Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 07, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HEARTLAND FINANCIAL USA INC | |
Entity Central Index Key | 920,112 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 31,068,676 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and due from banks | $ 143,071 | $ 168,723 |
Interest bearing deposits with the Federal Reserve Bank and other banks and other short-term investments | 123,275 | 27,280 |
Cash and cash equivalents | 266,346 | 196,003 |
Time deposits in other financial institutions | 6,297 | 9,820 |
Securities: | ||
Available for sale, at fair value (cost of $2,080,514 at March 31, 2018, and $2,248,181 at December 31, 2017) | 2,027,665 | 2,216,753 |
Held to maturity, at cost (fair value of $258,638 at March 31, 2018, and $265,494 at December 31, 2017) | 249,766 | 253,550 |
Other investments, at cost | 22,982 | 22,563 |
Loans held for sale | 24,376 | 44,560 |
Loans receivable: | ||
Held to maturity | 6,746,015 | 6,391,464 |
Allowance for loan and lease losses | (58,656) | (55,686) |
Loans receivable, net | 6,687,359 | 6,335,778 |
Premises, furniture and equipment, net | 171,385 | 172,324 |
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Other real estate, net | 11,801 | 10,777 |
Goodwill | 270,305 | 236,615 |
Core deposit intangibles and customer relationship intangibles, net | 41,063 | 35,203 |
Servicing rights, net | 25,471 | 25,857 |
Cash surrender value on life insurance | 143,444 | 142,818 |
Other assets | 106,126 | 106,141 |
TOTAL ASSETS | 10,055,863 | 9,810,739 |
Deposits: | ||
Demand | 3,094,457 | 2,983,128 |
Savings | 4,536,106 | 4,240,328 |
Time | 910,977 | 923,453 |
Total deposits | 8,541,540 | 8,146,909 |
Short-term borrowings | 131,240 | 324,691 |
Other borrowings | 276,118 | 285,011 |
Accrued expenses and other liabilities | 55,460 | 62,671 |
TOTAL LIABILITIES | 9,004,358 | 8,819,282 |
STOCKHOLDERS' EQUITY: | ||
Common stock (par value $1 per share; 40,000,000 shares authorized at both March 31, 2018, and December 31, 2017; issued 31,068,239 shares at March 31, 2018, and 29,953,356 shares at December 31, 2017) | 31,068 | 29,953 |
Capital surplus | 557,990 | 503,709 |
Retained earnings | 500,959 | 481,331 |
Accumulated other comprehensive loss | (39,450) | (24,474) |
Treasury stock at cost (0 shares at both March 31, 2018, and December 31, 2017) | 0 | 0 |
TOTAL STOCKHOLDERS' EQUITY | 1,051,505 | 991,457 |
TOTAL LIABILITIES AND EQUITY | 10,055,863 | 9,810,739 |
Preferred Stock | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | 0 | 0 |
Series A Junior Participating Preferred Stock | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | 0 | 0 |
Series C Senior Non-Cumulative Perpetual Preferred Stock | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | 0 | 0 |
Series D Senior Non-Cumulative Perpetual Preferred Stock | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | $ 938 | $ 938 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Cost of available for sale securities | $ 2,080,514 | $ 2,248,181 |
Fair value of held to maturity securities | $ 258,638 | $ 265,494 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 40,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 31,068,239 | 29,953,356 |
Treasury stock (in shares) | 0 | 0 |
Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 17,604 | 17,604 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series A Junior Participating Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 16,000 | 16,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series C Senior Non-Cumulative Perpetual Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 81,698 | 81,698 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Series D Senior Non-Cumulative Perpetual Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 3,000 | 3,000 |
Preferred stock, shares issued (in shares) | 745 | 745 |
Preferred stock, shares outstanding (in shares) | 745 | 745 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
INTEREST INCOME: | ||
Interest and fees on loans | $ 85,651 | $ 66,898 |
Interest on securities: | ||
Taxable | 11,577 | 8,253 |
Nontaxable | 3,579 | 5,191 |
Interest on federal funds sold | 0 | 0 |
Interest on interest bearing deposits in other financial institutions | 407 | 209 |
TOTAL INTEREST INCOME | 101,214 | 80,551 |
INTEREST EXPENSE: | ||
Interest on deposits | 5,766 | 3,730 |
Interest on short-term borrowings | 268 | 137 |
Interest on other borrowings | 3,596 | 3,656 |
TOTAL INTEREST EXPENSE | 9,630 | 7,523 |
NET INTEREST INCOME | 91,584 | 73,028 |
Provision for loan losses | 4,263 | 3,641 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 87,321 | 69,387 |
NONINTEREST INCOME: | ||
Service charges and fees | 10,079 | 9,457 |
Loan servicing income | 1,754 | 1,724 |
Trust fees | 4,680 | 3,631 |
Brokerage and insurance commissions | 907 | 1,036 |
Securities gains, net | 1,441 | 2,482 |
Unrealized loss on equity securities, net | (28) | 0 |
Net gains on sale of loans held for sale | 4,051 | 6,147 |
Valuation allowance on commercial servicing rights | (2) | 5 |
Income on bank owned life insurance | 614 | 617 |
Other noninterest income | 1,220 | 794 |
TOTAL NONINTEREST INCOME | 24,716 | 25,893 |
NONINTEREST EXPENSES: | ||
Salaries and employee benefits | 48,710 | 41,767 |
Occupancy | 6,043 | 5,073 |
Furniture and equipment | 2,749 | 2,501 |
Professional fees | 8,459 | 8,309 |
FDIC insurance assessments | 989 | 807 |
Advertising | 1,940 | 2,424 |
Core deposit intangibles and customer relationship intangibles amortization | 1,863 | 1,171 |
Other real estate and loan collection expenses | 732 | 828 |
(Gain)/loss on sales/valuations of assets, net | (197) | 412 |
Restructuring expenses | 2,564 | 0 |
Other noninterest expenses | 9,794 | 8,448 |
TOTAL NONINTEREST EXPENSES | 83,646 | 71,740 |
INCOME BEFORE INCOME TAXES | 28,391 | 23,540 |
Income taxes | 5,123 | 5,530 |
NET INCOME | 23,268 | 18,010 |
Preferred dividends | (13) | (19) |
Interest expense on convertible preferred debt | 0 | 5 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 23,255 | $ 17,996 |
EARNINGS PER COMMON SHARE - BASIC (in dollars per share) | $ 0.76 | $ 0.68 |
EARNINGS PER COMMON SHARE - DILUTED (in dollars per share) | 0.76 | 0.68 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.13 | $ 0.11 |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest expense related to derivatives reclassified from accumulated other comprehensive income | $ 3,596 | $ 3,656 |
Net security gains reclassified from accumulated other comprehensive income | 1,441 | 2,482 |
Income tax expense reclassified from accumulated other comprehensive income | 5,123 | 5,530 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Derivatives | ||
Interest expense related to derivatives reclassified from accumulated other comprehensive income | 197 | 397 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss) | ||
Net security gains reclassified from accumulated other comprehensive income | 1,441 | 2,482 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) | ||
Income tax expense reclassified from accumulated other comprehensive income | $ 261 | $ 778 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 23,268 | $ 18,010 |
Securities: | ||
Net change in unrealized gain (loss) on securities | (19,834) | 5,379 |
Reclassification adjustment for net gains realized in net income | (1,441) | (2,482) |
Income taxes | 5,391 | (1,111) |
Other comprehensive income (loss) on securities | (15,884) | 1,786 |
Derivatives used in cash flow hedging relationships: | ||
Net change in unrealized gain on derivatives | 1,699 | 136 |
Reclassification adjustment for net losses on derivatives realized in net income | 197 | 397 |
Income taxes | (708) | (215) |
Other comprehensive income on cash flow hedges | 1,188 | 318 |
Other comprehensive income (loss) | (14,696) | 2,104 |
TOTAL COMPREHENSIVE INCOME | $ 8,572 | $ 20,114 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 23,268 | $ 18,010 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 6,802 | 7,023 |
Provision for loan losses | 4,263 | 3,641 |
Net amortization of premium on securities | 5,823 | 7,226 |
Securities gains, net | (1,441) | (2,482) |
Unrealized loss on equity securities, net | 28 | 0 |
Stock based compensation | 1,858 | 1,782 |
Loans originated for sale | (112,433) | (164,324) |
Proceeds on sales of loans held for sale | 135,506 | 180,404 |
Net gains on sale of loans held for sale | (2,889) | (3,828) |
Decrease in accrued interest receivable | 3,239 | 93 |
Decrease in prepaid expenses | 194 | 84 |
Increase in accrued interest payable | 1,029 | 825 |
Capitalization of servicing rights | (1,183) | (2,226) |
Valuation allowance on commercial servicing rights | 2 | (5) |
(Gain)/loss on sales/valuations of assets, net | (197) | 412 |
Net excess tax benefit from stock based compensation | 611 | 888 |
Other, net | (5,441) | (13,767) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 59,039 | 33,756 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from the sale of securities available for sale | 392,246 | 221,637 |
Proceeds from the redemption of time deposits in other financial institutions | 8,767 | 5,867 |
Proceeds from the maturity of and principal paydowns on securities available for sale | 49,603 | 47,515 |
Proceeds from the maturity of and principal paydowns on securities held to maturity | 3,570 | 2,823 |
Proceeds from the maturity of and principal paydowns on time deposits in other financial institutions | 4,368 | 3,185 |
Proceeds from the maturity of and principal paydowns on other investments | 677 | 1,521 |
Purchase of securities available for sale | (244,289) | (312,769) |
Purchase of other investments | (644) | (968) |
Net (increase) decrease in loans | (32,314) | 80,916 |
Capital expenditures | (2,356) | (3,588) |
Net cash and cash equivalents received in acquisitions | 5,543 | 33,698 |
Proceeds from the sale of equipment | 615 | 3 |
Proceeds on sale of OREO and other repossessed assets | 668 | 585 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 186,454 | 80,425 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net increase in demand deposits | 5,834 | 22,799 |
Net increase in savings deposits | 100,608 | 88,767 |
Net decrease in time deposit accounts | (69,143) | (50,612) |
