Loans and Leases (Tables)

3 Months Ended

Mar. 31, 2014

Loans and leases as of March 31, 2014, and December 31, 2013, were as follows, in thousands:



	March 31, 2014			December 31, 2013
Loans and leases receivable held to maturity:
Commercial	$	986,713		$	950,197
Commercial real estate	1,560,912			1,529,683
Agricultural and agricultural real estate	370,348			376,735
Residential real estate	365,162			349,349
Consumer	297,978			294,145
Gross loans and leases receivable held to maturity	3,581,113			3,500,109
Unearned discount	(136		)	(168		)
Deferred loan fees	(3,201		)	(2,989		)
Total net loans and leases receivable held to maturity	3,577,776			3,496,952
Loans covered under loss share agreements:
Commercial and commercial real estate	2,292			2,314
Agricultural and agricultural real estate	502			543
Residential real estate	2,062			2,280
Consumer	610			612
Total loans covered under loss share agreements	5,466			5,749
Allowance for loan and lease losses	(38,573		)	(41,685		)
Loans and leases receivable, net	$	3,544,669		$	3,461,016

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 significant changes to the accounting for the allowance for loan and lease losses policy during 2014.



	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, 2014
Commercial	$	603	$	11,030	$	11,633	$	8,172	$	978,541	$	986,713
Commercial real estate	365		12,645		13,010		27,403		1,533,509		1,560,912
Agricultural and agricultural real estate	15		2,556		2,571		9,006		361,342		370,348
Residential real estate	538		3,133		3,671		7,668		357,494		365,162
Consumer	1,745		5,631		7,376		6,175		291,803		297,978
Unallocated	—		312		312		—		—		—
Total	$	3,266	$	35,307	$	38,573	$	58,424	$	3,522,689	$	3,581,113
December 31, 2013
Commercial	$	2,817	$	10,282	$	13,099	$	14,644	$	935,553	$	950,197
Commercial real estate	818		13,334		14,152		28,299		1,501,384		1,529,683
Agricultural and agricultural real estate	756		2,236		2,992		16,667		360,068		376,735
Residential real estate	605		3,115		3,720		7,214		342,135		349,349
Consumer	1,721		6,001		7,722		5,137		289,008		294,145
Unallocated	—		—		—		—		—		—
Total	$	6,717	$	34,968	$	41,685	$	71,961	$	3,428,148	$	3,500,109

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, 2014, and December 31, 2013, in thousands. There were no nonaccrual leases, accruing leases past due 90 days or more or restructured leases at March 31, 2014, and December 31, 2013.



	March 31, 2014		December 31, 2013
Nonaccrual loans	$	26,630	$	29,313
Nonaccrual troubled debt restructured loans	5,298		13,081
Total nonaccrual loans	$	31,928	$	42,394
Accruing loans past due 90 days or more	$	—	$	24
Performing troubled debt restructured loans	$	12,548	$	19,353

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, 2014, and March 31, 2013, dollars in thousands:



	Three Months Ended March 31,
	2014					2013
	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	1	368		368		—	—		—
Total commercial and commercial real estate	1	368		368		2	4,670		4,670
Agricultural and agricultural real estate	—	—		—		3	2,576		2,576
Residential real estate	—	—		—		2	646		646
Consumer	—	—		—		—	—		—
Total	1	$	368	$	368	7	$	7,892	$	7,892

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, 2014, and December 31, 2013, in thousands:



	Pass		Nonpass		Total
March 31, 2014
Commercial	$	896,019	$	90,694	$	986,713
Commercial real estate	1,401,965		158,947		1,560,912
Total commercial and commercial real estate	2,297,984		249,641		2,547,625
Agricultural and agricultural real estate	330,764		39,584		370,348
Residential real estate	340,936		24,226		365,162
Consumer	288,653		9,325		297,978
Total gross loans and leases receivable held to maturity	$	3,258,337	$	322,776	$	3,581,113
December 31, 2013
Commercial	$	871,825	$	78,372	$	950,197
Commercial real estate	1,390,820		138,863		1,529,683
Total commercial and commercial real estate	2,262,645		217,235		2,479,880
Agricultural and agricultural real estate	335,821		40,914		376,735
Residential real estate	333,161		16,188		349,349
Consumer	284,148		9,997		294,145
Total gross loans and leases receivable held to maturity	$	3,215,775	$	284,334	$	3,500,109

