x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer
x
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Accelerated Filer
¨
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Non-accelerated filer
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Part I
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Part II
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101 Financial statements formatted in 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.
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HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
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Six Months Ended
June 30, |
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2018
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2017
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$
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51,147
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$
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39,968
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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14,273
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14,566
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Provision for loan losses
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9,094
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4,530
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Net amortization of premium on securities
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12,587
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13,997
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Securities gains, net
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(1,182
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)
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(3,874
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)
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Unrealized gain on equity securities, net
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(43
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)
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—
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Stock based compensation
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2,770
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2,763
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Loans originated for sale
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(317,979
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)
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(369,579
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)
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Proceeds on sales of loans held for sale
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346,083
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390,683
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Net gains on sale of loans held for sale
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(8,178
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)
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(8,691
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)
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(Increase) decrease in accrued interest receivable
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(35
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)
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1,876
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Decrease in prepaid expenses
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2,263
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936
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Decrease in accrued interest payable
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(25
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)
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(130
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)
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Capitalization of servicing rights
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(2,694
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)
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(4,406
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)
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Valuation allowance on servicing rights
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218
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(24
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)
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Loss on sales/valuations of assets, net
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1,331
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300
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Net excess tax benefit from stock based compensation
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660
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989
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Other, net
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(16,605
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)
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(11,989
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)
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NET CASH PROVIDED BY OPERATING ACTIVITIES
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93,685
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71,915
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of time deposits in other financial institutions
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(1,000
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)
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—
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Proceeds from the sale of securities available for sale
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635,735
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624,008
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Proceeds from the redemption of time deposits in other financial institutions
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8,767
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5,867
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Proceeds from the maturity of and principal paydowns on securities available for sale
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112,166
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102,506
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Proceeds from the maturity of and principal paydowns on securities held to maturity
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8,897
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3,655
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Proceeds from the maturity of and principal paydowns on time deposits in other financial institutions
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4,862
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14,483
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Proceeds from the maturity of and principal paydowns on other investments
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1,400
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2,017
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Purchase of securities available for sale
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(733,030
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)
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(666,588
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)
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Purchase of other investments
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(1,842
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)
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(1,001
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)
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Net (increase) decrease in loans
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(86,466
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)
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113,369
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Purchase of bank owned life insurance policies
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—
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(2,000
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)
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Capital expenditures
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(9,788
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)
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(5,683
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)
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Net cash and cash equivalents received in acquisitions
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212,197
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33,698
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Proceeds from the sale of equipment
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622
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1,692
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Proceeds on sale of OREO and other repossessed assets
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2,091
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4,352
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NET CASH PROVIDED BY INVESTING ACTIVITIES
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$
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154,611
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$
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230,375
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Three Months Ended
June 30, |
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(Dollars and number of shares in thousands, except per share data)
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2018
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2017
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Net income
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$
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27,879
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$
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21,958
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Preferred dividends
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(13
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)
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(13
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)
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Interest expense on convertible preferred debt
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—
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4
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Net income available to common stockholders
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$
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27,866
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$
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21,949
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Weighted average common shares outstanding for basic earnings per share
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32,621
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26,687
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Assumed incremental common shares issued upon exercise of stock options and non-vested restricted stock units
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210
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286
