QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | Accelerated Filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Part I | |||||
Part II | |||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) | |||||||||||
September 30, 2019 (Unaudited) | December 31, 2018 | ||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | $ | |||||||||
Interest bearing deposits with other banks and other short-term investments | |||||||||||
Cash and cash equivalents | |||||||||||
Time deposits in other financial institutions | |||||||||||
Securities: | |||||||||||
Carried at fair value (cost of $ | |||||||||||
Held to maturity, at cost (fair value of $ | |||||||||||
Other investments, at cost | |||||||||||
Loans held for sale | |||||||||||
Loans receivable: | |||||||||||
Held to maturity | |||||||||||
Allowance for loan and lease losses | ( | ( | |||||||||
Loans receivable, net | |||||||||||
Premises, furniture and equipment, net | |||||||||||
Premises, furniture and equipment held for sale | |||||||||||
Other real estate, net | |||||||||||
Goodwill | |||||||||||
Core deposit intangibles and customer relationship intangibles, net | |||||||||||
Servicing rights, net | |||||||||||
Cash surrender value on life insurance | |||||||||||
Other assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
LIABILITIES: | |||||||||||
Deposits: | |||||||||||
Demand | $ | $ | |||||||||
Savings | |||||||||||
Time | |||||||||||
Total deposits | |||||||||||
Deposits held for sale | |||||||||||
Short-term borrowings | |||||||||||
Other borrowings | |||||||||||
Accrued expenses and other liabilities | |||||||||||
TOTAL LIABILITIES | |||||||||||
STOCKHOLDERS' EQUITY: | |||||||||||
Preferred stock (par value $ | |||||||||||
Series A Junior Participating preferred stock (par value $ | |||||||||||
Series C Senior Non-Cumulative Perpetual Preferred Stock (par value $ | |||||||||||
Series D Senior Non-Cumulative Perpetual Convertible Preferred Stock (par value $ | |||||||||||
Common stock (par value $ | |||||||||||
Capital surplus | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income/(loss) | ( | ||||||||||
TOTAL STOCKHOLDERS' EQUITY | |||||||||||
TOTAL LIABILITIES AND EQUITY | $ | $ | |||||||||
See accompanying notes to consolidated financial statements. |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | |||||||||||||||||||
Interest on securities: | |||||||||||||||||||||||
Taxable | |||||||||||||||||||||||
Nontaxable | |||||||||||||||||||||||
Interest on federal funds sold | |||||||||||||||||||||||
Interest on interest bearing deposits in other financial institutions | |||||||||||||||||||||||
TOTAL INTEREST INCOME | |||||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||
Interest on deposits | |||||||||||||||||||||||
Interest on short-term borrowings | |||||||||||||||||||||||
Interest on other borrowings (includes $ | |||||||||||||||||||||||
TOTAL INTEREST EXPENSE | |||||||||||||||||||||||
NET INTEREST INCOME | |||||||||||||||||||||||
Provision for loan losses | |||||||||||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | |||||||||||||||||||||||
NONINTEREST INCOME: | |||||||||||||||||||||||
Service charges and fees | |||||||||||||||||||||||
Loan servicing income | |||||||||||||||||||||||
Trust fees | |||||||||||||||||||||||
Brokerage and insurance commissions | |||||||||||||||||||||||
Securities gains/(losses), net (includes $ | ( | ||||||||||||||||||||||
Unrealized gain on equity securities, net | |||||||||||||||||||||||
Net gains on sale of loans held for sale | |||||||||||||||||||||||
Valuation allowance on servicing rights | ( | ( | |||||||||||||||||||||
Income on bank owned life insurance | |||||||||||||||||||||||
Other noninterest income | |||||||||||||||||||||||
TOTAL NONINTEREST INCOME | |||||||||||||||||||||||
NONINTEREST EXPENSES: | |||||||||||||||||||||||
Salaries and employee benefits | |||||||||||||||||||||||
Occupancy | |||||||||||||||||||||||
Furniture and equipment | |||||||||||||||||||||||
Professional fees | |||||||||||||||||||||||
Advertising | |||||||||||||||||||||||
Core deposit intangibles and customer relationship intangibles amortization | |||||||||||||||||||||||
Other real estate and loan collection expenses | ( | ||||||||||||||||||||||
(Gain)/loss on sales/valuations of assets, net | ( | ||||||||||||||||||||||
Restructuring expenses | |||||||||||||||||||||||
Other noninterest expenses | |||||||||||||||||||||||
TOTAL NONINTEREST EXPENSES | |||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
Income taxes (includes $ | |||||||||||||||||||||||
NET INCOME | |||||||||||||||||||||||
Preferred dividends | ( | ( | |||||||||||||||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE - BASIC | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE - DILUTED | $ | $ | $ | $ | |||||||||||||||||||
CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to consolidated financial statements. |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
OTHER COMPREHENSIVE INCOME/(LOSS) | |||||||||||||||||||||||
Securities: | |||||||||||||||||||||||
Net change in unrealized gain/(loss) on securities | ( | ( | |||||||||||||||||||||
Reclassification adjustment for net (gains)/losses realized in net income | ( | ( | ( | ||||||||||||||||||||
Income taxes | ( | ( | |||||||||||||||||||||
Other comprehensive income/(loss) on securities | ( | ( | |||||||||||||||||||||
Derivatives used in cash flow hedging relationships: | |||||||||||||||||||||||
Net change in unrealized gain/(loss) on derivatives | ( | ( | |||||||||||||||||||||
Reclassification adjustment for net losses on derivatives realized in net income | |||||||||||||||||||||||
Income taxes | ( | ( | |||||||||||||||||||||
Other comprehensive income/(loss) on cash flow hedges | ( | ( | |||||||||||||||||||||
Other comprehensive income/(loss) | ( | ( | |||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to consolidated financial statements. |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Provision for loan losses | |||||||||||
Net amortization of premium on securities | |||||||||||
Securities gains, net | ( | ( | |||||||||
Unrealized gain on equity securities, net | ( | ( | |||||||||
Stock based compensation | |||||||||||
Loans originated for sale | ( | ( | |||||||||
Proceeds on sales of loans held for sale | |||||||||||
Net gains on sale of loans held for sale | ( | ( | |||||||||
(Increase) decrease in accrued interest receivable | ( | ||||||||||
(Increase) decrease in prepaid expenses | ( | ||||||||||
Increase in accrued interest payable | |||||||||||
Gain on extinguishment of debt | ( | ||||||||||
Capitalization of servicing rights | ( | ( | |||||||||
Valuation allowance on servicing rights | ( | ||||||||||
(Gain)/loss on sales/valuations of assets, net | ( | ||||||||||
Net excess tax benefit from stock based compensation | |||||||||||
Other, net | ( | ( | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchase of time deposits in other financial institutions | ( | ( | |||||||||
Proceeds from the sale of securities available for sale | |||||||||||
Proceeds from the redemption of time deposits in other financial institutions | |||||||||||
Proceeds from the maturity of and principal paydowns on securities available for sale | |||||||||||
Proceeds from the maturity of and principal paydowns on securities held to maturity | |||||||||||
Proceeds from the maturity of and principal paydowns on time deposits in other financial institutions | |||||||||||
Proceeds from the sale, maturity of and principal paydowns on other investments | |||||||||||
Purchase of securities available for sale | ( | ( | |||||||||
Purchase of other investments | ( | ( | |||||||||
Net increase in loans | ( | ( | |||||||||
Purchase of bank owned life insurance policies | ( | ( | |||||||||
Proceeds from bank owned life insurance policies | |||||||||||
Proceeds from sale of mortgage servicing rights | |||||||||||
Capital expenditures | ( | ( | |||||||||
Net cash and cash equivalents received in acquisitions | |||||||||||
Proceeds from the sale of equipment | |||||||||||
Net cash expended in divestitures | ( | ||||||||||
Proceeds on sale of OREO and other repossessed assets | |||||||||||
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | $ | ( | $ | ||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED (Unaudited) (Dollars in thousands) | |||||||||||
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Net increase in demand deposits | $ | $ | |||||||||
Net increase in savings deposits | |||||||||||
Net decrease in time deposit accounts | ( | ( | |||||||||
Proceeds on short-term revolving credit line | |||||||||||
Repayments on short-term revolving credit line | ( | ||||||||||
Net decrease in short-term borrowings | ( | ( | |||||||||
Proceeds from short term FHLB advances | |||||||||||
Repayments of short term FHLB advances | ( | ( | |||||||||
Proceeds from other borrowings | |||||||||||
Repayments of other borrowings | ( | ( | |||||||||
Payment for the redemption of debt | ( | ||||||||||
Purchase of treasury stock | ( | ||||||||||
Proceeds from issuance of common stock | |||||||||||
Dividends paid | ( | ( | |||||||||
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | ( | ||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents at beginning of year | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | |||||||||
Supplemental disclosures: | |||||||||||
Cash paid for income/franchise taxes | $ | $ | |||||||||
Cash paid for interest | $ | $ | |||||||||
Loans transferred to OREO | $ | $ | |||||||||
Transfer of premises from premises, furniture and equipment, net, to premises, furniture and equipment held for sale | $ | $ | |||||||||
Transfer of premises from premises, furniture and equipment held for sale to premises, furniture and equipment, net, | $ | $ | |||||||||
Deposits transferred to held for sale | $ | $ | |||||||||
Loans transferred to held for sale | $ | $ | |||||||||
Securities transferred from held to maturity to available for sale | $ | $ | |||||||||
Purchases of securities available for sale, accrued, not settled | $ | $ | |||||||||
Conversion of Series D preferred stock to common stock | $ | $ | |||||||||
Stock consideration granted for acquisitions | $ | $ | |||||||||
See accompanying notes to consolidated financial statements. |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
Heartland Financial USA, Inc. Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Comprehensive income | ( | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Series D Preferred, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Common, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Conversion of Series D Preferred Stock | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of | |||||||||||||||||||||||||||||||||||||||||
Stock based compensation | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Comprehensive income | ( | ||||||||||||||||||||||||||||||||||||||||
Reclassification of unrealized net gain on equity securities | ( | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Series D Preferred, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Common, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Conversion of Series D Preferred Stock | ( | ( | |||||||||||||||||||||||||||||||||||||||
Purchase of | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of | |||||||||||||||||||||||||||||||||||||||||
Stock based compensation | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Comprehensive income | $ | $ | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Common, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of | |||||||||||||||||||||||||||||||||||||||||
Stock based compensation | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||||||||||||
Retained earnings adjustment for adoption of leasing standard | ( | ( | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | |||||||||||||||||||||||||||||||||||||||||
Common, $ | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of | |||||||||||||||||||||||||||||||||||||||||
Stock based compensation | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements. |
Three Months Ended September 30, | |||||||||||
(Dollars and number of shares in thousands, except per share data) | 2019 | 2018 | |||||||||
Net income | $ | $ | |||||||||
Preferred dividends | ( | ||||||||||
Net income available to common stockholders | $ | $ | |||||||||
Weighted average common shares outstanding for basic earnings per share | |||||||||||
Assumed incremental common shares issued upon vesting of outstanding restricted stock units | |||||||||||
Weighted average common shares for diluted earnings per share | |||||||||||
Earnings per common share — basic | $ | $ | |||||||||
Earnings per common share — diluted | $ | $ | |||||||||
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation | |||||||||||
Nine Months Ended September 30, | |||||||||||
(Dollars and number of shares in thousands, except per share data) | 2019 | 2018 | |||||||||
Net income | $ | $ | |||||||||
Preferred dividends | ( | ||||||||||
Net income available to common stockholders | $ | $ | |||||||||
Weighted average common shares outstanding for basic earnings per share | |||||||||||
Assumed incremental common shares issued upon vesting of outstanding restricted stock units | |||||||||||
Weighted average common shares for diluted earnings per share | |||||||||||
Earnings per common share — basic | $ | $ | |||||||||
Earnings per common share — diluted | $ | $ | |||||||||
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | $ | $ | |||||||||||||||||||
Mortgage and asset-backed securities | ( | ||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Total debt securities | ( | ||||||||||||||||||||||
Equity securities with a readily determinable fair value | — | — | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Mortgage and asset-backed securities | ( | ||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Total debt securities | ( | ||||||||||||||||||||||
Equity securities with a readily determinable fair value | — | — | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | ( | $ | ||||||||||||||||||
Total | $ | $ | $ | ( | $ |
September 30, 2019 | |||||||||||
Amortized Cost | Estimated Fair Value | ||||||||||
Due in 1 year or less | $ | $ | |||||||||
Due in 1 to 5 years | |||||||||||
Due in 5 to 10 years | |||||||||||
Due after 10 years | |||||||||||