Proceeds on short-term revolving credit line | 15,000 | 0 |
Net decrease in short-term borrowings | (168,451) | (131,068) |
Proceeds from short term FHLB advances | 220,000 | 60,939 |
Repayments of short term FHLB advances | (260,000) | (81,305) |
Repayments of other borrowings | (14,995) | (6,432) |
Purchase of treasury stock | (97) | (160) |
Proceeds from issuance of common stock | 14 | 218 |
Dividends paid | (3,920) | (2,900) |
NET CASH USED BY FINANCING ACTIVITIES | (175,150) | (99,754) |
Net increase in cash and cash equivalents | 70,343 | 14,427 |
Cash and cash equivalents at beginning of year | 196,003 | 158,724 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 266,346 | 173,151 |
Supplemental disclosures: | ||
Cash paid for income/franchise taxes | 2 | 5 |
Cash paid for interest | 8,601 | 6,698 |
Loans transferred to OREO | 939 | 2,680 |
Purchases of securities available for sale, accrued, not settled | 0 | 3,654 |
Conversion of convertible debt to common stock | 0 | 167 |
Conversion of Series D preferred stock to common stock | 0 | 419 |
Stock consideration granted for acquisitions | $ 53,621 | $ 22,589 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Preferred StockSeries D Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Balance at beginning of period at Dec. 31, 2016 | $ 740,916 | $ 1,357 | $ 26,120 | $ 328,376 | $ 416,109 | $ (31,046) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income | 20,114 | 18,010 | 2,104 | |||||
Cash dividends declared: | ||||||||
Preferred | (19) | (19) | ||||||
Common | (2,881) | (2,881) | ||||||
Conversion of Series D preferred stock | (419) | $ (419) | ||||||
Purchase of shares of common stock | (160) | (160) | ||||||
Issuance of shares of common stock | 21,979 | 554 | 21,265 | 160 | ||||
Stock based compensation | 1,782 | 1,782 | ||||||
Balance at end of period at Mar. 31, 2017 | 781,312 | 938 | 26,674 | 351,423 | 431,219 | (28,942) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Reclassification of unrealized net gain on equity securities | 0 | (280) | (280) | |||||
Balance at beginning of period at Dec. 31, 2017 | 991,457 | 938 | 29,953 | 503,709 | 481,331 | (24,474) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Comprehensive income | 8,572 | 23,268 | (14,696) | |||||
Cash dividends declared: | ||||||||
Preferred | (13) | (13) | ||||||
Common | (3,907) | (3,907) | ||||||
Purchase of shares of common stock | (97) | (97) | ||||||
Issuance of shares of common stock | 53,635 | 1,115 | 52,423 | 97 | ||||
Stock based compensation | 1,858 | 1,858 | ||||||
Balance at end of period at Mar. 31, 2018 | $ 1,051,505 | $ 938 | $ 31,068 | $ 557,990 | $ 500,959 | $ (39,450) | $ 0 |
CONSOLIDATED STATEMENTS OF CHA9
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash dividends per share common stock (in dollars per share) | $ 0.13 | $ 0.11 |
Shares of common stock purchased (in shares) | 1,761 | 3,338 |
Shares of common stock issued (in shares) | 1,116,644 | 557,530 |
Series D Preferred Stock | ||
Cash dividends per share preferred stock (in dollars per share) | $ 17.50 | $ 17.50 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The interim unaudited consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended December 31, 2017 , included in the Form 10-K of Heartland Financial USA, Inc. ("Heartland") filed with the Securities and Exchange Commission ("SEC") on February 28, 2018 . Foot note disclosures to the interim unaudited consolidated financial statements which would substantially duplicate the disclosure contained in the footnotes to the audited consolidated financial statements have been omitted. The financial information of Heartland included herein has been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Such information reflects all adjustments (consisting of normal recurring adjustments), that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of the interim period ended March 31, 2018 , are not necessarily indicative of the results expected for the year ending December 31, 2018 . In the Annual Report on Form 10-K for the year ended December 31, 2017, Heartland reported the results of operations through two business segments: Community and Other Banking and Mortgage Banking. Effective January 1, 2018, the recently restructured mortgage banking segment is no longer a reportable segment due to the significant reduction in infrastructure and the reporting structure of the mortgage sales staff, who currently report directly to the bank president in each market. Accordingly, Heartland is no longer reporting results of operations by segment. Earnings Per Share Basic earnings per share is determined using net income available to common stockholders and weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average common shares and assumed incremental common shares issued. Amounts used in the determination of basic and diluted earnings per share for the three -month periods ended March 31, 2018 , and 2017 , are shown in the table below: Three Months Ended (Dollars and number of shares in thousands, except per share data) 2018 2017 Net income $ 23,268 $ 18,010 Preferred dividends (13 ) (19 ) Interest expense on convertible preferred debt — 5 Net income available to common stockholders $ 23,255 $ 17,996 Weighted average common shares outstanding for basic earnings per share 30,442 26,335 Assumed incremental common shares issued upon non-vested restricted stock units 203 293 Weighted average common shares for diluted earnings per share 30,645 26,628 Earnings per common share — basic $ 0.76 $ 0.68 Earnings per common share — diluted $ 0.76 $ 0.68 Number of antidilutive common stock equivalents excluded from diluted earnings per share computation — — Stock-Based Compensation Heartland may grant, through its Nominating and Compensation Committee (the "Compensation Committee"), non-qualified and incentive stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units and cash incentive awards, under its 2012 Long-Term Incentive Plan (the "Plan"). The Plan was originally approved by stockholders in May 2012 and was amended effective March 8, 2016, to increase the number of shares of common stock authorized for issuance and make certain other changes to the Plan. As of March 31, 2018 , 459,893 shares of common stock were available for issuance under future awards that may be granted under the Plan to employees and directors of, and service providers to, Heartland or its subsidiaries. Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, "Compensation-Stock Compensation" requires the measurement of the cost of employee services received in exchange for an award of equity instruments based upon the fair value of the award on the grant date. The cost of the award is based upon its fair value estimated on the date of grant and recognized in the consolidated statements of income over the vesting period of the award. The fair market value of restricted stock and restricted stock units is based on the fair value of the underlying shares of common stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes model. Forfeitures are accounted for as they occur. The amount of tax benefit related to the exercise, vesting and forfeiture of equity-based awards reflected as a tax benefit in Heartland's income tax expense was $611,000 and $ 888,000 during the three months ended March 31, 2018 and 2017, respectively. Restricted Stock Units The Plan permits the Compensation Committee to grant restricted stock units ("RSUs"). In the first quarter of 2018, the Compensation Committee granted time-based RSUs with respect to 52,153 shares of common stock, and in the first quarter of 2017, the Compensation Committee granted time-based RSUs with respect to 55,665 shares of common stock to selected officers and employees. The time-based RSUs represent the right, without payment, to receive shares of Heartland common stock on a specified date in the future. The time-based RSUs granted in 2018 vest over three years in equal installments on March 6 of each of the three years following the year of the grant, while the 2017 time-based RSUs vest in equal installments on January 19 of each of the three years following the year of the grant. The time-based RSUs may also vest upon death or disability, upon a change in control or upon a "qualified retirement" (as defined in the RSU agreement). The retiree is required to sign a non-solicitation agreement as a condition to vesting. In addition to the time-based RSUs referenced in the preceding paragraph, the Compensation Committee granted one -year performance-based RSUs with respect to 18,988 shares of common stock in the first quarter of 2018, and 27,570 shares of common stock in the first quarter of 2017. These performance-based RSUs are earned based on satisfaction of performance targets for the fiscal years ended December 31, 2018, and December 31, 2017, respectively, and then fully vest on a specified date in the third calendar year following the year of the initial grant. The Compensation Committee also granted three -year performance-based RSUs with respect to 16,108 shares and 9,032 shares of common stock in the first quarter of 2018 and 2017, respectively. These performance-based RSUs will be earned based on satisfaction of performance targets for the three -year performance period ended December 31, 2020, and December 31, 2019, respectively. These performance-based RSUs or a portion thereof may vest in 2021 and 2020, respectively, after measurement of performance in relation to the performance targets. The one -year and three -year performance-based RSUs vest to the extent that they are earned upon death or disability or upon a "qualified retirement." Upon a change in control, performance-based RSUs shall become vested at 100% of target if the RSU obligations are not assumed by the successor company. If the successor company does assume the RSU obligations, the 2017 and 2018 performance-based RSUs will vest at 100% of target upon a "Termination of Service" within the period beginning six months prior to a change in control and ending twenty-four months after a change in control. All of Heartland's RSUs will be settled in common stock upon vesting and are not entitled to dividends until vested. The Compensation Committee may grant RSUs