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Weighted average common shares for diluted earnings per share
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32,831
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26,973
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Earnings per common share — basic
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$
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0.85
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$
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0.82
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Earnings per common share — diluted
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$
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0.85
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$
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0.81
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Number of antidilutive common stock equivalents excluded from diluted earnings per share computation
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—
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—
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Six Months Ended
June 30, |
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(Dollars and number of shares in thousands, except per share data)
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2018
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2017
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Net income
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$
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51,147
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$
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39,968
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Preferred dividends
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(26
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)
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(32
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)
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Interest expense on convertible preferred debt
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—
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9
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Net income available to common stockholders
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$
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51,121
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$
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39,945
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Weighted average common shares outstanding for basic earnings per share
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31,537
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26,512
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Assumed incremental common shares issued upon non-vested restricted stock units
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209
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286
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Weighted average common shares for diluted earnings per share
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31,746
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26,798
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Earnings per common share — basic
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$
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1.62
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$
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1.51
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Earnings per common share — diluted
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$
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1.61
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$
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1.49
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Number of antidilutive common stock equivalents excluded from diluted earnings per share computation
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—
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—
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2018
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2017
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Shares
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Weighted-Average Grant Date
Fair Value
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Shares
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Weighted-Average Grant Date
Fair Value
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||||||
Outstanding at January 1
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301,578
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$
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34.74
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346,817
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$
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27.61
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Granted
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113,738
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55.16
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108,245
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47.21
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Vested
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(124,764
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)
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32.64
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(125,840
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)
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26.32
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Forfeited
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(25,011
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)
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45.50
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(10,563
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)
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31.78
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Outstanding at June 30
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265,541
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$
|
43.49
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318,659
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$
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34.64
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2018
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2017
|
||||||||||
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Shares
|
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Weighted-Average
Exercise Price
|
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Shares
|
|
Weighted-Average
Exercise Price
|
||||||
Outstanding at January 1
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6,500
|
|
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$
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18.60
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26,400
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$
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18.60
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Granted
|
—
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—
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—
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—
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Exercised
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(6,500
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)
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18.60
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(8,250
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)
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18.60
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Forfeited
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—
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—
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(500
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)
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18.60
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Outstanding at June 30
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—
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$
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—
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17,650
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$
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18.60
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Options exercisable at June 30
|
—
|
|
|
$
|
—
|
|
|
17,650
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|
|
$
|
18.60
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As of May 18, 2018
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Fair value of consideration paid:
|
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Common stock (3,350,664 shares)
|
$
|
184,454
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|
Cash
|
5,451
|
|
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Total consideration paid
|
189,905
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Fair value of assets acquired
|
|
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Cash and cash equivalents
|
212,105
|
|
|
Securities:
|
|
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Carried at fair value
|
1,788
|
|
|
Other securities
|
3,268
|
|
|
Loans held for sale
|
31,050
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|
|
Loans held to maturity
|
681,080
|
|
|
Premises, furniture and equipment, net
|
23,271
|
|
|
Other real estate, net
|
379
|
|
|
Mortgage servicing rights
|
6,995
|
|
|
Core deposit intangibles and customer relationships, net
|
13,908
|
|
|
Cash surrender value on life insurance
|
14,997
|
|
|
Other assets
|
7,185
|
|
|
Total assets
|
996,026
|
|
|
Fair value of liabilities assumed
|
|
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Deposits
|
893,827
|
|
|
Other borrowings
|
12,077
|
|
|
Other liabilities
|
21,580
|
|
|
Total liabilities assumed
|
927,484
|
|
|
Fair value of net assets acquired
|
68,542
|
|
|
Goodwill resulting from acquisition
|
$
|
121,363
|
|
(Dollars in thousands, except per share data), unaudited
|
For the Six Months Ended
|
||||||
|
June 30, 2018
|
|
June 30, 2017
|
||||
Net interest income
|
$
|
207,168
|
|
|
$
|
163,837
|
|
Net income available to common stockholders
|
$
|
35,378
|
|
|
$
|
48,817
|
|
Basic earnings per share
|
$
|
1.04
|
|
|
$
|
1.63
|
|
Diluted earnings per share
|
$
|
1.03
|
|
|
$
|
1.62
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
20,273
|
|
|
$
|
1
|
|
|
$
|
(86
|
)
|
|
$
|
20,188
|
|
Mortgage and asset-backed securities
|
1,834,569
|
|
|
1,916
|
|
|
(52,754
|
)
|
|
1,783,731
|
|
||||
Obligations of states and political subdivisions
|
386,272
|
|
|
781
|
|
|
(10,789
|
)
|
|
376,264
|
|
||||
Total debt securities
|
2,241,114
|
|
|
2,698
|
|
|
(63,629
|
)
|
|
2,180,183
|
|
||||
Equity securities with a readily determinable fair value
|
16,934
|
|
|
—
|
|
|
—
|
|
|
16,934
|
|
||||
Total
|
$
|
2,258,048
|
|
|
$
|
2,698
|
|
|
$
|
(63,629
|
)
|
|
$
|
2,197,117
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
5,358
|
|
|
$
|
8
|
|
|
$
|
(38
|
)
|
|
$
|
5,328
|
|
Mortgage and asset-backed securities
|
1,785,467
|
|
|
5,856
|
|
|
(37,587
|
)
|
|
1,753,736
|
|
||||
Obligations of states and political subdivisions
|
441,060
|
|
|
4,669
|
|
|
(4,714
|
)
|
|
441,015
|
|
||||
Total debt securities
|
2,231,885
|
|
|
