Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2013

Loans and leases as of June 30, 2013, and December 31, 2012, were as follows, in thousands:



	June 30, 2013			December 31, 2012
Loans and leases receivable held to maturity:
Commercial	$	709,908		$	712,308
Commercial real estate	1,294,975			1,289,184
Agricultural and agricultural real estate	327,490			328,311
Residential real estate	248,604			249,689
Consumer	254,825			245,678
Gross loans and leases receivable held to maturity	2,835,802			2,825,170
Unearned discount	(347		)	(676		)
Deferred loan fees	(3,078		)	(2,945		)
Total net loans and leases receivable held to maturity	2,832,377			2,821,549
Loans covered under loss share agreements:
Commercial and commercial real estate	2,519			3,074
Agricultural and agricultural real estate	441			748
Residential real estate	2,493			2,645
Consumer	822			786
Total loans covered under loss share agreements	6,275			7,253
Allowance for loan and lease losses	(37,623		)	(38,715		)
Loans and leases receivable, net	$	2,801,029		$	2,790,087

Allowance for Loan and Lease Losses, Based on Impairment Methodology

All other loans are collectively evaluated for impairment under ASC 450-20. Heartland has made no changes to the accounting for the allowance for loan and lease losses policy during 2013.



	Allowance For Loan and Lease Losses						Gross Loans and Leases Receivable Held to Maturity
	Ending Balance Under ASC 310-10-35		Ending Balance Under ASC 450-20		Total		Ending Balance Evaluated for Impairment Under ASC 310-10-35		Ending Balance Evaluated for Impairment Under ASC 450-20		Total
June 30, 2013
Commercial	$	682	$	8,754	$	9,436	$	20,668	$	689,240	$	709,908
Commercial real estate	800		12,871		13,671		29,997		1,264,978		1,294,975
Agricultural and agricultural real estate	904		2,151		3,055		20,168		307,322		327,490
Residential real estate	915		2,665		3,580		7,950		240,654		248,604
Consumer	1,928		5,953		7,881		4,919		249,906		254,825
Total	$	5,229	$	32,394	$	37,623	$	83,702	$	2,752,100	$	2,835,802
December 31, 2012
Commercial	$	1,350	$	10,038	$	11,388	$	9,031	$	703,277	$	712,308
Commercial real estate	1,112		13,361		14,473		45,583		1,243,601		1,289,184
Agricultural and agricultural real estate	109		2,029		2,138		16,128		312,183		328,311
Residential real estate	783		2,760		3,543		7,443		242,246		249,689
Consumer	1,270		5,903		7,173		5,391		240,287		245,678
Total	$	4,624	$	34,091	$	38,715	$	83,576	$	2,741,594	$	2,825,170

Schedule of Financing Receivables, Non Accrual Status

The following table presents nonaccrual loans, accruing loans past due 90 days or more and troubled debt restructured loans not covered under loss share agreements at June 30, 2013, and December 31, 2012, in thousands. There were no nonaccrual leases, accruing leases past due 90 days or more or restructured leases at June 30, 2013, and December 31, 2012.



	June 30, 2013		December 31, 2012
Nonaccrual loans	$	35,219	$	38,675
Nonaccrual troubled debt restructured loans	5,784		4,481
Total nonaccrual loans	$	41,003	$	43,156
Accruing loans past due 90 days or more	6		—
Performing troubled debt restructured loans	$	32,661	$	21,121

Troubled Debt Restructurings on Financing Receivables

The following tables provide information on troubled debt restructured loans that were modified during the three months and six months ended June 30, 2013, and June 30, 2012, in thousands:



	Three Months Ended June 30,
	2013					2012
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Commercial	2	$	13,203	$	13,203	—	$	—	$	—
Commercial real estate	—	—		—		1	1,380		1,380
Total commercial and commercial real estate	2	13,203		13,203		1	1,380		1,380
Agricultural and agricultural real estate	—	—		—		3	1,014		1,014
Residential real estate	1	50		50		1	1,005		1,005
Consumer	1	166		166		—	—		—
Total	4	$	13,419	$	13,419	5	$	3,399	$	3,399



	Six Months Ended June 30,
	2013					2012
	Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment		Number of Loans	Pre- Modification Recorded Investment		Post- Modification Recorded Investment
Commercial	3	$	17,873	$	17,873	—	$	—	$	—
Commercial real estate	—	—		—		2	1,398		1,398
Total commercial and commercial real estate	3	17,873		17,873		2	1,398		1,398
Agricultural and agricultural real estate	3	2,576		2,576		3	1,014		1,014
Residential real estate	3	696		696		1	1,005		1,005
Consumer	1	166		166		—	—		—
Total	10	$	21,311	$	21,311	6	$	3,417	$	3,417