Total debt securities | |||||||||||
Mortgage and asset-backed securities | |||||||||||
Equity securities with a readily determinable fair value | |||||||||||
Total investment securities | $ | $ |
September 30, 2019 | |||||||||||
Amortized Cost | Estimated Fair Value | ||||||||||
Due in 1 year or less | $ | $ | |||||||||
Due in 1 to 5 years | |||||||||||
Due in 5 to 10 years | |||||||||||
Due after 10 years | |||||||||||
Total investment securities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Proceeds from sales | $ | $ | $ | $ | |||||||||||||||||||
Gross security gains | |||||||||||||||||||||||
Gross security losses |
Debt securities available for sale | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Mortgage and asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Mortgage and asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Securities held to maturity | Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Total temporarily impaired securities | $ | $ | ( | $ | $ | ( | $ | $ | ( |
September 30, 2019 | December 31, 2018 | ||||||||||
Loans receivable held to maturity: | |||||||||||
Commercial | $ | $ | |||||||||
Commercial real estate | |||||||||||
Agricultural and agricultural real estate | |||||||||||
Residential real estate | |||||||||||
Consumer | |||||||||||
Gross loans receivable held to maturity | |||||||||||
Unearned discount | ( | ( | |||||||||
Deferred loan fees | ( | ( | |||||||||
Total net loans receivable held to maturity | |||||||||||
Allowance for loan losses | ( | ( | |||||||||
Loans receivable, net | $ | $ |
Allowance For Loan Losses | Gross Loans 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, 2019 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||||||
Nonaccrual loans | $ | $ | |||||||||
Nonaccrual troubled debt restructured loans | |||||||||||
Total nonaccrual loans | $ | $ | |||||||||
Accruing loans past due 90 days or more | $ | $ | |||||||||
Performing troubled debt restructured loans | $ | $ |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
With Payment Defaults During the Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
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 | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ |
With Payment Defaults During the Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
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 | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ |
Pass | Nonpass | Total | |||||||||||||||
September 30, 2019 | |||||||||||||||||
Commercial | $ | $ | $ | ||||||||||||||
Commercial real estate | |||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | |||||||||||||||||
Total gross loans receivable held to maturity | $ | $ | $ | ||||||||||||||
December 31, 2018 | |||||||||||||||||
Commercial | $ | $ | $ | ||||||||||||||
Commercial real estate | |||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||
Residential real estate | |||||||||||||||||
Consumer | |||||||||||||||||
Total gross loans receivable held to maturity | $ | $ | $ |
Accruing Loans | |||||||||||||||||||||||||||||||||||||||||
30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due | Total Past Due | Current | Nonaccrual | Total Loans | |||||||||||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total gross loans receivable held to maturity | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total gross loans receivable held to maturity | $ | $ | $ | $ | $ | $ | $ |
Unpaid Principal 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, 2019 | |||||||||||||||||||||||||||||||||||||||||
Impaired loans with a related allowance: | |||||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total loans held to maturity | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Impaired loans without a related allowance: | |||||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | — | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||||||||||||||
Total commercial and commercial real estate | — | ||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | — | ||||||||||||||||||||||||||||||||||||||||
Residential real estate | — | ||||||||||||||||||||||||||||||||||||||||
Consumer | — | ||||||||||||||||||||||||||||||||||||||||
Total loans held to maturity | $ | $ | $ | — | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Total impaired loans held to maturity: | |||||||||||||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||
Total impaired loans held to maturity | $ | $ | $ | $ | $ | $ | $ |
Unpaid Principal Balance | Loan Balance | Related Allowance Recorded | Year-to- Date Avg. Loan Balance | Year-to- Date Interest Income Recognized | |||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||
Impaired loans with a related allowance: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total loans held to maturity | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Impaired loans without a related allowance: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||
Commercial real estate | — | ||||||||||||||||||||||||||||
Total commercial and commercial real estate | — | ||||||||||||||||||||||||||||
Agricultural and agricultural real estate | — | ||||||||||||||||||||||||||||
Residential real estate | — | ||||||||||||||||||||||||||||
Consumer | — | ||||||||||||||||||||||||||||
Total loans held to maturity | $ | $ | $ | — | $ | $ | |||||||||||||||||||||||
Total impaired loans held to maturity: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Total commercial and commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total impaired loans held to maturity | $ | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||
Impaired Purchased Loans | Non Impaired Purchased Loans | Total Purchased Loans | Impaired Purchased Loans | Non Impaired Purchased Loans | Total Purchased Loans | ||||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||
Consumer loans | |||||||||||||||||||||||||||||||||||
Total covered loans | $ | $ | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | $ | $ | ||||||||||||||||||
Original yield discount, net, at date of acquisition | |||||||||||||||||||||||
Accretion | ( | ( | ( | ( | |||||||||||||||||||
Reclassification from nonaccretable difference(1) | |||||||||||||||||||||||
Balance at period end | $ | $ | $ | $ | |||||||||||||||||||
(1) Represents increases in estimated cash flows expected to be received, primarily due to lower estimated credit losses. |
Commercial | Commercial Real Estate | Agricultural and Agricultural Real Estate | Residential Real Estate | Consumer | Total | ||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
Provision | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial | Commercial Real Estate | Agricultural and Agricultural Real Estate | Residential Real Estate | Consumer | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
Provision | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ |
Commercial | Commercial Real Estate | Agricultural and Agricultural Real Estate | Residential Real Estate | Consumer | Total | ||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
Provision | ( | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Commercial | Commercial Real Estate | Agricultural and Agricultural Real Estate | Residential Real Estate | Consumer | Total | ||||||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
Provision | ( | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | $ | $ |
September 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
Amortizing intangible assets: | |||||||||||||||||||||||||||||||||||
Core deposit intangibles | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Customer relationship intangibles | |||||||||||||||||||||||||||||||||||
Mortgage servicing rights | |||||||||||||||||||||||||||||||||||
Commercial servicing rights | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Core Deposit Intangibles | Customer Relationship Intangibles | Mortgage Servicing Rights | Commercial Servicing Rights | Total | |||||||||||||||||||||||||
Three months ending December 31, 2019 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Year ending December 31, | |||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||||
2024 | |||||||||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
2019 | 2018 | ||||||||||
Balance at January 1, | $ | $ | |||||||||
Originations | |||||||||||
Amortization | ( | ( | |||||||||
Sale of mortgage servicing rights | ( | ||||||||||
Acquired mortgage servicing rights | |||||||||||
Valuation allowance | ( | ||||||||||
Balance at period end | $ | $ | |||||||||
Mortgage servicing rights, net to servicing portfolio | % | % |
2019 | 2018 | ||||||||||
Balance at January 1, | $ | $ | |||||||||
Originations | |||||||||||
Amortization | ( | ( | |||||||||
Valuation allowance on commercial servicing rights | ( | ||||||||||
Balance at period end | $ | $ | |||||||||
Fair value of commercial servicing rights | $ | $ | |||||||||
Commercial servicing rights, net to servicing portfolio | % | % |
September 30, 2019 | Book Value 15-Year Tranche | Fair Value 15-Year Tranche | Impairment 15-Year Tranche | Book Value 30-Year Tranche | Fair Value 30-Year Tranche | Impairment 30-Year Tranche | |||||||||||||||||||||||||||||
Dubuque Bank and Trust Company | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
First Bank & Trust | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Dubuque Bank and Trust Company | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
First Bank & Trust | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
September 30, 2019 | Book Value Less than 20 Years | Fair Value Less than 20 Years | Impairment Less than 20 Years | Book Value More than 20 Years | Fair Value More than 20 Years | Impairment More than 20 Years | |||||||||||||||||||||||||||||
Citywide Banks | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Premier Valley Bank | |||||||||||||||||||||||||||||||||||
Wisconsin Bank & Trust | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Citywide Banks | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Premier Valley Bank | |||||||||||||||||||||||||||||||||||
Wisconsin Bank & Trust | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Notional Amount | Fair Value | Balance Sheet Category | Receive Rate | Weighted Average Pay Rate | Maturity | ||||||||||||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | $ | ( | Other liabilities | % | % | 03/17/2021 | ||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 01/07/2020 | ||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 05/10/2021 | |||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 07/24/2028 | ||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 06/15/2024 | ||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 03/01/2024 | ||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 06/15/2021 | ||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 06/30/2021 | ||||||||||||||||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | $ | Other assets | % | % | 03/17/2021 | |||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 01/07/2020 | ||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 03/26/2019 | |||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 03/18/2019 | |||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 05/10/2021 | |||||||||||||||||||||||||||||||||
Interest rate swap | ( | Other liabilities | 07/24/2028 | ||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 06/15/2024 | |||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 03/01/2024 | |||||||||||||||||||||||||||||||||
Interest rate swap | Other Assets | 06/15/2021 | |||||||||||||||||||||||||||||||||
Interest rate swap | Other assets | 06/30/2021 |
Effective Portion | Ineffective Portion | ||||||||||||||||||||||||||||
Recognized in OCI | Reclassified from AOCI into Income | Recognized in Income on Derivatives | |||||||||||||||||||||||||||
Amount of Gain (Loss) | Category | Amount of Gain (Loss) | Category | Amount of Gain (Loss) | |||||||||||||||||||||||||
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | ( | Interest expense | $ | ( | Other income | $ | ||||||||||||||||||||||
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | ( | Interest expense | $ | ( | Other income | $ | ||||||||||||||||||||||
Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | Interest expense | $ | Other income | $ | ||||||||||||||||||||||||
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
Interest rate swaps | $ | Interest expense | $ | ( | Other income | $ |
Notional Amount | Fair Value | Balance Sheet Category | |||||||||||||||
September 30, 2019 | |||||||||||||||||
Fair value hedges | $ | $ | Other assets | ||||||||||||||
Fair value hedges | ( | Other liabilities | |||||||||||||||
December 31, 2018 | |||||||||||||||||
Fair value hedges | $ | $ | Other assets | ||||||||||||||
Fair value hedges | $ | ( | Other liabilities |
Amount of Gain (Loss) | Income Statement Category | |||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||
Fair value hedges | $ | ( | Interest income | |||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||
Fair value hedges | $ | ( | Interest income | |||||||||||
Three Months Ended September 30, 2018 | ||||||||||||||
Fair value hedges | $ | Interest income | ||||||||||||
Nine Months Ended September 30, 2018 | ||||||||||||||
Fair value hedges | $ | Interest income |
Notional Amount | Fair Value | Balance Sheet Category | |||||||||||||||
September 30, 2019 | |||||||||||||||||
Embedded derivatives | $ | $ | Other assets | ||||||||||||||
Embedded derivatives | Other liabilities | ||||||||||||||||
December 31, 2018 | |||||||||||||||||
Embedded derivatives | $ | $ | Other assets | ||||||||||||||
Embedded derivatives | ( | Other liabilities |
Amount of Gain (Loss) | Income Statement Category | |||||||||||||
Three Months Ended September 30, 2019 | ||||||||||||||
Embedded derivatives | $ | Other noninterest income | ||||||||||||
Nine Months Ended September 30, 2019 | ||||||||||||||
Embedded derivatives | $ | Other noninterest income | ||||||||||||
Three Months Ended September 30, 2018 | ||||||||||||||
Embedded derivatives | $ | Other noninterest income | ||||||||||||
Nine Months Ended September 30, 2018 | ||||||||||||||
Embedded derivatives | $ | Other noninterest income |
Notional Amount | Fair Value | Balance Sheet Category | Weighted Average Receive Rate | Weighted Average Pay Rate | ||||||||||||||||||||||||||||