10,533
|
|
|
(42,339
|
)
|
|
2,200,079
|
|
||||
Equity securities
|
16,296
|
|
|
378
|
|
|
—
|
|
|
16,674
|
|
||||
Total
|
$
|
2,248,181
|
|
|
$
|
10,911
|
|
|
$
|
(42,339
|
)
|
|
$
|
2,216,753
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
244,271
|
|
|
$
|
9,669
|
|
|
$
|
(787
|
)
|
|
$
|
253,153
|
|
Total
|
$
|
244,271
|
|
|
$
|
9,669
|
|
|
$
|
(787
|
)
|
|
$
|
253,153
|
|
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
253,550
|
|
|
$
|
12,460
|
|
|
$
|
(516
|
)
|
|
$
|
265,494
|
|
Total
|
$
|
253,550
|
|
|
$
|
12,460
|
|
|
$
|
(516
|
)
|
|
$
|
265,494
|
|
|
June 30, 2018
|
||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
Due in 1 year or less
|
$
|
18,467
|
|
|
$
|
18,422
|
|
Due in 1 to 5 years
|
56,798
|
|
|
56,473
|
|
||
Due in 5 to 10 years
|
123,063
|
|
|
118,857
|
|
||
Due after 10 years
|
208,217
|
|
|
202,700
|
|
||
Total debt securities
|
406,545
|
|
|
396,452
|
|
||
Mortgage and asset-backed securities
|
1,834,569
|
|
|
1,783,731
|
|
||
Total investment securities
|
$
|
2,241,114
|
|
|
$
|
2,180,183
|
|
|
June 30, 2018
|
||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
Due in 1 year or less
|
$
|
1,359
|
|
|
$
|
1,383
|
|
Due in 1 to 5 years
|
27,074
|
|
|
27,651
|
|
||
Due in 5 to 10 years
|
104,305
|
|
|
106,680
|
|
||
Due after 10 years
|
111,533
|
|
|
117,439
|
|
||
Total investment securities
|
$
|
244,271
|
|
|
$
|
253,153
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Proceeds from sales
|
$
|
243,489
|
|
|
$
|
402,371
|
|
|
$
|
635,735
|
|
|
$
|
624,008
|
|
Gross security gains
|
457
|
|
|
2,667
|
|
|
3,470
|
|
|
6,497
|
|
||||
Gross security losses
|
716
|
|
|
1,275
|
|
|
2,288
|
|
|
2,614
|
|
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
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government corporations and agencies
|
$
|
19,687
|
|
|
$
|
(86
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,687
|
|
|
$
|
(86
|
)
|
Mortgage and asset-backed securities
|
1,142,205
|
|
|
(20,824
|
)
|
|
430,160
|
|
|
(31,930
|
)
|
|
1,572,365
|
|
|
(52,754
|
)
|
||||||
Obligations of states and political subdivisions
|
198,005
|
|
|
(3,696
|
)
|
|
131,780
|
|
|
(7,093
|
)
|
|
329,785
|
|
|
(10,789
|
)
|
||||||
Total temporarily impaired securities
|
$
|
1,359,897
|
|
|
$
|
(24,606
|
)
|
|
$
|
561,940
|
|
|
$
|
(39,023
|
)
|
|
$
|
1,921,837
|
|
|
$
|
(63,629
|
)
|
December 31, 2017
|
|||||||||||||||||||||||
U.S. government corporations and agencies
|
$
|
4,819
|
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,819
|
|
|
$
|
(38
|
)
|
Mortgage and asset-backed securities
|
851,070
|
|
|
(11,533
|
)
|
|
399,978
|
|
|
(26,054
|
)
|
|
1,251,048
|
|
|
(37,587
|
)
|
||||||
Obligations of states and political subdivisions
|
93,040
|
|
|
(667
|
)
|
|
159,180
|
|
|
(4,047
|
)
|
|
252,220
|
|
|
(4,714
|
)
|
||||||
Total temporarily impaired securities
|
$
|
948,929
|
|
|
$
|
(12,238
|
)
|
|
$
|
559,158
|
|
|
$
|
(30,101
|
)
|
|
$
|
1,508,087
|
|
|
$
|
(42,339
|
)
|
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
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
$
|
26,942
|
|
|
$
|
(261
|
)
|
|
$
|
7,889
|
|
|
$
|
(526
|
)
|
|
$
|
34,831
|
|
|
$
|
(787
|
)
|
Total temporarily impaired securities
|
$
|
26,942
|
|
|
$
|
(261
|
)
|
|
$
|
7,889
|
|
|
$
|
(526
|
)
|
|
$
|
34,831
|
|
|
$
|
(787
|
)
|
December 31, 2017
|
|||||||||||||||||||||||
Obligations of states and political subdivisions
|
$
|
8,512
|
|
|
$
|
(49
|
)
|
|
$
|
8,989
|
|
|
$
|
(467
|
)
|
|
$
|
17,501
|
|
|
$
|
(516
|
)
|
Total temporarily impaired securities
|
$
|
8,512
|
|
|
$
|
(49
|
)
|
|
$
|
8,989
|
|
|
$
|
(467
|
)
|
|
$
|
17,501
|
|
|
$
|
(516
|
)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Loans receivable held to maturity:
|
|
|
|
||||
Commercial
|
$
|
2,034,240
|
|
|
$
|
1,646,606
|
|
Commercial real estate
|
3,686,898
|
|
|
3,163,269
|
|
||
Agricultural and agricultural real estate
|
562,353
|
|
|
511,588
|
|
||
Residential real estate
|
683,051
|
|
|
624,279
|
|
||
Consumer
|
512,899
|
|
|
447,484
|
|
||
Gross loans receivable held to maturity
|
7,479,441
|
|
|
6,393,226
|
|
||
Unearned discount
|
(1,420
|
)
|
|
(556
|
)
|
||
Deferred loan fees
|
(324
|
)
|
|
(1,206
|
)
|
||
Total net loans receivable held to maturity
|
7,477,697
|
|
|
6,391,464
|
|
||
Allowance for loan losses
|
(61,324
|
)
|
|
(55,686
|
)
|
||
Loans receivable, net
|
$
|
7,416,373
|
|
|
$
|
6,335,778
|
|
|
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
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
2,821
|
|
|
$
|
17,888
|
|
|
$
|
20,709
|
|
|
$
|
14,072
|
|
|
$
|
2,020,168
|
|
|
$
|
2,034,240
|
|
Commercial real estate
|
212
|
|
|
23,515
|
|
|
23,727
|
|
|
13,164
|
|
|
3,673,734
|
|
|
3,686,898
|
|
||||||
Agricultural and agricultural real estate
|
1,648
|
|
|
4,061
|
|
|
5,709
|
|
|
20,887
|
|
|
541,466
|
|
|
562,353
|
|
||||||
Residential real estate
|
310
|
|
|
1,547
|
|
|
1,857
|
|
|
25,481
|
|
|
657,570
|
|
|
683,051
|
|
||||||
Consumer
|
1,445
|
|
|
7,877
|
|
|
9,322
|
|
|
8,857
|
|
|
504,042
|
|
|
512,899
|
|
||||||
Total
|
$
|
6,436
|
|
|
$
|
54,888
|
|
|
$
|
61,324
|
|
|
$
|
82,461
|
|
|
$
|
7,396,980
|
|
|
$
|
7,479,441
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
1,613
|
|
|
$
|
16,485
|
|
|
$
|
18,098
|
|
|
$
|
7,415
|
|
|
$
|
1,639,191
|
|
|
$
|
1,646,606
|
|
Commercial real estate
|
766
|
|
|
21,184
|
|
|
21,950
|
|
|
23,705
|
|
|
3,139,564
|
|
|
3,163,269
|
|
||||||
Agricultural and agricultural real estate
|
546
|
|
|
3,712
|
|
|
4,258
|
|
|
13,304
|
|
|
498,284
|
|
|
511,588
|
|
||||||
Residential real estate
|
430
|
|
|
1,794
|
|
|
2,224
|
|
|
27,141
|
|
|
597,138
|
|
|
624,279
|
|
||||||
Consumer
|
1,400
|
|
|
7,756
|
|
|
9,156
|
|
|
6,903
|
|
|
440,581
|
|
|
447,484
|
|
||||||
Total
|
$
|
4,755
|
|
|
$
|
50,931
|
|
|
$
|
55,686
|
|
|
$
|
78,468
|
|
|
$
|
6,314,758
|
|
|
$
|
6,393,226
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Nonaccrual loans
|
$
|
64,980
|
|
|
$
|
58,272
|
|
Nonaccrual troubled debt restructured loans
|
4,396
|
|
|
4,309
|
|
||
Total nonaccrual loans
|
$
|
69,376
|
|
|
$
|
62,581
|
|
Accruing loans past due 90 days or more
|
$
|
54
|
|
|
$
|
830
|
|
Performing troubled debt restructured loans
|
$
|
4,012
|
|
|
$
|
6,617
|
|
|
Three Months Ended
June 30, |
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Number
of Loans |
|
Pre-
Modification Recorded Investment |
|
Post-
Modification Recorded Investment |
|
Number
of Loans |
|
Pre-
Modification Recorded Investment |
|
Post-
Modification Recorded Investment |
||||||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
131
|
|
|
$
|
131
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
131
|
|
|
131
|
|
||||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
6
|
|
|
1,292
|
|
|
1,125
|
|
|
11
|
|
|
1,455
|
|
|
1,455
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
6
|
|
|
$
|
1,292
|
|
|
$
|
1,125
|
|
|
14
|
|
|
$
|
1,586
|
|
|
$
|
1,586
|
|
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
||||||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
3
|
|
|
$
|
131
|
|
|
$
|
131
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
131
|
|
|
131
|
|
||||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
11
|
|
|
2,169
|
|
|
1,877
|
|
|
14
|
|
|
1,803
|
|
|
1,803
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
11
|
|
|
$
|
2,169
|
|
|
$
|
1,877
|
|
|
17
|
|
|
$
|
1,934
|
|
|
$
|
1,934
|
|
|
With Payment Defaults During the
|
||||||||||||
|
Three Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
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
|
3
|
|
|
667
|
|
|
2
|
|
|
150
|
|
||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
3
|
|
|
$
|
667
|
|
|
2
|
|
|
$
|
150
|
|
|
With Payment Defaults During the
|
||||||||||||
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
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
|
6
|
|
|
1,184
|
|
|
2
|
|
|
150
|
|
||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
6
|
|
|
$
|
1,184
|
|
|
2
|
|
|
$
|
150
|
|
|
Pass
|
|
Nonpass
|
|
Total
|
||||||
June 30, 2018
|
|
|
|
|
|
||||||
Commercial
|
$
|
1,910,993
|
|
|
$
|
123,247
|
|
|
$
|
2,034,240
|
|
Commercial real estate
|
3,525,070
|
|
|
161,828
|
|
|
3,686,898
|
|
|||
Total commercial and commercial real estate
|
5,436,063
|
|
|
285,075
|
|
|
5,721,138
|
|
|||
Agricultural and agricultural real estate
|
473,508
|
|
|
88,845
|
|
|
562,353
|
|
|||
Residential real estate
|
648,045
|
|
|
35,006
|
|
|
683,051
|
|
|||
Consumer
|
496,098
|
|
|
16,801
|
|
|
512,899
|
|
|||
Total gross loans receivable held to maturity
|
$
|
7,053,714
|
|
|
$
|
425,727
|
|
|
$
|
7,479,441
|
|
December 31, 2017
|
|
|
|
|
|
||||||
Commercial
|
$
|
1,552,783
|
|
|
$
|
93,823
|
|
|
$
|
1,646,606
|
|
Commercial real estate
|
2,985,501
|
|
|
177,768
|
|
|
3,163,269
|
|
|||
Total commercial and commercial real estate
|
4,538,284
|
|
|
271,591
|
|
|
4,809,875
|
|
|||
Agricultural and agricultural real estate
|
451,539
|
|
|
60,049
|
|
|
511,588
|
|
|||
Residential real estate
|
586,623
|
|
|
37,656
|
|
|
624,279
|
|
|||
Consumer
|
432,936
|
|
|
14,548
|
|
|
447,484
|
|
|||
Total gross loans receivable held to maturity
|
$
|
6,009,382
|
|
|
$
|
383,844
|
|
|
$
|
6,393,226
|
|
|
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
|
||||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
7,863
|
|
|
$
|
1,569
|
|
|
$
|
—
|
|
|
$
|
9,432
|
|
|
$
|
2,009,179
|
|
|
$
|
15,629
|
|
|
$
|
2,034,240
|
|
Commercial real estate
|
2,836
|
|
|
873
|
|
|
—
|
|
|
3,709
|
|
|
3,672,429
|
|
|
10,760
|
|
|
3,686,898
|
|
|||||||
Total commercial and commercial real estate
|
10,699
|
|
|
2,442
|
|
|
—
|
|
|
13,141
|
|
|
5,681,608
|
|
|
26,389
|
|
|
5,721,138
|
|
|||||||
Agricultural and agricultural real estate
|
2,970
|
|
|
—
|
|
|
—
|
|
|
2,970
|
|
|
538,447
|
|
|
20,936
|
|
|
562,353
|
|
|||||||
Residential real estate
|
1,606
|
|
|
202
|
|
|
54
|
|
|
1,862
|
|
|
665,010
|
|
|
16,179
|
|
|
683,051
|
|
|||||||
Consumer
|
3,644
|
|
|
891
|
|
|
—
|
|
|
4,535
|
|
|
502,492
|
|
|
5,872
|
|
|
512,899
|
|
|||||||
Total gross loans receivable held to maturity
|
$
|
18,919
|
|
|
$
|
3,535
|
|
|
$
|
54
|
|
|
$
|
22,508
|
|
|
$
|
7,387,557
|
|
|
$
|
69,376
|
|
|
$
|
7,479,441
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
1,246
|
|
|
$
|
259
|
|
|
$
|
100
|
|
|
$
|
1,605
|
|
|
$
|
1,637,773
|
|
|
$
|
7,228
|
|
|
$
|
1,646,606
|
|
Commercial real estate
|
4,769
|
|
|
2,326
|
|
|
—
|
|
|
7,095
|
|
|
3,139,576
|
|
|
16,598
|
|
|
3,163,269
|
|
|||||||
Total commercial and commercial real estate
|
6,015
|
|
|
2,585
|
|
|
100
|
|
|
8,700
|
|
|
4,777,349
|
|
|
23,826
|
|
|
4,809,875
|
|
|||||||
Agricultural and agricultural real estate
|
604
|
|
|
134
|
|
|
—
|
|
|
738
|
|
|
497,546
|
|
|
13,304
|
|
|
511,588
|
|
|||||||
Residential real estate
|
2,022
|
|
|
270
|
|
|
—
|
|
|
2,292
|
|
|
601,120
|
|
|
20,867
|
|
|
624,279
|
|
|||||||
Consumer
|
4,734
|
|
|
943
|
|
|
730
|
|
|
6,407
|
|
|
436,493
|
|
|
4,584
|
|
|
447,484
|
|
|||||||
Total gross loans receivable held to maturity
|
$
|
13,375
|
|
|
$
|
3,932
|
|
|
$
|
830
|
|
|
$
|
18,137
|
|
|
$
|
6,312,508
|
|
|
$
|
62,581
|
|
|
$
|
6,393,226
|
|
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Impaired loans with a related allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
4,306
|
|
|
$
|
4,306
|
|
|
$
|
2,821
|
|
|
$
|
3,116
|
|
|
$
|
36
|
|
|
$
|
2,795
|
|
|
$
|
36
|
|
Commercial real estate
|
965
|
|
|
965
|
|
|
212
|
|
|
6,530
|
|
|
8
|
|
|
8,008
|
|
|
16
|
|
|||||||
Total commercial and commercial real estate
|
5,271
|
|
|
5,271
|
|
|
3,033
|
|
|
9,646
|
|
|
44
|
|
|
10,803
|
|
|
52
|
|
|||||||
Agricultural and agricultural real estate
|
4,667
|
|
|
4,667
|
|
|
1,648
|
|
|
2,566
|
|
|
—
|
|
|
2,058
|
|
|
—
|
|
|||||||