under the Plan to directors as part of their compensation, to new management level employees at commencement of employment, and to other employees and service providers as incentives. During the three months ended March 31, 2018 , and March 31, 2017 , no time-based RSUs were granted to directors and new employees. A summary of the RSUs outstanding as of March 31, 2018 and 2017 , and changes during the three months ended March 31, 2018 and 2017 , follows: 2018 2017 Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Outstanding at January 1 301,578 $ 34.74 346,817 $ 27.61 Granted 87,249 55.25 92,267 47.50 Vested (107,553 ) 30.79 (103,897 ) 24.74 Forfeited (19,113 ) 43.62 (7,765 ) 31.03 Outstanding at March 31 262,161 $ 42.60 327,422 $ 34.04 Total compensation costs recorded for RSUs were $1.9 million and $1.7 million for the three -month periods ended March 31, 2018 and 2017 . As of March 31, 2018 , there were $6.1 million of total unrecognized compensation costs related to the Plan for RSUs that are expected to be recognized through 2021. Options Although the Plan provides authority to the Compensation Committee to grant stock options, no options were granted during the first three months of 2018 and 2017 . Prior to 2009, options were typically granted annually with an expiration date ten years after the date of grant. Vesting was generally over a five -year service period with equal portions of a grant becoming exercisable at three years, four years, and five years after the date of grant. A summary of the stock options outstanding as of March 31, 2018 and 2017 , and changes during the three months ended March 31, 2018 and 2017 , follows: 2018 2017 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Outstanding at January 1 6,500 $ 18.60 26,400 $ 18.60 Granted — — — — Exercised (6,500 ) 18.60 (5,500 ) 18.60 Forfeited — — — — Outstanding at March 31 — $ — 20,900 $ 18.60 Options exercisable at March 31 — $ — 20,900 $ 18.60 The intrinsic value for the total of all options exercised during the three months ended March 31, 2018 , was $231,000 . Cash received from options exercised was $ 121,000 for the three months ended March 31, 2018 , and $102,000 for the three months ended March 31, 2017 . No compensation costs were recorded for options during the three month periods ended March 31, 2018 and 2017 . There are no unrecorded compensation costs related to options at March 31, 2018 . No stock options vested during the three -month periods ended March 31, 2018 and 2017 . Subsequent Events - Heartland has evaluated subsequent events that may require recognition or disclosure through the filing date of this Quarterly Report on Form 10-Q with the SEC. Effect of New Financial Accounting Standards In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, " Revenue from Contracts with Customers." The amendment clarifies the principles for recognizing revenue and develops a common revenue standard. The amendment outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." In applying the revenue model to contracts within its scope, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance does not apply to certain contracts within the scope of other ASC Topics, such as lease contracts, insurance contracts, financing arrangements, financial instruments, guarantees other than product or service warranties and nonmonetary exchanges between entities in the same line of business to facilitate sales to customers. Heartland evaluates noninterest income contracts affected by the new guidance by analyzing contracts and current accounting practices to determine if a change is appropriate. The amendment is largely consistent with existing guidance and current practices; however Heartland had to change the recognition of certain recurring revenue streams within trust and investment management fees. Heartland adopted the accounting standard effective January 1, 2018, as required, using a modified retrospective approach. However, the adoption of these amendments did not have a significant effect on Heartland's results of operations, financial position and liquidity other than expanded disclosure requirements. See Note 9, "Revenue," for further details regarding Heartland's revenue. In January 2016, the FASB issued guidance ASU 2016-01, " Recognition and Measurement of Financial Assets and Financial Liabilitie s." The amendments in ASU 2016-01 to Subtopic 825-10, Financial Instruments, contain the following elements: (1) require equity investments to be measured at fair value with changes in fair value recognized in net income; (2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (3) eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (4) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (5) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or accompanying notes to the financial statements; and (7) clarifies that the entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity's other deferred tax assets. The amendments are effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Except for the early application of the amendment noted in item (5) above, early adoption of the amendments in this update is not permitted. Entities are required to and Heartland applied the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which are to be applied prospectively to equity investments that exist as of the adoption date. Heartland adopted the accounting standard on January 1, 2018, as required, and the adoption of these amendments did not have a material impact on its results of operations, financial position and liquidity. Heartland reclassified $280,000 from accumulated other comprehensive income to retained earnings on January 1, 2018, related to the fair value of its equity investments. In February 2016, the FASB issued ASU 2016-02, " Leases (Topic 842). " Topic 842 requires a lessee to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and will be applied on a modified retrospective basis. Heartland leases certain properties and equipment under operating leases that will result in recognition of lease assets and lease liabilities on the consolidated balance sheets under the ASU; however the majority of Heartland's properties and equipment are owned, not leased. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. In January 2018, the FASB issued an amendment to provide entities with the optional practical expedient to not evaluate existing or expired land easements that were previously not accounted for as leases under Topic 840. Heartland intends to adopt the accounting standard in 2019, as required, and does not expect the adoption of this standard to have a significant impact on its results of operations, financial position and liquidity. Heartland has signed an agreement with a cloud-based lease software provider, and implementation of the software started in the first quarter of 2018. In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326) ." The amendments in this ASU require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The amendments in this ASU indicate that an entity should not use the length of time a security has been in an unrealized loss position to avoid recording a credit loss. In addition, in determining whether a credit loss exists, the amendments in this ASU also remove the requirements to consider the historical and implied volatility of the fair value of a security and recoveries or declines in fair value after the balance sheet date. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity may adopt the amendments earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Heartland intends to adopt the accounting standard in 2020, as required, and is currently evaluating the potential impact of this guidance on its results of operations, financial position and liquidity. Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. Heartland has formed an internal committee to assess and implement the standard, and Heartland has entered into an agreement with a third party vendor to evaluate potential methodologies and data. In August 2016, the FASB issued ASU 2016-15, " Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. " The amendments in this update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this update should be applied using a retrospective transition method to each period presented. Heartland adopted this ASU on January 1, 2018, as required, and the adoption of these amendments did not have a material impact on Heartland's results of operations, financial position and liquidity. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other Than Inventory." The amendment requires an entity to recognize income tax consequences on an intra-entity transfer of an asset other than inventory at the time the transaction occurs. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments must be applied and Heartland applied these amendments using a modified retrospective basis. Heartland adopted this ASU on January 1, 2018, as required, and the adoption of this amendment did not have a material impact on Heartland's results of operations, financial position and liquidity. In January 2017, the FASB issued ASU No. 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business ," which narrows the definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 is effective for public business entities in annual periods beginning after December 15, 2017, including interim periods therein. Heartland adopted ASU 2017-01 on January 1, 2018, as required, and the adoption did not have a material impact on Heartland's results of operations, financial position, and liquidity. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350)." This amendment is to simplify the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing the impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied prospectively. Early adoption is permitted, including in an interim period for impairment tests performed after January 1, 2017. Heartland intends to adopt this ASU in the third quarter of 2020, consistent with the annual impairment test as of September 30, 2020, and is currently evaluating the potential impact of this guidance on its results of operations, financial position and liquidity. In March 2017, the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fee and Other Costs (Subtopic 310-20)." These amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount. Discounts continue to be amortized to maturity. These amendments are effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If any entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes the interim period. The amendments must be applied and Heartland intends to apply these amendments on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Heartland intends to adopt this ASU in 2019, as required, and is currently evaluating the potential impact on its results of operations, financial position and liquidity. In May 2017, the FASB issued ASU 2017-09, " Compensation - Stock Compensation (Topic 718) ." The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments are effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim periods for public business entities for reporting periods for which financial statements have not yet been issued. The amendments should be applied and Heartland applied these amendments prospectively to an award modified on or after the adoption date. Heartland adopted this ASU on January 1, 2018, as required, the adoption did not have a material impact to its results of operations, financial position and liquidity because Heartland has not typically modified share-based payment awards after the original award has been granted. In August 2017, the FASB issued ASU 2017-12, " Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities ." The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which Heartland will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated balance sheet as of the date of adoption. Heartland intends to adopt this ASU in 2019, as required, and does not believe there will be a material impact to its results of operations, financial position and liquidity. In February 2018, the FASB issued ASU 2018-02, " Income Statement-Reporting Comprehensive Income (Topic 220). " This ASU allows for the option to reclassify from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017. The legislation included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for public businesses for reporting periods for which financial statements have not yet been issued. Heartland adopted the guidance as of December 31, 2017. The adoption of this ASU was accounted for as a cumulative-effect adjustment to the balance sheet resulting in a $4.5 million increase to retained earnings and a corresponding decrease to AOCI on December 31, 2017. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS First Bank Lubbock Bancshares, Inc. On December 12, 2017, Heartland entered into a definitive merger agreement with First Bank Lubbock Bancshares, Inc., parent company of FirstBank & Trust Company, headquartered in Lubbock, Texas. Under the terms of the definitive merger agreement, Heartland will acquire First Bank Lubbock Bancshares, Inc. in a transaction valued at approximately $185.6 million as of the announcement date, subject to certain adjustments. Shareholders of First Bank Lubbock Bancshares, Inc. will receive a combination of Heartland common stock and cash. As of March 31, 2018, FirstBank & Trust Company had total assets of $971.5 million , including $704.9 million of gross loans held to maturity, and deposits of $869.3 million . Upon closing of the transaction, FirstBank & Trust Company will become a wholly-owned subsidiary of Heartland and will continue to operate under its current name and management team as Heartland's eleventh state-chartered bank. Heartland has received approval by the bank regulatory authorities related to this acquisition. The transaction is expected to close in the second quarter of 2018. Signature Bancshares, Inc. On February 23, 2018, Heartland completed the acquisition of Signature Bancshares, Inc., parent company of Signature Bank, headquartered in Minnetonka, Minnesota. Under the terms of the definitive merger agreement, Heartland acquired Signature Bancshares, Inc. in a transaction valued at approximately $61.4 million , of which $7.8 million was cash, and the remainder was settled by delivery of 1,000,843 shares of Heartland common stock. Simultaneous with the close, Signature Bank merged into Heartland's wholly-owned Minnesota Bank & Trust subsidiary, and the combined entity operates under the Minnesota Bank & Trust brand name. The transaction included, at fair value, total assets of $427.1 million , including $324.5 million of gross loans held to maturity, and deposits of $357.3 million . The transaction was a tax-free reorganization with respect to the stock consideration received by the stockholders of Signature Bancshares, Inc. Citywide Banks of Colorado, Inc. On July 7, 2017, Heartland acquired Citywide Banks of Colorado, Inc., parent company of Citywide Banks, headquartered in Aurora, Colorado. The transaction consideration was approximately $211.2 million , of which $58.6 million was cash, and the remainder was settled by delivery of 3,216,161 shares of Heartland common stock. Simultaneous with the close, Citywide Banks merged into Heartland's Centennial Bank and Trust subsidiary, and the combined entity operates as Citywide Banks. The transaction included, at fair value, total assets of $1.49 billion , including $985.4 million of net loans outstanding, and $1.21 billion of deposits on the acquisition date. Included in this transaction was one bank building with a fair value of $1.4 million that Heartland intends to sell and is classified as premises, furniture and equipment held for sale on the consolidated balance sheets. The transaction was a tax-free reorganization with respect to the stock consideration received by the stockholders of Citywide Banks of Colorado, Inc. Founders Bancorp On February 28, 2017, Heartland acquired Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. The purchase price was approximately $31.0 million , which was paid by delivery of 455,877 shares of Heartland common stock and cash of $8.4 million . The transaction included, at fair value, total assets of $213.9 million , loans of $96.4 million , and deposits of $181.5 million on the acquisition date. The transaction also included one bank building with a fair value of $576,000 that Heartland sold during the second quarter of 2017. Simultaneous with the closing of the transaction, Founders Community Bank merged into Heartland's Premier Valley Bank subsidiary. The transaction was a tax-free reorganization with respect to the stock consideration received by the stockholders of Founders Bancorp. |
Securities
Securities | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Securities | SECURITIES The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of March 31, 2018 , and December 31, 2017 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2018 U.S. government corporations and agencies $ 11,254 $ 3 $ (69 ) $ 11,188 Mortgage and asset-backed securities 1,691,092 3,968 (47,456 ) 1,647,604 Obligations of states and political subdivisions 361,475 1,132 (10,427 ) 352,180 Total debt securities 2,063,821 5,103 (57,952 ) 2,010,972 Equity securities 16,693 — — 16,693 Total $ 2,080,514 $ 5,103 $ (57,952 ) $ 2,027,665 December 31, 2017 U.S. government corporations and agencies $ 5,358 $ 8 $ (38 ) $ 5,328 Mortgage and asset-backed securities 1,785,467 5,856 (37,587 ) 1,753,736 Obligations of states and political subdivisions 441,060 4,669 (4,714 ) 441,015 Total debt securities 2,231,885 10,533 (42,339 ) 2,200,079 Equity securities 16,296 378 — 16,674 Total $ 2,248,181 $ 10,911 $ (42,339 ) $ 2,216,753 The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of March 31, 2018 , and December 31, 2017 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2018 Obligations of states and political subdivisions $ 249,766 $ 9,699 $ (827 ) $ 258,638 Total $ 249,766 $ 9,699 $ (827 ) $ 258,638 December 31, 2017 Obligations of states and political subdivisions $ 253,550 $ 12,460 $ (516 ) $ 265,494 Total $ 253,550 $ 12,460 $ (516 ) $ 265,494 At March 31, 2018 , approximately 77% of Heartland's mortgage and asset-backed securities were issued by government-sponsored enterprises. The amortized cost and estimated fair value of debt securities available for sale at March 31, 2018 , by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties. March 31, 2018 Amortized Cost Estimated Fair Value Due in 1 year or less $ 5,397 $ 5,392 Due in 1 to 5 years 56,369 56,209 Due in 5 to 10 years 116,517 112,484 Due after 10 years 194,446 189,283 Total debt securities 372,729 363,368 Mortgage and asset-backed securities 1,691,092 1,647,604 Equity securities 16,693 16,693 Total investment securities $ 2,080,514 $ 2,027,665 The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2018 , by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties. March 31, 2018 Amortized Cost Estimated Fair Value Due in 1 year or less $ 2,486 $ 2,523 Due in 1 to 5 years 27,627 28,231 Due in 5 to 10 years 104,170 106,538 Due after 10 years 115,483 121,346 Total investment securities $ 249,766 $ 258,638 As of March 31, 2018 , and December 31, 2017 , securities with a fair value of $594.3 million and $670.3 million , respectively, were pledged to secure public and trust deposits, short-term borrowings and for other purposes as required or permitted by law. Gross gains and losses realized related to the sales of securities available for sale for the three -month periods ended March 31, 2018 and 2017 , are summarized as follows, in thousands: Three Months Ended 2018 2017 Proceeds from sales $ 392,246 $ 221,637 Gross security gains 3,013 3,830 Gross security losses 1,572 1,339 The following tables summarize, in thousands, the amount of unrealized losses, defined as the amount by which cost or amortized cost exceeds fair value, and the related fair value of investments with unrealized losses in Heartland's securities portfolio as of March 31, 2018 , and December 31, 2017 . The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more. The reference point for determining how long an investment was in an unrealized loss position w as March 31, 2017 , and December 31, 2016 , respectively. Securities for which Heartland has taken credit-related other-than-temporary impairment ("OTTI") write-downs are categorized as being "less than 12 months" or "12 months or longer" in a continuous loss position based on the point in time that the fair value declined to below the cost basis and not the period of time since the credit-related OTTI write-down. 