Loans and Leases (Tables)

9 Months Ended

Sep. 30, 2015

Loans and leases as of September 30, 2015, and December 31, 2014, were as follows, in thousands:



	September 30, 2015			December 31, 2014
Loans and leases receivable held to maturity:
Commercial	$	1,240,956		$	1,036,080
Commercial real estate	2,062,142			1,707,060
Agricultural and agricultural real estate	469,381			423,827
Residential real estate	491,667			380,341
Consumer	379,903			330,555
Gross loans and leases receivable held to maturity	4,644,049			3,877,863
Unearned discount	(478		)	(90		)
Deferred loan fees	(1,048		)	(1,028		)
Total net loans and leases receivable held to maturity	4,642,523			3,876,745
Loans covered under loss share agreements:
Commercial and commercial real estate	—			54
Agricultural and agricultural real estate	—			—
Residential real estate	—			1,204
Consumer	—			—
Total loans covered under loss share agreements	—			1,258
Allowance for loan and lease losses	(47,105		)	(41,449		)
Loans and leases receivable, net	$	4,595,418		$	3,836,554

Allowance for Loan and Lease Losses, Based on Impairment Methodology

The following table shows the balance in the allowance for loan and lease losses at September 30, 2015, and December 31, 2014, and the related loan balances, disaggregated on the basis of impairment methodology, in thousands. Loans evaluated under ASC 310-10-35 include loans on nonaccrual status and troubled debt restructurings, which are individually evaluated for impairment, and other impaired loans deemed to have similar risk characteristics. 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 2015.



	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
September 30, 2015
Commercial	$	388	$	13,522	$	13,910	$	8,386	$	1,232,570	$	1,240,956
Commercial real estate	645		17,441		18,086		43,682		2,018,460		2,062,142
Agricultural and agricultural real estate	40		3,899		3,939		5,916		463,465		469,381
Residential real estate	372		3,474		3,846		14,024		477,643		491,667
Consumer	1,057		6,267		7,324		4,925		374,978		379,903
Total	$	2,502	$	44,603	$	47,105	$	76,933	$	4,567,116	$	4,644,049
December 31, 2014
Commercial	$	754	$	11,155	$	11,909	$	4,526	$	1,031,554	$	1,036,080
Commercial real estate	636		15,262		15,898		35,771		1,671,289		1,707,060
Agricultural and agricultural real estate	52		3,243		3,295		5,049		418,778		423,827
Residential real estate	442		3,299		3,741		10,235		370,106		380,341
Consumer	813		5,793		6,606		6,143		324,412		330,555
Total	$	2,697	$	38,752	$	41,449	$	61,724	$	3,816,139	$	3,877,863

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 September 30, 2015, and December 31, 2014, in thousands. There were no nonaccrual leases, accruing leases past due 90 days or more or restructured leases at September 30, 2015, and December 31, 2014.



	September 30, 2015		December 31, 2014
Nonaccrual loans	$	30,965	$	24,205
Nonaccrual troubled debt restructured loans	1,612		865
Total nonaccrual loans	$	32,577	$	25,070
Accruing loans past due 90 days or more	$	1,181	$	—
Performing troubled debt restructured loans	$	10,154	$	12,133

Troubled Debt Restructuring on Loans Modified

The following table provides information on troubled debt restructured loans that were modified during the three and nine months ended September 30, 2015, and September 30, 2014, dollars in thousands:



	Three Months Ended September 30,
	2015					2014
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Commercial	—	$	—	$	—	—	$	—	$	—
Commercial real estate	—	—		—		—	—		—
Total commercial and commercial real estate	—	—		—		—	—		—
Agricultural and agricultural real estate	—	—		—		1	60		60
Residential real estate	1	55		55		—	—		—
Consumer	—	—		—		—	—		—
Total	1	$	55	$	55	1	$	60	$	60



	Nine Months Ended September 30,
	2015					2014
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Commercial	1	$	830	$	830	—	$	—	$	—
Commercial real estate	1	3,992		3,992		1	298		298
Total commercial and commercial real estate	2	4,822		4,822		1	298		298
Agricultural and agricultural real estate	1	311		311		3	3,417		3,417
Residential real estate	1	55		55		1	38		38
Consumer	—	—		—		—	—		—
Total	4	$	5,188	$	5,188	5	$	3,753	$	3,753