Residential real estate
|
1,120
|
|
|
1,120
|
|
|
310
|
|
|
1,223
|
|
|
3
|
|
|
1,415
|
|
|
6
|
|
|||||||
Consumer
|
3,342
|
|
|
3,342
|
|
|
1,445
|
|
|
2,989
|
|
|
11
|
|
|
3,031
|
|
|
20
|
|
|||||||
Total impaired loans with a related allowance
|
$
|
14,400
|
|
|
$
|
14,400
|
|
|
$
|
6,436
|
|
|
$
|
16,424
|
|
|
$
|
58
|
|
|
$
|
17,307
|
|
|
$
|
78
|
|
Impaired loans without a related allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
10,885
|
|
|
$
|
9,766
|
|
|
$
|
—
|
|
|
$
|
9,364
|
|
|
$
|
46
|
|
|
$
|
7,384
|
|
|
$
|
95
|
|
Commercial real estate
|
12,804
|
|
|
12,199
|
|
|
—
|
|
|
12,794
|
|
|
24
|
|
|
13,336
|
|
|
121
|
|
|||||||
Total commercial and commercial real estate
|
23,689
|
|
|
21,965
|
|
|
—
|
|
|
22,158
|
|
|
70
|
|
|
20,720
|
|
|
216
|
|
|||||||
Agricultural and agricultural real estate
|
18,248
|
|
|
16,220
|
|
|
—
|
|
|
15,428
|
|
|
2
|
|
|
14,173
|
|
|
3
|
|
|||||||
Residential real estate
|
24,361
|
|
|
24,361
|
|
|
—
|
|
|
24,907
|
|
|
90
|
|
|
25,781
|
|
|
199
|
|
|||||||
Consumer
|
5,590
|
|
|
5,515
|
|
|
—
|
|
|
5,122
|
|
|
34
|
|
|
4,634
|
|
|
56
|
|
|||||||
Total impaired loans without a related allowance
|
$
|
71,888
|
|
|
$
|
68,061
|
|
|
$
|
—
|
|
|
$
|
67,615
|
|
|
$
|
196
|
|
|
$
|
65,308
|
|
|
$
|
474
|
|
Total impaired loans held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
15,191
|
|
|
$
|
14,072
|
|
|
$
|
2,821
|
|
|
$
|
12,480
|
|
|
$
|
82
|
|
|
$
|
10,179
|
|
|
$
|
131
|
|
Commercial real estate
|
13,769
|
|
|
13,164
|
|
|
212
|
|
|
19,324
|
|
|
32
|
|
|
21,344
|
|
|
137
|
|
|||||||
Total commercial and commercial real estate
|
28,960
|
|
|
27,236
|
|
|
3,033
|
|
|
31,804
|
|
|
114
|
|
|
31,523
|
|
|
268
|
|
|||||||
Agricultural and agricultural real estate
|
22,915
|
|
|
20,887
|
|
|
1,648
|
|
|
17,994
|
|
|
2
|
|
|
16,231
|
|
|
3
|
|
|||||||
Residential real estate
|
25,481
|
|
|
25,481
|
|
|
310
|
|
|
26,130
|
|
|
93
|
|
|
27,196
|
|
|
205
|
|
|||||||
Consumer
|
8,932
|
|
|
8,857
|
|
|
1,445
|
|
|
8,111
|
|
|
45
|
|
|
7,665
|
|
|
76
|
|
|||||||
Total impaired loans held to maturity
|
$
|
86,288
|
|
|
$
|
82,461
|
|
|
$
|
6,436
|
|
|
$
|
84,039
|
|
|
$
|
254
|
|
|
$
|
82,615
|
|
|
$
|
552
|
|
|
Unpaid
Contractual
Balance
|
|
Loan
Balance
|
|
Related
Allowance
Recorded
|
|
Year-to-
Date
Avg.
Loan
Balance
|
|
Year-to-
Date
Interest
Income
Recognized
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Impaired loans with a related allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
2,292
|
|
|
$
|
2,292
|
|
|
$
|
1,613
|
|
|
$
|
3,607
|
|
|
$
|
39
|
|
Commercial real estate
|
11,925
|
|
|
10,068
|
|
|
766
|
|
|
11,479
|
|
|
34
|
|
|||||
Total commercial and commercial real estate
|
14,217
|
|
|
12,360
|
|
|
2,379
|
|
|
15,086
|
|
|
73
|
|
|||||
Agricultural and agricultural real estate
|
1,539
|
|
|
1,539
|
|
|
546
|
|
|
3,437
|
|
|
—
|
|
|||||
Residential real estate
|
1,568
|
|
|
1,568
|
|
|
430
|
|
|
2,056
|
|
|
15
|
|
|||||
Consumer
|
2,634
|
|
|
2,634
|
|
|
1,400
|
|
|
2,370
|
|
|
41
|
|
|||||
Total impaired loans with a related allowance
|
$
|
19,958
|
|
|
$
|
18,101
|
|
|
$
|
4,755
|
|
|
$
|
22,949
|
|
|
$
|
129
|
|
Impaired loans without a related allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
6,243
|
|
|
$
|
5,123
|
|
|
$
|
—
|
|
|
$
|
2,586
|
|
|
$
|
165
|
|
Commercial real estate
|
14,243
|
|
|
13,637
|
|
|
—
|
|
|
20,148
|
|
|
514
|
|
|||||
Total commercial and commercial real estate
|
20,486
|
|
|
18,760
|
|
|
—
|
|
|
22,734
|
|
|
679
|
|
|||||
Agricultural and agricultural real estate
|
13,793
|
|
|
11,765
|
|
|
—
|
|
|
9,654
|
|
|
—
|
|
|||||
Residential real estate
|
25,573
|
|
|
25,573
|
|
|
—
|
|
|
26,024
|
|
|
277
|
|
|||||
Consumer
|
4,269
|
|
|
4,269
|
|
|
—
|
|
|
3,884
|
|
|
73
|
|
|||||
Total impaired loans without a related allowance
|
$
|
64,121
|
|
|
$
|
60,367
|
|
|
$
|
—
|
|
|
$
|
62,296
|
|
|
$
|
1,029
|
|
Total impaired loans held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
8,535
|
|
|
$
|
7,415
|
|
|
$
|
1,613
|
|
|
$
|
6,193
|
|
|
$
|
204
|
|
Commercial real estate
|
26,168
|
|
|
23,705
|
|
|
766
|
|
|
31,627
|
|
|
548
|
|
|||||
Total commercial and commercial real estate
|
34,703
|
|
|
31,120
|
|
|
2,379
|
|
|
37,820
|
|
|
752
|
|
|||||
Agricultural and agricultural real estate
|
15,332
|
|
|
13,304
|
|
|
546
|
|
|
13,091
|
|
|
—
|
|
|||||
Residential real estate
|
27,141
|
|
|
27,141
|
|
|
430
|
|
|
28,080
|
|
|
292
|
|
|||||
Consumer
|
6,903
|
|
|
6,903
|
|
|
1,400
|
|
|
6,254
|
|
|
114
|
|
|||||
Total impaired loans held to maturity
|
$
|
84,079
|
|
|
$
|
78,468
|
|
|
$
|
4,755
|
|
|
$
|
85,245
|
|
|
$
|
1,158
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Impaired
Purchased Loans |
|
Non
Impaired
Purchased Loans |
|
Total
Purchased
Loans
|
|
Impaired
Purchased Loans |
|
Non
Impaired
Purchased Loans |
|
Total
Purchased
Loans
|
||||||||||||
Commercial
|
$
|
10,150
|
|
|
$
|
391,687
|
|
|
$
|
401,837
|
|
|
$
|
952
|
|
|
$
|
187,375
|
|
|
$
|
188,327
|
|
Commercial real estate
|
1,376
|
|
|
1,349,784
|
|
|
1,351,160
|
|
|
2,572
|
|
|
1,052,469
|
|
|
1,055,041
|
|
||||||
Agricultural and agricultural real estate
|
—
|
|
|
31,010
|
|
|
31,010
|
|
|
—
|
|
|
1,242
|
|
|
1,242
|
|
||||||
Residential real estate
|
210
|
|
|
220,454
|
|
|
220,664
|
|
|
214
|
|
|
173,909
|
|
|
174,123
|
|
||||||
Consumer loans
|
—
|
|
|
104,488
|
|
|
104,488
|
|
|
—
|
|
|
51,292
|
|
|
51,292
|
|
||||||
Total loans
|
$
|
11,736
|
|
|
$
|
2,097,423
|
|
|
$
|
2,109,159
|
|
|
$
|
3,738
|
|
|
$
|
1,466,287
|
|
|
$
|
1,470,025
|
|
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at March 31, 2018
|
$
|
19,395
|
|
|
$
|
23,469
|
|
|
$
|
4,716
|
|
|
$
|
2,141
|
|
|
$
|
8,935
|
|
|
$
|
58,656
|
|
Charge-offs
|
(978
|
)
|
|
(437
|
)
|
|
(212
|
)
|
|
(195
|
)
|
|
(1,342
|
)
|
|
(3,164
|
)
|
||||||
Recoveries
|
300
|
|
|
323
|
|
|
—
|
|
|
1
|
|
|
377
|
|
|
1,001
|
|
||||||
Provision
|
1,992
|
|
|
372
|
|
|
1,205
|
|
|
(90
|
)
|
|
1,352
|
|
|
4,831
|
|
||||||
Balance at June 30, 2018
|
$
|
20,709
|
|
|
$
|
23,727
|
|
|
$
|
5,709
|
|
|
$
|
1,857
|
|
|
$
|
9,322
|
|
|
$
|
61,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at December 31, 2017
|
$
|
18,098
|
|
|
$
|
21,950
|
|
|
$
|
4,258
|
|
|
$
|
2,224
|
|
|
$
|
9,156
|
|
|
$
|
55,686
|
|
Charge-offs
|
(1,772
|
)
|
|
(562
|
)
|
|
(212
|
)
|
|
(211
|
)
|
|
(2,631
|
)
|
|
(5,388
|
)
|
||||||
Recoveries
|
404
|
|
|
771
|
|
|
14
|
|
|
76
|
|
|
667
|
|
|
1,932
|
|
||||||
Provision
|
3,979
|
|
|
1,568
|
|
|
1,649
|
|
|
(232
|
)
|
|
2,130
|
|
|
9,094
|
|
||||||
Balance at June 30, 2018
|
$
|
20,709
|
|
|
$
|
23,727
|
|
|
$
|
5,709
|
|
|
$
|
1,857
|
|
|
$
|
9,322
|
|
|
$
|
61,324
|
|
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at March 31, 2017
|
$
|
16,180
|
|
|
$
|
23,797
|
|
|
$
|
3,983
|
|
|
$
|
2,183
|
|
|
$
|
8,856
|
|
|
$
|
54,999
|
|
Charge-offs
|
(1,126
|
)
|
|
(1
|
)
|
|
(17
|
)
|
|
(134
|
)
|
|
(1,488
|
)
|
|
(2,766
|
)
|
||||||
Recoveries
|
54
|
|
|
602
|
|
|
2
|
|
|
5
|
|
|
266
|
|
|
929
|
|
||||||
Provision
|
2,060
|
|
|
(2,537
|
)
|
|
(136
|
)
|
|
209
|
|
|
1,293
|
|
|
889
|
|
||||||
Balance at June 30, 2017
|
$
|
17,168
|
|
|
$
|
21,861
|
|
|
$
|
3,832
|
|
|
$
|
2,263
|
|
|
$
|
8,927
|
|
|
$
|
54,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at December 31, 2016
|
$
|
14,765
|
|
|
$
|
24,319
|
|
|
$
|
4,210
|
|
|
$
|
2,263
|
|
|
$
|
8,767
|
|
|
$
|
54,324
|
|
Charge-offs
|
(1,356
|
)
|
|
(609
|
)
|
|
(888
|
)
|
|
(399
|
)
|
|
(3,232
|
)
|
|
(6,484
|
)
|
||||||
Recoveries
|
288
|
|
|
814
|
|
|
3
|
|
|
7
|
|
|
569
|
|
|
1,681
|
|
||||||
Provision
|
3,471
|
|
|
(2,663
|
)
|
|
507
|
|
|
392
|
|
|
2,823
|
|
|
4,530
|
|
||||||
Balance at June 30, 2017
|
$
|
17,168
|
|
|
$
|
21,861
|
|
|
$
|
3,832
|
|
|
$
|
2,263
|
|
|
$
|
8,927
|
|
|
$
|
54,051
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Core deposit intangibles
|
$
|
83,639
|
|
|
$
|
31,203
|
|
|
$
|
52,436
|
|
|
$
|
62,008
|
|
|
$
|
27,086
|
|
|
$
|
34,922
|
|
Customer relationship intangibles
|
1,177
|
|
|
915
|
|
|
262
|
|
|
1,177
|
|
|
896
|
|
|
281
|
|
||||||
Mortgage servicing rights
|
42,457
|
|
|
12,502
|
|
|
29,955
|
|
|
42,139
|
|
|
18,891
|
|
|
23,248
|
|
||||||
Commercial servicing rights
|
6,740
|
|
|
4,699
|
|
|
2,041
|
|
|
6,719
|
|
|
4,110
|
|
|
2,609
|
|
||||||
Total
|
$
|
134,013
|
|
|
$
|
49,319
|
|
|
$
|
84,694
|
|
|
$
|
112,043
|
|
|
$
|
50,983
|
|
|
$
|
61,060
|
|
|
Core
Deposit
Intangibles
|
|
Customer
Relationship
Intangibles
|
|
Mortgage
Servicing
Rights
|
|
Commercial
Servicing
Rights
|
|
Total
|
||||||||||
Six months ending December 31, 2018
|
$
|
5,199
|
|
|
$
|
19
|
|
|
$
|
3,015
|
|
|
$
|
292
|
|
|
$
|
8,525
|
|
Year ending December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
9,452
|
|
|
38
|
|
|
6,735
|
|
|
495
|
|
|
16,720
|
|
|||||
2020
|
8,230
|
|
|
37
|
|
|
5,773
|
|
|
389
|
|
|
14,429
|
|
|||||
2021
|
7,036
|
|
|
35
|
|
|
4,811
|
|
|
341
|
|
|
12,223
|
|
|||||
2022
|
5,634
|
|
|
35
|
|
|
3,849
|
|
|
278
|
|
|
9,796
|
|
|||||
2023
|
4,934
|
|
|
34
|
|
|
2,886
|
|
|
158
|
|
|
8,012
|
|
|||||
Thereafter
|
11,951
|
|
|
64
|
|
|
2,886
|
|
|
88
|
|
|
14,989
|
|
|||||
Total
|
$
|
52,436
|
|
|
$
|
262
|
|
|
$
|
29,955
|
|
|
$
|
2,041
|
|
|
$
|
84,694
|
|
|
2018
|
|
2017
|
||||
Balance at January 1,
|
$
|
23,248
|
|
|
$
|
32,088
|
|
Originations
|
2,673
|
|
|
4,273
|
|
||
Amortization
|
(2,752
|
)
|
|
(4,729
|
)
|
||
Valuation allowance on mortgage servicing rights
|
(209
|
)
|
|
—
|
|
||
Acquired mortgage servicing rights
|
6,995
|
|
|
—
|
|
||
Balance at period end
|
$
|
29,955
|
|
|
$
|
31,632
|
|
Fair value of mortgage servicing rights
|
$
|
47,357
|
|
|
$
|
43,597
|
|
Mortgage servicing rights, net to servicing portfolio
|
0.72
|
%
|
|
0.73
|
%
|
|
2018
|
|
2017
|
||||
Balance at January 1,
|
$
|
2,609
|
|
|
$
|
3,690
|
|
Originations
|
21
|
|
|
133
|
|
||
Amortization
|
(580
|
)
|
|
(743
|
)
|
||
Valuation allowance on commercial servicing rights
|
(9
|
)
|
|
24
|
|
||
Balance at period end
|
$
|
2,041
|
|
|
$
|
3,104
|
|
Fair value of commercial servicing rights
|
$
|
2,502
|
|
|
$
|
3,678
|
|
Commercial servicing rights, net to servicing portfolio
|
1.75
|
%
|
|
2.08
|
%
|
June 30, 2018
|
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
|
$
|
2,573
|
|
|
$
|
4,959
|
|
|
$
|
—
|
|
|
$
|
19,450
|
|
|
$
|
35,544
|
|
|
$
|
—
|
|
First Bank & Trust
|
1,777
|
|
|
1,747
|
|
|
30
|
|
|
5,286
|
|
|
5,107
|
|
|
179
|
|
||||||
Total
|
$
|
4,350
|
|
|
$
|
6,706
|
|
|
$
|
30
|
|
|
$
|
24,736
|
|
|
$
|
40,651
|
|
|
$
|
179
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dubuque Bank and Trust Company
|
$
|
2,858
|
|
|
$
|
4,988
|
|
|
$
|
—
|
|
|
$
|
20,377
|
|
|
$
|
32,093
|
|
|
$
|
—
|
|
Total
|
$
|
2,858
|
|
|
$
|
4,988
|
|
|
$
|
—
|
|
|
$
|
20,377
|
|
|
$
|
32,093
|
|
|
$
|
—
|
|
June 30, 2018
|
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
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
34
|
|
|
$
|
—
|
|
Premier Valley Bank
|
61
|
|
|
91
|
|
|
—
|
|
|
238
|
|
|
217
|
|
|
21
|
|
||||||
Wisconsin Bank & Trust
|
303
|
|
|
455
|
|
|
—
|
|
|
1,426
|
|
|
1,697
|
|
|
—
|
|
||||||
Total
|
$
|
367
|
|
|
$
|
554
|
|
|
$
|
—
|
|
|
$
|
1,695
|
|
|
$
|
1,948
|
|
|
$
|
21
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Citywide Banks
|
$
|
8
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
37
|
|
|
$
|
—
|
|
Premier Valley Bank
|
83
|
|
|
110
|
|
|
—
|
|
|
303
|
|
|
291
|
|
|
12
|
|
||||||
Wisconsin Bank & Trust
|
446
|
|
|
619
|
|
|
—
|
|
|
1,747
|
|
|
2,153
|
|
|
—
|
|
||||||
Total
|
$
|
537
|
|
|
$
|
740
|
|
|
$
|
—
|
|
|
$
|
2,084
|
|
|
$
|
2,481
|
|
|
$
|
12
|
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance
Sheet
Category
|
|
Receive
Rate
|
|
Weighted
Average
Pay Rate
|
|
Maturity
|
||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