September 30, 2019 | ||||||||||||||||||||||||||||||||
Customer interest rate swaps | $ | $ | Other assets | % | % | |||||||||||||||||||||||||||
Customer interest rate swaps | ( | Other liabilities | ||||||||||||||||||||||||||||||
December 31, 2018 | ||||||||||||||||||||||||||||||||
Customer interest rate swaps | $ | $ | Other assets | % | % | |||||||||||||||||||||||||||
Customer interest rate swaps | ( | Other liabilities | ||||||||||||||||||||||||||||||
Balance Sheet Category | Notional Amount | Fair Value | |||||||||||||||
September 30, 2019 | |||||||||||||||||
Interest rate lock commitments (mortgage) | Other assets | $ | $ | ||||||||||||||
Forward commitments | Other assets | ||||||||||||||||
Forward commitments | Other liabilities | ( | |||||||||||||||
Undesignated interest rate swaps | Other liabilities | ( | |||||||||||||||
Undesignated interest rate swaps | Other assets | ||||||||||||||||
December 31, 2018 | |||||||||||||||||
Interest rate lock commitments (mortgage) | Other assets | $ | $ | ||||||||||||||
Forward commitments | Other assets | ||||||||||||||||
Forward commitments | Other liabilities | ( | |||||||||||||||
Undesignated interest rate swaps | Other liabilities | ( | |||||||||||||||
Undesignated interest rate swaps | Other assets |
Income Statement Category | Gain (Loss) Recognized | ||||||||||
Three Months Ended September 30, 2019 | |||||||||||
Interest rate lock commitments (mortgage) | Net gains on sale of loans held for sale | $ | ( | ||||||||
Forward commitments | Net gains on sale of loans held for sale | ||||||||||
Undesignated interest rate swaps | Other noninterest income | ( | |||||||||
Nine Months Ended September 30, 2019 | |||||||||||
Interest rate lock commitments (mortgage) | Net gains on sale of loans held for sale | $ | |||||||||
Forward commitments | Net gains on sale of loans held for sale | ||||||||||
Undesignated interest rate swaps | Other noninterest income | ( | |||||||||
Three Months Ended September 30, 2018 | |||||||||||
Interest rate lock commitments (mortgage) | Net gains on sale of loans held for sale | $ | ( | ||||||||
Forward commitments | Net gains on sale of loans held for sale | ||||||||||
Undesignated interest rate swaps | Other noninterest income | ||||||||||
Nine Months Ended September 30, 2018 | |||||||||||
Interest rate lock commitments (mortgage) | Net gains on sale of loans held for sale | $ | ( | ||||||||
Forward commitments | Net gains on sale of loans held for sale | ||||||||||
Undesignated interest rate swaps | Other noninterest income |
Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
September 30, 2019 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | $ | $ | |||||||||||||||||||
Mortgage and asset-backed securities | |||||||||||||||||||||||
Obligations of states and political subdivisions | |||||||||||||||||||||||
Equity securities with a readily determinable fair value | |||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||
Interest rate lock commitments | |||||||||||||||||||||||
Forward commitments | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative financial instruments(2) | $ | $ | $ | $ | |||||||||||||||||||
Forward commitments | |||||||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2018 | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Securities available for sale | |||||||||||||||||||||||
U.S. government corporations and agencies | $ | $ | $ | $ | |||||||||||||||||||
Mortgage and asset-backed securities | |||||||||||||||||||||||
Obligations of states and political subdivisions | |||||||||||||||||||||||
Equity securities | |||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||
Interest rate lock commitments | |||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative financial instruments(2) | $ | $ | $ | $ | |||||||||||||||||||
Forward commitments | |||||||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ | |||||||||||||||||||
(1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. | |||||||||||||||||||||||
(2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives and free standing derivative instruments. |
Fair Value Measurements at September 30, 2019 | |||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Year-to- Date (Gains) Losses | |||||||||||||||||||||||||
Collateral dependent impaired loans: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total collateral dependent impaired loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Premises, furniture and equipment held for sale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Servicing rights | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Fair Value Measurements at December 31, 2018 | |||||||||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Year-to- Date (Gains) Losses | |||||||||||||||||||||||||
Collateral dependent impaired loans: | |||||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total collateral dependent impaired loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||
Other real estate owned | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Premises, furniture and equipment held for sale | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Servicing rights | $ | $ | $ | $ | $ |
Fair Value at 9/30/2019 | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||||||||||||||
Interest rate lock commitments | $ | Discounted cash flows | Closing ratio | ||||||||||||||||||||
Other real estate owned | Modified appraised value | Third party appraisal | (2) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Servicing rights | Discounted cash flows | Third party valuation | (4) | ||||||||||||||||||||
Premises, furniture and equipment held for sale | Modified appraised value | Third party appraisal | |||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Collateral dependent impaired loans: | |||||||||||||||||||||||
Commercial | Modified appraised value | Third party appraisal | (2) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Commercial real estate | Modified appraised value | Third party appraisal | (2) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Agricultural and agricultural real estate | Modified appraised value | Third party appraisal | (2) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Residential real estate | Modified appraised value | Third party appraisal | (2) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Consumer | Modified appraised value | Third party valuation | (2) | ||||||||||||||||||||
Valuation discount | |||||||||||||||||||||||
(1) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. The weighted average closing ratio for PrimeWest Mortgage Corporation is | |||||||||||||||||||||||
(2) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. | |||||||||||||||||||||||
(3) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. | |||||||||||||||||||||||
(4) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. |
Fair Value at 12/31/2018 | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||||||||||||||
Loans held for sale | $ | Discounted cash flows | Sales contract | (1) | |||||||||||||||||||
Interest rate lock commitments | Discounted cash flows | Closing ratio | |||||||||||||||||||||
Other real estate owned | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Servicing rights | Discounted cash flows | Third party valuation | (5) | ||||||||||||||||||||
Premises, furniture and equipment held for sale | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Collateral dependent impaired loans: | |||||||||||||||||||||||
Commercial | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Commercial real estate | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Agricultural and agricultural real estate | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Residential real estate | Modified appraised value | Third party appraisal | (3) | ||||||||||||||||||||
Appraisal discount | |||||||||||||||||||||||
Consumer | Modified appraised value | Third party valuation | (3) | ||||||||||||||||||||
Valuation discount | |||||||||||||||||||||||
(1) The significant unobservable input related to the loans held for sale was the third party sales contract Heartland entered into prior to December 31, 2018. The sale of these consumer loans closed on January 11, 2019. | |||||||||||||||||||||||
(2) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. | |||||||||||||||||||||||
(3) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. | |||||||||||||||||||||||
(4) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. | |||||||||||||||||||||||
(5) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. |
For the Nine Months Ended September 30, 2019 | For the Year Ended December 31, 2018 | ||||||||||
Balance at January 1, | $ | $ | |||||||||
Acquired interest rate lock commitments | |||||||||||
Total gains (losses) included in earnings | ( | ||||||||||
Issuances | |||||||||||
Settlements | ( | ( | |||||||||
Balance at period end | $ | $ |
Fair Value Measurements at September 30, 2019 | |||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Time deposits in other financial institutions | |||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||
Carried at fair value | |||||||||||||||||||||||||||||
Held to maturity | |||||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Loans, net: | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total Loans, net | |||||||||||||||||||||||||||||
Cash surrender value on life insurance | |||||||||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||||||||
Interest rate lock commitments | |||||||||||||||||||||||||||||
Forward commitments | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||
Demand deposits | |||||||||||||||||||||||||||||
Savings deposits | |||||||||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||||||||
Deposits held for sale | |||||||||||||||||||||||||||||
Short term borrowings | |||||||||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||||||||
Forward commitments | |||||||||||||||||||||||||||||
(1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. |
Fair Value Measurements at December 31, 2018 | |||||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Time deposits in other financial institutions | |||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||
Carried at fair value | |||||||||||||||||||||||||||||
Held to maturity | |||||||||||||||||||||||||||||
Other investments | |||||||||||||||||||||||||||||
Loans held for sale | |||||||||||||||||||||||||||||
Loans, net: | |||||||||||||||||||||||||||||
Commercial | |||||||||||||||||||||||||||||
Commercial real estate | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total Loans, net | |||||||||||||||||||||||||||||
Cash surrender value on life insurance | |||||||||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||||||||
Interest rate lock commitments | |||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||
Demand deposits | |||||||||||||||||||||||||||||
Savings deposits | |||||||||||||||||||||||||||||
Time deposits | |||||||||||||||||||||||||||||
Deposits held for sale | |||||||||||||||||||||||||||||
Short term borrowings | |||||||||||||||||||||||||||||
Other borrowings | |||||||||||||||||||||||||||||
Derivative financial instruments(1) | |||||||||||||||||||||||||||||
Forward commitments | |||||||||||||||||||||||||||||
(1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
In-scope of Topic 606 | |||||||||||||||||||||||
Service charges and fees | |||||||||||||||||||||||
Service charges and fees on deposit accounts | $ | $ | $ | $ | |||||||||||||||||||
Overdraft fees | |||||||||||||||||||||||
Customer service and other service fees | |||||||||||||||||||||||
Credit card fee income | |||||||||||||||||||||||
Debit card income | |||||||||||||||||||||||
Total service charges and fees | $ | $ | $ | $ | |||||||||||||||||||
Trust fees | |||||||||||||||||||||||
Brokerage and insurance commissions | |||||||||||||||||||||||
Total noninterest income in-scope of Topic 606 | $ | $ | $ | $ | |||||||||||||||||||
Out-of-scope of Topic 606 | |||||||||||||||||||||||
Loan servicing income | $ | $ | $ | $ | |||||||||||||||||||
Securities gains/(losses), net | ( | ||||||||||||||||||||||
Unrealized gain on equity securities, net | |||||||||||||||||||||||
Net gains on sale of loans held for sale | |||||||||||||||||||||||
Valuation adjustment on servicing rights | ( | ( | |||||||||||||||||||||
Income on bank owned life insurance | |||||||||||||||||||||||
Other noninterest income | |||||||||||||||||||||||
Total noninterest income out-of-scope of Topic 606 | |||||||||||||||||||||||
Total noninterest income | $ | $ | $ | $ |
2019 | 2018 | ||||||||||||||||||||||
Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||
Outstanding at January 1, | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Outstanding at September 30, | $ | $ |
Assets | Classification | September 30, 2019 | ||||||||||||
Operating lease assets | Other assets | $ | ||||||||||||
Total lease right-of-use assets | $ | |||||||||||||
Liabilities | ||||||||||||||
Operating lease liabilities | Accrued expenses and other liabilities | $ | ||||||||||||
Total lease liabilities | $ |
Income Statement Category | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||||||||||||
Lease Cost | ||||||||||||||||||||
Operating lease cost | Occupancy expense | $ | $ | |||||||||||||||||
Variable lease cost | Occupancy expense | |||||||||||||||||||
Total lease cost | $ | $ | ||||||||||||||||||
Supplemental Information | ||||||||||||||||||||
Noncash reduction of ROU assets arising from lease modifications | Occupancy expense | $ | $ | |||||||||||||||||
Noncash reduction lease liabilities arising from lease modifications | Occupancy expense | |||||||||||||||||||
Supplemental balance sheet information | As of September 30, 2019 | |||||||||||||||||||
Weighted-average remaining operating lease term (in years) | ||||||||||||||||||||
Weighted-average discount rate for operating leases | % |
Three months ending December 31, 2019 | $ | ||||
Year ending December 31, | |||||
2020 | |||||
2021 | |||||
2022 | |||||
2023 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less interest | ( | ||||
Present value of lease liabilities | $ |
2019 | $ | ||||
2020 | |||||
2021 | |||||
2022 | |||||
2023 | |||||
Thereafter | |||||
$ |
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