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 March 31, 2018 U.S. government corporations and agencies $ 10,685 $ (69 ) $ — $ — $ 10,685 $ (69 ) Mortgage and asset-backed securities 923,293 (18,459 ) 379,672 (28,997 ) 1,302,965 (47,456 ) Obligations of states and political subdivisions 177,100 (3,456 ) 131,574 (6,971 ) 308,674 (10,427 ) Total debt securities 1,111,078 (21,984 ) 511,246 (35,968 ) 1,622,324 (57,952 ) Total temporarily impaired securities $ 1,111,078 $ (21,984 ) $ 511,246 $ (35,968 ) $ 1,622,324 $ (57,952 ) December 31, 2017 U.S. government corporations and agencies $ 4,819 $ (38 ) $ — $ — $ 4,819 $ (38 ) Mortgage and asset-backed securities 851,070 (11,533 ) 399,978 (26,054 ) 1,251,048 (37,587 ) Obligations of states and political subdivisions 93,040 (667 ) 159,180 (4,047 ) 252,220 (4,714 ) Total debt securities 948,929 (12,238 ) 559,158 (30,101 ) 1,508,087 (42,339 ) Total temporarily impaired securities $ 948,929 $ (12,238 ) $ 559,158 $ (30,101 ) $ 1,508,087 $ (42,339 ) Securities held to maturity Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2018 Obligations of states and political subdivisions $ 30,496 $ (272 ) $ 7,907 $ (555 ) $ 38,403 $ (827 ) Total temporarily impaired securities $ 30,496 $ (272 ) $ 7,907 $ (555 ) $ 38,403 $ (827 ) December 31, 2017 Obligations of states and political subdivisions $ 8,512 $ (49 ) $ 8,989 $ (467 ) $ 17,501 $ (516 ) Total temporarily impaired securities $ 8,512 $ (49 ) $ 8,989 $ (467 ) $ 17,501 $ (516 ) Heartland reviews the investment securities portfolio on a quarterly basis to monitor its exposure to OTTI. A determination as to whether a security's decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors Heartland may consider in the OTTI analysis include the length of time the security has been in an unrealized loss position, changes in security ratings, financial condition of the issuer, as well as security and industry specific economic conditions. In addition, with regard to debt securities, Heartland may also evaluate payment structure, whether there are defaulted payments or expected defaults, prepayment speeds and the value of any underlying collateral. For certain debt securities in unrealized loss positions, Heartland prepares cash flow analyses to compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. The remaining unrealized losses on Heartland's mortgage and asset-backed securities are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. The losses are not related to concerns regarding the underlying credit of the issuers or the underlying collateral. It is expected that the securities will not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because Heartland has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, these investments are not considered other-than-temporarily impaired. The remaining unrealized losses on Heartland's obligations of states and political subdivisions are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. Management monitors the published credit ratings of these securities and the stability of the underlying municipalities. Because the decline in fair value is attributable to changes in interest rates or widening market spreads due to insurance company downgrades and not underlying credit quality, and because Heartland has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, these investments are not considered other-than-temporarily impaired. There were no gross realized gains or losses on the sale of available for sale or held to maturity securities with OTTI write-downs for the three-month periods ended March 31, 2018, and March 31, 2017, respectively. Included in other securities at March 31, 2018 , and December 31, 2017 , were shares of stock in the Federal Home Loan Banks (the "FHLBs") of Des Moines, Chicago, Dallas, San Francisco and Topeka at an amortized cost of $14.3 million and $ 14.0 million , respectively. The Heartland banks are required by federal law to maintain FHLB stock as members of the various FHLBs. These equity securities are "restricted" in that they can only be sold back to the respective institutions from which they were acquired or another member institution at par. Therefore, the FHLB stock is less liquid than other marketable equity securities, and the fair value approximates amortized cost. Heartland considers its FHLB stock as a long-term investment that provides access to competitive products and liquidity. Heartland evaluates impairment in these investments based on the ultimate recoverability of the par value and, at March 31, 2018 , did not consider the investments to be other than temporarily impaired. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Loans | LOANS Loans as of March 31, 2018 , and December 31, 2017 , were as follows, in thousands: March 31, 2018 December 31, 2017 Loans receivable held to maturity: Commercial $ 1,806,683 $ 1,646,606 Commercial real estate 3,323,094 3,163,269 Agricultural and agricultural real estate 518,386 511,588 Residential real estate 624,725 624,279 Consumer 474,929 447,484 Gross loans receivable held to maturity 6,747,817 6,393,226 Unearned discount (1,620 ) (556 ) Deferred loan fees (182 ) (1,206 ) Total net loans receivable held to maturity 6,746,015 6,391,464 Allowance for loan losses (58,656 ) (55,686 ) Loans receivable, net $ 6,687,359 $ 6,335,778 Heartland has certain lending policies and procedures in place that are designed to provide for an acceptable level of credit risk. The board of directors reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the board with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans. Diversification in the loan portfolio is also a means of managing risk associated with fluctuations in economic conditions. Heartland originates commercial and commercial real estate loans for a wide variety of business purposes, including lines of credit for capital and operating purposes and term loans for real estate and equipment purchases. Agricultural loans provide financing for capital improvements and farm operations, as well as livestock and machinery purchases. Residential mortgage loans are originated for the construction, purchase or refinancing of single family residential properties. Consumer loans include loans for motor vehicles, home improvement, home equity and personal lines of credit. Heartland's consumer finance subsidiaries, Citizens Finance Co. and Citizens Finance of Illinois Co., typically lend to borrowers with past credit problems or limited credit histories, which comprises approximately 15% of Heartland's total consumer loan portfolio. Under Heartland’s credit practices, a loan is impaired when, based on current information and events, it is probable that Heartland will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loan impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except where more practical, impairment is measured at the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. The following table shows the balance in the allowance for loan losses at March 31, 2018 , and December 31, 2017 , and the related loan balances, disaggregated on the basis of impairment methodology, in thousands. Loans evaluated under ASC 310-10-35 include loans on nonaccrual status and troubled debt restructurings, which are individually evaluated for impairment, and other impaired loans deemed to have similar risk characteristics. All other loans are collectively evaluated for impairment under ASC 450-20. Heartland has made no significant changes to the accounting for the allowance for loan losses during 2018. 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 March 31, 2018 Commercial $ 2,425 $ 16,970 $ 19,395 $ 9,005 $ 1,797,678 $ 1,806,683 Commercial real estate 736 22,733 23,469 22,920 3,300,174 3,323,094 Agricultural and agricultural real estate 787 3,929 4,716 16,896 501,490 518,386 Residential real estate 386 1,755 2,141 28,324 596,401 624,725 Consumer 1,137 7,798 8,935 6,427 468,502 474,929 Total $ 5,471 $ 53,185 $ 58,656 $ 83,572 $ 6,664,245 $ 6,747,817 December 31, 2017 Commercial $ 1,613 $ 16,485 $ 18,098 $ 7,415 $ 1,639,191 $ 1,646,606 Commercial real estate 766 21,184 21,950 23,705 3,139,564 3,163,269 Agricultural and agricultural real estate 546 3,712 4,258 13,304 498,284 511,588 Residential real estate 430 1,794 2,224 27,141 597,138 624,279 Consumer 1,400 7,756 9,156 6,903 440,581 447,484 Total $ 4,755 $ 50,931 $ 55,686 $ 78,468 $ 6,314,758 $ 6,393,226 The following table presents nonaccrual loans, accruing loans past due 90 days or more and performing troubled debt restructured loans at March 31, 2018 , and December 31, 2017 , in thousands: March 31, 2018 December 31, 2017 Nonaccrual loans $ 60,644 $ 58,272 Nonaccrual troubled debt restructured loans 4,162 4,309 Total nonaccrual loans $ 64,806 $ 62,581 Accruing loans past due 90 days or more $ 22 $ 830 Performing troubled debt restructured loans $ 3,206 $ 6,617 The following tables provide information on troubled debt restructured loans that were modified during the three -month periods ended March 31, 2018 , and March 31, 2017 , dollars in thousands: Three Months Ended 2018 2017 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial — $ — $ — — $ — $ — Commercial real estate — — — — — — Total commercial and commercial real estate — — — — — — Agricultural and agricultural real estate — — — — — — Residential real estate 5 877 752 3 348 348 Consumer — — — — — — Total 5 $ 877 $ 752 3 $ 348 $ 348 The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The change related to the pre-modification investment and post-modification investment amounts on Heartland's residential real estate trouble debt restructured loans is due to $142,000 of principal deferment collected from government guarantees and $17,000 of capitalized interest and escrow. At March 31, 2018 , there were no commitments to extend credit to any of the borrowers with an existing troubled debt restructured loan. The following table shows troubled debt restructured loans for which there was a payment default during the three month periods ended March 