361
|
|
|
Other assets
|
|
2.335
|
%
|
|
2.255
|
%
|
|
03/17/2021
|
Interest rate swap
|
20,000
|
|
|
(252
|
)
|
|
Other liabilities
|
|
2.331
|
|
|
3.355
|
|
|
01/07/2020
|
||
Interest rate swap
|
10,000
|
|
|
61
|
|
|
Other assets
|
|
2.339
|
|
|
1.674
|
|
|
03/26/2019
|
||
Interest rate swap
|
10,000
|
|
|
61
|
|
|
Other assets
|
|
2.335
|
|
|
1.658
|
|
|
03/18/2019
|
||
Interest rate swap
|
31,667
|
|
|
1,082
|
|
|
Other assets
|
|
4.546
|
|
|
3.674
|
|
|
05/10/2021
|
||
Interest rate swap
|
20,000
|
|
|
502
|
|
|
Other assets
|
|
2.341
|
|
|
2.390
|
|
|
06/15/2024
|
||
Interest rate swap
|
20,000
|
|
|
523
|
|
|
Other assets
|
|
2.300
|
|
|
2.352
|
|
|
03/01/2024
|
||
Interest rate swap
|
6,000
|
|
|
164
|
|
|
Other assets
|
|
2.341
|
|
|
1.866
|
|
|
06/15/2021
|
||
Interest rate swap
|
3,000
|
|
|
86
|
|
|
Other assets
|
|
2.348
|
|
|
1.878
|
|
|
06/30/2021
|
||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
(106
|
)
|
|
Other liabilities
|
|
1.600
|
%
|
|
2.255
|
%
|
|
03/17/2021
|
Interest rate swap
|
20,000
|
|
|
(621
|
)
|
|
Other liabilities
|
|
1.350
|
|
|
3.355
|
|
|
01/07/2020
|
||
Interest rate swap
|
10,000
|
|
|
30
|
|
|
Other assets
|
|
1.329
|
|
|
1.674
|
|
|
03/26/2019
|
||
Interest rate swap
|
10,000
|
|
|
29
|
|
|
Other assets
|
|
1.600
|
|
|
1.658
|
|
|
03/18/2019
|
||
Interest rate swap
|
33,667
|
|
|
759
|
|
|
Other assets
|
|
3.932
|
|
|
3.674
|
|
|
05/10/2021
|
||
Interest rate swap
|
20,000
|
|
|
(177
|
)
|
|
Other liabilities
|
|
1.588
|
|
|
2.390
|
|
|
06/15/2024
|
||
Interest rate swap
|
20,000
|
|
|
(149
|
)
|
|
Other Liabilities
|
|
1.481
|
|
|
2.352
|
|
|
03/01/2024
|
|
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 June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
927
|
|
|
Interest expense
|
|
$
|
(30
|
)
|
|
Other income
|
|
$
|
—
|
|
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
2,823
|
|
|
Interest expense
|
|
$
|
(227
|
)
|
|
Other income
|
|
$
|
—
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
(509
|
)
|
|
Interest expense
|
|
$
|
(300
|
)
|
|
Other income
|
|
$
|
—
|
|
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
24
|
|
|
Interest expense
|
|
$
|
(697
|
)
|
|
Other income
|
|
$
|
—
|
|
|
Notional Amount
|
|
Fair Value
|
|
Balance Sheet Category
|
||||
June 30, 2018
|
|
|
|
|
|
||||
Fair value hedges
|
$
|
35,270
|
|
|
$
|
245
|
|
|
Other assets
|
December 31, 2017
|
|
|
|
|
|
||||
Fair value hedges
|
$
|
35,635
|
|
|
$
|
(999
|
)
|
|
Other liabilities
|
|
|
Amount of Gain (Loss)
|
|
Income Statement Category
|
||
Three Months Ended June 30, 2018
|
|
|
|
|
||
Fair value hedges
|
|
$
|
350
|
|
|
Interest income
|
Six Months Ended June 30, 2018
|
|
|
|
|
||
Fair value hedges
|
|
$
|
1,244
|
|
|
Interest income
|
Three Months Ended June 30, 2017
|
|
|
|
|
||
Fair value hedges
|
|
$
|
(42
|
)
|
|
Interest income
|
Six Months Ended June 30, 2017
|
|
|
|
|
||
Fair value hedges
|
|
$
|
152
|
|
|
Interest income
|
|
Notional Amount
|
|
Fair Value
|
|
Balance Sheet Category
|
||||
June 30, 2018
|
|
|
|
|
|
||||
Embedded derivatives
|
$
|
13,778
|
|
|
$
|
323
|
|
|
Other assets
|
December 31, 2017
|
|
|
|
|
|
||||
Embedded derivatives
|
$
|
14,045
|
|
|
$
|
738
|
|
|
Other assets
|
|
|
Amount of Gain (Loss)
|
|
Income Statement Category
|
||
Three Months Ended June 30, 2018
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
138
|
|
|
Other noninterest income
|
Six Months Ended June 30, 2018
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
415
|
|
|
Other noninterest income
|
Three Months Ended June 30, 2017
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
(2
|
)
|
|
Other noninterest income
|
Six Months Ended June 30, 2017
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
115
|
|
|
Other noninterest income
|
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Category
|
|
Weighted
Average
Receive
Rate
|
|
Weighted
Average
Pay
Rate
|
||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer interest rate swaps
|
|
$
|
172,421
|
|
|
$
|
4,640
|
|
|
Other assets
|
|
4.88
|
%
|
|
3.98
|
%
|
Customer interest rate swaps
|
|
172,421
|
|
|
(4,640
|
)
|
|
Other liabilities
|
|
3.98
|
|
|
4.88
|
|
||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer interest rate swaps
|
|
$
|
126,766
|
|
|
$
|
2,377
|
|
|
Other assets
|
|
4.70
|
%
|
|
4.03
|
%
|
Customer interest rate swaps
|
|
126,766
|
|
|
(2,377
|
)
|
|
Other liabilities
|
|
4.03
|
|
|
4.70
|
|
|
Balance Sheet
Category
|
|
Notional
Amount
|
|
Fair
Value
|
||||
June 30, 2018
|
|
|
|
|
|
||||
Interest rate lock commitments (mortgage)
|
Other assets
|
|
$
|
99,410
|
|
|
$
|
3,395
|
|
Forward commitments
|
Other assets
|
|
47,025
|
|
|
153
|
|
||
Forward commitments
|
Other liabilities
|
|
148,919
|
|
|
(597
|
)
|
||
Undesignated interest rate swaps
|
Other liabilities
|
|
13,778
|
|
|
(323
|
)
|
||
December 31, 2017
|
|
|
|
|
|
|
|
||
Interest rate lock commitments (mortgage)
|
Other assets
|
|
$
|
53,588
|
|
|
$
|
1,738
|
|
Forward commitments
|
Other assets
|
|
37,286
|
|
|
80
|
|
||
Forward commitments
|
Other liabilities
|
|
118,632
|
|
|
(232
|
)
|
||
Undesignated interest rate swaps
|
Other liabilities
|
|
14,045
|
|
|
(738
|
)
|
|
Fair Value Measurements at
June 30, 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
|
$
|
3,988
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,988
|
|
|
$
|
—
|
|
Commercial real estate
|
487
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|
—
|
|
|||||
Agricultural and agricultural real estate
|
10,186
|
|
|
—
|
|
|
—
|
|
|
10,186
|
|
|
—
|
|
|||||
Residential real estate
|
810
|
|
|
—
|
|
|
—
|
|
|
810
|
|
|
76
|
|
|||||
Consumer
|
1,897
|
|
|
—
|
|
|
—
|
|
|
1,897
|
|
|
—
|
|
|||||
Total collateral dependent impaired loans
|
$
|
17,368
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,368
|
|
|
$
|
76
|
|
Loans held for sale
|
$
|
55,684
|
|
|
$
|
—
|
|
|
$
|
55,684
|
|
|
$
|
—
|
|
|
$
|
113
|
|
Other real estate owned
|
$
|
11,074
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,074
|
|
|
$
|
991
|
|
Premises, furniture and equipment held for sale
|
$
|
3,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,978
|
|
|
$
|
35
|
|
Mortgage servicing rights
|
$
|
6,854
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,854
|
|
|
$
|
209
|
|
Commercial servicing rights
|
$
|
217
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
217
|
|
|
$
|
9
|
|
|
Fair Value Measurements at
December 31, 2017
|
|||||||||||||||||||
|
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
|
$
|
3,212
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,212
|
|
|
$
|
1,119
|
|
|
Commercial real estate
|
9,480
|
|
|
—
|
|
|
—
|
|
|
9,480
|
|
|
322
|
|
||||||
Agricultural and agricultural real estate
|
8,406
|
|
|
—
|
|
|
—
|
|
|
8,406
|
|
|
2,028
|
|
||||||
Residential real estate
|
1,137
|
|
|
—
|
|
|
—
|
|
|
1,137
|
|
|
—
|
|
||||||
Consumer
|
1,234
|
|
|
—
|
|
|
—
|
|
|
1,234
|
|
|
—
|
|
||||||
Total collateral dependent impaired loans
|
$
|
23,469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
—
|
|
$
|
23,469
|
|
|
$
|
3,469
|
|
Loans held for sale
|
$
|
44,560
|
|
|
$
|
—
|
|
|
$
|
44,560
|
|
|
$
|
—
|
|
|
$
|
190
|
|
|
Other real estate owned
|
$
|
10,777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,777
|
|
|
$
|
737
|
|
|
Premises, furniture and equipment held for sale
|
$
|
1,977
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,977
|
|
|
$
|
192
|
|
|
Commercial servicing rights
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
291
|
|
|
$
|
(21
|
)
|
|
For the Six Months Ended
June 30, 2018 |
|
For the Year Ended
December 31, 2017
|
||||
Balance at January 1,
|
$
|
1,738
|
|
|
$
|
2,790
|
|
Acquired interest rate lock commitments
|
1,383
|
|
|
—
|
|
||
Total gains (losses) included in earnings
|
769
|
|
|
(1,479
|
)
|
||
Issuances
|
1,970
|
|
|
1,875
|
|
||
Settlements
|
(2,465
|
)
|
|
(1,448
|
)
|
||
Balance at period end
|
$
|
3,395
|
|
|
$
|
1,738
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
In-scope of Topic 606
|
|
|
|
|
|
|
|
||||||||
Service charges and fees
|
|
|
|
|
|
|
|
||||||||
Service charges and fees on deposit accounts
|
$
|
2,794
|
|
|
$
|
2,265
|
|
|
$
|
5,412
|
|
|
$
|
4,425
|
|
Overdraft fees
|
2,518
|
|
|
2,278
|
|
|
4,726
|
|
|
4,471
|
|
||||
Customer service fees
|
87
|
|
|
65
|
|
|
164
|
|
|
115
|
|
||||
Credit card fee income
|
2,992
|
|
|
2,185
|
|
|
5,182
|
|
|
4,218
|
|
||||
Debit card income
|
3,680
|
|
|
2,902
|
|
|
6,665
|
|
|
5,922
|
|
||||
Other service charges
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Total service charges and fees
|
$
|
12,072
|
|
|
$
|
9,696
|
|
|
$
|
22,151
|
|
|
$
|
19,153
|
|
Trust fees
|
4,615
|
|
|
3,979
|
|
|
9,295
|
|
|
7,610
|
|
||||
Brokerage and insurance commissions
|
877
|
|
|
976
|
|
|
1,784
|
|
|
2,012
|
|
||||
Total noninterest income in-scope of Topic 606
|
$
|
17,564
|
|
|
$
|
14,651
|
|
|
$
|
33,230
|
|
|
$
|
28,775
|
|
|
|
|
|
|
|
|
|
||||||||
Out-of-scope of Topic 606
|
|
|
|
|
|
|
|
||||||||
Loan servicing income
|
$
|
1,807
|
|
|
$
|
1,351
|
|
|
$
|
3,561
|
|
|
$
|
3,075
|
|
Securities gains/(losses), net
|
(259
|
)
|
|
1,392
|
|
|
1,182
|
|
|
3,874
|
|
||||
Unrealized gain on equity securities, net
|
71
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||
Net gains on sale of loans held for sale
|
6,800
|
|
|
6,817
|
|
|
10,851
|
|
|
12,964
|
|
||||
Valuation adjustment on commercial servicing rights
|
(216
|
)
|
|
19
|
|
|
(218
|
)
|
|
24
|
|
||||
Income on bank owned life insurance
|
700
|
|
|
656
|
|
|
1,314
|
|
|
1,273
|
|
||||
Other noninterest income
|
1,167
|
|
|
738
|
|
|
2,387
|
|
|
1,532
|
|
||||
Total noninterest income out-of-scope of Topic 606
|
10,070
|
|
|
10,973
|
|
|
19,120
|
|
|
22,742
|
|
||||
Total noninterest income
|
$
|
27,634
|
|
|
$
|
25,624
|
|
|
$
|
52,350
|
|
|
$
|
51,517
|
|
•
|
On February 23, 2018, Heartland completed the acquisition of Signature Bancshares, Inc., parent company of Signature Bank, based in Minnetonka, Minnesota. Based on Heartland's closing common stock price of $53.55 per share as of February 23, 2018, the aggregate consideration was $61.4 million, with approximately 10% of the consideration paid in cash and 90% paid by delivery of Heartland common stock. Simultaneous with the closing of the transaction, Signature Bank merged into Heartland's Minnesota Bank & Trust subsidiary. As of the close date, Signature Bancshares, Inc. had, at fair value, total assets of $427.1 million, total loans of $324.5 million and total deposits of $357.3 million. The systems conversion for this transaction occurred on April 20, 2018.
|
•
|
On May 18, 2018, Heartland completed the acquisition of Lubbock, Texas based First Bank Lubbock Bancshares, Inc. ("FBLB"), parent company of First Bank & Trust, and PrimeWest Mortgage Corporation, which is a wholly-owned subsidiary of First Bank & Trust. Based on Heartland's closing common stock price of $55.05 per share on May 18, 2018, the aggregate consideration paid to FBLB common shareholders was $189.9 million, with approximately 3% of the consideration paid in cash and 97% paid by delivery of Heartland common stock. As a result of the transaction, First Bank & Trust became a wholly-owned subsidiary of Heartland and its 11th state-chartered bank. First Bank & Trust and PrimeWest Mortgage Corporation continue to operate under their present brands and management teams. As of the closing date, FBLB had, at fair value, total assets of $1.12 billion, total loans held to maturity of $681.1 million and total deposits of $893.8 million. Heartland also assumed, at fair value, $8.2 million of trust preferred debt. The systems conversion for this transaction is expected to occur in the third quarter of 2018.
