☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Large accelerated filer
|
☒
|
|
Accelerated Filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $1.00 per share
|
HTLF
|
Nasdaq Stock Market
|
Part I
|
|
Part II
|
|
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
|
|
||||||
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
76,666
|
|
|
$
|
51,147
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
16,315
|
|
|
14,273
|
|
||
Provision for loan losses
|
6,553
|
|
|
9,094
|
|
||
Net amortization of premium on securities
|
10,927
|
|
|
12,587
|
|
||
Securities gains, net
|
(5,155
|
)
|
|
(1,182
|
)
|
||
Unrealized gain on equity securities, net
|
(370
|
)
|
|
(43
|
)
|
||
Stock based compensation
|
3,602
|
|
|
2,770
|
|
||
Loans originated for sale
|
(165,249
|
)
|
|
(317,979
|
)
|
||
Proceeds on sales of loans held for sale
|
161,625
|
|
|
346,083
|
|
||
Net gains on sale of loans held for sale
|
(7,177
|
)
|
|
(8,178
|
)
|
||
(Increase) decrease in accrued interest receivable
|
2,421
|
|
|
(35
|
)
|
||
Decrease in prepaid expenses
|
229
|
|
|
2,263
|
|
||
Increase (decrease) in accrued interest payable
|
1,021
|
|
|
(25
|
)
|
||
Capitalization of servicing rights
|
(415
|
)
|
|
(2,694
|
)
|
||
Valuation allowance on servicing rights
|
953
|
|
|
218
|
|
||
(Gain)/loss on sales/valuations of assets, net
|
(10,735
|
)
|
|
1,331
|
|
||
Net excess tax benefit from stock based compensation
|
272
|
|
|
660
|
|
||
Other, net
|
(29,184
|
)
|
|
(16,605
|
)
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
62,299
|
|
|
93,685
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchase of time deposits in other financial institutions
|
(248
|
)
|
|
(1,000
|
)
|
||
Proceeds from the sale of securities available for sale
|
1,194,897
|
|
|
635,735
|
|
||
Proceeds from the redemption of time deposits in other financial institutions
|
—
|
|
|
8,767
|
|
||
Proceeds from the maturity of and principal paydowns on securities available for sale
|
178,930
|
|
|
112,166
|
|
||
Proceeds from the maturity of and principal paydowns on securities held to maturity
|
2,406
|
|
|
8,897
|
|
||
Proceeds from the maturity of and principal paydowns on time deposits in other financial institutions
|
490
|
|
|
4,862
|
|
||
Proceeds from the sale, maturity of and principal paydowns on other investments
|
7,992
|
|
|
1,400
|
|
||
Purchase of securities available for sale
|
(1,148,238
|
)
|
|
(733,030
|
)
|
||
Purchase of other investments
|
(4,899
|
)
|
|
(1,842
|
)
|
||
Net (increase) decrease in loans
|
77,147
|
|
|
(86,466
|
)
|
||
Purchase of bank owned life insurance policies
|
(16
|
)
|
|
—
|
|
||
Proceeds from bank owned life insurance policies
|
421
|
|
|
—
|
|
||
Proceeds from sale of mortgage servicing rights
|
33,823
|
|
|
—
|
|
||
Capital expenditures
|
(3,909
|
)
|
|
(9,788
|
)
|
||
Net cash and cash equivalents received in acquisitions
|
38,650
|
|
|
212,197
|
|
||
Proceeds from the sale of equipment
|
829
|
|
|
622
|
|
||
Net cash expended in divestitures
|
(49,264
|
)
|
|
—
|
|
||
Proceeds on sale of OREO and other repossessed assets
|
3,825
|
|
|
2,091
|
|
||
NET CASH PROVIDED BY INVESTING ACTIVITIES
|
$
|
332,836
|
|
|
$
|
154,611
|
|
|
|
|
|
|
Three Months Ended
June 30, |
||||||
(Dollars and number of shares in thousands, except per share data)
|
2019
|
|
2018
|
||||
Net income
|
$
|
45,169
|
|
|
$
|
27,879
|
|
Preferred dividends
|
—
|
|
|
(13
|
)
|
||
Net income available to common stockholders
|
$
|
45,169
|
|
|
$
|
27,866
|
|
Weighted average common shares outstanding for basic earnings per share
|
35,744
|
|
|
32,621
|
|
||
Assumed incremental common shares issued upon vesting of outstanding restricted stock units
|
135
|
|
|
210
|
|
||
Weighted average common shares for diluted earnings per share
|
35,879
|
|
|
32,831
|
|
||
Earnings per common share — basic
|
$
|
1.26
|
|
|
$
|
0.85
|
|
Earnings per common share — diluted
|
$
|
1.26
|
|
|
$
|
0.85
|
|
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation
|
7
|
|
|
—
|
|
||
|
|
|
|
||||
|
Six Months Ended
June 30, |
||||||
(Dollars and number of shares in thousands, except per share data)
|
2019
|
|
2018
|
||||
Net income
|
$
|
76,666
|
|
|
$
|
51,147
|
|
Preferred dividends
|
—
|
|
|
(26
|
)
|
||
Net income available to common stockholders
|
$
|
76,666
|
|
|
$
|
51,121
|
|
Weighted average common shares outstanding for basic earnings per share
|
35,157
|
|
|
31,537
|
|
||
Assumed incremental common shares issued upon vesting of outstanding restricted stock units
|
138
|
|
|
209
|
|
||
Weighted average common shares for diluted earnings per share
|
35,295
|
|
|
31,746
|
|
||
Earnings per common share — basic
|
$
|
2.18
|
|
|
$
|
1.62
|
|
Earnings per common share — diluted
|
$
|
2.17
|
|
|
$
|
1.61
|
|
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation
|
7
|
|
|
—
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
18,660
|
|
|
$
|
48
|
|
|
$
|
(87
|
)
|
|
$
|
18,621
|
|
Mortgage and asset-backed securities
|
2,191,327
|
|
|
17,472
|
|
|
(15,473
|
)
|
|
2,193,326
|
|
||||
Obligations of states and political subdivisions
|
324,070
|
|
|
8,097
|
|
|
(384
|
)
|
|
331,783
|
|
||||
Total debt securities
|
2,534,057
|
|
|
25,617
|
|
|
(15,944
|
)
|
|
2,543,730
|
|
||||
Equity securities with a readily determinable fair value
|
18,157
|
|
|
—
|
|
|
—
|
|
|
18,157
|
|
||||
Total
|
$
|
2,552,214
|
|
|
$
|
25,617
|
|
|
$
|
(15,944
|
)
|
|
$
|
2,561,887
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
U.S. government corporations and agencies
|
$
|
32,075
|
|
|
$
|
3
|
|
|
$
|
(127
|
)
|
|
$
|
31,951
|
|
Mortgage and asset-backed securities
|
2,061,358
|
|
|
3,740
|
|
|
(38,400
|
)
|
|
2,026,698
|
|
||||
Obligations of states and political subdivisions
|
382,101
|
|
|
919
|
|
|
(8,046
|
)
|
|
374,974
|
|
||||
Total debt securities
|
2,475,534
|
|
|
4,662
|
|
|
(46,573
|
)
|
|
2,433,623
|
|
||||
Equity securities with a readily determinable fair value
|
17,086
|
|
|
—
|
|
|
—
|
|
|
17,086
|
|
||||
Total
|
$
|
2,492,620
|
|
|
$
|
4,662
|
|
|
$
|
(46,573
|
)
|
|
$
|
2,450,709
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
June 30, 2019
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
88,166
|
|
|
$
|
8,453
|
|
|
$
|
—
|
|
|
$
|
96,619
|
|
Total
|
$
|
88,166
|
|
|
$
|
8,453
|
|
|
$
|
—
|
|
|
$
|
96,619
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Obligations of states and political subdivisions
|
$
|
236,283
|
|
|
$
|
9,554
|
|
|
$
|
(496
|
)
|
|
$
|
245,341
|
|
Total
|
$
|
236,283
|
|
|
$
|
9,554
|
|
|
$
|
(496
|
)
|
|
$
|
245,341
|
|
|
June 30, 2019
|
||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
Due in 1 year or less
|
$
|
24,891
|
|
|
$
|
24,889
|
|
Due in 1 to 5 years
|
45,463
|
|
|
45,685
|
|
||
Due in 5 to 10 years
|
72,708
|
|
|
74,659
|
|
||
Due after 10 years
|
199,668
|
|
|
205,171
|
|
||
Total debt securities
|
342,730
|
|
|
350,404
|
|
||
Mortgage and asset-backed securities
|
2,191,327
|
|
|
2,193,326
|
|
||
Equity securities with a readily determinable fair value
|
18,157
|
|
|
18,157
|
|
||
Total investment securities
|
$
|
2,552,214
|
|
|
$
|
2,561,887
|
|
|
June 30, 2019
|
||||||
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
Due in 1 year or less
|
$
|
1,531
|
|
|
$
|
1,567
|
|
Due in 1 to 5 years
|
11,634
|
|
|
11,863
|
|
||
Due in 5 to 10 years
|
58,200
|
|
|
61,679
|
|
||
Due after 10 years
|
16,801
|
|
|
21,510
|
|
||
Total investment securities
|
$
|
88,166
|
|
|
$
|
96,619
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Proceeds from sales
|
$
|
760,743
|
|
|
$
|
243,489
|
|
|
$
|
1,194,897
|
|
|
$
|
635,735
|
|
Gross security gains
|
5,522
|
|
|
457
|
|
|
7,930
|
|
|
3,470
|
|
||||
Gross security losses
|
1,942
|
|
|
716
|
|
|
2,775
|
|
|
2,288
|
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government corporations and agencies
|
$
|
4,631
|
|
|
$
|
(87
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,631
|
|
|
$
|
(87
|
)
|
Mortgage and asset-backed securities
|
544,795
|
|
|
(5,265
|
)
|
|
448,159
|
|
|
(10,208
|
)
|
|
992,954
|
|
|
(15,473
|
)
|
||||||
Obligations of states and political subdivisions
|
10,975
|
|
|
(11
|
)
|
|
48,748
|
|
|
(373
|
)
|
|
59,723
|
|
|
(384
|
)
|
||||||
Total temporarily impaired securities
|
$
|
560,401
|
|
|
$
|
(5,363
|
)
|
|
$
|
496,907
|
|
|
$
|
(10,581
|
)
|
|
$
|
1,057,308
|
|
|
$
|
(15,944
|
)
|
December 31, 2018
|
|||||||||||||||||||||||
U.S. government corporations and agencies
|
$
|
24,902
|
|
|
$
|
(83
|
)
|
|
$
|
4,577
|
|
|
$
|
(44
|
)
|
|
$
|
29,479
|
|
|
$
|
(127
|
)
|
Mortgage and asset-backed securities
|
733,826
|
|
|
(9,060
|
)
|
|
805,089
|
|
|
(29,340
|
)
|
|
1,538,915
|
|
|
(38,400
|
)
|
||||||
Obligations of states and political subdivisions
|
34,990
|
|
|
(390
|
)
|
|
258,143
|
|
|
(7,656
|
)
|
|
293,133
|
|
|
(8,046
|
)
|
||||||
Total temporarily impaired securities
|
$
|
793,718
|
|
|
$
|
(9,533
|
)
|
|
$
|
1,067,809
|
|
|
$
|
(37,040
|
)
|
|
$
|
1,861,527
|
|
|
$
|
(46,573
|
)
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Obligations of states and political subdivisions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total temporarily impaired securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
December 31, 2018
|
|||||||||||||||||||||||
Obligations of states and political subdivisions
|
$
|
10,802
|
|
|
$
|
(17
|
)
|
|
$
|
19,508
|
|
|
$
|
(479
|
)
|
|
$
|
30,310
|
|
|
$
|
(496
|
)
|
Total temporarily impaired securities
|
$
|
10,802
|
|
|
$
|
(17
|
)
|
|
$
|
19,508
|
|
|
$
|
(479
|
)
|
|
$
|
30,310
|
|
|
$
|
(496
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Loans receivable held to maturity:
|
|
|
|
||||
Commercial
|
$
|
2,238,453
|
|
|
$
|
2,020,231
|
|
Commercial real estate
|
3,991,919
|
|
|
3,711,481
|
|
||
Agricultural and agricultural real estate
|
549,404
|
|
|
565,408
|
|
||
Residential real estate
|
613,707
|
|
|
673,603
|
|
||
Consumer
|
461,802
|
|
|
440,158
|
|
||
Gross loans receivable held to maturity
|
7,855,285
|
|
|
7,410,881
|
|
||
Unearned discount
|
(942
|
)
|
|
(1,624
|
)
|
||
Deferred loan fees
|
(1,292
|