31, 2018 , and March 31, 2017 , that had been modified during the twelve-month period prior to default, in thousands: With Payment Defaults During the Following Periods Three Months Ended 2018 2017 Number of Loans Recorded Investment Number of Loans Recorded Investment Commercial — $ — — $ — Commercial real estate — — — — Total commercial and commercial real estate — — — — Agricultural and agricultural real estate — — — — Residential real estate 3 519 — — Consumer — — — — Total 3 $ 519 — $ — Heartland's internal rating system is a series of grades reflecting management's risk assessment, based on its analysis of the borrower's financial condition. The "pass" category consists of all loans that are not in the "nonpass" category, categorized into a range of loan grades that reflect increasing, though still acceptable, risk. Movement of risk through the various grade levels in the pass category is monitored for early identification of credit deterioration. The "nonpass" category consists of special mention, substandard, doubtful and loss loans. The "special mention" rating is attached to loans where the borrower exhibits negative trends in financial circumstances due to borrower specific or systemic conditions that, if left uncorrected, threaten the borrower's capacity to meet its debt obligations. The borrower is believed to have sufficient financial flexibility to react to and resolve its negative financial situation. These credits are closely monitored for improvement or deterioration. The "substandard" rating is assigned to loans that are inadequately protected by the current net worth and paying capacity of the borrower and that may be further at risk due to deterioration in the value of collateral pledged. Well-defined weaknesses jeopardize liquidation of the debt. These loans are still considered collectible; however, a distinct possibility exists that Heartland will sustain some loss if deficiencies are not corrected. Substandard loans may exhibit some or all of the following weaknesses: deteriorating financial trends, lack of earnings, inadequate debt service capacity, excessive debt and/or lack of liquidity. The "doubtful" rating is assigned to loans where identified weaknesses in the borrowers' ability to repay the loan make collection or liquidation in full, on the basis of existing facts, conditions and values, highly questionable and improbable. These borrowers are usually in default, lack liquidity and capital, as well as resources necessary to remain as an operating entity. Specific pending events, such as capital injections, liquidations or perfection of liens on additional collateral, may strengthen the credit, thus deferring the rating of the loan as "loss" until the exact status of the loan can be determined. The loss rating is assigned to loans considered uncollectible. Heartland had no loans classified as loss or doubtful as of March 31, 2018. Loans are placed on "nonaccrual" when management does not expect to collect payments of principal and interest in full or when principal or interest has been in default for a period of 90 days or more, unless the loan is both well secured and in the process of collection. The following table presents loans by credit quality indicator at March 31, 2018 , and December 31, 2017 , in thousands: Pass Nonpass Total March 31, 2018 Commercial $ 1,677,338 $ 129,345 $ 1,806,683 Commercial real estate 3,146,622 176,472 3,323,094 Total commercial and commercial real estate 4,823,960 305,817 5,129,777 Agricultural and agricultural real estate 442,484 75,902 518,386 Residential real estate 585,886 38,839 624,725 Consumer 461,786 13,143 474,929 Total gross loans receivable held to maturity $ 6,314,116 $ 433,701 $ 6,747,817 December 31, 2017 Commercial $ 1,552,783 $ 93,823 $ 1,646,606 Commercial real estate 2,985,501 177,768 3,163,269 Total commercial and commercial real estate 4,538,284 271,591 4,809,875 Agricultural and agricultural real estate 451,539 60,049 511,588 Residential real estate 586,623 37,656 624,279 Consumer 432,936 14,548 447,484 Total gross loans receivable held to maturity $ 6,009,382 $ 383,844 $ 6,393,226 The nonpass category in the table above is comprised of approximately 55% special mention loans and 45% substandard loans as of March 31, 2018 . The percent of nonpass loans on nonaccrual status as of March 31, 2018 , was 15% . As of December 31, 2017 , the nonpass category in the table above was comprised of approximately 52% special mention loans and 48% substandard loans. The percent of nonpass loans on nonaccrual status as of December 31, 2017 , was 16% . Loans delinquent 30 to 89 days as a percent of total loans were 0.21% at March 31, 2018 , compared to 0 .27% at December 31, 2017 . Changes in credit risk are monitored on a regular basis and changes in risk ratings are made when identified. All impaired loans are reviewed at least annually. As of March 31, 2018 , Heartland had $ 2.8 million of loans secured by residential real estate property that were in the process of foreclosure. The following table sets forth information regarding Heartland's accruing and nonaccrual loans at March 31, 2018 , and December 31, 2017 , in thousands: Accruing Loans 30-59 Days Past Due 60-89 Days 90 Days or More Past Due Total Past Due Current Nonaccrual Total Loans March 31, 2018 Commercial $ 2,906 $ 1,883 $ — $ 4,789 $ 1,793,565 $ 8,329 $ 1,806,683 Commercial real estate 403 740 — 1,143 3,305,043 16,908 3,323,094 Total commercial and commercial real estate 3,309 2,623 — 5,932 5,098,608 25,237 5,129,777 Agricultural and agricultural real estate 1,147 69 22 1,238 500,320 16,828 518,386 Residential real estate 2,891 66 — 2,957 602,927 18,841 624,725 Consumer 2,618 1,477 — 4,095 466,934 3,900 474,929 Total gross loans receivable held to maturity $ 9,965 $ 4,235 $ 22 $ 14,222 $ 6,668,789 $ 64,806 $ 6,747,817 December 31, 2017 Commercial $ 1,246 $ 259 $ 100 $ 1,605 $ 1,637,773 $ 7,228 $ 1,646,606 Commercial real estate 4,769 2,326 — 7,095 3,139,576 16,598 3,163,269 Total commercial and commercial real estate 6,015 2,585 100 8,700 4,777,349 23,826 4,809,875 Agricultural and agricultural real estate 604 134 — 738 497,546 13,304 511,588 Residential real estate 2,022 270 — 2,292 601,120 20,867 624,279 Consumer 4,734 943 730 6,407 436,493 4,584 447,484 Total gross loans receivable held to maturity $ 13,375 $ 3,932 $ 830 $ 18,137 $ 6,312,508 $ 62,581 $ 6,393,226 The majority of Heartland's impaired loans are on nonaccrual or have had their terms restructured in a troubled debt restructuring. The following tables present, by category of loan, impaired loans, the unpaid contractual loan balances at March 31, 2018 , and December 31, 2017 ; the outstanding loan balances recorded on the consolidated balance sheets at March 31, 2018 , and December 31, 2017 ; any related allowance recorded for those loans as of March 31, 2018 , and December 31, 2017 ; the average outstanding loan balances recorded on the consolidated balance sheets during the three -months ended March 31, 2018 , and year ended December 31, 2017 ; and the interest income recognized on the impaired loans during the three -month period ended March 31, 2018 , and year ended December 31, 2017 , in thousands: Unpaid Contractual Balance Loan Balance Related Allowance Recorded Year- to- Date Avg. Loan Balance Year- to- Date Interest Income Recognized March 31, 2018 Impaired loans with a related allowance: Commercial $ 2,816 $ 2,816 $ 2,425 $ 2,472 $ — Commercial real estate 11,180 9,324 736 9,520 8 Total commercial and commercial real estate 13,996 12,140 3,161 11,992 8 Agricultural and agricultural real estate 1,536 1,536 787 1,537 — Residential real estate 1,693 1,693 386 1,608 3 Consumer 2,859 2,859 1,137 3,069 9 Total impaired loans with a related allowance $ 20,084 $ 18,228 $ 5,471 $ 18,206 $ 20 Impaired loans without a related allowance: Commercial $ 7,308 $ 6,189 $ — $ 5,449 $ 49 Commercial real estate 14,202 13,596 — 13,879 97 Total commercial and commercial real estate 21,510 19,785 — 19,328 146 Agricultural and agricultural real estate 17,388 15,360 — 12,954 1 Residential real estate 26,635 26,631 — 26,878 109 Consumer 3,757 3,568 — 3,912 22 Total impaired loans without a related allowance $ 69,290 $ 65,344 $ — $ 63,072 $ 278 Total impaired loans held to maturity: Commercial $ 10,124 $ 9,005 $ 2,425 $ 7,921 $ 49 Commercial real estate 25,382 22,920 736 23,399 105 Total commercial and commercial real estate 35,506 31,925 3,161 31,320 154 Agricultural and agricultural real estate 18,924 16,896 787 14,491 1 Residential real estate 28,328 28,324 386 28,486 112 Consumer 6,616 6,427 1,137 6,981 31 Total impaired loans held to maturity $ 89,374 $ 83,572 $ 5,471 $ 81,278 $ 298 Unpaid Contractual Balance Loan Balance Related Allowance Recorded Year-to- Date Avg. Loan Balance Year-to- Date Interest Income Recognized December 31, 2017 Impaired loans with a related allowance: Commercial $ 2,292 $ 2,292 $ 1,613 $ 3,607 $ 39 Commercial real estate 11,925 10,068 766 11,479 34 Total commercial and commercial real estate 14,217 12,360 2,379 15,086 73 Agricultural and agricultural real estate 1,539 1,539 546 3,437 — Residential real estate 1,568 1,568 430 2,056 15 Consumer 2,634 2,634 1,400 2,370 41 Total impaired loans with a related allowance $ 19,958 $ 18,101 $ 4,755 $ 22,949 $ 129 Impaired loans without a related allowance: Commercial $ 6,243 $ 5,123 $ — $ 2,586 $ 165 Commercial real estate 14,243 13,637 — 20,148 514 Total commercial and commercial real estate 20,486 18,760 — 22,734 679 Agricultural and agricultural real estate 13,793 11,765 — 9,654 — Residential real estate 25,573 25,573 — 26,024 277 Consumer 4,269 4,269 — 3,884 73 Total impaired loans without a related allowance $ 64,121 $ 60,367 $ — $ 62,296 $ 1,029 Total impaired loans held to maturity: Commercial $ 8,535 $ 7,415 $ 1,613 $ 6,193 $ 204 Commercial real estate 26,168 23,705 766 31,627 548 Total commercial and commercial real estate 34,703 31,120 2,379 37,820 752 Agricultural and agricultural real estate 15,332 13,304 546 13,091 — Residential real estate 27,141 27,141 430 28,080 292 Consumer 6,903 6,903 1,400 6,254 114 Total impaired loans held to maturity $ 84,079 $ 78,468 $ 4,755 $ 85,245 $ 1,158 On February 23, 2018, Heartland acquired Signature