|
(Dollars in thousands, except per share data)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
STATEMENT OF INCOME DATA
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
113,409
|
|
|
$
|
82,061
|
|
|
$
|
214,623
|
|
|
$
|
162,612
|
|
Interest expense
|
12,000
|
|
|
7,481
|
|
|
21,630
|
|
|
15,004
|
|
||||
Net interest income
|
101,409
|
|
|
74,580
|
|
|
192,993
|
|
|
147,608
|
|
||||
Provision for loan losses
|
4,831
|
|
|
889
|
|
|
9,094
|
|
|
4,530
|
|
||||
Net interest income after provision for loan losses
|
96,578
|
|
|
73,691
|
|
|
183,899
|
|
|
143,078
|
|
||||
Noninterest income
|
27,634
|
|
|
25,624
|
|
|
52,350
|
|
|
51,517
|
|
||||
Noninterest expenses
|
88,882
|
|
|
69,298
|
|
|
172,528
|
|
|
141,038
|
|
||||
Income taxes
|
7,451
|
|
|
8,059
|
|
|
12,574
|
|
|
13,589
|
|
||||
Net income
|
27,879
|
|
|
21,958
|
|
|
51,147
|
|
|
39,968
|
|
||||
Preferred dividends
|
(13
|
)
|
|
(13
|
)
|
|
(26
|
)
|
|
(32
|
)
|
||||
Interest expense on convertible preferred debt
|
—
|
|
|
4
|
|
|
—
|
|
|
9
|
|
||||
Net income available to common stockholders
|
$
|
27,866
|
|
|
$
|
21,949
|
|
|
$
|
51,121
|
|
|
$
|
39,945
|
|
|
|
|
|
|
|
|
|
||||||||
Key Performance Ratios
|
|
|
|
|
|
|
|
||||||||
Annualized return on average assets
|
1.05
|
%
|
|
1.06
|
%
|
|
1.01
|
%
|
|
0.97
|
%
|
||||
Annualized return on average common equity (GAAP)
|
9.81
|
%
|
|
11.13
|
%
|
|
9.58
|
%
|
|
10.44
|
%
|
||||
Annualized return on average tangible common equity (non-GAAP)
(1)
|
14.56
|
%
|
|
14.07
|
%
|
|
13.82
|
%
|
|
13.18
|
%
|
||||
Annualized ratio of net charge-offs to average loans
|
0.12
|
%
|
|
0.14
|
%
|
|
0.10
|
%
|
|
0.18
|
%
|
||||
Annualized net interest margin (GAAP)
|
4.23
|
%
|
|
3.94
|
%
|
|
4.21
|
%
|
|
3.95
|
%
|
||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)
(2)
|
4.30
|
%
|
|
4.14
|
%
|
|
4.28
|
%
|
|
4.15
|
%
|
||||
Efficiency ratio, fully tax-equivalent
(3)
|
65.04
|
%
|
|
65.61
|
%
|
|
66.53
|
%
|
|
67.75
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
(4)
|
|
|
|
|
|
|
|
||||||||
Net income available to common shareholders (GAAP)
|
$
|
27,866
|
|
|
$
|
21,949
|
|
|
$
|
51,121
|
|
|
$
|
39,945
|
|
|
|
|
|
|
|
|
|
||||||||
Average common stockholders' equity (GAAP)
|
$
|
1,139,876
|
|
|
$
|
791,039
|
|
|
$
|
1,076,083
|
|
|
$
|
771,464
|
|
Less average goodwill
|
325,781
|
|
|
141,461
|
|
|
288,185
|
|
|
136,976
|
|
||||
Less average other intangibles, net
|
46,363
|
|
|
23,649
|
|
|
41,961
|
|
|
23,438
|
|
||||
Average tangible common equity (non-GAAP)
|
$
|
767,732
|
|
|
$
|
625,929
|
|
|
$
|
745,937
|
|
|
$
|
611,050
|
|
Annualized return on average common equity (GAAP)
|
9.81
|
%
|
|
11.13
|
%
|
|
9.58
|
%
|
|
10.44
|
%
|
||||
Annualized return on average tangible common equity (non-GAAP)
|
14.56
|
%
|
|
14.07
|
%
|
|
13.82
|
%
|
|
13.18
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
(5)
|
|
|
|
|
|
|
|
||||||||
Net Interest Income (GAAP)
|
$
|
101,409
|
|
|
$
|
74,580
|
|
|
$
|
192,993
|
|
|
$
|
147,608
|
|
Plus tax-equivalent adjustment
(6)
|
1,575
|
|
|
3,796
|
|
|
3,119
|
|
|
7,656
|
|
||||
Net interest income - tax-equivalent (non-GAAP)
|
$
|
102,984
|
|
|
$
|
78,376
|
|
|
$
|
196,112
|
|
|
$
|
155,264
|
|
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
9,614,800
|
|
|
$
|
7,586,256
|
|
|
$
|
9,238,391
|
|
|
$
|
7,544,609
|
|
Net interest margin (GAAP)
|
4.23
|
%
|
|
3.94
|
%
|
|
4.21
|
%
|
|
3.95
|
%
|
||||
Net interest margin, fully tax-equivalent (non-GAAP)
|
4.30
|
%
|
|
4.14
|
%
|
|
4.28
|
%
|
|
4.15
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Non-GAAP Measure-Efficiency Ratio
(7)
|
|
|
|
|
|
|
|
||||||||
Net Interest Income (GAAP)
|
$
|
101,409
|
|
|
$
|
74,580
|
|
|
$
|
192,993
|
|
|
$
|
147,608
|
|
Plus tax-equivalent adjustment
(6)
|
1,575
|
|
|
3,796
|
|
|
3,119
|
|
|
7,656
|
|
||||
Net interest income - tax-equivalent (non-GAAP)
|
102,984
|
|
|
78,376
|
|
|
196,112
|
|
|
155,264
|
|
||||
Noninterest income
|
27,634
|
|
|
25,624
|
|
|
52,350
|
|
|
51,517
|
|
||||
Securities gains, net
|
259
|
|
|
(1,392
|
)
|
|
(1,182
|
)
|
|
(3,874
|
)
|
||||
Unrealized gain on equity securities, net
|
(71
|
)
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
(Dollars in thousands, except per share data)
|
As Of and For the Quarter Ended
|
||||||||||||||||||
|
6/30/2018
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
||||||||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
2,468,113
|
|
|
$
|
2,300,413
|
|
|
$
|
2,492,866
|
|
|
$
|
2,372,916
|
|
|
$
|
2,070,121
|
|
Loans held for sale
|
55,684
|
|
|
24,376
|
|
|
44,560
|
|
|
35,795
|
|
|
48,848
|
|
|||||
Total loans receivable
(1)
|
7,477,697
|
|
|
6,746,015
|
|
|
6,391,464
|
|
|
6,373,415
|
|
|
5,325,082
|
|
|||||
Allowance for loan losses
|
61,324
|
|
|
58,656
|
|
|
55,686
|
|
|
54,885
|
|
|
54,051
|
|
|||||
Total assets
|
11,301,920
|
|
|
10,055,863
|
|
|
9,810,739
|
|
|
9,755,627
|
|
|
8,204,721
|
|
|||||
Total deposits
|
9,489,144
|
|
|
8,541,540
|
|
|
8,146,909
|
|
|
8,231,884
|
|
|
6,930,169
|
|
|||||
Long-term obligations
|
258,708
|
|
|
276,118
|
|
|
285,011
|
|
|
301,473
|
|
|
281,096
|
|
|||||
Preferred equity
|
938
|
|
|
938
|
|
|
938
|
|
|
938
|
|
|
938
|
|
|||||
Common stockholders’ equity
|
1,254,809
|
|
|
1,050,567
|
|
|
990,519
|
|
|
980,746
|
|
|
805,032
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per common share (GAAP)
|
$
|
36.44
|
|
|
$
|
33.81
|
|
|
$
|
33.07
|
|
|
$
|
32.75
|
|
|
$
|
30.15
|
|
Tangible book value per common share (non-GAAP)
(2)
|
$
|
23.53
|
|
|
$
|
23.79
|
|
|
$
|
23.99
|
|
|
$
|
23.61
|
|
|
$
|
24.00
|
|
Common shares outstanding, net of treasury stock
|
34,438,445
|
|
|
31,068,239
|
|
|
29,953,356
|
|
|
29,946,069
|
|
|
26,701,226
|
|
|||||
Tangible common equity ratio (non-GAAP)
(3)
|
7.46
|
%
|
|
7.59
|
%
|
|
7.53
|
%
|
|
7.46
|
%
|
|
7.97
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stockholders' equity (GAAP)
|
$
|
1,254,809
|
|
|
$
|
1,050,567
|
|
|
$
|
990,518
|
|
|
$
|
980,746
|
|
|
$
|
805,032
|
|
Less goodwill
|
391,668
|
|
|
270,305
|
|
|
236,615
|
|
|
236,615
|
|
|
141,461
|
|
|||||
Less core deposit intangibles and customer relationship
intangibles, net |
52,698
|
|
|
41,063
|
|
|
35,203
|
|
|
37,028
|
|
|
22,850
|
|
|||||
Tangible common stockholders' equity (non-GAAP)
|
$
|
810,443
|
|
|
$
|
739,199
|
|
|
$
|
718,700
|
|
|
$
|
707,103
|
|
|
$
|
640,721
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares outstanding, net of treasury stock
|
34,438,445
|
|
|
31,068,239
|
|
|
29,953,356
|
|
|
29,946,069
|
|
|
26,701,226
|
|
|||||
Common stockholders' equity (book value) per share (GAAP)
|
$
|
36.44
|
|
|
$
|
33.81
|
|
|
$
|
33.07
|
|
|
$
|
32.75
|
|
|
$
|
30.15
|
|
Tangible book value per common share (non-GAAP)
|
$
|
23.53
|
|
|
$
|
23.79
|
|
|
$
|
23.99
|
|
|
$
|
23.61
|
|
|
$
|
24.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets (GAAP)
|
$
|
11,301,920
|
|
|
$
|
10,055,863
|
|
|
$
|
9,810,739
|
|
|
$
|
9,755,627
|
|
|
$
|
8,204,721
|
|
Less goodwill
|
391,668
|
|
|
270,305
|
|
|
236,615
|
|
|
236,615
|
|
|
141,461
|
|
|||||
Less core deposit intangibles and customer relationship
intangibles, net |
52,698
|
|
|
41,063
|
|
|
35,203
|
|
|
37,028
|
|
|
22,850
|
|
|||||
Total tangible assets (non-GAAP)
|
$
|
10,857,554
|
|
|
$
|
9,744,495
|
|
|
$
|
9,538,921
|
|
|
$
|
9,481,984
|
|
|
$
|
8,040,410
|
|
Tangible common equity ratio (non-GAAP)
|
7.46
|
%
|
|
7.59
|
%
|
|
7.53
|
%
|
|
7.46
|
%
|
|
7.97
|
%
|
|||||
|
|||||||||||||||||||
(1) Excludes loans held for sale.
|
|||||||||||||||||||
(2) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table.
|
|||||||||||||||||||
(3) Refer to the "Reconciliation of Tangible Common Equity Ratio (non-GAAP)" table.