STATEMENT OF INCOME DATA | |||||||||||||||||||||||
Interest income | $ | 133,403 | $ | 124,894 | $ | 381,127 | $ | 339,517 | |||||||||||||||
Interest expense | 22,082 | 14,216 | 60,143 | 35,846 | |||||||||||||||||||
Net interest income | 111,321 | 110,678 | 320,984 | 303,671 | |||||||||||||||||||
Provision for loan losses | 5,201 | 5,238 | 11,754 | 14,332 | |||||||||||||||||||
Net interest income after provision for loan losses | 106,120 | 105,440 | 309,230 | 289,339 | |||||||||||||||||||
Noninterest income | 29,400 | 29,765 | 88,178 | 82,115 | |||||||||||||||||||
Noninterest expenses | 92,967 | 92,539 | 256,295 | 265,067 | |||||||||||||||||||
Income taxes | 7,941 | 8,956 | 29,835 | 21,530 | |||||||||||||||||||
Net income | 34,612 | 33,710 | 111,278 | 84,857 | |||||||||||||||||||
Preferred dividends | — | (13) | — | (39) | |||||||||||||||||||
Net income available to common stockholders | $ | 34,612 | $ | 33,697 | $ | 111,278 | $ | 84,818 | |||||||||||||||
Key Performance Ratios | |||||||||||||||||||||||
Annualized return on average assets | 1.12 | % | 1.18 | % | 1.27 | % | 1.07 | % | |||||||||||||||
Annualized return on average common equity (GAAP) | 8.91 | % | 10.58 | % | 10.33 | % | 9.95 | % | |||||||||||||||
Annualized return on average tangible common equity (non-GAAP)(1) | 13.78 | % | 17.31 | % | 16.13 | % | 15.64 | % | |||||||||||||||
Annualized ratio of net charge-offs to average loans | 0.14 | % | 0.28 | % | 0.13 | % | 0.17 | % | |||||||||||||||
Annualized net interest margin (GAAP) | 3.98 | % | 4.32 | % | 4.05 | % | 4.25 | % | |||||||||||||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.02 | % | 4.38 | % | 4.10 | % | 4.32 | % | |||||||||||||||
Efficiency ratio, fully tax-equivalent (non-GAAP)(1) | 61.92 | % | 62.51 | % | 63.95 | % | 65.03 | % | |||||||||||||||
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP) | |||||||||||||||||||||||
Net income available to common shareholders (GAAP) | $ | 34,612 | $ | 33,697 | $ | 111,278 | $ | 84,818 | |||||||||||||||
Plus core deposit and customer relationship intangibles amortization, net of tax(2) | 2,291 | 2,075 | 7,153 | 5,343 | |||||||||||||||||||
Adjusted net income available to common shareholders (non-GAAP) | $ | 36,903 | $ | 35,772 | $ | 118,431 | $ | 90,161 | |||||||||||||||
Average common stockholders' equity (GAAP) | $ | 1,541,369 | $ | 1,263,226 | $ | 1,440,754 | $ | 1,139,149 | |||||||||||||||
Less average goodwill | 427,097 | 391,668 | 409,932 | 323,058 | |||||||||||||||||||
Less average other intangibles, net | 51,704 | 51,592 | 49,373 | 45,207 | |||||||||||||||||||
Average tangible common equity (non-GAAP) | $ | 1,062,568 | $ | 819,966 | $ | 981,449 | $ | 770,884 | |||||||||||||||
Annualized return on average common equity (GAAP) | 8.91 | % | 10.58 | % | 10.33 | % | 9.95 | % | |||||||||||||||
Annualized return on average tangible common equity (non-GAAP) | 13.78 | % | 17.31 | % | 16.13 | % | 15.64 | % | |||||||||||||||
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) | |||||||||||||||||||||||
Net Interest Income (GAAP) | $ | 111,321 | $ | 110,678 | $ | 320,984 | $ | 303,671 | |||||||||||||||
Plus tax-equivalent adjustment(2) | 1,140 | 1,544 | 3,820 | 4,663 | |||||||||||||||||||
Net interest income - tax-equivalent (non-GAAP) | $ | 112,461 | $ | 112,222 | $ | 324,804 | $ | 308,334 | |||||||||||||||
Average earning assets | $ | 11,102,581 | $ | 10,154,591 | $ | 10,598,465 | $ | 9,547,147 | |||||||||||||||
Net interest margin (GAAP) | 3.98 | % | 4.32 | % | 4.05 | % | 4.25 | % | |||||||||||||||
Net interest margin, fully tax-equivalent (non-GAAP) | 4.02 | % | 4.38 | % | 4.10 | % | 4.32 | % | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||
(Dollars in thousands, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Reconciliation of Efficiency Ratio (non-GAAP) | |||||||||||||||||||||||
Net interest income (GAAP) | $ | 111,321 | $ | 110,678 | $ | 320,984 | $ | 303,671 | |||||||||||||||
Plus tax-equivalent adjustment(2) | 1,140 | 1,544 | 3,820 | 4,663 | |||||||||||||||||||
Fully tax-equivalent net interest income | 112,461 | 112,222 | 324,804 | 308,334 | |||||||||||||||||||
Noninterest income | 29,400 | 29,765 | 88,178 | 82,115 | |||||||||||||||||||
Securities (gains)/losses, net | (2,013) | 145 | (7,168) | (1,037) | |||||||||||||||||||
Unrealized gain on equity securities, net | (144) | (54) | (514) | (97) | |||||||||||||||||||
Gain on extinguishment of debt | (375) | — | (375) | — | |||||||||||||||||||
Valuation adjustment on servicing rights | 626 | (230) | 1,579 | (12) | |||||||||||||||||||
Adjusted income (non-GAAP) | $ | 139,955 | $ | 141,848 | $ | 406,504 | $ | 389,303 | |||||||||||||||
Total noninterest expenses (GAAP) | $ | 92,967 | $ | 92,539 | $ | 256,295 | $ | 265,067 | |||||||||||||||
Less: | |||||||||||||||||||||||
Core deposit and customer relationship intangibles amortization | 2,899 | 2,626 | 9,054 | 6,763 | |||||||||||||||||||
Partnership investment in tax credit projects | 3,052 | 338 | 4,992 | 338 | |||||||||||||||||||
(Gain)/loss on sales/valuations of assets, net | 356 | 912 | (20,934) | 2,243 | |||||||||||||||||||
Restructuring expenses | — | — | 3,227 | 2,564 | |||||||||||||||||||
Adjusted noninterest expenses (non-GAAP) | $ | 86,660 | $ | 88,663 | $ | 259,956 | $ | 253,159 | |||||||||||||||
Efficiency ratio, fully tax-equivalent (non-GAAP) | 61.92 | % | 62.51 | % | 63.95 | % | 65.03 | % | |||||||||||||||
(1) Refer to the "Non-GAAP Financial Measures" section after these financial tables for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures. | |||||||||||||||||||||||
(2) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | As Of and For the Quarter Ended | ||||||||||||||||||||||||||||
9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
BALANCE SHEET DATA | |||||||||||||||||||||||||||||
Investments | $ | 3,137,575 | $ | 2,681,419 | $ | 2,516,055 | $ | 2,715,388 | $ | 2,540,779 | |||||||||||||||||||
Loans held for sale | 35,427 | 34,575 | 69,716 | 119,801 | 77,727 | ||||||||||||||||||||||||
Total loans receivable(1) | 7,971,608 | 7,853,051 | 7,331,544 | 7,407,697 | 7,365,493 | ||||||||||||||||||||||||
Allowance for loan losses | 66,222 | 63,850 | 62,639 | 61,963 | 61,221 | ||||||||||||||||||||||||
Total assets | 12,569,262 | 12,160,290 | 11,312,495 | 11,408,006 | 11,335,132 | ||||||||||||||||||||||||
Total deposits(2) | 10,469,856 | 10,108,557 | 9,352,942 | 9,396,429 | 9,512,163 | ||||||||||||||||||||||||
Long-term obligations | 278,417 | 282,863 | 268,312 | 274,905 | 277,563 | ||||||||||||||||||||||||
Common stockholders’ equity | 1,563,843 | 1,521,787 | 1,372,102 | 1,325,175 | 1,280,393 | ||||||||||||||||||||||||
Common Share Data | |||||||||||||||||||||||||||||
Book value per common share (GAAP) | $ | 42.62 | $ | 41.48 | $ | 39.65 | $ | 38.44 | $ | 37.14 | |||||||||||||||||||
Tangible book value per common share (non-GAAP)(3) | $ | 29.62 | $ | 28.40 | $ | 27.04 | $ | 25.70 | $ | 24.33 | |||||||||||||||||||
Common shares outstanding, net of treasury stock | 36,696,190 | 36,690,061 | 34,603,611 | 34,477,499 | 34,473,029 | ||||||||||||||||||||||||
Tangible common equity ratio (non-GAAP)(3) | 8.99 | % | 8.92 | % | 8.60 | % | 8.08 | % | 7.70 | % |
FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | As Of and For the Quarter Ended | ||||||||||||||||||||||||||||
9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
Reconciliation of Tangible Book Value Per Common Share (non-GAAP) | |||||||||||||||||||||||||||||
Common stockholders' equity (GAAP) | $ | 1,563,843 | $ | 1,521,787 | $ | 1,372,102 | $ | 1,325,175 | $ | 1,280,393 | |||||||||||||||||||
Less goodwill | 427,097 | 427,097 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
Less core deposit and customer relationship intangibles, net | 49,819 | 52,718 | 44,637 | 47,479 | 50,071 | ||||||||||||||||||||||||
Tangible common stockholders' equity (non-GAAP) | $ | 1,086,927 | $ | 1,041,972 | $ | 935,797 | $ | 886,028 | $ | 838,654 | |||||||||||||||||||
Common shares outstanding, net of treasury stock | 36,696,190 | 36,690,061 | 34,603,611 | 34,477,499 | 34,473,029 | ||||||||||||||||||||||||
Common stockholders' equity (book value) per share (GAAP) | $ | 42.62 | $ | 41.48 | $ | 39.65 | $ | 38.44 | $ | 37.14 | |||||||||||||||||||
Tangible book value per common share (non-GAAP) | $ | 29.62 | $ | 28.40 | $ | 27.04 | $ | 25.70 | $ | 24.33 | |||||||||||||||||||
Reconciliation of Tangible Common Equity Ratio (non-GAAP) | |||||||||||||||||||||||||||||
Tangible common stockholders' equity (non-GAAP) | $ | 1,086,927 | $ | 1,041,972 | $ | 935,797 | $ | 886,028 | $ | 838,654 | |||||||||||||||||||
Total assets (GAAP) | $ | 12,569,262 | $ | 12,160,290 | $ | 11,312,495 | $ | 11,408,006 | $ | 11,335,132 | |||||||||||||||||||
Less goodwill | 427,097 | 427,097 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
Less core deposit and customer relationship intangibles, net | 49,819 | 52,718 | 44,637 | 47,479 | 50,071 | ||||||||||||||||||||||||
Total tangible assets (non-GAAP) | $ | 12,092,346 | $ | 11,680,475 | $ | 10,876,190 | $ | 10,968,859 | $ | 10,893,393 | |||||||||||||||||||
Tangible common equity ratio (non-GAAP) | 8.99 | % | 8.92 | % | 8.60 | % | 8.08 | % | 7.70 | % | |||||||||||||||||||
(1) Excludes loans held for sale. | |||||||||||||||||||||||||||||
(2) Excludes deposits held for sale. | |||||||||||||||||||||||||||||
(3) Refer to the "Non-GAAP Financial Measures" section after these financial tables for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures. |
ANALYSIS OF AVERAGE BALANCES, TAX EQUIVALENT YIELDS AND RATES (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(DOLLARS IN THOUSANDS) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||||||||||||||||||||||||||||||
Earning Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxable | $ | 2,658,107 | $ | 18,567 | 2.77 | % | $ | 2,217,863 | $ | 16,123 | 2.92 | % | $ | 2,066,071 | $ | 14,433 | 2.77 | % | |||||||||||||||||||||||||||||||||||
Nontaxable(1) | 266,933 | 2,682 | 3.99 | 324,164 | 3,233 | 4.00 | 435,045 | 4,418 | 4.03 | ||||||||||||||||||||||||||||||||||||||||||||
Total securities | 2,925,040 | 21,249 | 2.88 | 2,542,027 | 19,356 | 3.05 | 2,501,116 | 18,851 | 2.99 | ||||||||||||||||||||||||||||||||||||||||||||
Interest on deposits with other banks and other short-term investments | 358,327 | 2,151 | 2.38 | 424,262 | 2,299 | 2.17 | 252,535 | 1,238 | 1.94 | ||||||||||||||||||||||||||||||||||||||||||||
Federal funds sold | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Loans:(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and commercial real estate(1) | 6,216,133 | 86,864 | 5.54 | 5,968,424 | 82,328 | 5.53 | 5,637,360 | 77,443 | 5.45 | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | 662,663 | 7,979 | 4.78 | 676,465 | 8,238 | 4.88 | 736,875 | 8,952 | 4.82 | ||||||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate(1) | 550,441 | 7,551 | 5.44 | 558,128 | 7,581 | 5.45 | 571,599 | 7,725 | 5.36 | ||||||||||||||||||||||||||||||||||||||||||||
Consumer | 454,441 | 6,697 | 5.85 | 445,545 | 6,517 | 5.87 | 516,342 | 10,043 | 7.72 | ||||||||||||||||||||||||||||||||||||||||||||
Fees on loans | 2,052 | — | 1,952 | — | 2,186 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Less: allowance for loan losses | (64,464) | — | — | (62,685) | — | — | (61,236) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net loans | 7,819,214 | 111,143 | 5.64 | 7,585,877 | 106,616 | 5.64 | 7,400,940 | 106,349 | 5.70 | ||||||||||||||||||||||||||||||||||||||||||||
Total earning assets | 11,102,581 | 134,543 | 4.81 | % | 10,552,166 | 128,271 | 4.88 | % | 10,154,591 | 126,438 | 4.94 | % | |||||||||||||||||||||||||||||||||||||||||
Nonearning Assets | 1,190,751 | 1,156,372 | 1,136,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 12,293,332 | $ | 11,708,538 | $ | 11,291,289 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Savings | $ | 5,643,722 | $ | 13,301 | 0.94 | % | $ | 5,360,355 | $ | 11,895 | 0.89 | % | $ | 4,932,013 | $ | 6,980 | 0.56 | % | |||||||||||||||||||||||||||||||||||
Time deposits | 1,149,064 | 4,681 | 1.62 | 1,142,842 | 4,243 | 1.49 | 1,193,971 | 3,112 | 1.03 | ||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | 102,440 | 250 | 0.97 | 92,977 | 338 | 1.46 | 148,041 | 464 | 1.24 | ||||||||||||||||||||||||||||||||||||||||||||
Other borrowings | 279,718 | 3,850 | 5.46 | 276,275 | 3,819 | 5.54 | 270,924 | 3,660 | 5.36 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 7,174,944 | 22,082 | 1.22 | % | 6,872,449 | 20,295 | 1.18 | % | 6,544,949 | 14,216 | 0.86 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest bearing deposits | 3,460,857 | 3,287,559 | 3,404,759 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued interest and other liabilities | 116,162 | 106,142 | 77,786 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest bearing liabilities | 3,577,019 | 3,393,701 | 3,482,545 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | 1,541,369 | 1,442,388 | 1,263,795 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 12,293,332 | $ | 11,708,538 | $ | 11,291,289 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 112,461 | $ | 107,976 | $ | 112,222 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest spread(1) | 3.59 | % | 3.70 | % | 4.08 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets | 4.02 | % | 4.10 | % | 4.38 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Includes deposits held for sale. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
ANALYSIS OF AVERAGE BALANCES, TAX EQUIVALENT YIELDS AND RATES (1) | |||||||||||||||||||||||||||||||||||
DOLLARS IN THOUSANDS | |||||||||||||||||||||||||||||||||||
For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||||||||||||||||||||||||
Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||||||||||||||||
Earning Assets | |||||||||||||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||||
Taxable | $ | 2,350,120 | $ | 50,566 | 2.88 | % | $ | 1,937,053 | $ | 38,280 | 2.64 | % | |||||||||||||||||||||||
Nontaxable(1) | 327,150 | 9,830 | 4.02 | % | 444,127 | 13,485 | 4.06 | ||||||||||||||||||||||||||||
Total securities | 2,677,270 | 60,396 | 3.02 | 2,381,180 | 51,765 | 2.91 | |||||||||||||||||||||||||||||
Interest bearing deposits with other banks and other short-term investments | 334,191 | 5,742 | 2.30 | 183,905 | 2,413 | 1.75 | |||||||||||||||||||||||||||||