Bancshares, Inc., parent company of Signature Bank, based in Minnetonka, Minnesota. As of February 23, 2018, Signature Bancshares, Inc. had gross loans of $ 335.1 million and the estimated fair value of the loans acquired was $ 324.5 million . Included in loans acquired from Signature Bank is a lease portfolio with a fair value of $16.0 million . The lease portfolio is include with the commercial loan category for disclosure purposes. On July 7, 2017, Heartland acquired Citywide Banks of Colorado, Inc., parent company of Citywide Banks, based in Denver, Colorado. As of July 7, 2017, Citywide Banks had gross loans of $1.00 billion , and the estimated fair value of the loans acquired was $985.4 million . On February 28, 2017, Heartland acquired Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. As of February 28, 2017, Founders Community Bank had gross loans of $98.9 million , and the estimated fair value of the loans acquired was $96.4 million . Heartland uses the acquisition method of accounting for purchased loans in accordance with ASC 805, " Business Combinations." Purchased loans acquired in a business combination are recorded at estimated fair value on their purchase date, but the purchaser cannot carry over the related allowance for loan losses. Purchased loans are accounted for under ASC 310-30, " Loans and Debt Securities with Deteriorated Credit Quality," when the loans have evidence of credit deterioration since origination, and when at the date of the acquisition, it is probable that Heartland will not collect all contractually required principal and interest payments. Evidence of credit quality deterioration at the purchase date includes statistics such as past due and nonaccrual status. Generally, acquired loans that meet Heartland’s definition for nonaccrual status fall within the scope of ASC 310-30. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference, which is included in the carrying value of the loans. Subsequent decreases to the expected cash flows of the loan will generally result in a provision for loan losses. Subsequent increases in cash flows result in a reversal of the provision for loan losses to the extent of prior charges, or a reclassification of the difference from nonaccretable to accretable with a positive impact on future interest income. Further, any excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized into interest income over the remaining life of the loan when there is a reasonable expectation about the amount and timing of such cash flows. At March 31, 2018 , and December 31, 2017 , the carrying amount of loans acquired since 2015 consist of purchased impaired and nonimpaired loans as summarized in the following table, in thousands: March 31, 2018 December 31, 2017 Impaired Non Impaired Total Loans Impaired Non Impaired Total Loans Commercial $ 3,142 $ 262,107 $ 265,249 $ 952 $ 187,375 $ 188,327 Commercial real estate 2,474 1,078,724 1,081,198 2,572 1,052,469 1,055,041 Agricultural and agricultural real estate — 26 26 — 1,242 1,242 Residential real estate 199 181,020 181,219 214 173,909 174,123 Consumer loans — 78,613 78,613 — 51,292 51,292 Total loans $ 5,815 $ 1,600,490 $ 1,606,305 $ 3,738 $ 1,466,287 $ 1,470,025 Changes in accretable yield on acquired loans with evidence of credit deterioration at the date of acquisition for the three -month periods ended March 31, 2018 , and March 31, 2017 , were as follows, in thousands: Three Months Ended 2018 2017 Balance at beginning of period $ 57 $ 182 Original yield premium, net, at date of acquisition (56 ) — Accretion (199 ) (173 ) Reclassification from nonaccretable difference (1) 198 127 Balance at period end $ — $ 136 (1) Represents increases in estimated cash flows expected to be received, primarily due to lower estimated credit losses. For loans acquired since January 2015, on the acquisition dates the preliminary estimate of the contractually required payments receivable for all loans with evidence of credit deterioration since origination was $26.0 million , and the estimated fair value of these loans was $15.0 million . At March 31, 2018 , a majority of these loans were valued based upon the liquidation value of the underlying collateral, because the expected cash flows are primarily based on the liquidation of such collateral, and the timing and amount of the cash flows could not be reasonably estimated. At March 31, 2018 , there was no allowance recorded and $139,000 of allowance recorded at December 31, 2017, related to these ASC 310-30 loans. Provision expense of $0 and $1,000 was recorded for the three-month periods ended March 31, 2018 , and 2017 , respectively. For loans acquired since January 2015, the preliminary estimate on the acquisition dates of the contractually required payments receivable for all nonimpaired loans acquired was $2.99 billion , and the estimated fair value of the loans was $2.91 billion . |
Allowance for Loan Losses
Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Allowance for Loan Losses | ALLOWANCE FOR LOAN LOSSES Changes in the allowance for loan losses for the three -month periods ended March 31, 2018 , and March 31, 2017 , were as follows, in thousands: Commercial Commercial Real Estate Agricultural Residential Real Estate Consumer Total Balance at December 31, 2017 $ 18,098 $ 21,950 $ 4,258 $ 2,224 $ 9,156 $ 55,686 Charge-offs (794 ) (125 ) — (16 ) (1,289 ) (2,224 ) Recoveries 104 448 14 75 290 931 Provision 1,987 1,196 444 (142 ) 778 4,263 Balance at March 31, 2018 $ 19,395 $ 23,469 $ 4,716 $ 2,141 $ 8,935 $ 58,656 Commercial Commercial Real Estate Agricultural Residential Real Estate Consumer Total Balance at December 31, 2016 $ 14,765 $ 24,319 $ 4,210 $ 2,263 $ 8,767 $ 54,324 Charge-offs (230 ) (608 ) (871 ) (265 ) (1,744 ) (3,718 ) Recoveries 234 212 1 2 303 752 Provision 1,411 (126 ) 643 183 1,530 3,641 Balance at March 31, 2017 $ 16,180 $ 23,797 $ 3,983 $ 2,183 $ 8,856 $ 54,999 Management allocates the allowance for loan losses by pools of risk within each loan portfolio. The allocation of the allowance for loan losses by loan portfolio is made for analytical purposes and is not necessarily indicative of the trend of future loan losses in any particular category. The total allowance for loan losses is available to absorb losses from any segment of the loan portfolio. |
Goodwill, Core Deposit Premium
Goodwill, Core Deposit Premium and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Core Deposit Premium and Other Intangible Assets | GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS Heartland had goodwill of $ 270.3 million at March 31, 2018 , and $236.6 million at December 31, 2017 . Heartland conducts its annual internal assessment of the goodwill both at the consolidated level and at its subsidiaries as of September 30. There was no goodwill impairment as of the most recent assessment. Heartland recorded $33.7 million of goodwill and $7.7 million of core deposit intangibles in connection with the acquisition of Signature Bancshares, Inc., parent company of Signature Bank, headquartered in Minnetonka, Minnesota on February 23, 2018. Heartland recorded $95.2 million of goodwill and $16.0 million of core deposit intangibles in connection with the acquisition of Citywide Banks of Colorado, Inc., parent company of Citywide Banks, headquartered in Aurora, Colorado on July 7, 2017. Heartland recorded $13.8 million of goodwill and $2.5 million of core deposit intangibles in connection with the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California on February 28, 2017. The core deposit intangibles recorded with the Signature Bancshares, Inc., Citywide Banks of Colorado, Inc., and Founders Bancorp acquisitions are not deductible for tax purposes and are expected to be amortized over a period of 10 years on an accelerated basis. Goodwill related to the Signature Bancshares, Inc., Citywide Banks of Colorado, Inc., and Founders Bancorp acquisitions resulted from expected operational synergies, increased market presence, cross-selling opportunities, and expanded business lines and is not deductible for tax purposes. Heartland's intangible assets consist of core deposit intangibles, mortgage servicing rights, customer relationship intangibles, and commercial servicing rights. The gross carrying amount of these intangible assets and the associated accumulated amortization at March 31, 2018 , and December 31, 2017 , are presented in the table below, in thousands: March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing intangible assets: Core deposit intangibles $ 69,731 $ 28,939 $ 40,792 $ 62,008 $ 27,086 $ 34,922 Customer relationship intangibles 1,177 906 271 1,177 896 281 Mortgage servicing rights 42,249 19,084 23,165 42,139 18,891 23,248 Commercial servicing rights 6,740 4,434 2,306 6,719 4,110 2,609 Total $ 119,897 $ 53,363 $ 66,534 $ 112,043 $ 50,983 $ 61,060 The following table shows the estimated future amortization expense for amortizable intangible assets, in thousands: Core Deposit Intangibles Customer Relationship Intangibles Mortgage Servicing Rights Commercial Servicing Rights Total Nine months ending December 31, 2018 $ 5,957 $ 29 $ 6,776 $ 471 $ 13,233 Year ending December 31, 2019 7,092 38 4,097 522 11,749 2020 6,220 37 3,512 411 10,180 2021 5,323 36 2,927 354 8,640 2022 4,175 34 2,341 290 6,840 2023 3,691 33 1,756 163 5,643 Thereafter 8,334 64 1,756 95 10,249 Total $ 40,792 $ 271 $ 23,165 $ 2,306 $ 66,534 Projections of amortization expense for mortgage servicing rights are based on existing asset balances and the existing interest rate environment as of March 31, 2018 . Heartland's actual experience may be significantly different depending upon changes in mortgage interest rates and market conditions. Mortgage loans serviced for others were approximately $3.54 billion and $ 3.56 billion as of March 31, 2018 , and December 31, 2017 , respectively. Custodial escrow balances maintained in connection with the mortgage loan servicing portfolio were approximately $23.2 million and $17.3 million as of March 31, 2018 , and December 31, 2017 , respectively. The fair value of Heartland's mortgage servicing rights was estimated at $40.4 million at March 31, 2018 , and $37.1 million at December 31, 2017 . Heartland's mortgage servicing rights portfolio is