)
|
|
(1,560
|
)
|
||
Total net loans receivable held to maturity
|
7,853,051
|
|
|
7,407,697
|
|
||
Allowance for loan losses
|
(63,850
|
)
|
|
(61,963
|
)
|
||
Loans receivable, net
|
$
|
7,789,201
|
|
|
$
|
7,345,734
|
|
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
5,685
|
|
|
$
|
18,397
|
|
|
$
|
24,082
|
|
|
$
|
26,881
|
|
|
$
|
2,211,572
|
|
|
$
|
2,238,453
|
|
Commercial real estate
|
377
|
|
|
26,923
|
|
|
27,300
|
|
|
22,141
|
|
|
3,969,778
|
|
|
3,991,919
|
|
||||||
Agricultural and agricultural real estate
|
1,557
|
|
|
4,492
|
|
|
6,049
|
|
|
21,729
|
|
|
527,675
|
|
|
549,404
|
|
||||||
Residential real estate
|
197
|
|
|
1,375
|
|
|
1,572
|
|
|
18,556
|
|
|
595,151
|
|
|
613,707
|
|
||||||
Consumer
|
546
|
|
|
4,301
|
|
|
4,847
|
|
|
5,411
|
|
|
456,391
|
|
|
461,802
|
|
||||||
Total
|
$
|
8,362
|
|
|
$
|
55,488
|
|
|
$
|
63,850
|
|
|
$
|
94,718
|
|
|
$
|
7,760,567
|
|
|
$
|
7,855,285
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
5,733
|
|
|
$
|
18,772
|
|
|
$
|
24,505
|
|
|
$
|
24,202
|
|
|
$
|
1,996,029
|
|
|
$
|
2,020,231
|
|
Commercial real estate
|
218
|
|
|
25,320
|
|
|
25,538
|
|
|
14,388
|
|
|
3,697,093
|
|
|
3,711,481
|
|
||||||
Agricultural and agricultural real estate
|
686
|
|
|
4,267
|
|
|
4,953
|
|
|
15,951
|
|
|
549,457
|
|
|
565,408
|
|
||||||
Residential real estate
|
168
|
|
|
1,617
|
|
|
1,785
|
|
|
20,251
|
|
|
653,352
|
|
|
673,603
|
|
||||||
Consumer
|
749
|
|
|
4,433
|
|
|
5,182
|
|
|
7,004
|
|
|
433,154
|
|
|
440,158
|
|
||||||
Total
|
$
|
7,554
|
|
|
$
|
54,409
|
|
|
$
|
61,963
|
|
|
$
|
81,796
|
|
|
$
|
7,329,085
|
|
|
$
|
7,410,881
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Nonaccrual loans
|
$
|
74,963
|
|
|
$
|
67,833
|
|
Nonaccrual troubled debt restructured loans
|
4,656
|
|
|
4,110
|
|
||
Total nonaccrual loans
|
$
|
79,619
|
|
|
$
|
71,943
|
|
Accruing loans past due 90 days or more
|
$
|
285
|
|
|
$
|
726
|
|
Performing troubled debt restructured loans
|
$
|
3,539
|
|
|
$
|
4,026
|
|
|
Three Months Ended
June 30, |
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
||||||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
3
|
|
|
240
|
|
|
246
|
|
|
6
|
|
|
1,292
|
|
|
1,125
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
3
|
|
|
$
|
240
|
|
|
$
|
246
|
|
|
6
|
|
|
$
|
1,292
|
|
|
$
|
1,125
|
|
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
|
Number
of Loans
|
|
Pre-
Modification
Recorded
Investment
|
|
Post-
Modification
Recorded
Investment
|
||||||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Residential real estate
|
4
|
|
|
276
|
|
|
288
|
|
|
11
|
|
|
2,169
|
|
|
1,877
|
|
||||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
4
|
|
|
$
|
276
|
|
|
$
|
288
|
|
|
11
|
|
|
$
|
2,169
|
|
|
$
|
1,877
|
|
|
With Payment Defaults During the
Three Months Ended
June 30,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Number of Loans
|
|
Recorded Investment
|
|
Number of Loans
|
|
Recorded Investment
|
||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Residential real estate
|
1
|
|
|
61
|
|
|
3
|
|
|
667
|
|
||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
1
|
|
|
$
|
61
|
|
|
3
|
|
|
$
|
667
|
|
|
With Payment Defaults During the
Six Months Ended
June 30,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Number of Loans
|
|
Recorded Investment
|
|
Number of Loans
|
|
Recorded Investment
|
||||||
Commercial
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total commercial and commercial real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Agricultural and agricultural real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Residential real estate
|
3
|
|
|
253
|
|
|
6
|
|
|
1,184
|
|
||
Consumer
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
3
|
|
|
$
|
253
|
|
|
6
|
|
|
$
|
1,184
|
|
|
Pass
|
|
Nonpass
|
|
Total
|
||||||
June 30, 2019
|
|
|
|
|
|
||||||
Commercial
|
$
|
2,095,930
|
|
|
$
|
142,523
|
|
|
$
|
2,238,453
|
|
Commercial real estate
|
3,755,285
|
|
|
236,634
|
|
|
3,991,919
|
|
|||
Total commercial and commercial real estate
|
5,851,215
|
|
|
379,157
|
|
|
6,230,372
|
|
|||
Agricultural and agricultural real estate
|
441,598
|
|
|
107,806
|
|
|
549,404
|
|
|||
Residential real estate
|
586,121
|
|
|
27,586
|
|
|
613,707
|
|
|||
Consumer
|
446,569
|
|
|
15,233
|
|
|
461,802
|
|
|||
Total gross loans receivable held to maturity
|
$
|
7,325,503
|
|
|
$
|
529,782
|
|
|
$
|
7,855,285
|
|
December 31, 2018
|
|
|
|
|
|
||||||
Commercial
|
$
|
1,880,579
|
|
|
$
|
139,652
|
|
|
$
|
2,020,231
|
|
Commercial real estate
|
3,524,344
|
|
|
187,137
|
|
|
3,711,481
|
|
|||
Total commercial and commercial real estate
|
5,404,923
|
|
|
326,789
|
|
|
5,731,712
|
|
|||
Agricultural and agricultural real estate
|
471,642
|
|
|
93,766
|
|
|
565,408
|
|
|||
Residential real estate
|
645,478
|
|
|
28,125
|
|
|
673,603
|
|
|||
Consumer
|
425,451
|
|
|
14,707
|
|
|
440,158
|
|
|||
Total gross loans receivable held to maturity
|
$
|
6,947,494
|
|
|
$
|
463,387
|
|
|
$
|
7,410,881
|
|
|
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, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
6,030
|
|
|
$
|
1,281
|
|
|
$
|
—
|
|
|
$
|
7,311
|
|
|
$
|
2,205,913
|
|
|
$
|
25,229
|
|
|
$
|
2,238,453
|
|
Commercial real estate
|
4,931
|
|
|
1,006
|
|
|
—
|
|
|
5,937
|
|
|
3,969,426
|
|
|
16,556
|
|
|
3,991,919
|
|
|||||||
Total commercial and commercial real estate
|
10,961
|
|
|
2,287
|
|
|
—
|
|
|
13,248
|
|
|
6,175,339
|
|
|
41,785
|
|
|
6,230,372
|
|
|||||||
Agricultural and agricultural real estate
|
2,664
|
|
|
386
|
|
|
285
|
|
|
3,335
|
|
|
524,655
|
|
|
21,414
|
|
|
549,404
|
|
|||||||
Residential real estate
|
2,744
|
|
|
653
|
|
|
—
|
|
|
3,397
|
|
|
598,120
|
|
|
12,190
|
|
|
613,707
|
|
|||||||
Consumer
|
3,850
|
|
|
578
|
|
|
—
|
|
|
4,428
|
|
|
453,144
|
|
|
4,230
|
|
|
461,802
|
|
|||||||
Total gross loans receivable held to maturity
|
$
|
20,219
|
|
|
$
|
3,904
|
|
|
$
|
285
|
|
|
$
|
24,408
|
|
|
$
|
7,751,258
|
|
|
$
|
79,619
|
|
|
$
|
7,855,285
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
2,574
|
|
|
$
|
205
|
|
|
$
|
—
|
|
|
$
|
2,779
|
|
|
$
|
1,991,525
|
|
|
$
|
25,927
|
|
|
$
|
2,020,231
|
|
Commercial real estate
|
4,819
|
|
|
—
|
|
|
726
|
|
|
5,545
|
|
|
3,694,259
|
|
|
11,677
|
|
|
3,711,481
|
|
|||||||
Total commercial and commercial real estate
|
7,393
|
|
|
205
|
|
|
726
|
|
|
8,324
|
|
|
5,685,784
|
|
|
37,604
|
|
|
5,731,712
|
|
|||||||
Agricultural and agricultural real estate
|
99
|
|
|
—
|
|
|
—
|
|
|
99
|
|
|
549,376
|
|
|
15,933
|
|
|
565,408
|
|
|||||||
Residential real estate
|
5,147
|
|
|
49
|
|
|
—
|
|
|
5,196
|
|
|
655,329
|
|
|
13,078
|
|
|
673,603
|
|
|||||||
Consumer
|
2,724
|
|
|
307
|
|
|
—
|
|
|
3,031
|
|
|
431,799
|
|
|
5,328
|
|
|
440,158
|
|
|||||||
Total gross loans receivable held to maturity
|
$
|
15,363
|
|
|
$
|
561
|
|
|
$
|
726
|
|
|
$
|
16,650
|
|
|
$
|
7,322,288
|
|
|
$
|
71,943
|
|
|
$
|
7,410,881
|
|
|
Unpaid
Principal
Balance
|
|
Loan
Balance
|
|
Related
Allowance
Recorded
|
|
Quarter-
to-
Date
Avg.
Loan
Balance
|
|
Quarter-
to-
Date
Interest
Income
Recognized
|
|
Year-
to-
Date
Avg.
Loan
Balance
|
|
Year-
to-
Date
Interest
Income
Recognized
|
||||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Impaired loans with a related allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
11,152
|
|
|
$
|
11,142
|
|
|
$
|
5,685
|
|
|
$
|
11,442
|
|
|
$
|
9
|
|
|
$
|
11,747
|
|
|
$
|
16
|
|
Commercial real estate
|
1,541
|
|
|
1,541
|
|
|
377
|
|
|
1,357
|
|
|
5
|
|
|
1,280
|
|
|
11
|
|
|||||||
Total commercial and commercial real estate
|
12,693
|
|
|
12,683
|
|
|
6,062
|
|
|
12,799
|
|
|
14
|
|
|
13,027
|
|
|
27
|
|
|||||||
Agricultural and agricultural real estate
|
3,916
|
|
|
3,916
|
|
|
1,557
|
|
|
3,314
|
|
|
—
|
|
|
2,772
|
|
|
—
|
|
|||||||
Residential real estate
|
1,273
|
|
|
1,273
|
|
|
197
|
|
|
1,378
|
|
|
—
|
|
|
1,194
|
|
|
—
|
|
|||||||
Consumer
|
1,175
|
|
|
1,173
|
|
|
546
|
|
|
1,200
|
|
|
1
|
|
|
1,237
|
|
|
7
|
|
|||||||
Total loans held to maturity
|
$
|
19,057
|
|
|
$
|
19,045
|
|
|
$
|
8,362
|
|
|
$
|
18,691
|
|
|
$
|
15
|
|
|
$
|
18,230
|
|
|
$
|
34
|
|
Impaired loans without a related allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
20,542
|
|
|
$
|
15,739
|
|
|
$
|
—
|
|
|
$
|
13,519
|
|
|
$
|
111
|
|
|
$
|
12,726
|
|
|
$
|
441
|
|
Commercial real estate
|
20,680
|
|
|
20,600
|
|
|
—
|
|
|
17,785
|
|
|
73
|
|
|
15,900
|
|
|
127
|
|
|||||||
Total commercial and commercial real estate
|
41,222
|
|
|
36,339
|
|
|
—
|
|
|
31,304
|
|
|
184
|
|
|
28,626
|
|
|
568
|
|
|||||||
Agricultural and agricultural real estate
|
20,220
|
|
|
17,813
|
|
|
—
|
|
|
17,739
|
|
|
17
|
|
|
16,056
|
|
|
33
|
|
|||||||
Residential real estate
|
17,283
|
|
|
17,283
|
|
|
—
|
|
|
17,198
|
|
|
121
|
|
|
17,566
|
|
|
151
|
|
|||||||
Consumer
|
4,238
|
|
|
4,238
|
|
|
—
|
|
|
4,222
|
|
|
18
|
|
|
4,522
|
|
|
43
|
|
|||||||
Total loans held to maturity
|
$
|
82,963
|
|
|
$
|
75,673
|
|
|
$
|
—
|
|
|
$
|
70,463
|
|
|
$
|
340
|
|
|
$
|
66,770
|
|
|
$
|
795
|
|
Total impaired loans held to maturity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
31,694
|
|
|
$
|
26,881
|
|
|
$
|
5,685
|
|
|
$
|
24,961
|
|
|
$
|
120
|
|
|
$
|
24,473
|
|
|
$
|
457
|
|
Commercial real estate
|
22,221
|
|
|
22,141
|
|
|
377
|
|
|
19,142
|
|
|
78
|
|
|
17,180
|
|
|
138
|
|
|||||||
Total commercial and commercial real estate
|
53,915
|
|
|
49,022
|
|
|
6,062
|
|
|
44,103
|
|
|
198
|
|
|
41,653
|
|
|
595
|
|
|||||||
Agricultural and agricultural real estate
|
24,136
|
|
|
21,729
|
|
|
1,557
|
|
|
21,053
|
|
|
17
|
|
|
18,828
|
|
|
33
|
|
|||||||
Residential real estate
|
18,556
|
|
|
18,556
|
|
|
197
|
|
|
18,576
|
|
|
121
|
|
|
18,760
|
|
|
151
|
|
|||||||
Consumer
|
5,413
|
|
|
5,411
|
|
|
546
|
|
|
5,422
|
|
|
19
|
|
|
5,759
|
|
|
50
|
|
|||||||
Total impaired loans held to maturity
|
$
|
102,020
|
|
|
$
|
94,718
|
|
|
$
|
8,362
|
|
|
$
|
89,154
|
|
|
$
|
355
|
|
|
$
|
85,000
|
|
|
$
|
829
|
|
|
Unpaid
Principal
Balance
|
|
Loan
Balance
|
|
Related
Allowance
Recorded
|
|
Year-to-
Date
Avg.