Federal funds sold | 185 | 4 | 2.89 | 471 | — | — | |||||||||||||||||||||||||||||
Loans:(2) | |||||||||||||||||||||||||||||||||||
Commercial and commercial real estate(1) | 5,978,304 | 247,275 | 5.53 | 5,319,862 | 211,557 | 5.32 | |||||||||||||||||||||||||||||
Residential mortgage | 670,896 | 23,396 | 4.66 | 688,367 | 23,365 | 4.54 | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate(1) | 554,344 | 22,433 | 5.41 | 542,755 | 20,579 | 5.07 | |||||||||||||||||||||||||||||
Consumer | 446,546 | 19,693 | 5.90 | 489,417 | 27,895 | 7.62 | |||||||||||||||||||||||||||||
Fees on loans | 6,008 | — | 6,606 | — | |||||||||||||||||||||||||||||||
Less: allowance for loan losses | (63,271) | — | — | (58,810) | — | — | |||||||||||||||||||||||||||||
Net loans | 7,586,819 | 318,805 | 5.62 | 6,981,591 | 290,002 | 5.55 | |||||||||||||||||||||||||||||
Total earning assets | 10,598,465 | 384,947 | 4.86 | % | 9,547,147 | 344,180 | 4.82 | % | |||||||||||||||||||||||||||
Nonearning Assets | 1,161,655 | 1,023,306 | |||||||||||||||||||||||||||||||||
Total Assets | $ | 11,760,120 | $ | 10,570,453 | |||||||||||||||||||||||||||||||
Interest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||
Savings | $ | 5,376,999 | $ | 35,279 | 0.88 | % | $ | 4,681,710 | $ | 16,306 | 0.47 | % | |||||||||||||||||||||||
Time deposits | 1,109,302 | 12,054 | 1.45 | 1,048,878 | 7,535 | 0.96 | |||||||||||||||||||||||||||||
Short-term borrowings | 129,928 | 1,477 | 1.52 | 149,453 | 1,279 | 1.14 | |||||||||||||||||||||||||||||
Other borrowings | 275,642 | 11,333 | 5.50 | 271,234 | 10,726 | 5.29 | |||||||||||||||||||||||||||||
Total interest bearing liabilities | 6,891,871 | 60,143 | 1.17 | % | 6,151,275 | 35,846 | 0.78 | % | |||||||||||||||||||||||||||
Noninterest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||
Noninterest bearing deposits | 3,317,187 | 3,207,709 | |||||||||||||||||||||||||||||||||
Accrued interest and other liabilities | 110,308 | 71,506 | |||||||||||||||||||||||||||||||||
Total noninterest bearing liabilities | 3,427,495 | 3,279,215 | |||||||||||||||||||||||||||||||||
Stockholders' Equity | 1,440,754 | 1,139,963 | |||||||||||||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 11,760,120 | $ | 10,570,453 | |||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 324,804 | $ | 308,334 | |||||||||||||||||||||||||||||||
Net interest spread(1) | 3.69 | % | 4.04 | % | |||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets | 4.10 | % | 4.32 | % | |||||||||||||||||||||||||||||||
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||||||||||||||
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding. | |||||||||||||||||||||||||||||||||||
(3) Includes deposits held for sale. |
Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Service charges and fees | $ | 12,366 | $ | 12,895 | $ | (529) | (4) | % | |||||||||||||||
Loan servicing income | 821 | 1,670 | (849) | (51) | |||||||||||||||||||
Trust fees | 4,959 | 4,499 | 460 | 10 | |||||||||||||||||||
Brokerage and insurance commissions | 962 | 1,111 | (149) | (13) | |||||||||||||||||||
Securities gains/(losses), net | 2,013 | (145) | 2,158 | 1,488 | |||||||||||||||||||
Unrealized gain on equity securities, net | 144 | 54 | 90 | 167 | |||||||||||||||||||
Net gains on sale of loans held for sale | 4,673 | 7,410 | (2,737) | (37) | |||||||||||||||||||
Valuation adjustment on servicing rights | (626) | 230 | (856) | (372) | |||||||||||||||||||
Income on bank owned life insurance | 881 | 892 | (11) | (1) | |||||||||||||||||||
Other noninterest income | 3,207 | 1,149 | 2,058 | 179 | |||||||||||||||||||
Total noninterest income | $ | 29,400 | $ | 29,765 | $ | (365) | (1) | % |
Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Service charges and fees | $ | 39,789 | $ | 35,046 | $ | 4,743 | 14 | % | |||||||||||||||
Loan servicing income | 3,888 | 5,231 | (1,343) | (26) | |||||||||||||||||||
Trust fees | 14,258 | 13,794 | 464 | 3 | |||||||||||||||||||
Brokerage and insurance commissions | 2,724 | 2,895 | (171) | (6) | |||||||||||||||||||
Securities gains, net | 7,168 | 1,037 | 6,131 | 591 | |||||||||||||||||||
Unrealized gain on equity securities, net | 514 | 97 | 417 | 430 | |||||||||||||||||||
Net gains on sale of loans held for sale | 12,192 | 18,261 | (6,069) | (33) | |||||||||||||||||||
Valuation adjustment on servicing rights | (1,579) | 12 | (1,591) | (13,258) | |||||||||||||||||||
Income on bank owned life insurance | 2,668 | 2,206 | 462 | 21 | |||||||||||||||||||
Other noninterest income | 6,556 | 3,536 | 3,020 | 85 | |||||||||||||||||||
Total noninterest income | $ | 88,178 | $ | 82,115 | $ | 6,063 | 7 | % |
Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Service charges and fees on deposit accounts | $ | 3,221 | $ | 2,858 | $ | 363 | 13 | % | |||||||||||||||
Overdraft fees | 2,917 | 2,990 | (73) | (2) | |||||||||||||||||||
Customer service and other service fees | 104 | 102 | 2 | 2 | |||||||||||||||||||
Credit card fee income | 3,936 | 3,062 | 874 | 29 | |||||||||||||||||||
Debit card income | 2,188 | 3,883 | (1,695) | (44) | |||||||||||||||||||
Total service charges and fees | $ | 12,366 | $ | 12,895 | $ | (529) | (4) | % | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Service charges and fees on deposit accounts | $ | 9,383 | $ | 8,270 | $ | 1,113 | 13 | % | |||||||||||||||
Overdraft fees | 8,537 | 7,716 | 821 | 11 | |||||||||||||||||||
Customer service and other service fees | 270 | 268 | 2 | 1 | |||||||||||||||||||
Credit card fee income | 11,555 | 8,443 | 3,112 | 37 | |||||||||||||||||||
Debit card income | 10,044 | 10,349 | (305) | (3) | |||||||||||||||||||
Total service charges and fees | $ | 39,789 | $ | 35,046 | $ | 4,743 | 14 | % |
Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Commercial and agricultural loan servicing fees(1) | $ | 774 | $ | 702 | $ | 72 | 10 | % | |||||||||||||||
Residential mortgage servicing fees | 519 | 2,610 | (2,091) | (80) | |||||||||||||||||||
Mortgage servicing rights amortization | (472) | (1,642) | 1,170 | 71 | |||||||||||||||||||
Total loan servicing income | $ | 821 | $ | 1,670 | $ | (849) | (51) | % | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Commercial and agricultural loan servicing fees(1) | $ | 2,270 | $ | 2,375 | $ | (105) | (4) | % | |||||||||||||||
Residential mortgage servicing fees | 4,484 | 7,250 | (2,766) | (38) | |||||||||||||||||||
Mortgage servicing rights amortization | (2,866) | (4,394) | 1,528 | 35 | |||||||||||||||||||
Total loan servicing income | $ | 3,888 | $ | 5,231 | $ | (1,343) | (26) | % | |||||||||||||||
(1) Includes servicing fees for commercial, commercial real estate, agricultural and agricultural real estate loans. |
Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Salaries and employee benefits | $ | 50,027 | $ | 49,921 | $ | 106 | — | % | |||||||||||||||
Occupancy | 6,594 | 6,348 | 246 | 4 | |||||||||||||||||||
Furniture and equipment | 2,858 | 3,470 | (612) | (18) | |||||||||||||||||||
Professional fees | 12,131 | 12,800 | (669) | (5) | |||||||||||||||||||
Advertising | 2,737 | 2,754 | (17) | (1) | |||||||||||||||||||
Core deposit and customer relationship intangibles amortization | 2,899 | 2,626 | 273 | 10 | |||||||||||||||||||
Other real estate and loan collection expenses, net | (89) | 784 | (873) | (111) | |||||||||||||||||||
(Gain)/loss on sales/valuations of assets, net | 356 | 912 | (556) | (61) | |||||||||||||||||||
Restructuring expenses | — | — | — | — | |||||||||||||||||||
Other noninterest expenses | 15,454 | 12,924 | 2,530 | 20 | |||||||||||||||||||
Total noninterest expenses | $ | 92,967 | $ | 92,539 | $ | 428 | — | % | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | Change | % Change | ||||||||||||||||||||
Salaries and employee benefits | $ | 150,307 | $ | 149,389 | $ | 918 | 1 | % | |||||||||||||||
Occupancy | 19,637 | 18,706 | 931 | 5 | |||||||||||||||||||
Furniture and equipment | 8,770 | 9,403 | (633) | (7) | |||||||||||||||||||
Professional fees | 38,478 | 32,880 | 5,598 | 17 | |||||||||||||||||||
Advertising | 7,723 | 6,839 | 884 | 13 | |||||||||||||||||||
Core deposit and customer relationship intangibles amortization | 9,054 | 6,763 | 2,291 | 34 | |||||||||||||||||||
Other real estate and loan collection expenses, net | 774 | 2,464 | (1,690) | (69) | |||||||||||||||||||
(Gain)/loss on sales/valuations of assets, net | (20,934) | 2,243 | (23,177) | (1,033) | |||||||||||||||||||
Restructuring expenses | 3,227 | 2,564 | 663 | 26 | |||||||||||||||||||
Other noninterest expenses | 39,259 | 33,816 | 5,443 | 16 | |||||||||||||||||||
Total noninterest expenses | $ | 256,295 | $ | 265,067 | $ | (8,772) | (3) | % | |||||||||||||||
LOAN PORTFOLIO | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
Loans receivable held to maturity: | |||||||||||||||||||||||
Commercial | $ | 2,276,916 | 28.56 | % | $ | 2,020,231 | 27.26 | % | |||||||||||||||
Commercial real estate | 4,116,680 | 51.61 | 3,711,481 | 50.08 | |||||||||||||||||||
Agricultural and agricultural real estate | 545,006 | 6.83 | 565,408 | 7.63 | |||||||||||||||||||
Residential mortgage | 589,793 | 7.39 | 673,603 | 9.09 | |||||||||||||||||||
Consumer | 447,718 | 5.61 | 440,158 | 5.94 | |||||||||||||||||||
Gross loans receivable held to maturity | 7,976,113 | 100.00 | % | 7,410,881 | 100.00 | % | |||||||||||||||||
Unearned discount | (833) | (1,624) | |||||||||||||||||||||
Deferred loan fees | (3,672) | (1,560) | |||||||||||||||||||||
Total net loans receivable held to maturity | 7,971,608 | 7,407,697 | |||||||||||||||||||||
Allowance for loan losses | (66,222) | (61,963) | |||||||||||||||||||||
Loans receivable, net | $ | 7,905,386 | $ | 7,345,734 |
LOANS SECURED BY REAL ESTATE | |||||||||||
September 30, 2019 | December 31, 2018 | ||||||||||
Residential real estate, excluding residential construction and residential lot loans | $ | 1,051,362 | $ | 1,119,942 | |||||||
Industrial, manufacturing, business and commercial | 630,781 | 805,265 | |||||||||
Agriculture | 281,143 | 270,023 | |||||||||
Retail | 465,184 | 435,680 | |||||||||
Office | 681,065 | 485,262 | |||||||||
Land development and lots | 228,997 | 216,665 | |||||||||
Hotel, resort and hospitality | 316,795 | 233,735 | |||||||||
Multi-family | 346,381 | 311,319 | |||||||||
Food and beverage | 134,721 | 130,981 | |||||||||
Warehousing | 203,697 | 186,436 | |||||||||
Health services | 262,696 | 182,882 | |||||||||
Residential construction | 188,639 | 171,116 | |||||||||
All other | 309,949 | 255,145 | |||||||||
Total loans secured by real estate | $ | 5,101,410 | $ | 4,804,451 |
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES | Three Months Ended September 30, | ||||||||||
2019 | 2018 | ||||||||||
Balance at beginning of period | $ | 63,850 | $ | 61,324 | |||||||
Provision for loan losses | 5,201 | 5,238 | |||||||||
Recoveries on loans previously charged off | 2,013 | 779 | |||||||||
Charge-offs on loans | (4,842) | (6,120) | |||||||||
Balance at end of period | $ | 66,222 | $ | 61,221 | |||||||
Annualized ratio of net charge offs to average loans | 0.14 | % | 0.28 | % | |||||||
Nine Months Ended September 30, | |||||||||||
2019 | 2018 | ||||||||||
Balance at beginning of period | $ | 61,963 | $ | 55,686 | |||||||
Provision for loan losses | 11,754 | 14,332 | |||||||||
Recoveries on loans previously charged off | 4,077 | 2,711 | |||||||||
Charge-offs on loans | (11,572) | (11,508) | |||||||||
Balance at end of period | $ | 66,222 | $ | 61,221 | |||||||
Annualized ratio of net charge offs to average loans | 0.13 | % | 0.17 | % |
NONPERFORMING ASSETS | September 30, | December 31, | |||||||||||||||||||||
2019 | 2018 | 2018 | 2017 | ||||||||||||||||||||
Nonaccrual loans | $ | 72,208 | $ | 73,060 | $ | 71,943 | $ | 62,581 | |||||||||||||||
Loans contractually past due 90 days or more | 40 | 154 | 726 | 830 | |||||||||||||||||||
Total nonperforming loans | 72,248 | 73,214 | 72,669 | 63,411 | |||||||||||||||||||
Other real estate | 6,425 | 11,908 | 6,153 | 10,777 | |||||||||||||||||||
Other repossessed assets | 13 | 495 | 459 | 411 | |||||||||||||||||||
Total nonperforming assets | $ | 78,686 | $ | 85,617 | $ | 79,281 | $ | 74,599 | |||||||||||||||
Performing troubled debt restructured loans(1) | $ | 3,199 | $ | 4,180 | $ | 4,026 | $ | 6,617 | |||||||||||||||
Nonperforming loans to total loans | 0.91 | % | 0.99 | % | 0.98 | % | 0.99 | % | |||||||||||||||
Nonperforming assets to total loans plus repossessed property | 0.99 | % | 1.16 | % | 1.07 | % | 1.17 | % | |||||||||||||||
Nonperforming assets to total assets | 0.63 | % | 0.76 | % | 0.69 | % | 0.76 | % | |||||||||||||||
(1) Represents accruing troubled debt restructured loans performing according to their restructured terms. |
Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | ||||||||||||||||||||
June 30, 2019 | $ | 79,904 | $ | 6,646 | $ | 39 | $ | 86,589 | |||||||||||||||
Loan foreclosures | (2,784) | 2,766 | 18 | — | |||||||||||||||||||
Net loan charge-offs | (2,829) | — | — | (2,829) | |||||||||||||||||||
Acquired nonperforming assets | — | — | — | — | |||||||||||||||||||
New nonperforming loans | 6,818 | — | — | 6,818 | |||||||||||||||||||
Reduction of nonperforming loans(1) | (8,861) | — | — | (8,861) | |||||||||||||||||||
OREO/Repossessed assets sales proceeds | — | (3,043) | (22) | (3,065) | |||||||||||||||||||
OREO/Repossessed assets writedowns, net | — | 56 | (20) | 36 | |||||||||||||||||||
Net activity at Citizens Finance Co. | — | — | (2) | (2) | |||||||||||||||||||
September 30, 2019 | $ | 72,248 | $ | 6,425 | $ | 13 | $ | 78,686 | |||||||||||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||||||||||
Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | ||||||||||||||||||||
December 31, 2018 | $ | 72,669 | $ | 6,153 | $ | 459 | $ | 79,281 | |||||||||||||||
Loan foreclosures | (7,631) | 7,421 | 210 | — | |||||||||||||||||||
Net loan charge-offs | (7,495) | — | — | (7,495) | |||||||||||||||||||
Acquired nonperforming assets | 230 | — | — | 230 | |||||||||||||||||||
New nonperforming loans | 35,820 | — | — | 35,820 | |||||||||||||||||||
Reduction of nonperforming loans(1) | (21,345) | — | — | (21,345) | |||||||||||||||||||
OREO/Repossessed assets sales proceeds | — | (6,268) | (177) | (6,445) | |||||||||||||||||||
OREO/Repossessed assets writedowns, net | — | (881) | (32) | (913) | |||||||||||||||||||