|
|||||||||||||||||||
(4) Tangible book value per common share is total common stockholders' equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This amount is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate the financial condition and capital strength of Heartland. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
|
|||||||||||||||||||
(5) The tangible common equity ratio is total common stockholders' equity less goodwill and core deposit intangibles, net divided by total assets less goodwill and core deposit intangibles, net. This ratio is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate the financial condition and capital strength of Heartland. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
|
|
Three Months Ended
June 30, |
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees
|
$
|
12,072
|
|
|
$
|
9,696
|
|
|
$
|
2,376
|
|
|
25
|
%
|
Loan servicing income
|
1,807
|
|
|
1,351
|
|
|
456
|
|
|
34
|
|
|||
Trust fees
|
4,615
|
|
|
3,979
|
|
|
636
|
|
|
16
|
|
|||
Brokerage and insurance commissions
|
877
|
|
|
976
|
|
|
(99
|
)
|
|
(10
|
)
|
|||
Securities gains/(losses), net
|
(259
|
)
|
|
1,392
|
|
|
(1,651
|
)
|
|
(119
|
)
|
|||
Unrealized gain on equity securities, net
|
71
|
|
|
—
|
|
|
71
|
|
|
100
|
|
|||
Net gains on sale of loans held for sale
|
6,800
|
|
|
6,817
|
|
|
(17
|
)
|
|
—
|
|
|||
Valuation adjustment on servicing rights
|
(216
|
)
|
|
19
|
|
|
(235
|
)
|
|
(1,237
|
)
|
|||
Income on bank owned life insurance
|
700
|
|
|
656
|
|
|
44
|
|
|
7
|
|
|||
Other noninterest income
|
1,167
|
|
|
738
|
|
|
429
|
|
|
58
|
|
|||
Total noninterest income
|
$
|
27,634
|
|
|
$
|
25,624
|
|
|
$
|
2,010
|
|
|
8
|
%
|
|
Six Months Ended
June 30, |
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees
|
$
|
22,151
|
|
|
$
|
19,153
|
|
|
$
|
2,998
|
|
|
16
|
%
|
Loan servicing income
|
3,561
|
|
|
3,075
|
|
|
486
|
|
|
16
|
|
|||
Trust fees
|
9,295
|
|
|
7,610
|
|
|
1,685
|
|
|
22
|
|
|||
Brokerage and insurance commissions
|
1,784
|
|
|
2,012
|
|
|
(228
|
)
|
|
(11
|
)
|
|||
Securities gains/(losses), net
|
1,182
|
|
|
3,874
|
|
|
(2,692
|
)
|
|
(69
|
)
|
|||
Unrealized gain on equity securities, net
|
43
|
|
|
—
|
|
|
43
|
|
|
100
|
|
|||
Net gains on sale of loans held for sale
|
10,851
|
|
|
12,964
|
|
|
(2,113
|
)
|
|
(16
|
)
|
|||
Valuation adjustment on servicing rights
|
(218
|
)
|
|
24
|
|
|
(242
|
)
|
|
(1,008
|
)
|
|||
Income on bank owned life insurance
|
1,314
|
|
|
1,273
|
|
|
41
|
|
|
3
|
|
|||
Other noninterest income
|
2,387
|
|
|
1,532
|
|
|
855
|
|
|
56
|
|
|||
Total noninterest income
|
$
|
52,350
|
|
|
$
|
51,517
|
|
|
$
|
833
|
|
|
2
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees on deposit accounts
|
$
|
2,794
|
|
|
$
|
2,265
|
|
|
$
|
529
|
|
|
23
|
%
|
Overdraft fees
|
2,518
|
|
|
2,278
|
|
|
240
|
|
|
11
|
|
|||
Customer service fees
|
87
|
|
|
65
|
|
|
22
|
|
|
34
|
|
|||
Credit card fee income
|
2,992
|
|
|
2,185
|
|
|
807
|
|
|
37
|
|
|||
Debit card income
|
3,680
|
|
|
2,902
|
|
|
778
|
|
|
27
|
|
|||
Other service charges
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
Total service charges and fees
|
$
|
12,072
|
|
|
$
|
9,696
|
|
|
$
|
2,376
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees on deposit accounts
|
$
|
5,412
|
|
|
$
|
4,425
|
|
|
$
|
987
|
|
|
22
|
%
|
Overdraft fees
|
4,726
|
|
|
4,471
|
|
|
255
|
|
|
6
|
|
|||
Customer service fees
|
164
|
|
|
115
|
|
|
49
|
|
|
43
|
|
|||
Credit card fee income
|
5,182
|
|
|
4,218
|
|
|
964
|
|
|
23
|
|
|||
Debit card income
|
6,665
|
|
|
5,922
|
|
|
743
|
|
|
13
|
|
|||
Other service charges
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Total service charges and fees
|
$
|
22,151
|
|
|
$
|
19,153
|
|
|
$
|
2,998
|
|
|
16
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commercial and agricultural loan servicing fees
(1)
|
$
|
924
|
|
|
$
|
604
|
|
|
$
|
320
|
|
|
53
|
%
|
Residential mortgage servicing fees
|
2,390
|
|
|
3,215
|
|
|
(825
|
)
|
|
(26
|
)
|
|||
Mortgage servicing rights amortization
|
(1,507
|
)
|
|
(2,468
|
)
|
|
961
|
|
|
39
|
|
|||
Total loan servicing income
|
$
|
1,807
|
|
|
$
|
1,351
|
|
|
$
|
456
|
|
|
34
|
%
|
|
||||||||||||||
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commercial and agricultural loan servicing fees
(1)
|
$
|
1,673
|
|
|
$
|
1,418
|
|
|
$
|
255
|
|
|
18
|
%
|
Residential mortgage servicing fees
|
4,640
|
|
|
6,387
|
|
|
(1,747
|
)
|
|
(27
|
)
|
|||
Mortgage servicing rights amortization
|
(2,752
|
)
|
|
(4,730
|
)
|
|
1,978
|
|
|
42
|
|
|||
Total loan servicing income
|
$
|
3,561
|
|
|
$
|
3,075
|
|
|
$
|
486
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes servicing fees for commercial, commercial real estate, agricultural and agricultural real estate loans.
|
|
Three Months Ended
June 30, |
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Salaries and employee benefits
|
$
|
50,758
|
|
|
$
|
41,126
|
|
|
$
|
9,632
|
|
|
23
|
%
|
Occupancy
|
6,315
|
|
|
5,056
|
|
|
1,259
|
|
|
25
|
|
|||
Furniture and equipment
|
3,184
|
|
|
2,586
|
|
|
598
|
|
|
23
|
|
|||
Professional fees
|
9,948
|
|
|
7,583
|
|
|
2,365
|
|
|
31
|
|
|||
FDIC insurance assessments
|
684
|
|
|
909
|
|
|
(225
|
)
|
|
(25
|
)
|
|||
Advertising
|
2,145
|
|
|
1,359
|
|
|
786
|
|
|
58
|
|
|||
Core deposit intangibles and customer relationship intangibles amortization
|
2,274
|
|
|
1,218
|
|
|
1,056
|
|
|
87
|
|
|||
Other real estate and loan collection expenses
|
948
|
|
|
365
|
|
|
583
|
|
|
160
|
|
|||
(Gain)/loss on sales/valuations of assets, net
|
1,528
|
|
|
(112
|
)
|
|
1,640
|
|
|
1,464
|
|
|||
Restructuring expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other noninterest expenses
|
11,098
|
|
|
9,208
|
|
|
1,890
|
|
|
21
|
|
|||
Total noninterest expenses
|
$
|
88,882
|
|
|
$
|
69,298
|
|
|
$
|
19,584
|
|
|
28
|
%
|
|
Six Months Ended
June 30, |
|
|
|||||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Salaries and employee benefits
|
$
|
99,468
|
|
|
$
|
82,893
|
|
|
$
|
16,575
|
|
|
20
|
%
|
Occupancy
|
12,358
|
|
|
10,129
|
|
|
2,229
|
|
|
22
|
|
|||
Furniture and equipment
|
5,933
|
|
|
5,087
|
|
|
846
|
|
|
17
|
|
|||
Professional fees
|
18,407
|
|
|
15,892
|
|
|
2,515
|
|
|
16
|
|
|||
FDIC insurance assessments
|
1,673
|
|
|
1,716
|
|
|
(43
|
)
|
|
(3
|
)
|
|||
Advertising
|
4,085
|
|
|
3,783
|
|
|
302
|
|
|
8
|
|
|||
Core deposit intangibles and customer relationship intangibles amortization
|
4,137
|
|
|
2,389
|
|
|
1,748
|
|
|
73
|
|
|||
Other real estate and loan collection expenses
|
1,680
|
|
|
1,193
|
|
|
487
|
|
|
41
|
|
|||
(Gain)/loss on sales/valuations of assets, net
|
1,331
|
|
|
300
|
|
|
1,031
|
|
|
344
|
|
|||
Restructuring expenses
|
2,564
|
|
|
—
|
|
|
2,564
|
|
|
100
|
|
|||
Other noninterest expenses
|
20,892
|
|
|
17,656
|
|
|
3,236
|
|
|
18
|
|
|||
Total noninterest expenses
|
$
|
172,528
|
|
|
$
|
141,038
|
|
|
$
|
31,490
|
|
|
22
|
%
|
LOAN PORTFOLIO
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
Loans receivable held to maturity:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
2,034,240
|
|
|
27.20
|
%
|
|
$
|
1,646,606
|
|
|
25.76
|
%
|
Commercial real estate
|
3,686,898
|
|
|
49.29
|
|
|
3,163,269
|
|
|
49.48
|
|
||
Agricultural and agricultural real estate
|
562,353
|
|
|
7.52
|
|
|
511,588
|
|
|
8.00
|
|
||
Residential mortgage
|
683,051
|
|
|
9.13
|
|
|
624,279
|
|
|
9.76
|
|
||
Consumer
|
512,899
|
|
|
6.86
|
|
|
447,484
|
|
|
7.00
|
|
||
Gross loans receivable held to maturity
|
7,479,441
|
|
|
100.00
|
%
|
|
6,393,226
|
|
|
100.00
|
%
|
||
Unearned discount
|
(1,420
|
)
|
|
|
|
(556
|
)
|
|
|
||||
Deferred loan fees
|
(324
|
)
|
|
|
|
(1,206
|
)
|
|
|
||||
Total net loans receivable held to maturity
|
7,477,697
|
|
|
|
|
6,391,464
|
|
|
|
||||
Allowance for loan losses
|
(61,324
|
)
|
|
|
|
(55,686
|
)
|
|
|
||||
Loans receivable, net
|
$
|
7,416,373
|
|
|
|
|
$
|
6,335,778
|
|
|
|
|
LOANS SECURED BY REAL ESTATE
|
|||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||
Residential real estate, excluding residential construction and residential lot loans
|
$
|
1,133,266
|
|
|
$
|
1,080,066
|
|
Industrial, manufacturing, business and commercial
|
882,348
|
|
|
935,614
|
|
||
Agriculture
|
260,684
|
|
|
256,452
|
|
||
Retail
|
386,887
|
|
|
348,749
|
|
||
Office
|
418,676
|
|
|
356,782
|
|
||
Land development and lots
|
160,362
|
|
|
162,273
|
|
||
Hotel, resort and hospitality
|
184,418
|
|
|
167,396
|
|
||
Multi-family
|
226,494
|
|
|
211,862
|
|
||
Food and beverage
|
101,342
|
|
|
108,977
|
|
||
Warehousing
|
173,815
|
|
|
125,372
|
|
||
Health services
|
156,176
|
|
|
155,529
|
|
||
Residential construction
|
139,423
|
|
|
134,848
|
|
||
All other
|
207,040
|
|
|
187,508
|
|
||
Loans acquired in the quarter
|
461,863
|
|
|
—
|
|
||
Purchase accounting valuations
|
(27,047
|
)
|
|
(25,331
|
)
|
||
Total loans secured by real estate
|
$
|
4,865,747
|
|
|
$
|
4,206,097
|
|
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
|
Three Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
58,656
|
|
|
$
|
54,999
|
|
Provision for loan losses
|
4,831
|
|
|
889
|
|
||
Recoveries on loans previously charged off
|
1,001
|
|
|
929
|
|
||
Charge-offs on loans
|
(3,164
|
)
|
|
(2,766
|
)
|
||
Balance at end of period
|
$
|
61,324
|
|
|
$
|
54,051
|
|
Annualized ratio of net charge offs to average loans
|
0.12
|
%
|
|
0.14
|
%
|
||
|
|
|
|
||||
|
Six Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
55,686
|
|
|
$
|
54,324
|
|
Provision for loan losses
|
9,094
|
|
|
4,530
|
|
||
Recoveries on loans previously charged off
|
1,932
|
|
|
1,681
|
|
||
Charge-offs on loans
|
(5,388
|
)
|
|
(6,484
|
)
|
||
Balance at end of period
|
$
|
61,324
|
|
|
$
|
54,051
|
|
Annualized ratio of net charge offs to average loans
|
0.10
|
%
|
|
0.18
|
%
|
|
Nonperforming
Loans
|
|
Other
Real Estate
Owned
|
|
Other
Repossessed
Assets
|
|
Total
Nonperforming
Assets
|
||||||||
March 31, 2018
|
$
|
64,828
|
|
|
$
|
11,801
|
|
|
$
|
423
|
|
|
$
|
77,052
|
|
Loan foreclosures
|
(1,387
|
)
|
|
1,387
|
|
|
—
|
|
|
—
|
|
||||
Net loan charge-offs
|
(2,163
|
)
|
|
—
|
|
|
—
|
|
|
(2,163
|
)
|
||||
Acquired nonperforming assets
|
7,594
|
|
|
379
|
|
|
—
|
|
|
7,973
|
|
||||
New nonperforming loans
|
16,254
|
|
|
—
|
|
|
—
|
|
|
16,254
|
|
||||
Reduction of nonperforming loans
(1)
|
(15,696
|
)
|
|
—
|
|
|
—
|
|
|
(15,696
|
)
|
||||
OREO/Repossessed assets sales proceeds
|
—
|
|
|
(1,514
|
)
|
|
(27
|
)
|
|
(1,541
|
)
|
||||
OREO/Repossessed assets writedowns, net
|
—
|
|
|
(979
|
)
|
|
(14
|
)
|
|
(993
|
)
|
||||
Net activity at Citizens Finance Co.
|
—
|
|
|
—
|
|
|
117
|
|
|
117
|
|
||||
June 30, 2018
|
$
|
69,430
|
|
|
$
|
11,074
|
|
|
$
|
499
|
|
|
$
|
81,003
|
|
|
Nonperforming
Loans
|
|
Other
Real Estate
Owned
|
|
Other
Repossessed
Assets
|
|
Total
Nonperforming
Assets
|
||||||||
December 31, 2017
|
$
|
63,411
|
|
|
$
|
10,777
|
|
|
$
|
411
|
|
|
$
|
74,599
|
|
Loan foreclosures
|
(2,326
|
)
|
|
2,264
|
|
|
62
|
|
|
—
|
|
||||
Net loan charge-offs
|
(3,456
|
)
|
|
—
|
|
|
—
|
|
|
(3,456
|
)
|
||||
Acquired nonperforming assets
|
9,246
|
|
|
1,186
|
|
|
—
|
|
|
10,432
|
|
||||
New nonperforming loans
|
24,800
|
|
|
—
|
|
|
—
|
|
|
24,800
|
|
||||
Reduction of nonperforming loans
(1)
|
(22,245
|
)
|
|
—
|
|
|
—
|
|
|
(22,245
|
)
|
||||
OREO/Repossessed assets sales proceeds
|
—
|
|
|
(2,162
|
)
|
|
(36
|
)
|
|
(2,198
|
)
|
||||
OREO/Repossessed assets writedowns, net
|
—
|
|
|
(991
|
)
|
|
(18
|
)
|
|
(1,009
|
)
|
||||
Net activity at Citizens Finance Co.