Loan
Balance
|
|
Year-to-
Date
Interest
Income
Recognized
|
||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Impaired loans with a related allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
12,376
|
|
|
$
|
12,366
|
|
|
$
|
5,733
|
|
|
$
|
4,741
|
|
|
$
|
33
|
|
Commercial real estate
|
891
|
|
|
891
|
|
|
218
|
|
|
4,421
|
|
|
25
|
|
|||||
Total commercial and commercial real estate
|
13,267
|
|
|
13,257
|
|
|
5,951
|
|
|
9,162
|
|
|
58
|
|
|||||
Agricultural and agricultural real estate
|
1,718
|
|
|
1,718
|
|
|
686
|
|
|
2,165
|
|
|
2
|
|
|||||
Residential real estate
|
647
|
|
|
647
|
|
|
168
|
|
|
1,138
|
|
|
12
|
|
|||||
Consumer
|
1,373
|
|
|
1,373
|
|
|
749
|
|
|
2,934
|
|
|
29
|
|
|||||
Total loans held to maturity
|
$
|
17,005
|
|
|
$
|
16,995
|
|
|
$
|
7,554
|
|
|
$
|
15,399
|
|
|
$
|
101
|
|
Impaired loans without a related allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
13,616
|
|
|
$
|
11,836
|
|
|
$
|
—
|
|
|
$
|
10,052
|
|
|
$
|
299
|
|
Commercial real estate
|
13,578
|
|
|
13,497
|
|
|
—
|
|
|
13,000
|
|
|
249
|
|
|||||
Total commercial and commercial real estate
|
27,194
|
|
|
25,333
|
|
|
—
|
|
|
23,052
|
|
|
548
|
|
|||||
Agricultural and agricultural real estate
|
16,836
|
|
|
14,233
|
|
|
—
|
|
|
14,781
|
|
|
5
|
|
|||||
Residential real estate
|
19,604
|
|
|
19,604
|
|
|
—
|
|
|
23,950
|
|
|
308
|
|
|||||
Consumer
|
5,631
|
|
|
5,631
|
|
|
—
|
|
|
5,117
|
|
|
97
|
|
|||||
Total loans held to maturity
|
$
|
69,265
|
|
|
$
|
64,801
|
|
|
$
|
—
|
|
|
$
|
66,900
|
|
|
$
|
958
|
|
Total impaired loans held to maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
25,992
|
|
|
$
|
24,202
|
|
|
$
|
5,733
|
|
|
$
|
14,793
|
|
|
$
|
332
|
|
Commercial real estate
|
14,469
|
|
|
14,388
|
|
|
218
|
|
|
17,421
|
|
|
274
|
|
|||||
Total commercial and commercial real estate
|
40,461
|
|
|
38,590
|
|
|
5,951
|
|
|
32,214
|
|
|
606
|
|
|||||
Agricultural and agricultural real estate
|
18,554
|
|
|
15,951
|
|
|
686
|
|
|
16,946
|
|
|
7
|
|
|||||
Residential real estate
|
20,251
|
|
|
20,251
|
|
|
168
|
|
|
25,088
|
|
|
320
|
|
|||||
Consumer
|
7,004
|
|
|
7,004
|
|
|
749
|
|
|
8,051
|
|
|
126
|
|
|||||
Total impaired loans held to maturity
|
$
|
86,270
|
|
|
$
|
81,796
|
|
|
$
|
7,554
|
|
|
$
|
82,299
|
|
|
$
|
1,059
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Impaired
Purchased Loans |
|
Non
Impaired
Purchased Loans |
|
Total
Purchased
Loans
|
|
Impaired
Purchased Loans |
|
Non
Impaired
Purchased Loans |
|
Total
Purchased
Loans
|
||||||||||||
Commercial
|
$
|
7,109
|
|
|
$
|
336,256
|
|
|
$
|
343,365
|
|
|
$
|
3,801
|
|
|
$
|
243,693
|
|
|
$
|
247,494
|
|
Commercial real estate
|
3,337
|
|
|
1,169,970
|
|
|
1,173,307
|
|
|
158
|
|
|
1,098,171
|
|
|
1,098,329
|
|
||||||
Agricultural and agricultural real estate
|
—
|
|
|
10,054
|
|
|
10,054
|
|
|
—
|
|
|
27,115
|
|
|
27,115
|
|
||||||
Residential real estate
|
—
|
|
|
171,327
|
|
|
171,327
|
|
|
231
|
|
|
184,389
|
|
|
184,620
|
|
||||||
Consumer loans
|
—
|
|
|
97,824
|
|
|
97,824
|
|
|
—
|
|
|
75,773
|
|
|
75,773
|
|
||||||
Total covered loans
|
$
|
10,446
|
|
|
$
|
1,785,431
|
|
|
$
|
1,795,877
|
|
|
$
|
4,190
|
|
|
$
|
1,629,141
|
|
|
$
|
1,633,331
|
|
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at March 31, 2019
|
$
|
23,821
|
|
|
$
|
26,787
|
|
|
$
|
5,598
|
|
|
$
|
1,605
|
|
|
$
|
4,828
|
|
|
$
|
62,639
|
|
Charge-offs
|
(3,687
|
)
|
|
(121
|
)
|
|
(49
|
)
|
|
(150
|
)
|
|
(773
|
)
|
|
(4,780
|
)
|
||||||
Recoveries
|
194
|
|
|
26
|
|
|
5
|
|
|
34
|
|
|
814
|
|
|
1,073
|
|
||||||
Provision
|
3,754
|
|
|
608
|
|
|
495
|
|
|
83
|
|
|
(22
|
)
|
|
4,918
|
|
||||||
Balance at June 30, 2019
|
$
|
24,082
|
|
|
$
|
27,300
|
|
|
$
|
6,049
|
|
|
$
|
1,572
|
|
|
$
|
4,847
|
|
|
$
|
63,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Commercial
|
|
Commercial
Real Estate
|
|
Agricultural and Agricultural
Real Estate
|
|
Residential
Real Estate
|
|
Consumer
|
|
Total
|
||||||||||||
Balance at December 31, 2018
|
$
|
24,505
|
|
|
$
|
25,538
|
|
|
$
|
4,953
|
|
|
$
|
1,785
|
|
|
$
|
5,182
|
|
|
$
|
61,963
|
|
Charge-offs
|
(4,331
|
)
|
|
(160
|
)
|
|
(428
|
)
|
|
(313
|
)
|
|
(1,498
|
)
|
|
(6,730
|
)
|
||||||
Recoveries
|
369
|
|
|
177
|
|
|
335
|
|
|
47
|
|
|
1,136
|
|
|
2,064
|
|
||||||
Provision
|
3,539
|
|
|
1,745
|
|
|
1,189
|
|
|
53
|
|
|
27
|
|
|
6,553
|
|
||||||
Balance at June 30, 2019
|
$
|
24,082
|
|
|
$
|
27,300
|
|
|
$
|
6,049
|
|
|
$
|
1,572
|
|
|
$
|
4,847
|
|
|
$
|
63,850
|
|
|
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
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Core deposit intangibles
|
$
|
95,033
|
|
|
$
|
42,539
|
|
|
$
|
52,494
|
|
|
$
|
83,640
|
|
|
$
|
36,403
|
|
|
$
|
47,237
|
|
Customer relationship intangibles
|
1,177
|
|
|
953
|
|
|
224
|
|
|
1,177
|
|
|
935
|
|
|
242
|
|
||||||
Mortgage servicing rights
|
7,112
|
|
|
1,311
|
|
|
5,801
|
|
|
42,228
|
|
|
12,865
|
|
|
29,363
|
|
||||||
Commercial servicing rights
|
6,907
|
|
|
5,528
|
|
|
1,379
|
|
|
6,834
|
|
|
5,125
|
|
|
1,709
|
|
||||||
Total
|
$
|
110,229
|
|
|
$
|
50,331
|
|
|
$
|
59,898
|
|
|
$
|
133,879
|
|
|
$
|
55,328
|
|
|
$
|
78,551
|
|
|
Core
Deposit
Intangibles
|
|
Customer
Relationship
Intangibles
|
|
Mortgage
Servicing
Rights
|
|
Commercial
Servicing
Rights
|
|
Total
|
||||||||||
Six months ending December 31, 2019
|
$
|
5,869
|
|
|
$
|
19
|
|
|
$
|
876
|
|
|
$
|
195
|
|
|
$
|
6,959
|
|
Year ending December 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
2020
|
10,238
|
|
|
36
|
|
|
1,231
|
|
|
329
|
|
|
11,834
|
|
|||||
2021
|
8,520
|
|
|
35
|
|
|
1,055
|
|
|
293
|
|
|
9,903
|
|
|||||
2022
|
6,947
|
|
|
35
|
|
|
879
|
|
|
246
|
|
|
8,107
|
|
|||||
2023
|
6,061
|
|
|
34
|
|
|
704
|
|
|
159
|
|
|
6,958
|
|
|||||
2024
|
4,981
|
|
|
33
|
|
|
528
|
|
|
86
|
|
|
5,628
|
|
|||||
Thereafter
|
9,878
|
|
|
32
|
|
|
528
|
|
|
71
|
|
|
10,509
|
|
|||||
Total
|
$
|
52,494
|
|
|
$
|
224
|
|
|
$
|
5,801
|
|
|
$
|
1,379
|
|
|
$
|
59,898
|
|
|
2019
|
|
2018
|
||||
Balance at January 1,
|
$
|
29,363
|
|
|
$
|
23,248
|
|
Originations
|
342
|
|
|
2,673
|
|
||
Amortization
|
(2,395
|
)
|
|
(2,752
|
)
|
||
Valuation allowance on mortgage servicing rights
|
—
|
|
|
(209
|
)
|
||
Sale of mortgage servicing rights
|
(20,556
|
)
|
|
—
|
|
||
Acquired mortgage servicing rights
|
—
|
|
|
6,995
|
|
||
Valuation adjustment
|
(953
|
)
|
|
—
|
|
||
Balance at period end
|
$
|
5,801
|
|
|
$
|
29,955
|
|
Mortgage servicing rights, net to servicing portfolio
|
0.92
|
%
|
|
0.72
|
%
|
|
2019
|
|
2018
|
||||
Balance at January 1,
|
$
|
1,709
|
|
|
$
|
2,609
|
|
Originations
|
73
|
|
|
21
|
|
||
Amortization
|
(403
|
)
|
|
(580
|
)
|
||
Valuation allowance on commercial servicing rights
|
—
|
|
|
(9
|
)
|
||
Balance at period end
|
$
|
1,379
|
|
|
$
|
2,041
|
|
Fair value of commercial servicing rights
|
$
|
1,851
|
|
|
$
|
2,502
|
|
Commercial servicing rights, net to servicing portfolio
|
1.52
|
%
|
|
1.75
|
%
|
June 30, 2019
|
Book Value 15-Year Tranche
|
|
Fair Value 15-Year Tranche
|
|
Impairment 15-Year Tranche
|
|
Book Value 30-Year Tranche
|
|
Fair Value 30-Year Tranche
|
|
Impairment 30-Year Tranche
|
||||||||||||
Dubuque Bank and Trust Company
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
First Bank & Trust
|
1,541
|
|
|
1,389
|
|
|
152
|
|
|
5,271
|
|
|
4,412
|
|
|
859
|
|
||||||
Total
|
$
|
1,541
|
|
|
$
|
1,389
|
|
|
$
|
152
|
|
|
$
|
5,271
|
|
|
$
|
4,412
|
|
|
$
|
859
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dubuque Bank and Trust Company
|
$
|
2,195
|
|
|
$
|
4,636
|
|
|
$
|
—
|
|
|
$
|
20,025
|
|
|
$
|
36,901
|
|
|
$
|
—
|
|
First Bank & Trust
|
1,685
|
|
|
1,665
|
|
|
20
|
|
|
5,516
|
|
|
5,478
|
|
|
38
|
|
||||||
Total
|
$
|
3,880
|
|
|
$
|
6,301
|
|
|
$
|
20
|
|
|
$
|
25,541
|
|
|
$
|
42,379
|
|
|
$
|
38
|
|
June 30, 2019
|
Book Value
Less than
20 Years
|
|
Fair Value
Less than
20 Years
|
|
Impairment
Less than
20 Years
|
|
Book Value
More than
20 Years
|
|
Fair Value
More than
20 Years
|
|
Impairment
More than
20 Years
|
||||||||||||
Citywide Banks
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Premier Valley Bank
|
33
|
|
|
62
|
|
|
—
|
|
|
159
|
|
|
176
|
|
|
—
|
|
||||||
Wisconsin Bank & Trust
|
178
|
|
|
346
|
|
|
—
|
|
|