Net activity at Citizens Finance Co. | — | — | (447) | (447) | |||||||||||||||||||
September 30, 2019 | $ | 72,248 | $ | 6,425 | $ | 13 | $ | 78,686 | |||||||||||||||
(1) Includes principal reductions and transfers to performing status. |
SECURITIES PORTFOLIO COMPOSITION | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
U.S. government corporations and agencies | $ | 8,950 | 0.29 | % | $ | 31,951 | 1.18 | % | |||||||||||||||
Mortgage and asset-backed securities | 2,480,677 | 79.05 | 2,026,698 | 74.64 | |||||||||||||||||||
Obligation of states and political subdivisions | 600,544 | 19.14 | 611,257 | 22.50 | |||||||||||||||||||
Equity securities | 18,362 | 0.59 | 17,086 | 0.63 | |||||||||||||||||||
Other securities | 29,042 | 0.93 | 28,396 | 1.05 | |||||||||||||||||||
Total securities | $ | 3,137,575 | 100.00 | % | $ | 2,715,388 | 100.00 | % |
DEPOSITS | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||
Amount | Percent | Amount | Percent | ||||||||||||||||||||
Demand | $ | 3,581,127 | 34.20 | % | $ | 3,264,737 | 34.74 | % | |||||||||||||||
Savings | 5,770,754 | 55.12 | 5,107,962 | 54.37 | |||||||||||||||||||
Time | 1,117,975 | 10.68 | 1,023,730 | 10.89 | |||||||||||||||||||
Total | $ | 10,469,856 | 100.00 | % | $ | 9,396,429 | 100.00 | % |
September 30, 2019 | December 31, 2018 | ||||||||||
Securities sold under agreement to repurchase | $ | 85,715 | $ | 80,124 | |||||||
Federal funds purchased | 5,850 | 35,400 | |||||||||
Advances from the FHLB | — | 100,838 | |||||||||
Other short-term borrowings | 16,288 | 10,648 | |||||||||
Total | $ | 107,853 | $ | 227,010 |
September 30, 2019 | December 31, 2018 | ||||||||||
Advances from the FHLB | $ | 3,260 | $ | 3,399 | |||||||
Trust preferred securities | 145,098 | 130,913 | |||||||||
Senior notes | — | 5,000 | |||||||||
Note payable to unaffiliated bank | 53,167 | 58,417 | |||||||||
Contracts payable for purchase of real estate and other assets | 1,908 | 1,953 | |||||||||
Subordinated notes | 74,250 | 74,143 | |||||||||
Other borrowings | 734 | 1,080 | |||||||||
Total | $ | 278,417 | $ | 274,905 |
Amount Issued | Issuance Date | Interest Rate | Interest Rate as of 9/30/19(1) | Maturity Date | Callable Date | |||||||||||||||||||||||||||||||||
Heartland Financial Statutory Trust IV | $ | 10,310 | 03/17/2004 | 2.75% over LIBOR | 4.89% | (2) | 03/17/2034 | 12/17/2019 | ||||||||||||||||||||||||||||||
Heartland Financial Statutory Trust V | 20,619 | 01/27/2006 | 1.33% over LIBOR | 3.63% | (3) | 04/07/2036 | 01/07/2020 | |||||||||||||||||||||||||||||||
Heartland Financial Statutory Trust VI | 20,619 | 06/21/2007 | 1.48% over LIBOR | 3.60% | (4) | 09/15/2037 | 12/15/2019 | |||||||||||||||||||||||||||||||
Heartland Financial Statutory Trust VII | 18,042 | 06/26/2007 | 1.48% over LIBOR | 3.61% | (5) | 09/01/2037 | 12/01/2019 | |||||||||||||||||||||||||||||||
Morrill Statutory Trust I | 9,064 | 12/19/2002 | 3.25% over LIBOR | 5.36% | 12/26/2032 | 12/26/2019 | ||||||||||||||||||||||||||||||||
Morrill Statutory Trust II | 8,726 | 12/17/2003 | 2.85% over LIBOR | 4.99% | 12/17/2033 | 12/17/2019 | ||||||||||||||||||||||||||||||||
Sheboygan Statutory Trust I | 6,506 | 09/17/2003 | 2.95% over LIBOR | 5.09% | 09/17/2033 | 12/17/2019 | ||||||||||||||||||||||||||||||||
CBNM Capital Trust I | 4,396 | 09/10/2004 | 3.25% over LIBOR | 5.37% | 12/15/2034 | 12/15/2019 | ||||||||||||||||||||||||||||||||
Citywide Capital Trust III | 6,424 | 12/19/2003 | 2.80% over LIBOR | 5.07% | 12/19/2033 | 01/23/2020 | ||||||||||||||||||||||||||||||||
Citywide Capital Trust IV | 4,281 | 09/30/2004 | 2.20% over LIBOR | 4.35% | 09/30/2034 | 11/23/2019 | ||||||||||||||||||||||||||||||||
Citywide Capital Trust V | 11,692 | 05/31/2006 | 1.54% over LIBOR | 3.66% | 07/25/2036 | 12/15/2019 | ||||||||||||||||||||||||||||||||
OCGI Statutory Trust III | 2,995 | 06/27/2002 | 3.65% over LIBOR | 5.95% | (6) | 09/30/2032 | 12/30/2019 | |||||||||||||||||||||||||||||||
OCGI Capital Trust IV | 5,328 | 09/23/2004 | 2.50% over LIBOR | 4.62% | (7) | 12/15/2034 | 12/15/2019 | |||||||||||||||||||||||||||||||
BVBC Capital Trust II | 7,187 | 04/10/2003 | 3.25% over LIBOR | 5.50% | 04/24/2033 | 01/24/2020 | ||||||||||||||||||||||||||||||||
BVBC Capital Trust III | 9,003 | 07/29/2005 | 1.60% over LIBOR | 3.70% | 09/30/2035 | 12/30/2019 | ||||||||||||||||||||||||||||||||
$ | 145,192 | |||||||||||||||||||||||||||||||||||||
(1) Effective weighted average interest rate as of September 30, 2019, was 4.94% due to interest rate swap transactions on the variable rate securities as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(2) Effective interest rate as of September 30, 2019, was 5.01% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(3) Effective interest rate as of September 30, 2019, was 4.69% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(4) Effective interest rate as of September 30, 2019, was 3.87% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(5) Effective interest rate as of September 30, 2019, was 3.83% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(6) Effective interest rate as of September 30, 2019, was 5.53% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. | ||||||||||||||||||||||||||||||||||||||
(7) Effective interest rate as of September 30, 2019, was 4.37% due to an interest rate swap transaction as discussed in Note 7 to Heartland's consolidated financial statements included herein. |
Total Capital (to Risk- Weighted Assets) | Tier 1 Capital (to Risk- Weighted Assets) | Common Equity Tier 1 (to Risk- Weighted Assets) | Tier 1 Capital (to Average Assets) | ||||||||||||||||||||
September 30, 2019 | 14.55 | % | 13.04 | % | 11.50 | % | 10.39 | % | |||||||||||||||
Minimum capital requirement | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | |||||||||||||||
Well capitalized requirement | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % | |||||||||||||||
Minimum capital requirement, including fully-phased in capital conservation buffer | 10.50 | % | 8.50 | % | 7.00 | % | N/A | ||||||||||||||||
Risk-weighted assets | $ | 9,418,827 | $ | 9,418,827 | $ | 9,418,827 | N/A | ||||||||||||||||
Average Assets | N/A | N/A | N/A | $ | 11,830,836 | ||||||||||||||||||
December 31, 2018 | 13.72 | % | 12.16 | % | 10.66 | % | 9.73 | % | |||||||||||||||
Minimum capital requirement | 8.00 | % | 6.00 | % | 4.50 | % | 4.00 | % | |||||||||||||||
Well capitalized requirement | 10.00 | % | 8.00 | % | 6.50 | % | 5.00 | % | |||||||||||||||
Minimum capital requirement, including fully-phased in capital conservation buffer (2019) | 10.50 | % | 8.50 | % | 7.00 | % | N/A | ||||||||||||||||
Risk-weighted assets | $ | 8,756,130 | $ | 8,756,130 | $ | 8,756,130 | N/A | ||||||||||||||||
Average Assets | N/A | N/A | N/A | $ | 10,946,440 |
2019 | 2018 | ||||||||||||||||||||||
Net Interest Margin | % Change From Base | Net Interest Margin | % Change From Base | ||||||||||||||||||||
Year 1 | |||||||||||||||||||||||
Down 100 Basis Points | $ | 425,662 | (3.37) | % | $ | 442,187 | (3.07) | % | |||||||||||||||
Base | $ | 440,498 | — | % | $ | 456,192 | — | % | |||||||||||||||
Up 200 Basis Points | $ | 468,374 | 6.33 | % | $ | 454,513 | (0.37) | % | |||||||||||||||
Year 2 | |||||||||||||||||||||||
Down 100 Basis Points | $ | 388,722 | (11.75) | % | $ | 423,766 | (7.11) | % | |||||||||||||||
Base | $ | 426,489 | (3.18) | % | $ | 463,765 | 1.66 | % | |||||||||||||||
Up 200 Basis Points | $ | 485,463 | 10.21 | % | $ | 474,816 | 4.08 | % |
(1)(2) | ||||||||
(2) | ||||||||
(2) | ||||||||
(2) | ||||||||
(2) | ||||||||
101 | Financial statement formatted in Inline Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity, and (vi) the Notes to Consolidated Financial Statements. | |||||||
104 | Cover page formatted in Inline Extensible Business Reporting Language |
HEARTLAND FINANCIAL USA, INC. | ||
(Registrant) | ||
/s/ Bruce K. Lee | ||
By: Bruce K. Lee | ||
President and Chief Executive Officer | ||
(Principal Executive Officer and Duly Authorized Officer) | ||
/s/ Bryan R. McKeag | ||
By: Bryan R. McKeag | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Duly Authorized Officer) | ||
/s/ Janet M. Quick | ||
By: Janet M. Quick | ||
Executive Vice President and Deputy Chief Financial Officer | ||
(Principal Accounting Officer and Duly Authorized Officer) | ||
Dated: November 6, 2019 |
ARTICLE I. CERTAIN DEFINITIONS | 1 | ||||
Section 1.1 Certain Definitions and Related Matters | 1 | ||||
ARTICLE II. TRANSFER OF ASSETS AND LIABILITIES | 10 | ||||
Section 2.1 Transferred Assets | 10 | ||||
Section 2.2 Proration; Other Closing Date Adjustments | 16 | ||||
Section 2.3 Title to the Real Property and the OREO | 17 | ||||
Section 2.4 Environmental Matters | 18 | ||||
Section 2.5 Assumed Contracts | 19 | ||||
Section 2.6 Books and Records | 19 | ||||
ARTICLE III. CLOSING AND EFFECTIVE TIME | 20 | ||||
Section 3.1 Effective Time | 20 | ||||
Section 3.2 Closing | 20 | ||||
Section 3.3 Post-Closing Adjustments | 22 | ||||
ARTICLE IV. TRANSITIONAL MATTERS | 23 | ||||
Section 4.1 General | 23 | ||||
Section 4.2 Notices to Customers and Others | 24 | ||||
Section 4.3 Trust Accounts | 24 | ||||
Section 4.4 Investment Accounts | 25 | ||||
Section 4.5 Leasing of Personal Property | 25 | ||||
Section 4.6 Notices to Obligors on Purchased Loans | 25 | ||||
ARTICLE V. INDEMNIFICATION | 26 | ||||
Section 5.1 Seller’s Indemnification of Purchaser | 26 | ||||
Section 5.2 Purchaser’s Indemnification of Seller | 26 | ||||
Section 5.3 Claims for Indemnity by Purchaser or Seller | 26 | ||||
Section 5.4 Limitations on Indemnification by Seller and Purchaser | 27 | ||||
Section 5.5 Parent’s Indemnification of Purchaser | 28 | ||||
Section 5.6 Treatment of Indemnification Payments | 28 | ||||
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER | 28 | ||||
Section 6.1 Corporate Organization; Corporate Authority | 28 | ||||
Section 6.2 No Violation | 28 | ||||
Section 6.3 Enforceable Agreement | 29 | ||||
Section 6.4 No Brokers | 29 | ||||
Section 6.5 Personal Property | 29 | ||||
Section 6.6 The Real Property, the OREO and the Leased Branch | 29 | ||||
Section 6.7 Condition of Property | 30 | ||||
Section 6.8 Labor Matters; Employees | 30 | ||||
Section 6.9 Certain Contracts | 31 |
31 | |||||
33 | |||||
33 | |||||
33 | |||||
33 | |||||
34 | |||||
34 | |||||
34 | |||||
35 | |||||
35 | |||||
35 | |||||
35 | |||||
35 | |||||
36 | |||||
ARTICLE VII. REPRESENTATIONS AND WARRANTIES OF PURCHASER | 36 | ||||
36 | |||||
36 | |||||
36 | |||||
36 | |||||
36 | |||||
36 | |||||
37 | |||||
ARTICLE VIII. OBLIGATIONS OF PARTIES PRIOR TO AND AFTER EFFECTIVE TIME | 37 | ||||
37 | |||||
38 | |||||
Section 8.3 Conduct of Business | 38 | ||||
Section 8.4 Solicitation of Customers by Purchaser Prior to Closing | 40 | ||||
Section 8.5 No Solicitation by Seller and Its Affiliates | 40 | ||||
Section 8.6 Efforts to Consummate; Further Assurances | 40 | ||||
Section 8.7 Fees and Expenses | 40 | ||||
Section 8.8 Third Party Consents | 41 | ||||
Section 8.9 Insurance | 41 | ||||
Section 8.10 Public Announcements | 41 | ||||
Section 8.11 Advice of Changes | 41 | ||||
Section 8.12 Non-Solicitation of Transactions | 41 | ||||
Section 8.13 Employees and Employee Benefit Matters | 42 | ||||
Section 8.14 Physical Damage to the Owned Branch | 44 | ||||
Section 8.15 Letters of Credit | 44 | ||||
Section 8.16 Loan Participations | 44 | ||||
Section 8.17 Updated Financial Statements and Future Call Reports | 44 | ||||
Section 8.18 Seller’s Corporate Approval | 44 |
Section 8.19 Exchange of Securities | 44 | ||||
ARTICLE IX. CONDITIONS TO PURCHASER’S OBLIGATIONS | 45 | ||||
Section 9.1 Representations and Warranties True | 45 | ||||
Section 9.2 Obligations Performed | 45 | ||||
Section 9.3 Delivery of Documents | 45 | ||||
Section 9.4 Approvals | 45 | ||||
Section 9.5 No Seller Material Adverse Effect | 45 | ||||
Section 9.6 Landlord Consent | 45 | ||||
Section 9.7 Evidence of Seller’s Corporate Approval | 45 | ||||
ARTICLE X. CONDITIONS TO SELLER’S OBLIGATIONS | 45 | ||||
Section 10.1 Representations and Warranties True | 45 | ||||
Section 10.2 Obligations Performed | 46 | ||||
Section 10.3 Delivery of Documents | 46 | ||||
46 | |||||
ARTICLE XI. TERMINATION | 46 | ||||
Section 11.1 Methods of Termination | 46 | ||||
Section 11.2 Procedure Upon Termination | 47 | ||||
Section 11.3 Certain Obligations upon Termination | 47 | ||||
ARTICLE XII. MISCELLANEOUS PROVISIONS | 47 | ||||
Section 12.1 Amendment and Modification; Waiver | 47 | ||||
Section 12.2 Survival | 48 | ||||
Section 12.3 Assignment | 48 | ||||
Section 12.4 Confidentiality | 48 | ||||
Section 12.5 Addresses for Notices, Etc. | 48 | ||||
Section 12.6 Counterparts | 50 | ||||
Section 12.7 Governing Law | 50 | ||||
Section 12.8 Entire Agreement | 50 | ||||
Section 12.9 No Third Party Beneficiaries | 50 | ||||
Section 12.10 Calculation of Dates and Deadlines | 50 | ||||
Section 12.11 Consent to Jurisdiction; Waiver of Jury Trial | 50 | ||||
Section 12.12 Severability | 51 | ||||
Section 12.13 Specific Performance | 51 | ||||
Section 12.14 Disclosure Schedules | 51 |
If to Seller, to: | Rockford Bank and Trust Company | |||||||
c/o QCR Holdings, Inc. | ||||||||
3551 Seventh Street | ||||||||
Moline, Illinois 61265 | ||||||||
Attention: Todd A. Gipple | ||||||||
Telephone Number: (309) 743-7745 | ||||||||
Email Address: tgipple@qcrh.com | ||||||||
with copies to: | Barack Ferrazzano Kirschbaum & Nagelberg LLP | |||||||
200 W. Madison Street, Suite 3900 | ||||||||
Chicago, Illinois 60606 | ||||||||
Attention: Abdul R. Mitha | ||||||||
Telephone Number: (312) 629-5171 | ||||||||
Email Address: abdul.mitha@bfkn.com | ||||||||
If to Parent, to: | QCR Holdings, Inc. | |||||||
3551 Seventh Street | ||||||||
Moline, Illinois 61265 | ||||||||
Attention: Todd A. Gipple | ||||||||
Telephone Number: (309) 743-7745 | ||||||||
Email Address: tgipple@qcrh.com | ||||||||
with copies to: | Barack Ferrazzano Kirschbaum & Nagelberg LLP | |||||||
200 W. Madison Street, Suite 3900 | ||||||||
Chicago, Illinois 60606 | ||||||||
Attention: Abdul R. Mitha | ||||||||
Telephone Number: (312) 629-5171 | ||||||||
Email Address: abdul.mitha@bfkn.com | ||||||||
If to Purchaser, to: | Illinois Bank & Trust | |||||||
6855 East Riverside Boulevard | ||||||||
Rockford, Illinois 61114 | ||||||||
Attention: Jeffrey S. Hultman | ||||||||
Telephone Number: (815) 637-7000 | ||||||||