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
||||
June 30, 2018
|
$
|
69,430
|
|
|
$
|
11,074
|
|
|
$
|
499
|
|
|
$
|
81,003
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes principal reductions and transfers to performing status.
|
SECURITIES PORTFOLIO COMPOSITION
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
U.S. government corporations and agencies
|
$
|
20,188
|
|
|
0.82
|
%
|
|
$
|
5,328
|
|
|
0.21
|
%
|
Mortgage and asset-backed securities
|
1,783,731
|
|
|
72.27
|
|
|
1,753,736
|
|
|
70.35
|
|
||
Obligation of states and political subdivisions
|
620,535
|
|
|
25.14
|
|
|
694,565
|
|
|
27.86
|
|
||
Equity securities
|
16,934
|
|
|
0.69
|
|
|
16,674
|
|
|
0.67
|
|
||
Other securities
|
26,725
|
|
|
1.08
|
|
|
22,563
|
|
|
0.91
|
|
||
Total securities
|
$
|
2,468,113
|
|
|
100.00
|
%
|
|
$
|
2,492,866
|
|
|
100.00
|
%
|
DEPOSITS
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
Demand
|
$
|
3,399,598
|
|
|
35.83
|
%
|
|
$
|
2,983,128
|
|
|
36.62
|
%
|
Savings
|
4,864,773
|
|
|
51.26
|
|
|
4,240,328
|
|
|
52.05
|
|
||
Time
|
1,224,773
|
|
|
12.91
|
|
|
923,453
|
|
|
11.33
|
|
||
Total
|
$
|
9,489,144
|
|
|
100.00
|
%
|
|
$
|
8,146,909
|
|
|
100.00
|
%
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Securities sold under agreement to repurchase
|
$
|
105,130
|
|
|
$
|
107,957
|
|
Federal funds purchased
|
15,754
|
|
|
168,250
|
|
||
Advances from the FHLB
|
75,602
|
|
|
40,000
|
|
||
Notes payable to unaffiliated banks
|
25,000
|
|
|
—
|
|
||
Other short-term borrowings
|
8,404
|
|
|
8,484
|
|
||
Total
|
$
|
229,890
|
|
|
$
|
324,691
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Advances from the FHLB
|
$
|
3,576
|
|
|
$
|
6,702
|
|
Wholesale repurchase agreements
|
10,000
|
|
|
30,000
|
|
||
Trust preferred securities
|
130,526
|
|
|
121,886
|
|
||
Senior notes
|
6,000
|
|
|
11,000
|
|
||
Note payable to unaffiliated bank
|
31,667
|
|
|
33,667
|
|
||
Contracts payable for purchase of real estate and other assets
|
1,849
|
|
|
1,881
|
|
||
Subordinated notes
|
74,071
|
|
|
74,000
|
|
||
Other borrowings
|
1,019
|
|
|
5,875
|
|
||
Total
|
$
|
258,708
|
|
|
$
|
285,011
|
|
|
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)
|
||||||||
June 30, 2018
|
13.11
|
%
|
|
11.54
|
%
|
|
10.02
|
%
|
|
9.79
|
%
|
||||
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
|
$
|
8,657,828
|
|
|
$
|
8,657,828
|
|
|
$
|
8,657,828
|
|
|
N/A
|
|
|
Average Assets
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
10,210,093
|
|
|||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
13.45
|
%
|
|
11.70
|
%
|
|
10.07
|
%
|
|
9.20
|
%
|
||||
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
|
$
|
7,511,544
|
|
|
$
|
7,511,544
|
|
|
$
|
7,511,544
|
|
|
N/A
|
|
|
Average Assets
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
9,552,227
|
|
|
2018
|
|
2017
|
||||||||||
|
Net Interest
Margin
|
|
% Change
From Base
|
|
Net Interest
Margin
|
|
% Change
From Base
|
||||||
Year 1
|
|
|
|
|
|
|
|
||||||
Down 100 Basis Points
|
$
|
368,974
|
|
|
(7.85
|
)%
|
|
$
|
289,377
|
|
|
(3.28
|
)%
|
Base
|
$
|
400,387
|
|
|
|
|
$
|
299,196
|
|
|
|
||
Up 200 Basis Points
|
$
|
403,254
|
|
|
0.72
|
%
|
|
$
|
300,077
|
|
|
0.29
|
%
|
Year 2
|
|
|
|
|
|
|
|
|
|||||
Down 100 Basis Points
|
$
|
366,246
|
|
|
(8.53
|
)%
|
|
$
|
274,065
|
|
|
(8.40
|
)%
|
Base
|
$
|
409,788
|
|
|
2.35
|
%
|
|
$
|
300,821
|
|
|
0.54
|
%
|
Up 200 Basis Points
|
$
|
436,963
|
|
|
9.14
|
%
|
|
$
|
318,483
|
|
|
6.45
|
%
|
(1)(2)
|
||
(2)
|
||
(2)
|
||
(2)
|
||
(2)
|
||
(2)
|
||
(2)
|
||
|
|
|
101
|
|
Financial statement formatted in 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.
|
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: August 7, 2018
|
The “
Participant
” is
______________________________
.
|
The “
Grant Date
” is
______________________________
.
|
The number of RSUs is
_____________________________
.
|
(a)
|
The “
Restricted Period
” for all of the RSUs shall begin on the Grant Date and end on June 5 of the year following the Grant Date (such date, or such earlier date on which the RSU shall vest pursuant to this Agreement, being hereafter referred to as the “
Vesting Date
”);
provided
that the Participant’s Termination of Service has not occurred prior thereto and the Participant has attended 75% of all board meetings. The price at which the RSUs shall vest is the fair market value of Company stock at closing on the business day prior to the Vesting Date.
|
(b)
|
Notwithstanding the foregoing provisions, the Restricted Period shall lapse immediately and the RSUs shall become fully vested immediately upon (i) the death of the Participant or (ii) a Change in Control that occurs on or before the Participant’s Termination of Service.
|
(c)
|
If the Participant’s Termination of Service occurs prior to the expiration of the Restricted Period, the Participant shall forfeit all right, title and interest in and to the RSUs as of such Termination of Service.
|
(a)
|
Delivery of Shares
. After the Restricted Period has lapsed, the Company shall deliver to the Participant one Share free and clear of any restrictions in settlement of each of the vested and unrestricted RSUs within 30 days following the end of the Restricted Period.
|
(b)
|
Compliance with Applicable Laws.
Notwithstanding any other term of this Agreement or the Plan, the Company shall have no obligation to deliver any Shares or make any other distribution of benefits under this Agreement or the Plan unless such delivery or distribution complies with all applicable laws and the applicable rules of any securities exchange or similar entity.
|
(c)
|
Certificates Not Required.
To the extent that this Agreement and the Plan provide for the issuance of Shares, such issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any securities exchange or similar entity.
|
Principal
$30,000,000.00
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0201
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
Principal Amount:
$30,000,000.00
|
Date of Note: June 14, 2018
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0201
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
¨
|
Personal
,
Family
,
or
Hous
eho
ld
Purposes or Personal
Investment.
|
x
|
Business (Including Real
Estat
e
Investment).
|
Undisbursed Funds:
|
|
$
|
5,000,000.00
|
|
Other Disbursements:
|
|
$
|
25,000,000.00
|
|
$25,000,000.00 Principal balance outstanding
|
||||
on loan #55120-0201 dated June 4, 2018
|
|
|||
Note Principal:
|
|
$
|
30,000,000.00
|
|
Prepaid Finance Charges Paid in Cash:
|
|
$
|
—
|
|
Other Charges Paid in Cash:
|
|
$
|
176,001.50
|
|
$176,001.50 Accrued Interest on loan
|
|
|
||
#55120-0201 through June 4, 2018
|
|
|||
Total Charges Paid in Cash:
|
|
$
|
176,001.50
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0201
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Assistant Vice President
|
Principal
$30,000,000.00
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0201
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Assistant Vice President
|
Principal
$38,333,333.25
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0301
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
Principal Amount:
$38,333,333.29
|
Date of Note: June 14, 2018
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$38,333,333.25
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0301
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
¨
|
Personal
,
Family
,
or
Hous
eho
ld
Purposes or Personal
Investment.
|
x
|
Business (Including Real
Estat
e
Investment).
|
Undisbursed Funds:
|
|
$
|
38,333,333.25
|
|
Note Principal:
|
|
$
|
38,333,333.25
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$38,333,333.25
|
Loan Date
06-14-2018
|
Maturity
06-14-2019
|
Loan No
55120-0301
|
Call / Coll
9A00 / AA
|
Account
00000160370
|
Officer
00229
|
Initials
|
||
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
Lender:
|
Bankers Trust Company
|
|
1398 Central Avenue
|
|
|
453 7th Street
|
|
Dubuque, IA 52001
|
|
|
P.O. Box 897
|
|
|
|
|
Des Moines, IA 50304-0897
|
|
|
|
|
(800) 362-1688
|
|
|
|
|
|
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THE LOAN AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THE WRITTEN LOAN AGREEMENT MAY BE LEGALLY ENFORCED. BORROWER MAY CHANGE THE TERMS OF THE LOAN AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
|
||||
|
|
|
|
|
As used in this Notice, the following terms have the following meanings:
|
||||
|
|
|
|
|
Loan.
The term "Loan: means the following described loan: a Variable Rate Nondisclosable Draw Down Line of Credit Loan to a Corporation for $38,333,333.25 due on June 14, 2019. This is an unsecured renewal of the following described indebtedness: This Note replaces that certain Promissory Note dated June 14, 2017 in the amount of $39,333,333.29 between Borrower and Lender to mature on June 14, 2018.
|
||||
|
|
|
|
|
Loan Agreement.
The term "Loan Agreement" means one or more promises, promissory notes, agreements, undertakings, security agreements, deeds of trust or other documents, or commitments, or any combination of those actions or documents, relating to the Loan, including without limitation the following:
|
||||
|
||||
LOAN DOCUMENTS
|
||||
|
|
|
|
|
Promissory Note
|
|
Disbursement Request and Authorization
|
|
|
Notice of Final Agreement
|
|
|
|
|
Parties.
The term "Parties" means Bankers Trust Company and any and all entities or individuals who are obligated to repay the loan or have pledged property as security for the Loan, including without limitation the following:
|
||||
|
|
|
|
|
Borrower:
|
Heartland Financial USA, Inc.
|
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Assistant Vice President
|
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:
|
August 7, 2018
|
|
|
/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:
|
August 7, 2018
|
|
|
/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:
|
August 7, 2018
|
/s/ Bryan R. McKeag
|
|
Bryan R. McKeag
|
|
Executive Vice President
|
|
Chief Financial Officer
|
|
|
|
Date:
|
August 7, 2018
|