1,009
|
|
|
1,267
|
|
|
—
|
|
||||||
Total
|
$
|
211
|
|
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
1,168
|
|
|
$
|
1,443
|
|
|
$
|
—
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Citywide Banks
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
20
|
|
|
$
|
—
|
|
Premier Valley Bank
|
45
|
|
|
74
|
|
|
—
|
|
|
178
|
|
|
184
|
|
|
—
|
|
||||||
Wisconsin Bank & Trust
|
249
|
|
|
411
|
|
|
—
|
|
|
1,218
|
|
|
1,439
|
|
|
—
|
|
||||||
Total
|
$
|
295
|
|
|
$
|
491
|
|
|
$
|
—
|
|
|
$
|
1,414
|
|
|
$
|
1,643
|
|
|
$
|
—
|
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance
Sheet
Category
|
|
Receive
Rate
|
|
Weighted
Average
Pay Rate
|
|
Maturity
|
||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
(184
|
)
|
|
Other liabilities
|
|
2.410
|
%
|
|
2.255
|
%
|
|
03/17/2021
|
Interest rate swap
|
20,000
|
|
|
(162
|
)
|
|
Other liabilities
|
|
2.589
|
|
|
3.355
|
|
|
01/07/2020
|
||
Interest rate swap
|
27,667
|
|
|
251
|
|
|
Other assets
|
|
4.912
|
|
|
3.674
|
|
|
05/10/2021
|
||
Interest rate swap
|
27,250
|
|
|
(1,452
|
)
|
|
Other liabilities
|
|
4.904
|
|
|
5.425
|
|
|
07/24/2028
|
||
Interest rate swap
|
20,000
|
|
|
(623
|
)
|
|
Other liabilities
|
|
2.410
|
|
|
2.390
|
|
|
06/15/2024
|
||
Interest rate swap
|
20,000
|
|
|
(563
|
)
|
|
Other liabilities
|
|
2.520
|
|
|
2.352
|
|
|
03/01/2024
|
||
Interest rate swap
|
6,000
|
|
|
(8
|
)
|
|
Other liabilities
|
|
2.410
|
|
|
1.866
|
|
|
06/15/2021
|
||
Interest rate swap
|
3,000
|
|
|
(2
|
)
|
|
Other liabilities
|
|
2.597
|
|
|
1.878
|
|
|
06/30/2021
|
||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
$
|
25,000
|
|
|
$
|
191
|
|
|
Other assets
|
|
2.788
|
%
|
|
2.255
|
%
|
|
03/17/2021
|
Interest rate swap
|
20,000
|
|
|
(177
|
)
|
|
Other liabilities
|
|
2.408
|
|
|
3.355
|
|
|
01/07/2020
|
||
Interest rate swap
|
10,000
|
|
|
29
|
|
|
Other assets
|
|
2.822
|
|
|
1.674
|
|
|
03/26/2019
|
||
Interest rate swap
|
10,000
|
|
|
28
|
|
|
Other assets
|
|
2.788
|
|
|
1.658
|
|
|
03/18/2019
|
||
Interest rate swap
|
29,667
|
|
|
763
|
|
|
Other assets
|
|
4.887
|
|
|
3.674
|
|
|
05/10/2021
|
||
Interest rate swap
|
28,750
|
|
|
(572
|
)
|
|
Other liabilities
|
|
5.004
|
|
|
5.425
|
|
|
07/24/2028
|
||
Interest rate swap
|
20,000
|
|
|
157
|
|
|
Other assets
|
|
2.788
|
|
|
2.390
|
|
|
06/15/2024
|
||
Interest rate swap
|
20,000
|
|
|
185
|
|
|
Other assets
|
|
2.738
|
|
|
2.352
|
|
|
03/01/2024
|
||
Interest rate swap
|
6,000
|
|
|
105
|
|
|
Other Assets
|
|
2.788
|
|
|
1.866
|
|
|
06/15/2021
|
||
Interest rate swap
|
3,000
|
|
|
51
|
|
|
Other assets
|
|
2.787
|
|
|
1.878
|
|
|
06/30/2021
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
|
Recognized in OCI
|
|
Reclassified from AOCI into Income
|
|
Recognized in Income on Derivatives
|
||||||||||
|
Amount of
Gain (Loss)
|
|
Category
|
|
Amount of
Gain (Loss)
|
|
Category
|
|
Amount of
Gain (Loss)
|
||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
(2,163
|
)
|
|
Interest expense
|
|
$
|
(100
|
)
|
|
Other income
|
|
$
|
—
|
|
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
|
$
|
(3,503
|
)
|
|
Interest expense
|
|
$
|
(265
|
)
|
|
Other income
|
|
$
|
—
|
|
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
|
|
$
|
—
|
|
|
Notional Amount
|
|
Fair Value
|
|
Balance Sheet Category
|
||||
June 30, 2019
|
|
|
|
|
|
||||
Fair value hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
Other assets
|
Fair value hedges
|
29,262
|
|
|
(1,555
|
)
|
|
Other liabilities
|
||
December 31, 2018
|
|
|
|
|
|
||||
Fair value hedges
|
$
|
19,820
|
|
|
$
|
74
|
|
|
Other assets
|
Fair value hedges
|
15,064
|
|
|
$
|
(339
|
)
|
|
Other liabilities
|
|
|
Amount of Gain (Loss)
|
|
Income Statement Category
|
||
Three Months Ended June 30, 2019
|
|
|
|
|
||
Fair value hedges
|
|
$
|
(660
|
)
|
|
Interest income
|
Six Months Ended June 30, 2019
|
|
|
|
|
||
Fair value hedges
|
|
$
|
(1,290
|
)
|
|
Interest income
|
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
|
|
Notional Amount
|
|
Fair Value
|
|
Balance Sheet Category
|
||||
June 30, 2019
|
|
|
|
|
|
||||
Embedded derivatives
|
$
|
—
|
|
|
$
|
—
|
|
|
Other assets
|
Embedded derivatives
|
11,874
|
|
|
(672
|
)
|
|
Other liabilities
|
||
December 31, 2018
|
|
|
|
|
|
||||
Embedded derivatives
|
$
|
11,266
|
|
|
$
|
453
|
|
|
Other assets
|
Embedded derivatives
|
2,231
|
|
|
(54
|
)
|
|
Other liabilities
|
|
|
Amount of Gain (Loss)
|
|
Income Statement Category
|
||
Three Months Ended June 30, 2019
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
182
|
|
|
Other noninterest income
|
Six Months Ended June 30, 2019
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
1,071
|
|
|
Other noninterest income
|
Three Months Ended June 30, 2018
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
138
|
|
|
Other noninterest income
|
Six Months Ended June 30, 2018
|
|
|
|
|
||
Embedded derivatives
|
|
$
|
415
|
|
|
Other noninterest income
|
|
|
Notional
Amount
|
|
Fair
Value
|
|
Balance Sheet
Category
|
|
Weighted
Average
Receive
Rate
|
|
Weighted
Average
Pay
Rate
|
||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer interest rate swaps
|
|
$
|
228,934
|
|
|
$
|
14,162
|
|
|
Other assets
|
|
5.16
|
%
|
|
4.77
|
%
|
Customer interest rate swaps
|
|
228,934
|
|
|
(14,162
|
)
|
|
Other liabilities
|
|
4.77
|
|
|
5.16
|
|
||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer interest rate swaps
|
|
$
|
211,246
|
|
|
$
|
4,449
|
|
|
Other assets
|
|
5.10
|
%
|
|
4.96
|
%
|
Customer interest rate swaps
|
|
211,246
|
|
|
(4,449
|
)
|
|
Other liabilities
|
|
4.96
|
|
|
5.10
|
|
|
Balance Sheet Category
|
|
Notional Amount
|
|
Fair Value
|
||||
June 30, 2019
|
|
|
|
|
|
||||
Interest rate lock commitments (mortgage)
|
Other assets
|
|
$
|
32,016
|
|
|
$
|
1,072
|
|
Forward commitments
|
Other assets
|
|
5,000
|
|
|
2
|
|
||
Forward commitments
|
Other liabilities
|
|
65,000
|
|
|
(430
|
)
|
||
Undesignated interest rate swaps
|
Other liabilities
|
|
11,874
|
|
|
(672
|
)
|
||
Undesignated interest rate swaps
|
Other assets
|
|
—
|
|
|
—
|
|
||
December 31, 2018
|
|
|
|
|
|
|
|
||
Interest rate lock commitments (mortgage)
|
Other assets
|
|
$
|
22,451
|
|
|
$
|
725
|
|
Forward commitments
|
Other assets
|
|
—
|
|
|
—
|
|
||
Forward commitments
|
Other liabilities
|
|
51,500
|
|
|
(399
|
)
|
||
Undesignated interest rate swaps
|
Other liabilities
|
|
11,266
|
|
|
(453
|
)
|
||
Undesignated interest rate swaps
|
Other assets
|
|
2,231
|
|
|
54
|
|
|
Fair Value Measurements at
June 30, 2019 |
||||||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Year-to-
Date (Gains)
Losses
|
||||||||||
Collateral dependent impaired loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
13,337
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,337
|
|
|
$
|
3,070
|
|
Commercial real estate
|
808
|
|
|
—
|
|
|
—
|
|
|
808
|
|
|
72
|
|
|||||
Agricultural and agricultural real estate
|
9,032
|
|
|
—
|
|
|
—
|
|
|
9,032
|
|
|
379
|
|
|||||
Residential real estate
|
1,076
|
|
|
—
|
|
|
—
|
|
|
1,076
|
|
|
—
|
|
|||||
Consumer
|
627
|
|
|
—
|
|
|
—
|
|
|
627
|
|
|
2
|
|
|||||
Total collateral dependent impaired loans
|
$
|
24,880
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,880
|
|
|
$
|
3,523
|
|
Loans held for sale
|
$
|
34,575
|
|
|
$
|
—
|
|
|
$
|
34,575
|
|
|
$
|
—
|
|
|
$
|
(1,386
|
)
|
Other real estate owned
|
$
|
6,646
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,646
|
|
|
$
|
936
|
|
Premises, furniture and equipment held for sale
|
$
|
3,701
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,701
|
|
|
$
|
954
|
|
Mortgage servicing rights
|
$
|
5,801
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,801
|
|
|
$
|
953
|
|
|
Fair Value Measurements at
December 31, 2018
|
||||||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Year-to-
Date (Gains) Losses |
||||||||||
Collateral dependent impaired loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
12,932
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,932
|
|
|
$
|
660
|
|
Commercial real estate
|
405
|
|
|
—
|
|
|
—
|
|
|
405
|
|
|
72
|
|
|||||
Agricultural and agricultural real estate
|
11,070
|
|
|
—
|
|
|
—
|
|
|
11,070
|
|
|
575
|
|
|||||
Residential real estate
|
478
|
|
|