Email Address: jhultman@illinoisbank.com |
with copies to: | Heartland Financial USA, Inc. | |||||||
1398 Central Avenue | ||||||||
Dubuque, Iowa 52001 | ||||||||
Attention: Michael J. Coyle | ||||||||
Telephone Number: (563) 587-4096 | ||||||||
Email Address: mcoyle@htlf.com | ||||||||
Dorsey & Whitney LLP | ||||||||
50 South Sixth Street, Suite 1500 | ||||||||
Minneapolis, Minnesota 55402 | ||||||||
Attention: Jay L. Kim | ||||||||
Telephone Number: (612) 492-6144 | ||||||||
Email Address: kim.jay@dorsey.com |
ILLINOIS BANK & TRUST | ||||||||
By: | /s/ Jeffrey S. Hultman | |||||||
Name: | Jeffrey S. Hultman | |||||||
Title: | President and Chief Executive Officer | |||||||
ROCKFORD BANK AND TRUST COMPANY | ||||||||
By: | /s/ Thomas D. Budd | |||||||
Name: | Thomas D. Budd | |||||||
Title: | President and Chief Executive Officer |
QCR HOLDINGS INC. | ||||||||
By: | /s/ Larry J. Helling | |||||||
Name: | Larry J. Helling | |||||||
Title: | Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Heartland Financial USA, Inc.; | |||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have: | |||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and | |||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and; | |||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): | |||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and | |||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 6, 2019 | ||||
/s/ Bruce K. Lee | |||||
Bruce K. Lee | |||||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Heartland Financial USA, Inc.; | |||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have: | |||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and | |||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and; | |||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): | |||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and | |||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 6, 2019 | ||||
/s/ Bryan R. McKeag | |||||
Bryan R. McKeag | |||||
Executive Vice President | |||||
Chief Financial Officer |
/s/ Bruce K. Lee | |||||
Bruce K. Lee | |||||
President and Chief Executive Officer | |||||
Date: | November 6, 2019 |
/s/ Bryan R. McKeag | |||||
Bryan R. McKeag | |||||
Executive Vice President | |||||
Chief Financial Officer | |||||
Date: | November 6, 2019 |
SECURITIES (Held to maturity securities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 87,965 | $ 236,283 |
Gross Unrealized Gains | 9,940 | 9,554 |
Gross Unrealized Losses | 0 | (496) |
Estimated fair value, held-to-maturity securities | 97,905 | 245,341 |
Obligations of states and political subdivisions | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 87,965 | 236,283 |
Gross Unrealized Gains | 9,940 | 9,554 |
Gross Unrealized Losses | 0 | (496) |
Estimated fair value, held-to-maturity securities | $ 97,905 | $ 245,341 |
BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 24,677 | ||
Operating lease liabilities | 26,403 | ||
Retained earnings | 670,816 | $ 579,252 | |
Securities available for sale | 3,020,568 | 2,450,709 | |
Held to maturity securities | $ (87,965) | $ (236,283) | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 25,900 | ||
Operating lease liabilities | 27,600 | ||
Retained earnings | 1,700 | ||
ASU 2017-12 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Securities available for sale | 148,000 | ||
Held to maturity securities | $ 148,000 |
BASIS OF PRESENTATION |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION The interim unaudited consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended December 31, 2018, included in the Form 10-K of Heartland Financial USA, Inc. ("Heartland") filed with the Securities and Exchange Commission ("SEC") on February 27, 2019. Footnote disclosures to the interim unaudited consolidated financial statements which would substantially duplicate the disclosure contained in the footnotes to the audited consolidated financial statements have been omitted. The financial information of Heartland included herein has been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Such information reflects all adjustments (consisting of normal recurring adjustments), that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of the interim period ended September 30, 2019, are not necessarily indicative of the results expected for the year ending December 31, 2019. Earnings Per Share Basic earnings per share is determined using net income available to common stockholders and weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average common shares and assumed incremental common shares issued. Amounts used in the determination of basic and diluted earnings per share for the three- and nine-month periods ended September 30, 2019, and 2018, are shown in the table below:
Subsequent Events - Heartland has evaluated subsequent events that may require recognition or disclosure through the filing date of this Quarterly Report on Form 10-Q with the SEC. Effect of New Financial Accounting Standards In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." Topic 842 requires a lessee to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and is applied on a modified retrospective basis. Heartland leases certain properties and equipment under operating leases that resulted in recognition of lease assets and lease liabilities on the consolidated balance sheets under the ASU; however the majority of Heartland's properties and equipment are owned, not leased. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. In January 2018, the FASB issued an amendment to provide entities with the optional practical expedient to not evaluate existing or expired land easements that were previously not accounted for as leases under Topic 840. In July 2018, the FASB issued ASU 2018-11, "Leases - Targeted Improvements" to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, Specifically, under the amendments in ASU 2018-11, entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02. Heartland adopted the accounting standard on January 1, 2019, on a modified retrospective basis, as required, and has not restated comparative periods. Heartland adopted the practical expedients, which allow for existing leases to be accounted for under previous guidance with the exception of balance sheet recognition for lessees. The adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $25.9 million and $27.6 million, respectively, on January 1, 2019. The difference between the lease assets and lease liabilities, which was $1.7 million, was recorded as an adjustment to retained earnings. The adoption of the standard did not impact Heartland's results of operations or liquidity. See Note 11, "Leases", for more information on Heartland's leases. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)." The amendments in this ASU require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The amendments in this ASU indicate that an entity should not use the length of time a security has been in an unrealized loss position to avoid recording a credit loss. In addition, in determining whether a credit loss exists, the amendments in this ASU also remove the requirements to consider the historical and implied volatility of the fair value of a security and recoveries or declines in fair value after the balance sheet date. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity may adopt the amendments earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Heartland intends to adopt the accounting standard in 2020, as required. In April 2019, the FASB also issued ASU 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." As it relates to current expected credit losses, this guidance amends certain provisions contained in ASU 2016-13, particularly with regards to the inclusion of accrued interest in the definition of amortized cost, as well as clarifying the extension and renewal options that are not unconditionally cancelable by the entity that are included in the original or modified contract should be considered in the entity's determination of expected credit losses. Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. Heartland formed an internal committee to assess and implement the standard. During 2018, Heartland entered into an agreement with a third party vendor for consulting services and a technology solution. The technology solution implementation has been completed, and Heartland has produced two parallel runs for the first two quarters of 2019 excluding economic forecasting to estimate the impact of this new guidance. Prior to the end of 2019, management will continue to prepare parallel calculations to compare the existing allowance for loan losses to this new guidance. Additionally, management expects to complete data validation and documentation of the accounting policies and internal controls related to the standard. Heartland has also entered into an agreement to have its new model validated by a third party prior to January 1, 2020. Further review and refinement of the economic forecasting, as well as the model and methodologies, will continue in preparation for the adoption of the standard on January 1, 2020. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350)." This amendment is to simplify the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing the impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied prospectively. Early adoption is permitted, including in an interim period for impairment tests performed after January 1, 2017. Heartland intends to adopt this ASU in the third quarter of 2020, consistent with the annual impairment test as of September 30, 2020, and is currently evaluating the potential impact of this guidance on its results of operations, financial position and liquidity. In March 2017, the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fee and Other Costs (Subtopic 310-20)." These amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount. Discounts continue to be amortized to maturity. These amendments are effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If any entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes the interim period. The amendments must be applied and Heartland intends to apply these amendments on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Heartland adopted this ASU on January 1, 2019, as required, and the adoption did not have a material impact on its results of operations, financial position and liquidity. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities." The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. For a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments, this ASU permits an entity to designate an amount that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flows (the "last-of-layer" method). Under this designation, prepayment risk is not incorporated into the measurement of the hedged item. ASU 2017-12 requires a modified retrospective transition method in which Heartland will recognize the cumulative effect of the change on the opening balance of each affected component of equity on the balance sheet as of the date of adoption. Heartland adopted this ASU on January 1, 2019, as required, and as a result of the adoption, $148.0 million of held to maturity securities were reclassified to available for sale debt securities carried at fair value. See Note 3, "Securities," for further details. There was no impact to Heartland's results of operations, or liquidity as a result of the adoption of this amendment. In August 2018, the FASB issued ASU 2018-13, "Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement." This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. Heartland intends to adopt this ASU in 2020, as required, and because the ASU only revises disclosure requirements, the adoption of this ASU is not expected to have a material impact on results of operations, financial position and liquidity. In August 2018, the FASB issued ASU 2018-15, "Intangible-Goodwill and Other-Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract." The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update require an entity in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The amendments also require the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The amendment is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and the amendment can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Early adoption was permitted. Heartland early adopted this ASU using the prospective approach in the second quarter of 2019, and the adoption did not have a material impact on its results of operations, financial position and liquidity. In October 2018, the FASB issued ASU 2018-16, "Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting." In the United States, eligible benchmark interest rates under Topic 815 are interest rates on direct Treasury obligations of the U.S. government ("UST"), the London Interbank Offered Rate ("LIBOR") swap rate, and the Overnight Index Swap ("OIS") Rate based on the Fed Funds Effective Rate. When the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, in August 2017, it introduced the Securities Industry and Financial Markets Association ("SIFMA") Municipal Swap Rate as the fourth permissible U.S. benchmark rate. The new ASU adds the OIS rate based on the Secured Overnight Financing Rate ("SOFR") as a U.S. benchmark interest rate to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes. The amendments in this update became effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and the financial statement impact immediately upon adoption was immaterial. The future financial statement impact will depend on any new contracts entered into using new benchmark rates, as well as any existing contracts that get migrated from LIBOR to new benchmark interest rates. Heartland is currently evaluating the impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates, including but not limited to the SOFR. Currently, Heartland has adjustable rate loans, several debt obligations and derivative instruments in place that reference LIBOR-based rates. The transition from LIBOR is estimated to take place at the end of 2021, and management will continue to actively assess the related opportunities and risks involved in this transition.
