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LOANS (Tables)
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Schedule of Loans
Loans as of June 30, 2020, and December 31, 2019, were as follows, in thousands:

June 30, 2020December 31, 2019
Loans receivable held to maturity:  
Commercial and industrial$2,364,400  $2,530,809  
Paycheck Protection Program ("PPP")1,124,430  —  
Owner occupied commercial real estate1,433,271  1,472,704  
Non-owner occupied commercial real estate1,543,623  1,495,877  
Real estate construction1,115,843  1,027,081  
Agricultural and agricultural real estate520,773  565,837  
Residential real estate735,762  832,277  
Consumer408,728  443,332  
Total loans receivable held to maturity9,246,830  8,367,917  
Allowance for credit losses(119,937) (70,395) 
Loans receivable, net$9,126,893  $8,297,522  
Allowance for Loan and Lease Losses, Based on Impairment Methodology The following table shows the balance in the allowance for credit losses at June 30, 2020, and December 31, 2019, and the related loan balances, disaggregated on the basis of measurement methodology, in thousands. As of June 30, 2020, loans individually assessed are collateral dependent and in the process of foreclosure or no longer share the same risk characteristics of the other loans in the pool. All other loans are collectively evaluated for losses. Loans individually evaluated were considered impaired at December 31, 2019.
Allowance For Credit LossesGross Loans Receivable Held to Maturity
Individually Evaluated for Credit LossesCollectively Evaluated for Credit LossesTotalLoans Individually Evaluated for Credit LossesLoans Collectively Evaluated for Credit Losses Total
June 30, 2020
Commercial and industrial$2,068  $30,463  $32,531  $14,731  $2,349,669  $2,364,400  
PPP —  —  —  —  1,124,430  1,124,430  
Owner occupied commercial real estate13,446  9,956  23,402  21,588  1,411,683  1,433,271  
Non-owner occupied commercial real estate29  10,133  10,162  3,550  1,540,073  1,543,623  
Real estate construction51  28,616  28,667  258  1,115,585  1,115,843  
Agricultural and agricultural real estate2,086  3,615  5,701  17,065  503,708  520,773  
Residential real estate240  9,064  9,304  4,783  730,979  735,762  
Consumer317  9,853  10,170  688  408,040  408,728  
Total$18,237  $101,700  $119,937  $62,663  $9,184,167  $9,246,830  
December 31, 2019
Commercial and industrial$6,276  $24,511  $30,787  $31,814  $2,498,995  $2,530,809  
Owner occupied commercial real estate351  7,863  8,214  9,468  1,463,236  1,472,704  
Non-owner occupied commercial real estate33  7,769  7,802  1,730  1,494,147  1,495,877  
Real estate construction—  11,599  11,599  685  1,026,396  1,027,081  
Agricultural and agricultural real estate916  4,757  5,673  18,554  547,283  565,837  
Residential real estate176  1,328  1,504  20,678  811,599  832,277  
Consumer419  4,397  4,816  4,123  439,209  443,332  
Total$8,171  $62,224  $70,395  $87,052  $8,280,865  $8,367,917  
Schedule of Financing Receivables, Non Accrual Status
The following tables present the amortized cost basis for loans on nonaccrual status and accruing loans past due 90 days or more at June 30, 2020, in thousands:
Nonaccrual
Loans with an
Allowance for
Credit Losses		Nonaccrual Loans
with No Allowance
for Credit Losses		Total
Nonaccrual
Loans		Accruing Loans
Past Due 90+ Days
June 30, 2020
Commercial and industrial$11,630  $9,812  $21,442  $—  
Owner occupied commercial real estate20,860  4,72525,585  —  
Non-owner occupied commercial real estate349  3,4123,761  —  
Real estate construction1,298  751,373  —  
Agricultural and agricultural real estate11,864  7,47619,340  83  
Residential mortgage9,468  6,11615,584  1,207  
Consumer 4,167  3574,524  70  
Total$59,636  $31,973  $91,609  $1,360  

Heartland recognized $0 of interest income on nonaccrual loans during the three- and six months ended June 30, 2020.