—
|
|
|
—
|
|
|
478
|
|
|
—
|
|
|||||
Consumer
|
624
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|
—
|
|
|||||
Total collateral dependent impaired loans
|
$
|
25,509
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,509
|
|
|
$
|
1,307
|
|
Loans held for sale
|
$
|
119,801
|
|
|
$
|
—
|
|
|
$
|
52,577
|
|
|
$
|
67,224
|
|
|
$
|
(1,870
|
)
|
Other real estate owned
|
$
|
6,153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,153
|
|
|
$
|
2,647
|
|
Premises, furniture and equipment held for sale
|
$
|
7,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,258
|
|
|
$
|
59
|
|
Mortgage servicing rights
|
$
|
7,143
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,143
|
|
|
$
|
58
|
|
|
For the Six Months Ended
June 30, 2019 |
|
For the Year Ended
December 31, 2018
|
||||
Balance at January 1,
|
$
|
725
|
|
|
$
|
1,738
|
|
Acquired interest rate lock commitments
|
—
|
|
|
1,383
|
|
||
Total gains (losses) included in earnings
|
816
|
|
|
(3,269
|
)
|
||
Issuances
|
4,661
|
|
|
2,962
|
|
||
Settlements
|
(5,130
|
)
|
|
(2,089
|
)
|
||
Balance at period end
|
$
|
1,072
|
|
|
$
|
725
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
In-scope of Topic 606
|
|
|
|
|
|
|
|
||||||||
Service charges and fees
|
|
|
|
|
|
|
|
||||||||
Service charges and fees on deposit accounts
|
$
|
3,186
|
|
|
$
|
2,794
|
|
|
$
|
6,163
|
|
|
$
|
5,412
|
|
Overdraft fees
|
2,876
|
|
|
2,518
|
|
|
5,619
|
|
|
4,726
|
|
||||
Customer service and other service fees
|
84
|
|
|
88
|
|
|
166
|
|
|
166
|
|
||||
Credit card fee income
|
4,270
|
|
|
3,114
|
|
|
7,619
|
|
|
5,381
|
|
||||
Debit card income
|
4,213
|
|
|
3,558
|
|
|
7,856
|
|
|
6,466
|
|
||||
Total service charges and fees
|
$
|
14,629
|
|
|
$
|
12,072
|
|
|
$
|
27,423
|
|
|
$
|
22,151
|
|
Trust fees
|
4,825
|
|
|
4,615
|
|
|
9,299
|
|
|
9,295
|
|
||||
Brokerage and insurance commissions
|
1,028
|
|
|
877
|
|
|
1,762
|
|
|
1,784
|
|
||||
Total noninterest income in-scope of Topic 606
|
$
|
20,482
|
|
|
$
|
17,564
|
|
|
$
|
38,484
|
|
|
$
|
33,230
|
|
|
|
|
|
|
|
|
|
||||||||
Out-of-scope of Topic 606
|
|
|
|
|
|
|
|
||||||||
Loan servicing income
|
$
|
1,338
|
|
|
$
|
1,807
|
|
|
$
|
3,067
|
|
|
$
|
3,561
|
|
Securities gains/(losses), net
|
3,580
|
|
|
(259
|
)
|
|
5,155
|
|
|
1,182
|
|
||||
Unrealized gain on equity securities, net
|
112
|
|
|
71
|
|
|
370
|
|
|
43
|
|
||||
Net gains on sale of loans held for sale
|
4,343
|
|
|
6,800
|
|
|
7,519
|
|
|
10,851
|
|
||||
Valuation adjustment on servicing rights
|
(364
|
)
|
|
(216
|
)
|
|
(953
|
)
|
|
(218
|
)
|
||||
Income on bank owned life insurance
|
888
|
|
|
700
|
|
|
1,787
|
|
|
1,314
|
|
||||
Other noninterest income
|
1,682
|
|
|
1,167
|
|
|
3,349
|
|
|
2,387
|
|
||||
Total noninterest income out-of-scope of Topic 606
|
11,579
|
|
|
10,070
|
|
|
20,294
|
|
|
19,120
|
|
||||
Total noninterest income
|
$
|
32,061
|
|
|
$
|
27,634
|
|
|
$
|
58,778
|
|
|
$
|
52,350
|
|
|
2019
|
|
2018
|
||||||||||
|
Shares
|
|
Weighted-Average Grant Date
Fair Value |
|
Shares
|
|
Weighted-Average Grant Date
Fair Value |
||||||
Outstanding at January 1,
|
266,995
|
|
|
$
|
43.89
|
|
|
301,578
|
|
|
$
|
34.74
|
|
Granted
|
157,583
|
|
|
45.00
|
|
|
113,738
|
|
|
55.16
|
|
||
Vested
|
(139,623
|
)
|
|
38.82
|
|
|
(124,764
|
)
|
|
32.64
|
|
||
Forfeited
|
(18,015
|
)
|
|
49.31
|
|
|
(25,011
|
)
|
|
45.50
|
|
||
Outstanding at June 30,
|
266,940
|
|
|
$
|
46.97
|
|
|
265,541
|
|
|
$
|
43.49
|
|
Assets
|
|
Classification
|
|
June 30, 2019
|
||
Operating lease assets
|
|
Other assets
|
|
$
|
21,076
|
|
Total lease right-of-use assets
|
|
|
|
$
|
21,076
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Operating lease liabilities
|
|
Accrued expenses and other liabilities
|
|
$
|
22,673
|
|
Total lease liabilities
|
|
|
|
$
|
22,673
|
|
|
|
Income Statement Category
|
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||
Lease Cost
|
|
|
|
|
|
|
||||
Operating lease cost
|
|
Occupancy expense
|
|
$
|
1,462
|
|
|
$
|
2,867
|
|
Variable lease cost
|
|
Occupancy expense
|
|
32
|
|
|
67
|
|
||
Total lease cost
|
|
|
|
$
|
1,494
|
|
|
$
|
2,934
|
|
Supplemental Information
|
|
|
|
|
|
|
||||
Noncash reduction of ROU assets arising from lease modifications
|
|
Occupancy expense
|
|
$
|
2,464
|
|
|
$
|
2,464
|
|
Noncash reduction lease liabilities arising from lease modifications
|
|
Occupancy expense
|
|
2,487
|
|
|
2,487
|
|
||
|
|
|
|
|
|
|
||||
Supplemental balance sheet information
|
|
|
|
As of June 30, 2019
|
||||||
Weighted-average remaining operating lease term (in years)
|
|
|
|
5.92
|
|
|||||
|
||||||||||
Weighted-average discount rate for operating leases
|
|
|
|
3.00
|
%
|
Six months ending December 31, 2019
|
$
|
2,976
|
|
Year ending December 31,
|
|
||
2020
|
5,793
|
|
|
2021
|
5,312
|
|
|
2022
|
3,343
|
|
|
2023
|
1,883
|
|
|
Thereafter
|
5,502
|
|
|
Total lease payments
|
$
|
24,809
|
|
Less interest
|
(2,136
|
)
|
|
Present value of lease liabilities
|
$
|
22,673
|
|
2019
|
$
|
5,776
|
|
2020
|
5,493
|
|
|
2021
|
5,102
|
|
|
2022
|
3,241
|
|
|
2023
|
2,297
|
|
|
Thereafter
|
12,419
|
|
|
|
$
|
34,328
|
|
•
|
On January 11, 2019, Heartland completed the sale of the loan portfolios of its consumer finance subsidiaries, Citizens Finance Co. and Citizens Finance of Illinois Co. (collectively, "Citizens"). The loan portfolios had a fair value of $67.2 million.
|
•
|
On February 22, 2019, Heartland completed the sale of two branch locations of Wisconsin Bank & Trust. The sale included loans of $11.7 million and deposits of $48.6 million. Heartland recorded a net gain of $3.2 million in the first quarter of 2019, which consisted of a gain of $3.5 million and write-off $329,000 of core deposit intangibles.
|
•
|
On April 30, 2019, Dubuque Bank and Trust Company closed on the sale of substantially all its mortgage servicing rights portfolio, which contained loans with an unpaid principal balance of approximately $3.31 billion to PNC Bank, N.A. The transaction qualified as a sale, and $20.6 million of mortgage servicing rights were de-recognized on the consolidated balance sheet as of June 30, 2019. Cash of approximately $34.8 million was received during the second quarter, and Heartland recorded an estimated gain on the sale of this portfolio of approximately $13.3 million. A payable of approximately $334,000 was recorded as of June 30, 2019, due to the timing of the servicing transfer per the terms of the sale agreement. In the agreement, which includes customary terms and conditions, Dubuque Bank and Trust Company provided interim servicing of the loans until the transfer date, which was August 1, 2019.
|
•
|
On May 3, 2019, Heartland completed the sale of two branches of Illinois Bank & Trust. The sale included loans of $1.2 million and deposits of $11.4 million. Heartland recorded a net gain of $340,000 in the second quarter of 2019, which consisted of a gain of $519,000 and write-off of $179,000 of core deposit intangibles.
|
•
|
On May 17, 2019, Heartland completed the sale of one branch of Citywide Banks. The sale included loans of $8.4 million and deposits of $24.4 million. Heartland recorded a net gain of $1.6 million in the second quarter of 2019, which consisted of a gain of $1.8 million and write-off of $174,000 of core deposit intangibles.
|
•
|
On May 31, 2019, Heartland completed the sale of two branch locations of Dubuque Bank and Trust Company, which operated as First Community Bank, in Keokuk, Iowa. The sale included loans of $17.5 million and deposits of $72.0 million. Heartland recorded a gain of $4.2 million in the second quarter of 2019.
|
•
|
a project called Operation Customer Compass, which is focused on streamlining and automating processes. This project is intended to create back-office capacity for growth and enhance the customer experience. Expense reductions of over $10 million annually are expected to be realized once the project is completed, which is anticipated to be the end of 2019;
|
•
|
an upgrade to the existing customer relationship management system to the Salesforce Platform, which is an industry leader for relationship management, and,
|
•
|
the implementation of nCino, a premiere commercial loan origination system.