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, 2014, and December 31, 2013, 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, 2014
Commercial	$	657	$	919	$	—	$	1,576	$	978,621	$	6,516	$	986,713
Commercial real estate	3,363		1,349		—		4,712		1,543,649		12,551		1,560,912
Total commercial and commercial real estate	4,020		2,268		—		6,288		2,522,270		19,067		2,547,625
Agricultural and agricultural real estate	417		82		—		499		364,791		5,058		370,348
Residential real estate	1,580		—		—		1,580		358,051		5,531		365,162
Consumer	2,178		566		—		2,744		292,962		2,272		297,978
Total gross loans and leases receivable held to maturity	$	8,195	$	2,916	$	—	$	11,111	$	3,538,074	$	31,928	$	3,581,113
December 31, 2013
Commercial	$	697	$	741	$	—	$	1,438	$	935,508	$	13,251	$	950,197
Commercial real estate	3,042		199		24		3,265		1,511,618		14,800		1,529,683
Total commercial and commercial real estate	3,739		940		24		4,703		2,447,126		28,051		2,479,880
Agricultural and agricultural real estate	818		—		—		818		369,907		6,010		376,735
Residential real estate	1,199		56		—		1,255		342,735		5,359		349,349
Consumer	2,624		1,089		—		3,713		287,458		2,974		294,145
Total gross loans and leases receivable held to maturity	$	8,380	$	2,085	$	24	$	10,489	$	3,447,226	$	42,394	$	3,500,109

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 contractual balance at March 31, 2014, and December 31, 2013; the outstanding loan balance recorded on the consolidated balance sheets at March 31, 2014, and December 31, 2013; any related allowance recorded for those loans as of March 31, 2014, and December 31, 2013; the average outstanding loan balance recorded on the consolidated balance sheets during the three months ended March 31, 2014, and year ended December 31, 2013; and the interest income recognized on the impaired loans during the three months ended March 31, 2014, and year ended December 31, 2013, in thousands:



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
March 31, 2014
Impaired loans with a related allowance:
Commercial	$	5,063	$	4,987	$	603	$	7,690	$	5
Commercial real estate	906		887		365		3,971		8
Total commercial and commercial real estate	5,969		5,874		968		11,661		13
Agricultural and agricultural real estate	472		472		15		7,070		2
Residential real estate	1,875		1,875		538		2,286		4
Consumer	4,358		4,358		1,745		4,451		30
Total loans held to maturity	$	12,674	$	12,579	$	3,266	$	25,468	$	49
Impaired loans without a related allowance:
Commercial	$	3,879	$	3,185	$	—	$	5,368	$	20
Commercial real estate	32,538		26,516		—		22,806		272
Total commercial and commercial real estate	36,417		29,701		—		28,174		292
Agricultural and agricultural real estate	10,044		8,534		—		5,224		30
Residential real estate	6,309		5,793		—		4,729		50
Consumer	1,818		1,817		—		1,650		15
Total loans held to maturity	$	54,588	$	45,845	$	—	$	39,777	$	387
Total impaired loans held to maturity:
Commercial	$	8,942	$	8,172	$	603	$	13,058	$	25
Commercial real estate	33,444		27,403		365		26,777		280
Total commercial and commercial real estate	42,386		35,575		968		39,835		305
Agricultural and agricultural real estate	10,516		9,006		15		12,294		32
Residential real estate	8,184		7,668		538		7,015		54
Consumer	6,176		6,175		1,745		6,101		45
Total impaired loans held to maturity	$	67,262	$	58,424	$	3,266	$	65,245	$	436



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
December 31, 2013
Impaired loans with a related allowance:
Commercial	$	7,901	$	7,901	$	2,817	$	5,343	$	38
Commercial real estate	9,164		8,909		818		7,686		282
Total commercial and commercial real estate	17,065		16,810		3,635		13,029		320
Agricultural and agricultural real estate	13,818		13,818		756		7,537		354
Residential real estate	2,460		2,460		605		3,179		13
Consumer	3,485		3,485		1,721		3,490		100
Total loans held to maturity	$	36,828	$	36,573	$	6,717	$	27,235	$	787
Impaired loans without a related allowance:
Commercial	$	7,724	$	6,743	$	—	$	9,394	$	89
Commercial real estate	24,830		19,390		—		25,676		538
Total commercial and commercial real estate	32,554		26,133		—		35,070		627
Agricultural and agricultural real estate	2,849		2,849		—		9,985		189
Residential real estate	5,345		4,754		—		4,198		80
Consumer	1,652		1,652		—		1,515		37
Total loans held to maturity	$	42,400	$	35,388	$	—	$	50,768	$	933
Total impaired loans held to maturity:
Commercial	$	15,625	$	14,644	$	2,817	$	14,737	$	127
Commercial real estate	33,994		28,299		818		33,362		820
Total commercial and commercial real estate	49,619		42,943		3,635		48,099		947
Agricultural and agricultural real estate	16,667		16,667		756		17,522		543
Residential real estate	7,805		7,214		605		7,377		93
Consumer	5,137		5,137		1,721		5,005		137
Total impaired loans held to maturity	$	79,228	$	71,961	$	6,717	$	78,003	$	1,720

Impaired Financing Receivables

The carrying amount of the loans covered by these loss share agreements at March 31, 2014, and December 31, 2013, consisted of purchased impaired and nonimpaired loans as summarized in the following table, in thousands:



	March 31, 2014						December 31, 2013
	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	$	565	$	1,727	$	2,292	$	549	$	1,765	$	2,314
Agricultural and agricultural real estate	—		502		502		—		543		543
Residential real estate	—		2,062		2,062		—		2,280		2,280
Consumer loans	574		36		610		538		74		612
Total Covered Loans	$	1,139	$	4,327	$	5,466	$	1,087	$	4,662	$	5,749