Troubled Debt Restructed Loans with Payment Default

The following tables provide information on troubled debt restructured loans for which there was a payment default during the three months and six months ended June 30, 2013, and June 30, 2012, in thousands, that had been modified during the twelve-month period prior to the default:



	With Payment Defaults During the Following Periods
	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	1	$	4,670	—	$	—
Commercial real estate	—	—		—	—
Total commercial and commercial real estate	1	4,670		—	—
Agricultural and agricultural real estate	—	—		—	—
Residential real estate	—	—		—	—
Consumer	—	—		—	—
Total	1	$	4,670	—	$	—



	With Payment Defaults During the Following Periods
	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial	1	$	4,670	—	$	—
Commercial real estate	—	—		1	640
Total commercial and commercial real estate	1	4,670		1	640
Agricultural and agricultural real estate	—	—		—	—
Residential real estate	—	—		—	—
Consumer	—	—		—	—
Total	1	$	4,670	1	$	640

Financing Receivable Credit Quality Indicators

The following table presents loans and leases not covered by loss share agreements by credit quality indicator at June 30, 2013, and December 31, 2012, in thousands:



	Pass		Nonpass		Total
June 30, 2013
Commercial	$	653,984	$	55,924	$	709,908
Commercial real estate	1,148,846		146,129		1,294,975
Total commercial and commercial real estate	1,802,830		202,053		2,004,883
Agricultural and agricultural real estate	281,217		46,273		327,490
Residential real estate	230,338		18,266		248,604
Consumer	244,542		10,283		254,825
Total gross loans and leases receivable held to maturity	$	2,558,927	$	276,875	$	2,835,802
December 31, 2012
Commercial	$	661,118	$	51,190	$	712,308
Commercial real estate	1,134,784		154,400		1,289,184
Total commercial and commercial real estate	1,795,902		205,590		2,001,492
Agricultural and agricultural real estate	286,264		42,047		328,311
Residential real estate	227,925		21,764		249,689
Consumer	235,232		10,446		245,678
Total gross loans and leases receivable held to maturity	$	2,545,323	$	279,847	$	2,825,170

Past Due Financing Receivables

The following table sets forth information regarding Heartland's accruing and nonaccrual loans and leases not covered by loss share agreements at June 30, 2013, and December 31, 2012, in thousands:



	Accruing Loans and Leases
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Nonaccrual		Total Loans and Leases
June 30, 2013
Commercial	$	603	$	98	$	—	$	701	$	702,979	$	6,228	$	709,908
Commercial real estate	1,417		755		—		2,172		1,274,617		18,186		1,294,975
Total commercial and commercial real estate	2,020		853		—		2,873		1,977,596		24,414		2,004,883
Agricultural and agricultural real estate	304		—		—		304		319,907		7,279		327,490
Residential real estate	1,374		629		—		2,003		240,608		5,993		248,604
Consumer	2,965		581		6		3,552		247,956		3,317		254,825
Total gross loans and leases receivable held to maturity	$	6,663	$	2,063	$	6	$	8,732	$	2,786,067	$	41,003	$	2,835,802
December 31, 2012
Commercial	$	1,143	$	525	$	—	$	1,668	$	708,459	$	2,181	$	712,308
Commercial real estate	1,631		494		—		2,125		1,259,112		27,947		1,289,184
Total commercial and commercial real estate	2,774		1,019		—		3,793		1,967,571		30,128		2,001,492
Agricultural and agricultural real estate	687		—		—		687		324,545		3,079		328,311
Residential real estate	1,278		234		—		1,512		241,860		6,317		249,689
Consumer	2,434		803		—		3,237		238,809		3,632		245,678
Total gross loans and leases receivable held to maturity	$	7,173	$	2,056	$	—	$	9,229	$	2,772,785	$	43,156	$	2,825,170

Allowance for Credit Losses on Financing Receivables

The following tables present, for impaired loans not covered by loss share agreements and by category of loan, the unpaid contractual balance at June 30, 2013, and December 31, 2012; the outstanding loan balance recorded on the consolidated balance sheets at June 30, 2013, and December 31, 2012; any related allowance recorded for those loans as of June 30, 2013, and December 31, 2012; the average outstanding loan balance recorded on the consolidated balance sheets during the three months and six months ended June 30, 2013, and year ended December 31, 2012; and the interest income recognized on the impaired loans during the three months and six months ended June 30, 2013, and year ended December 31, 2012, in thousands:



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Quarter-to- Date Avg. Loan Balance		Quarter-to- Date Interest Income Recognized		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
June 30, 2013
Impaired loans with a related allowance:
Commercial	$	1,427	$	1,427	$	682	$	2,063	$	11	$	2,345	$	30
Commercial real estate	9,950		9,729		800		8,725		132		7,199		282
Total commercial and commercial real estate	11,377		11,156		1,482		10,788		143		9,544		312
Agricultural and agricultural real estate	16,019		16,019		904		6,250		80		3,876		168
Residential real estate	3,571		3,515		915		3,488		13		3,404		31
Consumer	3,362		3,362		1,928		3,378		25		3,429		50
Total loans held to maturity	$	34,329	$	34,052	$	5,229	$	23,904	$	261	$	20,253	$	561
Impaired loans without a related allowance:
Commercial	$	20,082	$	19,241	$	—	$	10,352	$	8	$	7,917	$	12
Commercial real estate	28,735		20,268		—		25,188		69		30,184		113
Total commercial and commercial real estate	48,817		39,509		—		35,540		77		38,101		125
Agricultural and agricultural real estate	4,149		4,149		—		13,931		68		12,870		121
Residential real estate	4,989		4,435		—		4,118		22		3,923		39
Consumer	1,733		1,557		—		1,611		9		1,506		15
Total loans held to maturity	$	59,688	$	49,650	$	—	$	55,200	$	176	$	56,400	$	300
Total impaired loans held to maturity:
Commercial	$	21,509	$	20,668	$	682	$	12,415	$	19	$	10,262	$	42
Commercial real estate	38,685		29,997		800		33,913		201		37,383		395
Total commercial and commercial real estate	60,194		50,665		1,482		46,328		220		47,645		437
Agricultural and agricultural real estate	20,168		20,168		904		20,181		148		16,746		289
Residential real estate	8,560		7,950		915		7,606		35		7,327		70
Consumer	5,095		4,919		1,928		4,989		34		4,935		65
Total impaired loans held to maturity	$	94,017	$	83,702	$	5,229	$	79,104	$	437	$	76,653	$	861



	Unpaid Contractual Balance		Loan Balance		Related Allowance Recorded		Year-to- Date Avg. Loan Balance		Year-to- Date Interest Income Recognized
December 31, 2012
Impaired loans with a related allowance:
Commercial	$	2,904	$	2,904	$	1,350	$	5,082	$	88
Commercial real estate	6,403		6,384		1,112		12,671		813
Total commercial and commercial real estate	9,307		9,288		2,462		17,753		901
Agricultural and agricultural real estate	1,493		1,493		109		379		83
Residential real estate	3,197		3,170		783		2,737		89
Consumer	3,876		3,836		1,270		3,781		204
Total loans held to maturity	$	17,873	$	17,787	$	4,624	$	24,650	$	1,277
Impaired loans without a related allowance:
Commercial	$	6,596	$	6,127	$	—	$	3,813	$	186
Commercial real estate	48,967		39,199		—		41,814		689
Total commercial and commercial real estate	55,563		45,326		—		45,627		875
Agricultural and agricultural real estate	14,654		14,635		—		13,728		539
Residential real estate	4,741		4,273		—		3,861		65
Consumer	1,708		1,555		—		1,630		18
Total loans held to maturity	$	76,666	$	65,789	$	—	$	64,846	$	1,497
Total impaired loans held to maturity:
Commercial	$	9,500	$	9,031	$	1,350	$	8,895	$	274
Commercial real estate	55,370		45,583		1,112		54,485		1,502
Total commercial and commercial real estate	64,870		54,614		2,462		63,380		1,776
Agricultural and agricultural real estate	16,147		16,128		109		14,107		622
Residential real estate	7,938		7,443		783		6,598		154
Consumer	5,584		5,391		1,270		5,411		222
Total impaired loans held to maturity	$	94,539	$	83,576	$	4,624	$	89,496	$	2,774

Impaired Financing Receivables

The carrying amount of the loans covered by these loss share agreements at June 30, 2013, and December 31, 2012, consisted of purchased impaired and nonimpaired loans as summarized in the following table, in thousands:



	June 30, 2013						December 31, 2012
	Impaired Purchased Loans		Non Impaired Purchased Loans		Total Covered Loans		Impaired Purchased Loans		Non Impaired Purchased Loans		Total Covered Loans
Commercial and commercial real estate	$	539	$	1,980	$	2,519	$	598	$	2,476	$	3,074
Agricultural and agricultural real estate	—		441		441		—		748		748
Residential real estate	—		2,493		2,493		—		2,645		2,645
Consumer loans	463		359		822		89		697		786
Total Covered Loans	$	1,002	$	5,273	$	6,275	$	687	$	6,566	$	7,253