|
FINANCIAL HIGHLIGHTS
|
|||||||||||||||
(Dollars in thousands, except per share data)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
STATEMENT OF INCOME DATA
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
127,003
|
|
|
$
|
113,409
|
|
|
$
|
247,724
|
|
|
$
|
214,623
|
|
Interest expense
|
20,295
|
|
|
12,000
|
|
|
38,061
|
|
|
21,630
|
|
||||
Net interest income
|
106,708
|
|
|
101,409
|
|
|
209,663
|
|
|
192,993
|
|
||||
Provision for loan losses
|
4,918
|
|
|
4,831
|
|
|
6,553
|
|
|
9,094
|
|
||||
Net interest income after provision for loan losses
|
101,790
|
|
|
96,578
|
|
|
203,110
|
|
|
183,899
|
|
FINANCIAL HIGHLIGHTS
|
|||||||||||||||
(Dollars in thousands, except per share data)
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Noninterest income
|
32,061
|
|
|
27,634
|
|
|
58,778
|
|
|
52,350
|
|
||||
Noninterest expenses
|
75,098
|
|
|
88,882
|
|
|
163,328
|
|
|
172,528
|
|
||||
Income taxes
|
13,584
|
|
|
7,451
|
|
|
21,894
|
|
|
12,574
|
|
||||
Net income
|
45,169
|
|
|
27,879
|
|
|
76,666
|
|
|
51,147
|
|
||||
Preferred dividends
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Net income available to common stockholders
|
$
|
45,169
|
|
|
$
|
27,866
|
|
|
$
|
76,666
|
|
|
$
|
51,121
|
|
|
|
|
|
|
|
|
|
||||||||
Key Performance Ratios
|
|
|
|
|
|
|
|
||||||||
Annualized return on average assets
|
1.55
|
%
|
|
1.05
|
%
|
|
1.35
|
%
|
|
1.01
|
%
|
||||
Annualized return on average common equity (GAAP)
|
12.56
|
%
|
|
9.81
|
%
|
|
11.13
|
%
|
|
9.58
|
%
|
||||
Annualized return on average tangible common equity (non-GAAP)(1)
|
19.52
|
%
|
|
15.50
|
%
|
|
17.49
|
%
|
|
14.70
|
%
|
||||
Annualized ratio of net charge-offs to average loans
|
0.19
|
%
|
|
0.12
|
%
|
|
0.12
|
%
|
|
0.10
|
%
|
||||
Annualized net interest margin (GAAP)
|
4.06
|
%
|
|
4.23
|
%
|
|
4.09
|
%
|
|
4.21
|
%
|
||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
|
4.10
|
%
|
|
4.30
|
%
|
|
4.14
|
%
|
|
4.28
|
%
|
||||
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)
|
64.81
|
%
|
|
64.94
|
%
|
|
65.01
|
%
|
|
66.48
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
|
|
|
|
|
|
|
|
||||||||
Net income available to common shareholders (GAAP)
|
$
|
45,169
|
|
|
$
|
27,866
|
|
|
$
|
76,666
|
|
|
$
|
51,121
|
|
Plus core deposit and customer relationship intangibles amortization, net of tax(2)
|
2,617
|
|
|
1,796
|
|
|
4,862
|
|
|
3,268
|
|
||||
Adjusted net income available to common shareholders (non-GAAP)
|
$
|
47,786
|
|
|
$
|
29,662
|
|
|
$
|
81,528
|
|
|
$
|
54,389
|
|
|
|
|
|
|
|
|
|
||||||||
Average common stockholders' equity (GAAP)
|
$
|
1,442,388
|
|
|
$
|
1,139,876
|
|
|
$
|
1,389,612
|
|
|
$
|
1,076,083
|
|
Less average goodwill
|
410,642
|
|
|
325,781
|
|
|
401,207
|
|
|
288,185
|
|
||||
Less average other intangibles, net
|
49,868
|
|
|
46,363
|
|
|
48,188
|
|
|
41,961
|
|
||||
Average tangible common equity (non-GAAP)
|
$
|
981,878
|
|
|
$
|
767,732
|
|
|
$
|
940,217
|
|
|
$
|
745,937
|
|
Annualized return on average common equity (GAAP)
|
12.56
|
%
|
|
9.81
|
%
|
|
11.13
|
%
|
|
9.58
|
%
|
||||
Annualized return on average tangible common equity (non-GAAP)
|
19.52
|
%
|
|
15.50
|
%
|
|
17.49
|
%
|
|
14.70
|
%
|
||||
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
|
|
|
|
|
|
|
|
||||||||
Net Interest Income (GAAP)
|
$
|
106,708
|
|
|
$
|
101,409
|
|
|
$
|
209,663
|
|
|
$
|
192,993
|
|
Plus tax-equivalent adjustment(2)
|
1,268
|
|
|
1,575
|
|
|
2,680
|
|
|
3,119
|
|
||||
Net interest income - tax-equivalent (non-GAAP)
|
$
|
107,976
|
|
|
$
|
102,984
|
|
|
$
|
212,343
|
|
|
$
|
196,112
|
|
|
|
|
|
|
|
|
|
||||||||
Average earning assets
|
$
|
10,552,166
|
|
|
$
|
9,614,800
|
|
|
$
|
10,342,229
|
|
|
$
|
9,238,391
|
|
Net interest margin (GAAP)
|
4.06
|
%
|
|
4.23
|
%
|
|
4.09
|
%
|
|
4.21
|
%
|
||||
Net interest margin, fully tax-equivalent (non-GAAP)
|
4.10
|
%
|
|
4.30
|
%
|
|
4.14
|
%
|
|
4.28
|
%
|
||||
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
As Of and For the Quarter Ended
|
||||||||||||||||||
|
6/30/2019
|
|
3/31/2019
|
|
12/31/2018
|
|
9/30/2018
|
|
6/30/2018
|
||||||||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
$
|
2,681,419
|
|
|
$
|
2,516,055
|
|
|
$
|
2,715,388
|
|
|
$
|
2,540,779
|
|
|
$
|
2,468,113
|
|
Loans held for sale
|
34,575
|
|
|
69,716
|
|
|
119,801
|
|
|
77,727
|
|
|
55,684
|
|
|||||
Total loans receivable(1)
|
7,853,051
|
|
|
7,331,544
|
|
|
7,407,697
|
|
|
7,365,493
|
|
|
7,477,697
|
|
|||||
Allowance for loan losses
|
63,850
|
|
|
62,639
|
|
|
61,963
|
|
|
61,221
|
|
|
61,324
|
|
|||||
Total assets
|
12,160,290
|
|
|
11,312,495
|
|
|
11,408,006
|
|
|
11,335,132
|
|
|
11,301,920
|
|
|||||
Total deposits(2)
|
10,108,557
|
|
|
9,352,942
|
|
|
9,396,429
|
|
|
9,512,163
|
|
|
9,489,144
|
|
|||||
Long-term obligations
|
282,863
|
|
|
268,312
|
|
|
274,905
|
|
|
277,563
|
|
|
258,708
|
|
|||||
Preferred equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
938
|
|
|||||
Common stockholders’ equity
|
1,521,787
|
|
|
1,372,102
|
|
|
1,325,175
|
|
|
1,280,393
|
|
|
1,254,809
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Book value per common share (GAAP)
|
$
|
41.48
|
|
|
$
|
39.65
|
|
|
$
|
38.44
|
|
|
$
|
37.14
|
|
|
$
|
36.44
|
|
Tangible book value per common share (non-GAAP)(3)
|
$
|
28.40
|
|
|
$
|
27.04
|
|
|
$
|
25.70
|
|
|
$
|
24.33
|
|
|
$
|
23.53
|
|
Common shares outstanding, net of treasury stock
|
36,690,061
|
|
|
34,603,611
|
|
|
34,477,499
|
|
|
34,473,029
|
|
|
34,438,445
|
|
|||||
Tangible common equity ratio (non-GAAP)(3)
|
8.92
|
%
|
|
8.60
|
%
|
|
8.08
|
%
|
|
7.70
|
%
|
|
7.46
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stockholders' equity (GAAP)
|
$
|
1,521,787
|
|
|
$
|
1,372,102
|
|
|
$
|
1,325,175
|
|
|
$
|
1,280,393
|
|
|
$
|
1,254,809
|
|
Less goodwill
|
427,097
|
|
|
391,668
|
|
|
391,668
|
|
|
391,668
|
|
|
391,668
|
|
|||||
Less core deposit and customer relationship intangibles, net
|
52,718
|
|
|
44,637
|
|
|
47,479
|
|
|
50,071
|
|
|
52,698
|
|
|||||
Tangible common stockholders' equity (non-GAAP)
|
$
|
1,041,972
|
|
|
$
|
935,797
|
|
|
$
|
886,028
|
|
|
$
|
838,654
|
|
|
$
|
810,443
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common shares outstanding, net of treasury stock
|
36,690,061
|
|
|
34,603,611
|
|
|
34,477,499
|
|
|
34,473,029
|
|
|
34,438,445
|
|
|||||
Common stockholders' equity (book value) per share (GAAP)
|
$
|
41.48
|
|
|
$
|
39.65
|
|
|
$
|
38.44
|
|
|
$
|
37.14
|
|
|
$
|
36.44
|
|
Tangible book value per common share (non-GAAP)
|
$
|
28.40
|
|
|
$
|
27.04
|
|
|
$
|
25.70
|
|
|
$
|
24.33
|
|
|
$
|
23.53
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible common stockholders' equity (non-GAAP)
|
$
|
1,041,972
|
|
|
$
|
935,797
|
|
|
$
|
886,028
|
|
|
$
|
838,654
|
|
|
$
|
810,443
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets (GAAP)
|
$
|
12,160,290
|
|
|
$
|
11,312,495
|
|
|
$
|
11,408,006
|
|
|
$
|
11,335,132
|
|
|
$
|
11,301,920
|
|
Less goodwill
|
427,097
|
|
|
391,668
|
|
|
391,668
|
|
|
391,668
|
|
|
391,668
|
|
|||||
Less core deposit and customer relationship intangibles, net
|
52,718
|
|
|
44,637
|
|
|
47,479
|
|
|
50,071
|
|
|
52,698
|
|
|||||
Total tangible assets (non-GAAP)
|
$
|
11,680,475
|
|
|
$
|
10,876,190
|
|
|
$
|
10,968,859
|
|
|
$
|
10,893,393
|
|
|
$
|
10,857,554
|
|
Tangible common equity ratio (non-GAAP)
|
8.92
|
%
|
|
8.60
|
%
|
|
8.08
|
%
|
|
7.70
|
%
|
|
7.46
|
%
|
|||||
|
|||||||||||||||||||
(1) Excludes loans held for sale.
|
|||||||||||||||||||
(2) Excludes deposits held for sale.
|
|||||||||||||||||||
(3) Refer to the "Non-GAAP Financial Measures" section after these financial tables for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.
|
•
|
Annualized return on average tangible common equity is net income available to common stockholders plus core deposit and customer relationship intangibles amortization, net of tax, divided by average common stockholders' equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
|
•
|
Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
|
•
|
Efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this Quarterly Report on Form 10-Q.
|
•
|
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 measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
|
•
|
Tangible common equity ratio is total common stockholders' equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
|
|
Three Months Ended
June 30, |
|
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees
|
$
|
14,629
|
|
|
$
|
12,072
|
|
|
$
|
2,557
|
|
|
21
|
%
|
Loan servicing income
|
1,338
|
|
|
1,807
|
|
|
(469
|
)
|
|
(26
|
)
|
|||
Trust fees
|
4,825
|
|
|
4,615
|
|
|
210
|
|
|
5
|
|
|||
Brokerage and insurance commissions
|
1,028
|
|
|
877
|
|
|
151
|
|
|
17
|
|
|||
Securities gains/(losses), net
|
3,580
|
|
|
(259
|
)
|
|
3,839
|
|
|
1,482
|
|
|||
Unrealized gain on equity securities, net
|
112
|
|
|
71
|
|
|
41
|
|
|
58
|
|
|||
Net gains on sale of loans held for sale
|
4,343
|
|
|
6,800
|
|
|
(2,457
|
)
|
|
(36
|
)
|
|||
Valuation adjustment on servicing rights
|
(364
|
)
|
|
(216
|
)
|
|
(148
|
)
|
|
69
|
|
|||
Income on bank owned life insurance
|
888
|
|
|
700
|
|
|
188
|
|
|
27
|
|
|||
Other noninterest income
|
1,682
|
|
|
1,167
|
|
|
515
|
|
|
44
|
|
|||
Total noninterest income
|
$
|
32,061
|
|
|
$
|
27,634
|
|
|
$
|
4,427
|
|
|
16
|
%
|
|
|
Six Months Ended
June 30, |
|
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees
|
$
|
27,423
|
|
|
$
|
22,151
|
|
|
$
|
5,272
|
|
|
24
|
%
|
Loan servicing income
|
3,067
|
|
|
3,561
|
|
|
(494
|
)
|
|
(14
|
)
|
|||
Trust fees
|
9,299
|
|
|
9,295
|
|
|
4
|
|
|
—
|
|
|||
Brokerage and insurance commissions
|
1,762
|
|
|
1,784
|
|
|
(22
|
)
|
|
(1
|
)
|
|||
Securities gains, net
|
5,155
|
|
|
1,182
|
|
|
3,973
|
|
|
336
|
|
|||
Unrealized gain on equity securities, net
|
370
|
|
|
43
|
|
|
327
|
|
|
760
|
|
|||
Net gains on sale of loans held for sale
|
7,519
|
|
|
10,851
|
|
|
(3,332
|
)
|
|
(31
|
)
|
|||
Valuation adjustment on servicing rights
|
(953
|
)
|
|
(218
|
)
|
|
(735
|
)
|
|
(337
|
)
|
|||
Income on bank owned life insurance
|
1,787
|
|
|
1,314
|
|
|
473
|
|
|
36
|
|
|||
Other noninterest income
|
3,349
|
|
|
2,387
|
|
|
962
|
|
|
40
|
|
|||
Total noninterest income
|
$
|
58,778
|
|
|
$
|
52,350
|
|
|
$
|
6,428
|
|
|
12
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees on deposit accounts
|
$
|
3,186
|
|
|
$
|
2,794
|
|
|
$
|
392
|
|
|
14
|
%
|
Overdraft fees
|
2,876
|
|
|
2,518
|
|
|
358
|
|
|
14
|
|
|||
Customer service and other service fees
|
84
|
|
|
88
|
|
|
(4
|
)
|
|
(5
|
)
|
|||
Credit card fee income
|
4,270
|
|
|
3,114
|
|
|
1,156
|
|
|
37
|
|
|||
Debit card income
|
4,213
|
|
|
3,558
|
|
|
655
|
|
|
18
|
|
|||
Total service charges and fees
|
$
|
14,629
|
|
|
$
|
12,072
|
|
|
$
|
2,557
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Service charges and fees on deposit accounts
|
$
|
6,163
|
|
|
$
|
5,412
|
|
|
$
|
751
|
|
|
14
|
%
|
Overdraft fees
|
5,619
|
|
|
4,726
|
|
|
893
|
|
|
19
|
|
|||
Customer service and other service fees
|
166
|
|
|
166
|
|
|
—
|
|
|
—
|
|
|||
Credit card fee income
|
7,619
|
|
|
5,381
|
|
|
2,238
|
|
|
42
|
|
|||
Debit card income
|
7,856
|
|
|
6,466
|
|
|
1,390
|
|
|
21
|
|
|||
Total service charges and fees
|
$
|
27,423
|
|
|
$
|
22,151
|
|
|
$
|
5,272
|
|
|
24
|
%
|
|
Three Months Ended
June 30, |
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Commercial and agricultural loan servicing fees(1)
|
$
|
735
|
|
|
$
|
924
|
|
|
$
|
(189
|
)
|
|
(20
|
)%
|
Residential mortgage servicing fees
|
1,355
|
|
|
2,390
|
|
|
(1,035
|
)
|
|
(43
|
)
|
|||
Mortgage servicing rights amortization
|
(752
|
)
|
|
(1,507
|
)
|
|
755
|
|
|
50
|
|
|||
Total loan servicing income
|
$
|
1,338
|
|
|
$
|
1,807
|
|
|
$
|
(469
|
)
|
|
(26
|
)%
|
|
||||||||||||||
|
Six Months Ended
June 30, |
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Commercial and agricultural loan servicing fees(1)
|
$
|
1,496
|
|
|
$
|
1,673
|
|
|
$
|
(177
|
)
|
|
(11
|
)%
|
Residential mortgage servicing fees
|
3,965
|
|
|
4,640
|
|
|
(675
|
)
|
|
(15
|
)
|
|||
Mortgage servicing rights amortization
|
(2,394
|
)
|
|
(2,752
|
)
|
|
358
|
|
|
13
|
|
|||
Total loan servicing income
|
$
|
3,067
|
|
|
$
|
3,561
|
|
|
$
|
(494
|
)
|
|
(14
|
)%
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes servicing fees for commercial, commercial real estate, agricultural and agricultural real estate loans.
