,874		20,174		1,297,583
Total commercial and commercial real estate	7,026		974		404		8,404		1,959,956		22,458		1,990,818
Agricultural and agricultural real estate	1,086		10		—		1,096		313,222		288		314,606
Residential real estate	2,006		—		—		2,006		232,241		6,206		240,453
Consumer	1,953		634		50		2,637		240,955		3,404		246,996
Total gross loans and leases receivable held to maturity	$	12,071	$	1,618	$	454	$	14,143	$	2,746,374	$	32,356	$	2,792,873
December 31, 2012
Commercial	$	1,143	$	525	$	—	$	1,668	$	708,459	$	2,181	$	712,308
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		1,967,571		30,128		2,001,492
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
Total gross loans and leases receivable held to maturity	$	7,173	$	2,056	$	—	$	9,229	$	2,772,785	$	43,156	$	2,825,170

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 March 31, 2013, and December 31, 2012; the outstanding loan balance recorded on the consolidated balance sheets at March 31, 2013, and December 31, 2012; any related allowance recorded for those loans as of March 31, 2013, and December 31, 2012; the average outstanding loan balance recorded on the consolidated balance sheets during the three months ended March 31, 2013, and year ended December 31, 2012; and the interest income recognized on the impaired loans during the three months ended March 31, 2013, and year ended December 31, 2012, in thousands:



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to-Date Avg. Loan Balance		Year-to-Date Interest Income Recognized
March 31, 2013
Impaired loans with a related allowance:
Commercial	$	2,561	$	2,561	$	1,026	$	2,631	$	19
Commercial real estate	7,007		6,043		964		5,667		89
Total commercial and commercial real estate	9,568		8,604		1,990		8,298		108
Agricultural and agricultural real estate	1,447		1,447		176		1,447		18
Residential real estate	3,562		3,536		796		3,274		19
Consumer	3,473		3,473		1,530		3,479		25
Total loans held to maturity	$	18,050	$	17,060	$	4,492	$	16,498	$	170
Impaired loans without a related allowance:
Commercial	$	6,266	$	5,896	$	—	$	5,485	$	65
Commercial real estate	39,718		31,151		—		34,884		164
Total commercial and commercial real estate	45,984		37,047		—		40,369		229
Agricultural and agricultural real estate	11,782		11,775		—		11,859		123
Residential real estate	4,314		3,769		—		3,727		16
Consumer	1,608		1,582		—		1,455		5
Total loans held to maturity	$	63,688	$	54,173	$	—	$	57,410	$	373
Total impaired loans held to maturity:
Commercial	$	8,827	$	8,457	$	1,026	$	8,116	$	84
Commercial real estate	46,725		37,194		964		40,551		252
Total commercial and commercial real estate	55,552		45,651		1,990		48,667		336
Agricultural and agricultural real estate	13,229		13,222		176		13,306		141
Residential real estate	7,876		7,305		796		7,001		35
Consumer	5,081		5,055		1,530		4,934		30
Total impaired loans held to maturity	$	81,738	$	71,233	$	4,492	$	73,908	$	542



	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

Impaired Financing Receivables

The carrying amount of the loans covered by these loss share agreements at March 31, 2013, and December 31, 2012, consisted of purchased impaired and nonimpaired loans as summarized in the following table, in thousands:



	March 31, 2013						December 31, 2012
	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	$	381	$	2,357	$	2,738	$	598	$	2,476	$	3,074
Agricultural and agricultural real estate	—		453		453		—		748		748
Residential real estate	—		2,722		2,722		—		2,645		2,645
Consumer loans	383		445		828		89		697		786
Total Covered Loans	$	764	$	5,977	$	6,741	$	687	$	6,566	$	7,253