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ALLOWANCE FOR LOAN LOSSES |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ALLOWANCE FOR LOAN LOSSES Changes in the allowance for loan losses for the three- and nine-month periods ended September 30, 2019, and September 30, 2018, were as follows, in thousands:
Management allocates the allowance for loan losses by pools of risk within each loan portfolio. The allocation of the allowance for loan losses by loan portfolio is made for analytical purposes and is not necessarily indicative of the trend of future loan losses in any particular category. The total allowance for loan losses is available to absorb losses from any segment of the loan portfolio.
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REVENUE |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE On January 1, 2018, Heartland adopted ASU 2014-09, "Revenue from Contracts with Customers" (Topic 606), and all subsequent ASUs that modified Topic 606. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with loan servicing income, bank owned life insurance, derivatives and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as service charges and fees, trust fees, and brokerage and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of Heartland's revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges and Fees Service charges and fees consist of revenue generated from deposit account related service charges and fees, overdraft fees, customer service fees and other service charges, credit card fee income, debit card income and other service charges and fees. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders and other deposit account related fees. Heartland's performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees, including overdraft fees, are largely transactional based, and therefore, the performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Customer service fees and other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. Heartland's performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Credit card fee income and debit card income are comprised of interchange fees, ATM fees, and merchant services income. Credit card fee income and debit card income are earned whenever the banks' debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a bank cardholder uses an ATM that is not owned by one of Heartland's banks or a non-bank cardholder uses Heartland-owned ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Trust Fees Trust fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. Heartland's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the average daily market value or month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days before or after month end through a direct charge to customers’ accounts. Heartland does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. Heartland's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Brokerage and Insurance Commissions Brokerage commission primarily consist of commissions related to broker-dealer contracts. The contracts are between the customer and the broker-dealer, and Heartland satisfies its performance obligation and earns commission when the transactions are completed. The recognition of revenue is based on a defined fee schedule and does not require significant judgment. Payment is received shortly after services are rendered. Insurance commissions are related to commissions received directly from the insurance carrier. Heartland acts as an insurance agent between the customer and the insurance carrier. Heartland's performance obligations and associated fee and commission income are defined with each insurance product with the insurance company. When insurance payments are received from customers, a portion of the payment is recognized as commission revenue. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three- and nine-months ended September 30, 2019, and 2018, in thousands:
Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. Heartland's noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after Heartland satisfies its performance obligation and revenue is recognized. Heartland does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of September 30, 2019, and December 31, 2018, Heartland did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). Heartland utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, Heartland did not capitalize any contract acquisition costs.
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DERIVATIVE FINANCIAL INSTRUMENTS (Other free standing derivatives balance sheet category and fair values) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Other assets | Interest rate lock commitments (mortgage) | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 29,816 | $ 22,451 |
Fair Value | 970 | 725 |
Other assets | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 18,000 | 0 |
Fair Value | 64 | 0 |
Other assets | Undesignated interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 0 | 2,231 |
Fair Value | 0 | 54 |
Other liabilities | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 48,500 | 51,500 |
Fair Value | (209) | (399) |
Other liabilities | Undesignated interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 11,742 | 11,266 |
Fair Value | $ (717) | $ (453) |
STOCK COMPENSATION (Summary of RSUs Activity) (Details) - RSUs - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Shares | ||
Outstanding at beginning of period (in shares) | 266,995 | 301,578 |
Granted (in shares) | 157,583 | 116,297 |
Vested (in shares) | (142,023) | (127,429) |
Forfeited (in shares) | (26,136) | (27,678) |
Outstanding at end of period (in shares) | 256,419 | 262,768 |
Weighted-Average Grant Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 43.89 | $ 34.74 |
Granted (in dollars per share) | 45.00 | 55.26 |
Vested (in dollars per share) | 38.93 | 32.70 |
Forfeited (in dollars per share) | 48.95 | 45.58 |
Outstanding at end of period (in dollars per share) | $ 46.96 | $ 43.65 |
DERIVATIVE FINANCIAL INSTRUMENTS (Embedded derivatives gain (losses) recognized) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Other noninterest income | Embedded derivatives | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) | $ 1,389 | $ 108 | $ 318 | $ 523 |
LOANS (Carrying amount of loans acquired narrative) (Details) - USD ($) $ in Millions |
May 10, 2019 |
May 18, 2018 |
Feb. 23, 2018 |
---|---|---|---|
Blue Valley Ban Corp. | |||
Business Acquisition [Line Items] | |||
Estimated fair value of loans acquired | $ 558.4 | ||
Loans held to maturity | $ 542.3 | ||
First Bank Lubbock Bancshares, Inc. | |||
Business Acquisition [Line Items] | |||
Estimated fair value of loans acquired | $ 696.9 | ||
Loans held to maturity | $ 681.1 | ||
Signature Bancshares, Inc. | |||
Business Acquisition [Line Items] | |||
Estimated fair value of loans acquired | $ 335.1 | ||
Loans held to maturity | $ 324.5 |
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | $ 63,850 | $ 61,324 | $ 61,963 | $ 55,686 |
Charge-offs | (4,842) | (6,120) | (11,572) | (11,508) |
Recoveries | 2,013 | 779 | 4,077 | 2,711 |
Provision | 5,201 | 5,238 | 11,754 | 14,332 |
Ending Balance | 66,222 | 61,221 | 66,222 | 61,221 |
Agricultural and Agricultural Real Estate | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 6,049 | 5,709 | 4,953 | 4,258 |
Charge-offs | (1,670) | (1,145) | (2,098) | (1,357) |
Recoveries | 198 | 0 | 533 | 14 |
Provision | 774 | 2 | 1,963 | 1,651 |
Ending Balance | 5,351 | 4,566 | 5,351 | 4,566 |
Residential Real Estate | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 1,572 | 1,857 | 1,785 | 2,224 |
Charge-offs | (3) | 0 | (316) | (211) |
Recoveries | 25 | 1 | 72 | 77 |
Provision | (152) | (8) | (99) | (240) |
Ending Balance | 1,442 | 1,850 | 1,442 | 1,850 |
Consumer | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 4,847 | 9,322 | 5,182 | 9,156 |
Charge-offs | (859) | (1,831) | (2,357) | (4,462) |
Recoveries | 313 | 378 | 1,449 | 1,045 |
Provision | 462 | 1,177 | 489 | 3,307 |
Ending Balance | 4,763 | 9,046 | 4,763 | 9,046 |
Commercial | Commercial | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 24,082 | 20,709 | 24,505 | 18,098 |
Charge-offs | (2,175) | (2,945) | (6,506) | (4,717) |
Recoveries | 1,273 | 158 | 1,642 | 562 |
Provision | 2,105 | 4,147 | 5,644 | 8,126 |
Ending Balance | 25,285 | 22,069 | 25,285 | 22,069 |
Commercial Real Estate | Commercial | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning Balance | 27,300 | 23,727 | 25,538 | 21,950 |
Charge-offs | (135) | (199) | (295) | (761) |
Recoveries | 204 | 242 | 381 | 1,013 |
Provision | 2,012 | (80) | 3,757 | 1,488 |
Ending Balance | $ 29,381 | $ 23,690 | $ 29,381 | $ 23,690 |
DERIVATIVE FINANCIAL INSTRUMENTS (Fair value hedges balance sheet category and fair values) (Details) - Fair value hedges - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Other assets | ||
Derivative [Line Items] | ||
Notional Amount | $ 0 | $ 19,820 |
Fair Value, Other assets | 0 | 74 |
Other liabilities | ||
Derivative [Line Items] | ||
Notional Amount | 21,349 | 15,064 |
Fair Value, Other liabilities | $ (1,818) | $ (339) |
LOANS (Troubled debt narrative) (Details) |
Sep. 30, 2019
loan
|
---|---|
Doubtful | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Number of loan relationships | 0 |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Interest expense | $ 3,850 | $ 3,660 | $ 11,333 | $ 10,726 |
Gain (loss) on securities | 2,013 | (145) | 7,168 | 1,037 |
Income tax expense (benefit) | 7,941 | 8,956 | 29,835 | 21,530 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Derivatives | ||||
Interest expense | 24 | 242 | 276 | 469 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss) | ||||
Gain (loss) on securities | 2,013 | (145) | 7,168 | 1,037 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) | ||||
Income tax expense (benefit) | $ 502 | $ (26) | $ 1,740 | $ 174 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Cash dividends per share common stock (in dollars per share) | $ 0.18 | $ 0.14 | $ 0.50 | $ 0.40 |
Shares of common stock purchased (in shares) | 1,761 | |||
Shares of common stock issued (in shares) | 6,129 | 34,584 | 2,218,691 | 4,521,434 |
Series D Preferred Stock | ||||
Cash dividends per share preferred stock (in dollars per share) | $ 17.50 | $ 52.50 |
BASIS OF PRESENTATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | Amounts used in the determination of basic and diluted earnings per share for the three- and nine-month periods ended September 30, 2019, and 2018, are shown in the table below:
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GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets | The gross carrying amount of these intangible assets and the associated accumulated amortization at September 30, 2019, and December 31, 2018, are presented in the table below, in thousands:
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Schedule of Estimated Future Amortization Expense of Amortizable Intangible Assets | The following table shows the estimated future amortization expense for amortizable intangible assets, in thousands:
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Schedule of Servicing Asset at Fair Value and Amortized Cost | The following table summarizes, in thousands, the book value, the fair value of each tranche of the mortgage servicing rights and any recorded valuation allowance at each respective subsidiary at September 30, 2019, and December 31, 2018:
The following table summarizes, in thousands, the book value, the fair value of each tranche of the commercial servicing rights and any recorded valuation allowance at each respective subsidiary at September 30, 2019, and December 31, 2018:
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Mortgage servicing rights | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Servicing Rights | The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the nine months ended September 30, 2019, and September 30, 2018:
|
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Commercial servicing rights | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Servicing Rights | The following table summarizes, in thousands, the changes in capitalized commercial servicing rights for the nine-months ended September 30, 2019, and September 30, 2018:
|
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