|
|
Three Months Ended
June 30, |
|
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Salaries and employee benefits
|
$
|
49,995
|
|
|
$
|
50,758
|
|
|
$
|
(763
|
)
|
|
(2
|
)%
|
Occupancy
|
6,436
|
|
|
6,315
|
|
|
121
|
|
|
2
|
|
|||
Furniture and equipment
|
3,220
|
|
|
3,184
|
|
|
36
|
|
|
1
|
|
|||
Professional fees
|
14,968
|
|
|
10,632
|
|
|
4,336
|
|
|
41
|
|
|||
Advertising
|
2,661
|
|
|
2,145
|
|
|
516
|
|
|
24
|
|
|||
Core deposit and customer relationship intangibles amortization
|
3,313
|
|
|
2,274
|
|
|
1,039
|
|
|
46
|
|
|||
Other real estate and loan collection expenses
|
162
|
|
|
948
|
|
|
(786
|
)
|
|
(83
|
)
|
|||
(Gain)/loss on sales/valuations of assets, net
|
(18,286
|
)
|
|
1,528
|
|
|
(19,814
|
)
|
|
(1,297
|
)
|
|||
Restructuring expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other noninterest expenses
|
12,629
|
|
|
11,098
|
|
|
1,531
|
|
|
14
|
|
|||
Total noninterest expenses
|
$
|
75,098
|
|
|
$
|
88,882
|
|
|
$
|
(13,784
|
)
|
|
(16
|
)%
|
|
Six Months Ended
June 30, |
|
|
|||||||||||
|
2019
|
|
2018
|
|
Change
|
|
% Change
|
|||||||
Salaries and employee benefits
|
$
|
100,280
|
|
|
$
|
99,468
|
|
|
$
|
812
|
|
|
1
|
%
|
Occupancy
|
13,043
|
|
|
12,358
|
|
|
685
|
|
|
6
|
|
|||
Furniture and equipment
|
5,912
|
|
|
5,933
|
|
|
(21
|
)
|
|
—
|
|
|||
Professional fees
|
26,347
|
|
|
20,080
|
|
|
6,267
|
|
|
31
|
|
|||
Advertising
|
4,986
|
|
|
4,085
|
|
|
901
|
|
|
22
|
|
|||
Core deposit and customer relationship intangibles amortization
|
6,155
|
|
|
4,137
|
|
|
2,018
|
|
|
49
|
|
|||
Other real estate and loan collection expenses
|
863
|
|
|
1,680
|
|
|
(817
|
)
|
|
(49
|
)
|
|||
Gain/(loss) on sales/valuations of assets, net
|
(21,290
|
)
|
|
1,331
|
|
|
(22,621
|
)
|
|
(1,700
|
)
|
|||
Restructuring expenses
|
3,227
|
|
|
2,564
|
|
|
663
|
|
|
26
|
|
|||
Other noninterest expenses
|
23,805
|
|
|
20,892
|
|
|
2,913
|
|
|
14
|
|
|||
Total noninterest expenses
|
$
|
163,328
|
|
|
$
|
172,528
|
|
|
$
|
(9,200
|
)
|
|
(5
|
)%
|
•
|
Commercial and commercial real estate loans totaled $6.23 billion at June 30, 2019, compared to $5.73 billion at December 31, 2018, which was an increase of $498.7 million or 9%. Excluding $14.9 million of commercial and commercial real estate loans classified as held for sale during the first quarter and $480.1 million of loans acquired in the BVBC transaction, commercial and commercial real estate loans increased $33.4 million or 1% since year-end.
|
•
|
Agricultural and agricultural real estate loans totaled $549.4 million at June 30, 2019, compared to $565.4 million at December 31, 2018, which was a decrease of $16.0 million or 3%. Excluding $6.6 million of agricultural and agricultural real estate loans classified as held for sale during the first quarter of 2019 and $1.8 million of loans acquired in the BVBC transaction, agricultural and agricultural real estate loans decreased $11.2 million or 2% since December 31, 2018.
|
•
|
Residential mortgage loans decreased $59.9 million or 9% to $613.7 million at June 30, 2019, from $673.6 million at December 31, 2018. Excluding $2.0 million of residential mortgage loans classified as held for sale during the first quarter of 2019 and $17.2 million of loans acquired in the BVBC transaction, residential mortgage loans decreased $75.1 million or 11% since year-end.
|
•
|
Consumer loans increased $21.6 million or 5% to $461.8 million at June 30, 2019, compared to $440.2 million at December 31, 2018. Excluding $8.6 million of loans classified as held for sale during the first quarter of 2019 and $42.9 million of loans acquired in the BVBC transaction, consumer loans decreased $12.6 million or 3% since year-end.
|
LOAN PORTFOLIO
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
Loans receivable held to maturity:
|
|
|
|
|
|
|
|
||||||
Commercial
|
$
|
2,238,453
|
|
|
28.50
|
%
|
|
$
|
2,020,231
|
|
|
27.26
|
%
|
Commercial real estate
|
3,991,919
|
|
|
50.82
|
|
|
3,711,481
|
|
|
50.08
|
|
||
Agricultural and agricultural real estate
|
549,404
|
|
|
6.99
|
|
|
565,408
|
|
|
7.63
|
|
||
Residential mortgage
|
613,707
|
|
|
7.81
|
|
|
673,603
|
|
|
9.09
|
|
||
Consumer
|
461,802
|
|
|
5.88
|
|
|
440,158
|
|
|
5.94
|
|
||
Gross loans receivable held to maturity
|
7,855,285
|
|
|
100.00
|
%
|
|
7,410,881
|
|
|
100.00
|
%
|
||
Unearned discount
|
(942
|
)
|
|
|
|
(1,624
|
)
|
|
|
||||
Deferred loan fees
|
(1,292
|
)
|
|
|
|
(1,560
|
)
|
|
|
||||
Total net loans receivable held to maturity
|
7,853,051
|
|
|
|
|
7,407,697
|
|
|
|
||||
Allowance for loan losses
|
(63,850
|
)
|
|
|
|
(61,963
|
)
|
|
|
||||
Loans receivable, net
|
$
|
7,789,201
|
|
|
|
|
$
|
7,345,734
|
|
|
|
|
LOANS SECURED BY REAL ESTATE
|
|||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||
Residential real estate, excluding residential construction and residential lot loans
|
$
|
1,036,564
|
|
|
$
|
1,119,942
|
|
Industrial, manufacturing, business and commercial
|
644,914
|
|
|
805,265
|
|
||
Agriculture
|
266,341
|
|
|
270,023
|
|
||
Retail
|
454,437
|
|
|
435,680
|
|
||
Office
|
485,121
|
|
|
485,262
|
|
||
Land development and lots
|
213,923
|
|
|
216,665
|
|
||
Hotel, resort and hospitality
|
293,626
|
|
|
233,735
|
|
||
Multi-family
|
332,148
|
|
|
311,319
|
|
||
Food and beverage
|
143,638
|
|
|
130,981
|
|
||
Warehousing
|
199,733
|
|
|
186,436
|
|
||
Health services
|
206,942
|
|
|
182,882
|
|
||
Residential construction
|
147,932
|
|
|
171,116
|
|
||
All other
|
273,710
|
|
|
255,145
|
|
||
Loans acquired in the quarter
|
355,305
|
|
|
—
|
|
||
Total loans secured by real estate
|
$
|
5,054,334
|
|
|
$
|
4,804,451
|
|
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
|
Three Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
62,639
|
|
|
$
|
58,656
|
|
Provision for loan losses
|
4,918
|
|
|
4,831
|
|
||
Recoveries on loans previously charged off
|
(4,780
|
)
|
|
(3,164
|
)
|
||
Charge-offs on loans
|
1,073
|
|
|
1,001
|
|
||
Balance at end of period
|
$
|
63,850
|
|
|
$
|
61,324
|
|
Annualized ratio of net charge offs to average loans
|
0.19
|
%
|
|
0.12
|
%
|
||
|
|
|
|
||||
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
61,963
|
|
|
$
|
55,686
|
|
Provision for loan losses
|
6,553
|
|
|
9,094
|
|
||
Recoveries on loans previously charged off
|
2,064
|
|
|
1,932
|
|
||
Charge-offs on loans
|
(6,730
|
)
|
|
(5,388
|
)
|
||
Balance at end of period
|
$
|
63,850
|
|
|
$
|
61,324
|
|
Annualized ratio of net charge offs to average loans
|
0.12
|
%
|
|
0.10
|
%
|
SECURITIES PORTFOLIO COMPOSITION
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
U.S. government corporations and agencies
|
$
|
18,621
|
|
|
0.69
|
%
|
|
$
|
31,951
|
|
|
1.18
|
%
|
Mortgage and asset-backed securities
|
2,193,326
|
|
|
81.80
|
|
|
2,026,698
|
|
|
74.64
|
|
||
Obligation of states and political subdivisions
|
419,949
|
|
|
15.66
|
|
|
611,257
|
|
|
22.50
|
|
||
Equity securities
|
18,157
|
|
|
0.68
|
|
|
17,086
|
|
|
0.63
|
|
||
Other securities
|
31,366
|
|
|
1.17
|
|
|
28,396
|
|
|
1.05
|
|
||
Total securities
|
$
|
2,681,419
|
|
|
100.00
|
%
|
|
$
|
2,715,388
|
|
|
100.00
|
%
|
•
|
Demand deposits increased $162.0 million or 5% to $3.43 billion at June 30, 2019, compared to $3.26 billion at December 31, 2018. Excluding $164.9 million of demand deposits acquired in the BVBC transaction and $17.3 million of demand deposits classified as held for sale in the first quarter of 2019, demand deposits increased $14.4 million or less than 1% since year-end 2018.
|
•
|
Savings deposits increased $425.5 million or 8% to $5.53 billion at June 30, 2019, from $5.11 billion at December 31, 2018. Excluding savings deposits of $346.2 million acquired in the BVBC transaction and $47.8 million of savings deposits classified as held for sale in the first quarter of 2019, savings deposits increased $127.2 million or 2% since year-end 2018.