Heartland had $6.6 million of troubled debt restructured loans at June 30, 2020, of which $4.0 million were classified as nonaccrual and $2.6 million were accruing according to the restructured terms. Heartland had $7.6 million of troubled debt
restructured loans at December 31, 2019, of which $3.8 million were classified as nonaccrual and $3.8 million were accruing according to the restructured terms.
Troubled Debt Restructuring on Loans Modified
The following tables provide information on troubled debt restructured loans that were modified during the three- and six-month periods ended June 30, 2020, and June 30, 2019, dollars in thousands:
Three Months Ended
June 30,
20202019
Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment		Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment
Commercial—  $—  $—  —  $—  $—  
PPP —  —  ——  —  —
Owner occupied commercial real estate—  —  ——  —  —
Non-owner occupied commercial real estate—  —  ——  —  —
Real estate construction—  —  ——  —  —
Agricultural and agricultural real estate—  —  ——  —  —
Residential real estate1  60  663  240  246
Consumer—  —  ——  —  —
Total1  $60  $66  3  $240  $246  

Six Months Ended
June 30,
20202019
Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment		Number
of Loans		Pre-
Modification
Recorded
Investment		Post-
Modification
Recorded
Investment
Commercial and industrial—  $—  $—  —  $—  $—  
PPP—  —  —  —  —  —  
Owner occupied commercial real estate—  —  —  —  —  —  
Non-owner occupied commercial real estate—  —  —  —  —  —  
Real estate construction—  —  —  —  —  —  
Agricultural and agricultural real estate—  —  —  —  —  —  
Residential real estate2  92  98  4  276  288  
Consumer—  —  —  —  —  —  
Total2  $92  $98  4  $276  $288  
Troubled Debt Restructuring on Loans With Payment Defaults
The following table shows troubled debt restructured loans for which there was a payment default during the three- and six--month periods ended June 30, 2020, and June 30, 2019, that had been modified during the twelve-month period prior to default, in thousands:
With Payment Defaults During the
Three Months Ended
June 30,
20202019
Number of LoansRecorded InvestmentNumber of LoansRecorded Investment
Commercial and industrial—  $—  —  $—  
PPP —  —  —  —  
Owner occupied commercial real estate—  —  —  —  
Non-owner occupied commercial real estate—  —  —  —  
Real estate construction—  —  —  —  
Agricultural and agricultural real estate—  —  —  —  
Residential real estate—  —  1  61  
Consumer—  —  —  —  
Total—  $—  1  $61  

With Payment Defaults During the
Six Months Ended
June 30,
20202019
Number of LoansRecorded InvestmentNumber of LoansRecorded Investment
Commercial and industrial—  $—  —  $—  
 PPP —  —  —  —  
Owner occupied commercial real estate—  —  —  —  
Non-owner occupied commercial real estate—  —  —  —  
Real estate construction—  —  —  —  
Agricultural and agricultural real estate—  —  —  —  
Residential real estate1  238  3  253  
Consumer—  —  —  —  
Total1  $238  3  $253  
Schedule of Financing Receivable Credit Quality Indicators
The following table summarizes, in thousands, the carrying amount of Heartland's held to maturity debt securities by investment rating as of June 30, 2020, which are updated quarterly and used to monitor the credit quality of the securities:

RatingObligations of states and political subdivisions
AAA$3,086  
AA, AA+, AA-16,947  
A+, A, A-13,750  
BBB6,102  
Not Rated50,756  
Total $90,641  
The following table shows the risk category of loans by loan category and year of origination as of June 30, 2020, in thousands:
Amortized Cost Basis of Term Loans by Year of Origination
202020192018201720162015 and PriorRevolvingTotal
Commercial and industrial
Pass$270,156  $395,142  $210,947  $255,555  $130,483  $356,052  $523,532  $2,141,867  
Watch 7,506  39,383  13,278  18,592  8,429  184  45,250  132,622  
Substandard 3,672  8,052  21,695  14,822  11,150  12,701  17,819  89,911  
Commercial and industrial total$281,334  $442,577  $245,920  $288,969  $150,062  $368,937  $586,601  $2,364,400  
PPP
Pass$1,071,796  $—  $—  $—  $—  $—  $—  $1,071,796  
Watch30,693  —  —  —  —  —  —  30,693  
Substandard21,941  —  —  —  —  —  —  21,941  
PPP total $1,124,430  $—  $—  $—  $—  $—  $—  $1,124,430  
Owner occupied commercial real estate
Pass$139,436  $307,221  $277,311  $175,702  $122,807  $252,559  $31,445  $1,306,481  
Watch5,865  6,529  5,467  29,782  4,585  8,422  100  60,750  
Substandard6,768  7,784  23,012  9,889  6,163  12,211  213  66,040  
Owner occupied commercial real estate total$152,069  $321,534  $305,790  $215,373  $133,555  $273,192  $31,758  $1,433,271  
Non-owner occupied commercial real estate
Pass$174,914  $403,907  $249,906  $176,422  $113,130  $285,323  $29,731  $1,433,333  
Watch254  2,520  26,360  17,152  8,868  16,265  475  71,894  
Substandard19,460  2,933  1,615  5,891  1,377  7,120  —  38,396  
Non-owner occupied commercial real estate total$194,628  $409,360  $277,881  $199,465  $123,375  $308,708  $30,206  $1,543,623  
Real estate construction
Pass$136,140  $423,116  $314,934  $82,944  $31,864  $32,028  $15,820  $1,036,846  
Watch 329  17,548  20,447  10,418  16,931  1,189  824  67,686  
Substandard5,762  2,021  863  1,462  522  681  —  11,311  
Real estate construction total$142,231  $442,685  $336,244  $94,824  $49,317  $33,898  $16,644  $1,115,843  
Agricultural and agricultural real estate
Pass$60,973  $91,129  $52,319  $34,156  $17,330  $40,204  $120,864  $416,975  
Watch3,117  7,501  5,293  1,153  2,027  3,914  9,307  32,312  
Substandard8,207  7,489  18,599  6,446  3,966  14,591  12,188  71,486  
Agricultural and agricultural real estate total$72,297  $106,119  $76,211  $41,755  $23,323  $58,709  $142,359  $520,773  
Residential real estate
Pass$47,582  $82,571  $119,637  $89,920  $56,886  $275,367  $27,211  $699,174  
Watch82  3,050  880  1,619  349  7,291  346  13,617  
Substandard147  312  1,047  408  1,217  18,739  1,101  22,971  
Residential real estate total $47,811  $85,933  $121,564  $91,947  $58,452  $301,397  $28,658  $735,762  
Amortized Cost Basis of Term Loans by Year of Origination
202020192018201720162015 and PriorRevolvingTotal
Consumer
Pass$18,844  $32,474  $21,239  $15,111  $4,718  $22,982  $280,592  $395,960  
Watch—  335  385  193  247  744  1,874  3,778  
Substandard377  767  2,583  919  907  2,608  829  8,990  
Consumer total$19,221  $33,576  $24,207  $16,223  $5,872  $26,334  $283,295  $408,728  
Total Pass$1,919,841  $1,735,560  $1,246,293  $829,810  $477,218  $1,264,515  $1,029,195  $8,502,432  
Total Watch47,846  76,866  72,110  78,909  41,436  38,009  58,176  413,352  
Total Substandard 66,334  29,358  69,414  39,837  25,302  68,651  32,150  331,046  
Total Loans$2,034,021  $1,841,784  $1,387,817  $948,556  $543,956  $1,371,175  $1,119,521  $9,246,830  

The following table shows Heartland's loan portfolio by credit quality indicator as of December 31, 2019, in thousands:
PassNonpassTotal
Commercial and industrial$2,352,131  $178,678  $2,530,809  
Owner occupied commercial real estate1,369,290  103,414  1,472,704  
Non-owner occupied commercial real estate1,429,760  66,117  1,495,877  
Real estate construction984,736  42,345  1,027,081  
Agricultural and agricultural real estate454,272  111,565  565,837  
Residential real estate790,226  42,051  832,277  
Consumer430,733  12,599  443,332  
  Total loans receivable held to maturity$7,811,148  $556,769  $8,367,917  
Past Due Financing Receivables
The following table sets forth information regarding Heartland's accruing and nonaccrual loans at June 30, 2020, and December 31, 2019, in thousands:

Accruing Loans
30-59 Days
Past Due		60-89 Days
Past Due		90 Days or
More
Past Due		Total
Past Due		CurrentNonaccrualTotal Loans
June 30, 2020
Commercial and industrial$4,587  $228  $—  $4,815  $2,338,143  $21,442  $2,364,400  
PPP—  —  —  —  1,124,430  —  1,124,430  
Owner occupied commercial real estate90  1,159  —  1,249  1,406,437  25,585  1,433,271  
Non-owner occupied commercial real estate2,776  158  —  2,934  1,536,928  3,761  1,543,623  
Real estate construction2,298  —  —  2,298  1,112,172  1,373  1,115,843  
Agricultural and agricultural real estate4,209  600  83  4,892  496,541  19,340  520,773  
Residential real estate483  1,242  1,207  2,932  717,246  15,584  735,762  
Consumer2,594  348  70  3,012  401,192  4,524  408,728  
Total gross loans receivable held to maturity$17,037  $3,735  $1,360  $22,132  $9,133,089  $91,609  $9,246,830  
December 31, 2019
Commercial and industrial$5,121  $904  $3,899  $9,924  $2,491,110  $29,775  $2,530,809  
Owner occupied commercial real estate3,487  690  —  4,177  1,461,589  6,938  1,472,704  
Non-owner occupied commercial real estate614  81  —  695  1,493,619  1,563  1,495,877  
Real estate construction5,689  72  —  5,761  1,020,153  1,167  1,027,081  
Agricultural and agricultural real estate3,734  79  26  3,839  541,455  20,543  565,837  
Residential real estate4,166  24  180  4,370  814,840  13,067  832,277  
Consumer2,511  651  —  3,162  436,675  3,495  443,332  
Total gross loans receivable held to maturity$25,322  $2,501  $4,105  $31,928  $8,259,441  $76,548  $8,367,917  
Summary of Impaired Loans The following table presents the unpaid principal balance that was contractually due at December 31, 2019, the outstanding loan balance recorded on the consolidated balance sheet at December 31, 2019, any related allowance recorded for those loans as of December 31, 2019, the
average outstanding loan balances recorded on the consolidated balance sheet during the year ended December 31, 2019, and the interest income recognized on the impaired loans during the year ended December 31, 2019, in thousands:

Unpaid
Principal
Balance		Loan
Balance		Related
Allowance
Recorded		Year-to-
Date
Avg.
Loan
Balance		Year-to-
Date
Interest
Income
Recognized
December 31, 2019
Impaired loans with a related allowance:
Commercial$11,727  $11,710  $6,276  $11,757  $6  
Owner occupied commercial real estate712  712  352  1,435  22  
Non-owner occupied commercial real estate138  138  33  —  —  
Real estate construction17  17  —  —  —  
Agricultural and agricultural real estate2,751  2,237  916  2,739  —  
Residential real estate1,378  1,378  176  1,116  —  
Consumer998  997  419  1,170  11  
Total loans held to maturity$17,721  $17,189  $8,172  $18,217  $39  
Impaired loans without a related allowance:
Commercial$22,525  $20,104  $—  $19,141  $782  
Owner occupied commercial real estate8,756  8,756  —  8,337  341  
Non-owner occupied commercial real estate1,592  1,592  —  1,515  62  
Real estate construction 668  668  —  636  26  
Agricultural and agricultural real estate19,113  16,317  —  16,837  60  
Residential real estate19,382  19,300  —  17,073  280  
Consumer3,135  3,126  —  4,182  45  
Total loans held to maturity$75,171  $69,863  $—  $67,721  $1,596  
Total impaired loans held to maturity:
Commercial$34,252  $31,814  $6,276  $30,898  $788  
Owner occupied commercial real estate9,468  9,468  352  9,772  363  
Non-owner occupied commercial real estate1,730  1,730  33  1,515  62  
Real estate construction 685  685  —  636  26  
Agricultural and agricultural real estate21,864  18,554  916  19,576  60  
Residential real estate20,760  20,678  176  18,189  280  
Consumer4,133  4,123  419  5,352  56  
Total impaired loans held to maturity$92,892  $87,052  $8,172  $85,938  $1,635