Troubled Debt Restructured 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 and nine months ended September 30, 2015, and September 30, 2014, in thousands, that had been modified during the twelve-month period prior to default:



	With Payment Defaults During the Following Periods
	Three Months Ended September 30,
	2015			2014
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	—	$	—	—	$	—
Commercial real estate	1	814		—	—
Total commercial and commercial real estate	1	814		—	—
Agricultural and agricultural real estate	—	—		1	60
Residential real estate	—	—		—	—
Consumer	—	—		—	—
Total	1	$	814	1	$	60



	With Payment Defaults During the Following Periods
	Nine Months Ended September 30,
	2015			2014
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	—	$	—	—	$	—
Commercial real estate	1	814		—	—
Total commercial and commercial real estate	1	814		—	—
Agricultural and agricultural real estate	—	—		1	60
Residential real estate	—	—		—	—
Consumer	—	—		—	—
Total	1	$	814	1	$	60

Financing Receivable Credit Quality Indicators

The following table presents loans and leases not covered by loss share agreements by credit quality indicator at September 30, 2015, and December 31, 2014, in thousands:



	Pass		Nonpass		Total
September 30, 2015
Commercial	$	1,093,853	$	147,103	$	1,240,956
Commercial real estate	1,878,579		183,563		2,062,142
Total commercial and commercial real estate	2,972,432		330,666		3,303,098
Agricultural and agricultural real estate	443,460		25,921		469,381
Residential real estate	470,332		21,335		491,667
Consumer	371,268		8,635		379,903
Total gross loans and leases receivable held to maturity	$	4,257,492	$	386,557	$	4,644,049
December 31, 2014
Commercial	$	939,717	$	96,363	$	1,036,080
Commercial real estate	1,567,711		139,349		1,707,060
Total commercial and commercial real estate	2,507,428		235,712		2,743,140
Agricultural and agricultural real estate	402,883		20,944		423,827
Residential real estate	361,325		19,016		380,341
Consumer	321,114		9,441		330,555
Total gross loans and leases receivable held to maturity	$	3,592,750	$	285,113	$	3,877,863

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 September 30, 2015, and December 31, 2014, 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
September 30, 2015
Commercial	$	1,729	$	21	$	291	$	2,041	$	1,235,294	$	3,621	$	1,240,956
Commercial real estate	6,115		1,475		890		8,480		2,040,177		13,485		2,062,142
Total commercial and commercial real estate	7,844		1,496		1,181		10,521		3,275,471		17,106		3,303,098
Agricultural and agricultural real estate	223		84		—		307		466,607		2,467		469,381
Residential real estate	2,118		535		—		2,653		478,464		10,550		491,667
Consumer	4,710		1,446		—		6,156		371,293		2,454		379,903
Total gross loans and leases receivable held to maturity	$	14,895	$	3,561	$	1,181	$	19,637	$	4,591,835	$	32,577	$	4,644,049
December 31, 2014
Commercial	$	980	$	48	$	—	$	1,028	$	1,032,707	$	2,345	$	1,036,080
Commercial real estate	1,788		111		—		1,899		1,693,554		11,607		1,707,060
Total commercial and commercial real estate	2,768		159		—		2,927		2,726,261		13,952		2,743,140
Agricultural and agricultural real estate	119		50		—		169		422,219		1,439		423,827
Residential real estate	1,037		445		—		1,482		371,982		6,877		380,341
Consumer	2,382		1,366		—		3,748		324,005		2,802		330,555
Total gross loans and leases receivable held to maturity	$	6,306	$	2,020	$	—	$	8,326	$	3,844,467	$	25,070	$	3,877,863

Impaired Loans Not Covered by Loss Share Agreements

The following tables present, for impaired loans not covered by loss share agreements and by category of loan, the unpaid contractual balance at September 30, 2015, and December 31, 2014; the outstanding loan balance recorded on the consolidated balance sheets at September 30, 2015, and December 31, 2014; any related allowance recorded for those loans as of September 30, 2015, and December 31, 2014; the average outstanding loan balance recorded on the consolidated balance sheets during the nine months ended September 30, 2015, and year ended December 31, 2014; and the interest income recognized on the impaired loans during the nine months ended September 30, 2015, and year ended December 31, 2014, in thousands:



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Quarter-to- Date Avg. Loan Balance		Quarter-to- Date Interest Income Recognized		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
September 30, 2015
Impaired loans with a related allowance:
Commercial	$	1,200	$	948	$	388	$	394	$	3	$	383	$	9
Commercial real estate	2,384		2,384		645		1,243		10		2,028		20
Total commercial and commercial real estate	3,584		3,332		1,033		1,637		13		2,411		29
Agricultural and agricultural real estate	3,196		3,196		40		3,281		85		3,058		123
Residential real estate	2,637		2,469		372		2,860		7		2,619		16
Consumer	3,036		3,027		1,057		3,136		5		2,845		16
Total impaired loans with a related allowance	$	12,453	$	12,024	$	2,502	$	10,914	$	110	$	10,933	$	184
Impaired loans without a related allowance:
Commercial	$	7,518	$	7,438	$	—	$	9,759	$	100	$	7,050	$	274
Commercial real estate	44,758		41,298		—		42,476		397		36,149		1,055
Total commercial and commercial real estate	52,276		48,736		—		52,235		497		43,199		1,329
Agricultural and agricultural real estate	2,720		2,720		—		2,197		—		2,106		9
Residential real estate	11,593		11,555		—		10,305		15		8,936		85
Consumer	1,898		1,898		—		2,025		4		2,431		27
Total impaired loans without a related allowance	$	68,487	$	64,909	$	—	$	66,762	$	516	$	56,672	$	1,450
Total impaired loans held to maturity:
Commercial	$	8,718	$	8,386	$	388	$	10,153	$	103	$	7,433	$	283
Commercial real estate	47,142		43,682		645		43,719		407		38,177		1,075
Total commercial and commercial real estate	55,860		52,068		1,033		53,872		510		45,610		1,358
Agricultural and agricultural real estate	5,916		5,916		40		5,478		85		5,164		132
Residential real estate	14,230		14,024		372		13,165		22		11,555		101
Consumer	4,934		4,925		1,057		5,161		9		5,276		43
Total impaired loans held to maturity	$	80,940	$	76,933	$	2,502	$	77,676	$	626	$	67,605	$	1,634



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
December 31, 2014
Impaired loans with a related allowance:
Commercial	$	780	$	780	$	754	$	5,594	$	19
Commercial real estate	7,356		7,322		636		5,931		303
Total commercial and commercial real estate	8,136		8,102		1,390		11,525		322
Agricultural and agricultural real estate	3,317		3,317		52		3,966		104
Residential real estate	2,412		2,244		442		3,398		12
Consumer	2,799		2,799		813		4,053		19
Total impaired loans with a related allowance	$	16,664	$	16,462	$	2,697	$	22,942	$	457
Impaired loans without a related allowance:
Commercial	$	4,913	$	3,746	$	—	$	3,499	$	101
Commercial real estate	32,708		28,449		—		24,522		1,172
Total commercial and commercial real estate	37,621		32,195		—		28,021		1,273
Agricultural and agricultural real estate	3,961		1,732		—		3,308		13
Residential real estate	8,200		7,991		—		6,267		110
Consumer	3,350		3,344		—		1,870		127
Total impaired loans without a related allowance	$	53,132	$	45,262	$	—	$	39,466	$	1,523
Total impaired loans held to maturity:
Commercial	$	5,693	$	4,526	$	754	$	9,093	$	120
Commercial real estate	40,064		35,771		636		30,453		1,475
Total commercial and commercial real estate	45,757		40,297		1,390		39,546		1,595
Agricultural and agricultural real estate	7,278		5,049		52		7,274		117
Residential real estate	10,612		10,235		442		9,665		122
Consumer	6,149		6,143		813		5,923		146
Total impaired loans held to maturity	$	69,796	$	61,724	$	2,697	$	62,408	$	1,980

Summary of Purchased Impaired and Nonimpaired Loans

The carrying amount of the loans acquired with the acquisitions in 2015 at September 30, 2015, consisted of purchased impaired and nonimpaired loans as summarized in the following table, in thousands:



	September 30, 2015
	Impaired Purchased Loans		Non Impaired Purchased Loans		Total Purchased Loans
Commercial	$	—	$	93,304	$	93,304
Commercial real estate	6,561		270,229		276,790
Agricultural and agricultural real estate	—		2,788		2,788
Residential real estate	—		49,816		49,816
Consumer loans	—		28,056		28,056
Total Loans	$	6,561	$	444,193	$	450,754