|
•
|
Time deposits increased $124.6 million or 12% to $1.15 billion at June 30, 2019 from $1.02 billion at December 31, 2018. Excluding time deposits of $106.0 million acquired in the BVBC transaction and $11.9 million of time deposits classified as held for sale in the first quarter of 2019, time deposits increased $30.4 million or 3% since year-end 2018. The increase in time deposits was primarily due to an increase in brokered time deposits of $30.9 million.
|
DEPOSITS
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||
Demand
|
$
|
3,426,758
|
|
|
33.90
|
%
|
|
$
|
3,264,737
|
|
|
34.74
|
%
|
Savings
|
5,533,503
|
|
|
54.74
|
|
|
5,107,962
|
|
|
54.37
|
|
||
Time
|
1,148,296
|
|
|
11.36
|
|
|
1,023,730
|
|
|
10.89
|
|
||
Total
|
$
|
10,108,557
|
|
|
100.00
|
%
|
|
$
|
9,396,429
|
|
|
100.00
|
%
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Securities sold under agreement to repurchase
|
$
|
90,184
|
|
|
$
|
80,124
|
|
Federal funds purchased
|
4,600
|
|
|
35,400
|
|
||
Advances from the FHLB
|
—
|
|
|
100,838
|
|
||
Other short-term borrowings
|
12,476
|
|
|
10,648
|
|
||
Total
|
$
|
107,260
|
|
|
$
|
227,010
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Advances from the FHLB
|
$
|
3,305
|
|
|
$
|
3,399
|
|
Trust preferred securities
|
147,430
|
|
|
130,913
|
|
||
Senior notes
|
—
|
|
|
5,000
|
|
||
Note payable to unaffiliated bank
|
54,917
|
|
|
58,417
|
|
||
Contracts payable for purchase of real estate and other assets
|
1,917
|
|
|
1,953
|
|
||
Subordinated notes
|
74,214
|
|
|
74,143
|
|
||
Other borrowings
|
1,080
|
|
|
1,080
|
|
||
Total
|
$
|
282,863
|
|
|
$
|
274,905
|
|
|
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, 2019
|
14.76
|
%
|
|
13.24
|
%
|
|
11.61
|
%
|
|
10.66
|
%
|
||||
Minimum capital requirement
|
8.00
|
%
|
|
6.00
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
||||
Well capitalized requirement
|
10.00
|
%
|
|
8.00
|
%
|
|
6.50
|
%
|
|
5.00
|
%
|
||||
Minimum capital requirement, including fully-phased in capital conservation buffer
|
10.50
|
%
|
|
8.50
|
%
|
|
7.00
|
%
|
|
N/A
|
|
||||
Risk-weighted assets
|
$
|
9,056,123
|
|
|
$
|
9,056,123
|
|
|
$
|
9,056,123
|
|
|
N/A
|
|
|
Average Assets
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
11,243,148
|
|
|||
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
13.72
|
%
|
|
12.16
|
%
|
|
10.66
|
%
|
|
9.73
|
%
|
||||
Minimum capital requirement
|
8.00
|
%
|
|
6.00
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
||||
Well capitalized requirement
|
10.00
|
%
|
|
8.00
|
%
|
|
6.50
|
%
|
|
5.00
|
%
|
||||
Minimum capital requirement, including fully-phased in capital conservation buffer (2019)
|
10.50
|
%
|
|
8.50
|
%
|
|
7.00
|
%
|
|
N/A
|
|
||||
Risk-weighted assets
|
$
|
8,756,130
|
|
|
$
|
8,756,130
|
|
|
$
|
8,756,130
|
|
|
N/A
|
|
|
Average Assets
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
$
|
10,946,440
|
|
|
2019
|
|
2018
|
||||||||||
|
Net Interest
Margin
|
|
% Change
From Base
|
|
Net Interest
Margin
|
|
% Change
From Base
|
||||||
Year 1
|
|
|
|
|
|
|
|
||||||
Down 100 Basis Points
|
$
|
414,461
|
|
|
(3.28
|
)%
|
|
$
|
368,974
|
|
|
(7.85
|
)%
|
Base
|
$
|
428,520
|
|
|
|
|
$
|
400,387
|
|
|
|
||
Up 200 Basis Points
|
$
|
455,185
|
|
|
6.22
|
%
|
|
$
|
403,254
|
|
|
0.72
|
%
|
Year 2
|
|
|
|
|
|
|
|
|
|||||
Down 100 Basis Points
|
$
|
385,037
|
|
|
(10.15
|
)%
|
|
$
|
366,246
|
|
|
(8.53
|
)%
|
Base
|
$
|
425,238
|
|
|
(0.77
|
)%
|
|
$
|
409,788
|
|
|
2.35
|
%
|
Up 200 Basis Points
|
$
|
483,672
|
|
|
12.87
|
%
|
|
$
|
436,963
|
|
|
9.14
|
%
|
•
|
Heartland's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) were effective.
|
•
|
During the quarter ended June 30, 2019, there have been no changes in Heartland's internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that have materially affected, or are reasonably likely to materially affect, Heartland's internal control over financial reporting.
|
(2)
|
||
|
|
|
(2)
|
||
|
|
|
(1)(2)
|
||
|
|
|
(1)(2)
|
||
|
|
|
(1)(2)
|
||
|
|
|
(1)(2)
|
||
|
|
|
(1)(2)
|
||
|
|
|
(1)
|
||
|
|
|
(2)
|
||
|
|
|
(2)
|
||
|
|
|
(2)
|
||
|
|
|
(2)
|
||
|
|
|
101
|
|
Financial statement formatted in Inline Extensible Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity, and (vi) the Notes to Consolidated Financial Statements.
|
104
|
|
Cover page formatted in Inline Extensible Business Reporting Language
|
HEARTLAND FINANCIAL USA, INC.
|
(Registrant)
|
|
|
/s/ Bruce K. Lee
|
By: Bruce K. Lee
|
President and Chief Executive Officer
|
(Principal Executive Officer and Duly Authorized Officer)
|
|
|
/s/ Bryan R. McKeag
|
By: Bryan R. McKeag
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer and Duly Authorized Officer)
|
|
|
/s/ Janet M. Quick
|
By: Janet M. Quick
|
Executive Vice President and Deputy Chief Financial Officer
|
(Principal Accounting Officer and Duly Authorized Officer)
|
|
Dated: August 7, 2019
|
|
/s/ Angela W. Kelley
|
|
Angela W. Kelley
Senior Vice President and Corporate Secretary
|
|
/s/ Angela W. Kelley
|
|
Angela W. Kelley
Senior Vice President and Corporate Secretary
|
Principal
|
Loan Date
|
Maturity
|
Loan No
|
Call/Coll
|
Account
|
Officer
|
Initials
|
$30,000,000.00
|
06-14-2019
|
06-14-2020
|
55120-0201
|
9A00 / AA
|
00000160370
|
00229
|
|
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, CFO of Heartland Financial USA, Inc.
|
By:
|
/s/ Ben A. Miller
|
|
Ben A. Miller, Asst. Vice President
|
Principal
$30,000,000.00
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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, 2019
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Assistant Vice President
|
Principal
$30,000,000.00
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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 Household Purposes or Personal Investment.
|
x
|
Business (Including Real Estate Investment).
|
Undisbursed Funds:
|
|
$
|
30,000,000.00
|
|
|
|
|||
Note Principal:
|
|
$
|
30,000,000.00
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
07-15-2019
|
Maturity
06-14-2020
|
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
|
|
|
Date of Agreement:
|
July 15 ,2019
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Asst. Vice President
|
Principal
$14,833,333.21
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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: $14,833,333.21
|
Date of Note: June 14, 2019
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$14,833,333.21
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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 $14,833,333.21 due on June 14, 2020. This is an unsecured renewal of the following described indebtedness: This Note replaces that certain Promissory Note dated June 14, 2018 in the amount of $38,333,333.25 between Borrower and Lender to mature on June 14, 2019.
|
||||
|
|
|
|
|
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
|
Principal
$14,833,333.21
|
Loan Date
06-14-2019
|
Maturity
06-14-2020
|
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 Household Purposes or Personal Investment.
|
x
|
Business (Including Real Estate Investment).
|
Undisbursed Funds:
|
|
$
|
14,833,333.21
|
|
|
|
|||
Note Principal:
|
|
$
|
14,833,333.21
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
14,833,333.21
|
Loan Date
07-15-2019
|
Maturity
06-14-2020
|
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:
|
$14,833,333.21
|
|
Date of Agreement:
|
July 15 ,2019
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Asst. Vice President
|
Principal
$40,000,000.00
|
Loan Date
05-10-2016
|
Maturity
05-10-2021
|
Loan No
55120-9002
|
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: $40,000,000.00
|
Date of Note: May 10, 2016
|
Payment Default. Borrower fails to make any payment when due under this Note.
|
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
|
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.
|
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
|
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
|
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.
|
Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.
|
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.
|
Insecurity. Lender in good faith believe itself insecure.
|
Loan No: 55120-9002
|
|
PROMISSORY NOTE
(Continued)
|
|
Page 2
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag EVP, CFO of Heartland Financial USA, Inc.
|
Principal
$40,000,000.00
|
Loan Date
05-10-2016
|
Maturity
05-10-2021
|
Loan No
55120-9002
|
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, Loan Officer
|
Principal
$27,666,666.79
|
Loan Date
06-14-2019
|
Maturity
05-10-2021
|
Loan No
55120-9002
|
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:
|
$
|
27,666,666.79
|
|
|
Date of Agreement:
|
June 14, 2019
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
By: /s/ Ben A. Miller
|
Ben A. Miller, Asst. Vice President
|
Principal
$30,000,000.00
|
Loan Date
07-24-2018
|
Maturity
07-24-2028
|
Loan No
55120-9003
|
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: July 28, 2018
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
07-24-2018
|
Maturity
07-24-2028
|
Loan No
55120-9003
|
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 Household Purposes or Personal Investment.
|
x
|
Business (Including Real Estate Investment).
|
Other Disbursements:
|
|
$
|
30,000,000.00
|
|
$30,000,000.00 to Borrower
|
|
|
||
|
|
|||
Note Principal:
|
|
$
|
30,000,000.00
|
|
By: /s/ Bryan R. McKeag
|
Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
|
Principal
$30,000,000.00
|
Loan Date
07-24-2018
|
Maturity
07-24-2028
|
Loan No
55120-9003
|
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
|
|
|
|
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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.
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As used in this Notice, the following terms have the following meanings:
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Loan. The term "Loan: means the following described loan: a Variable Rate Nondisclosable Loan to a Corporation for $30,000,000.00.
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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:
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LOAN DOCUMENTS
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Promissory Note
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Disbursement Request and Authorization
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Notice of Final Agreement
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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:
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Borrower:
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Heartland Financial USA, Inc.
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By: /s/ Bryan R. McKeag
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Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
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By: /s/ Ben A. Miller
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Ben A. Miller, Asst. Vice President
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Principal
$27,500,000.00
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Loan Date
06-14-2019
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Maturity
07-24-2028
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Loan No
55120-9003
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Call / Coll
9A00 / AA
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Account
00000160370
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Officer
00229
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Initials
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References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing “***” has been omitted due to text length limitations.
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Borrower:
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Heartland Financial USA, Inc.
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Lender:
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Bankers Trust Company
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1398 Central Avenue
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453 7th Street
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Dubuque, IA 52001
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P.O. Box 897
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Des Moines, IA 50304-0897
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(800) 362-1688
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Principal Amount:
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$
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27,500,000
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Date of Agreement:
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June 14, 2019
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By: /s/ Bryan R. McKeag
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Bryan R. McKeag, CFO of Heartland Financial USA, Inc.
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By: /s/ Ben A. Miller
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Ben A. Miller, Asst. Vice President
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1.
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I have reviewed this quarterly report on Form 10-Q of Heartland Financial USA, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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;
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 7, 2019
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/s/ Bruce K. Lee
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Bruce K. Lee
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Heartland Financial USA, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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;
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 7, 2019
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/s/ Bryan R. McKeag
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Bryan R. McKeag
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Executive Vice President
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Chief Financial Officer
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/s/ Bruce K. Lee
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Bruce K. Lee
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President and Chief Executive Officer
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Date:
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August 7, 2019
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/s/ Bryan R. McKeag
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Bryan R. McKeag
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Executive Vice President
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Chief Financial Officer
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Date:
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August 7, 2019
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