SEGMENT REPORTING

Reportable segments include community banking and retail mortgage banking services. These segments were determined based on the products and services provided or the type of customers served and are consistent with the information that is used by Heartland's key decision makers to make operating decisions and to assess Heartland's performance. Community banking involves making loans to, and generating deposits from, individuals and businesses in the markets where Heartland has banks. Retail mortgage banking involves the origination of residential loans and the subsequent sale of those loans to investors. The mortgage banking segment is a strategic business unit that offers different products and services. It is managed separately because the segment is aimed at different markets and, accordingly, requires different technology and marketing strategies. The segment's most significant revenue and expense is non-interest income and non-interest expense, respectively. Heartland does not have other reportable operating segments. The accounting policies of the mortgage banking segment are the same as those described in the summary of significant accounting policies. All intersegment sales prices are market based. All of Heartland's goodwill is associated with the community banking segment.

The following table presents the financial information from Heartland's operating segments for the years ending December 31, 2017, December 31, 2016, and December 31, 2015, in thousands.



	Community and Other Banking		Mortgage Banking			Total
December 31, 2017
Net Interest Income	$	326,130	$	4,178		$	330,308
Provision for loan losses	15,563		—			15,563
Total noninterest income	77,837		24,185			102,022
Total noninterest expense	264,929		32,746			297,675
Income (loss) before income taxes	$	123,475	$	(4,383	)	$	119,092

December 31, 2016
Net Interest Income	$	290,088	$	4,578		$	294,666
Provision for loan losses	11,694		—			11,694
Total noninterest income	74,145		39,456			113,601
Total noninterest expense	237,198		42,470			279,668
Income (loss) before income taxes	$	115,341	$	1,564		$	116,905

December 31, 2015
Net Interest Income	$	228,422	$	5,576		$	233,998
Provision for loan losses	12,697		—			12,697
Total noninterest income	65,414		45,271			110,685
Total noninterest expense	201,063		49,983			251,046
Income (loss) before income taxes	$	80,076	$	864		$	80,940

Segment Assets
December 31, 2017	$	9,757,575	$	53,164		$	9,810,739
December 31, 2016	8,149,465		97,614			8,247,079
December 31, 2015	7,585,130		109,624			7,694,754

Average Loans, Net of Unearned
December 31, 2017	$	5,810,308	$	36,753		$	5,847,061
December 31, 2016	5,418,169		69,943			5,488,112
December 31, 2015	4,466,528		84,480			4,551,008