comprised of loans serviced for the Federal National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). Prior to the third quarter of 2017, Heartland also serviced loans for the Government National Mortgage Association ("GNMA"). The servicing rights portfolio is separated into 15 - and 30 -year tranches, and the servicing rights portfolio is an asset of one of Heartland's subsidiaries. During the third quarter of 2017, Heartland entered into an agreement to sell substantially all of its GNMA servicing portfolio, which contained loans with an unpaid principal balance of approximately $773.9 million . The transaction qualified as a sale, and $6.9 million of mortgage servicing rights were de-recognized on the consolidated balance sheet as of December 31, 2017 . The fair value of mortgage servicing rights is calculated based upon a discounted cash flow analysis. Cash flow assumptions, including prepayment speeds, servicing costs and escrow earnings are considered in the calculation. The average constant prepayment rate was 8.23% and 9.73% for the March 31, 2018 , and December 31, 2017 , valuations, respectively. The discount rate was 9.04% and 9.06% for the March 31, 2018 , and December 31, 2017 , valuations, respectively. The average capitalization rate for the first three months of 2018 ranged from 96 to 125 basis points compared to the range of 91 to 150 basis points for 2017 . Fees collected for the servicing of mortgage loans for others were $ 2.2 million and $ 3.2 million for the three months ended March 31, 2018 , and March 31, 2017 . The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the three months ended March 31, 2018 , and March 31, 2017 : 2018 2017 Balance at January 1, $ 23,248 $ 32,088 Originations 1,162 2,132 Amortization (1,245 ) (2,261 ) Balance at period end $ 23,165 $ 31,959 Fair value of mortgage servicing rights $ 40,434 $ 47,564 Mortgage servicing rights, net to servicing portfolio 0.66 % 0.74 % Heartland's commercial servicing portfolio is comprised of loans guaranteed by the Small Business Administration and United States Department of Agriculture that have been sold with servicing retained by Heartland, which totaled $125.5 million at March 31, 2018 and $139.9 million at December 31, 2017. The commercial servicing rights portfolio is separated into two tranches at the respective Heartland subsidiary, loans with a term of less than 20 years and loans with a term of more than 20 years . Fees collected for the servicing of commercial loans for others were $420,000 and $415,000 for the three months ended March 31, 2018 , and March 31, 2017 , respectively. The fair value of each commercial servicing rights portfolio is calculated based upon a discounted cash flow analysis. Cash flow assumptions, including prepayment speeds and servicing costs, are considered in the calculation. The range of average constant prepayment rates for the valuations was 8.27% to 9.89% as of March 31, 2018 , compared to 7.27% to 8.88% as of December 31, 2017 . The discount rate range was 13.09% to 16.71% for the March 31, 2018 , valuations compared to 13.04% to 15.49% for the December 31, 2017 , valuations. The capitalization rate for 2018 ranged from 310 to 445 basis points compared to 310 to 445 basis points for 2017 . The total fair value of Heartland's commercial servicing rights was estimated at $2.8 million as of March 31, 2018 , and $ 3.2 million as of December 31, 2017. The following table summarizes, in thousands, the changes in capitalized commercial servicing rights for the three months ended March 31, 2018 , and March 31, 2017 : 2018 2017 Balance at January 1, $ 2,609 $ 3,690 Originations 21 93 Amortization (322 ) (306 ) Valuation allowance on commercial servicing rights (2 ) 5 Balance at period end $ 2,306 $ 3,482 Fair value of commercial servicing rights $ 2,781 $ 4,040 Commercial servicing rights, net to servicing portfolio 1.84 % 2.17 % Mortgage and commercial servicing rights are initially recorded at fair value in net gains on sale of loans held for sale when they are acquired through loan sales. Fair value is based on market prices for comparable servicing contracts, when available, or based on a valuation model that calculates the present value of estimated future net servicing income. Mortgage and commercial servicing rights are subsequently measured using the amortization method, which requires the asset to be amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans. Servicing rights are evaluated for impairment at each Heartland subsidiary based upon the fair value of the assets as compared to the carrying amount. Impairment is recognized through a valuation allowance for specific tranches to the extent that fair value is less than carrying amount at each Heartland subsidiary. At March 31, 2018 , no valuation allowance was required on commercial servicing rights with a term less than 20 years and a $14,000 valuation allowance was required on commercial servicing rights with a term greater than 20 years. At December 31, 2017 , no valuation allowance was required on commercial servicing rights with a term less than 20 years and a $12,000 valuation allowance was required on commercial servicing rights with a term greater than 20 years. The following table summarizes, in thousands, the book value, the fair value of each tranche of the commercial servicing rights and any recorded valuation allowance at each respective subsidiary at March 31, 2018 , and December 31, 2017 : March 31, 2018 Book Value- Less than 20 Years Fair Value- Less than 20 Years Impairment- Less than 20 Years Book Value- More than 20 Years Fair Value- More than 20 Years Impairment- More than 20 Years Citywide Banks $ 6 $ 10 $ — $ 33 $ 36 $ — Premier Valley Bank 72 104 — 286 272 14 Wisconsin Bank & Trust 368 534 — 1,554 1,825 — Total $ 446 $ 648 $ — $ 1,873 $ 2,133 $ 14 December 31, 2017 Citywide Banks $ 8 $ 11 $ — $ 34 $ 37 $ — Premier Valley Bank 83 110 — 303 291 12 Wisconsin Bank & Trust 446 619 — 1,747 2,153 — Total $ 537 $ 740 $ — $ 2,084 $ 2,481 $ 12 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Heartland uses derivative financial instruments as part of its interest rate risk management strategy. As part of the strategy, Heartland considers the use of interest rate swaps, caps, floors, collars, and certain interest rate lock commitments and forward sales of securities related to mortgage banking activities. Heartland's current strategy includes the use of interest rate swaps, interest rate lock commitments and forward sales of mortgage securities. In addition, Heartland is facilitating back-to-back loan swaps to assist customers in managing interest rate risk. Heartland's objectives are to add stability to its net interest margin and to manage its exposure to movements in interest rates. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. Heartland is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. Heartland minimizes this risk by entering into derivative contracts with counterparties that meet Heartland’s credit standards, and the contracts contain collateral provisions protecting the at-risk party. Heartland has not experienced any losses from nonperformance by these counterparties. Heartland monitors counterparty risk in accordance with the provisions of ASC 815. In addition, interest rate-related derivative instruments generally contain language outlining collateral pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits which are determined by credit ratings of each counterparty. Heartland was required to pledge no cash as collateral at March 31, 2018 , and $1.2 million at December 31, 2017 . At March 31, 2018 , $860,000 of collateral was required to be pledged by Heartland's counterparties, compared to no collateral at December 31, 2017 . Heartland's derivative and hedging instruments are recorded at fair value on the consolidated balance sheets. See Note 8, “Fair Value,” for additional fair value information and disclosures. Cash Flow Hedges Heartland has variable rate funding which creates exposure to variability in interest payments due to changes in interest rates. To manage the interest rate risk related to the variability of interest payments, Heartland has entered into various interest rate swap agreements. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are received or made on Heartland's variable-rate liabilities. For the three months ended March 31, 2018 , the change in net unrealized losses on cash flow hedges reflects changes in the fair value of the swaps and reclassification from accumulated other comprehensive income to interest expense totaling $197,000 . For the next twelve months, Heartland estimates that cash payments and reclassification from accumulated other comprehensive income to interest expense will total $789,000 . Heartland entered into five forward starting interest rate swap transactions to effectively convert Heartland Financial Statutory Trust IV, V, and VII, which total $ 65.0 million , as well as Morrill Statutory Trust I and II, which total $ 20.0 million , from variable rate subordinated debentures to fixed rate debt. For accounting purposes, these five swap transactions are designated as cash flow hedges of the changes in LIBOR, the benchmark interest rate being hedged, associated with the interest payments made on $85.0 million of Heartland's subordinated debentures that reset quarterly on a specified reset date. At inception, Heartland asserted that the underlying principal balance would remain outstanding throughout the hedge transaction, making it probable that sufficient LIBOR-based interest payments would exist through the maturity date of the swaps. The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as cash flow hedges at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category Receive Rate Weighted Average Pay Rate Maturity March 31, 2018 Interest rate swap $ 25,000 $ 239 Other assets 2.178 % 2.255 % 03/17/2021 Interest rate swap 20,000 (380 ) Other liabilities 1.704 3.355 01/07/2020 Interest rate swap 10,000 69 Other assets 2.286 1.674 03/26/2019 Interest rate swap 10,000 68 Other assets 2.178 1.658 03/18/2019 Interest rate swap 32,667 1,010 Other assets 4.240 3.674 05/10/2021 Interest rate swap 20,000 316 Other assets 2.125 2.390 06/15/2024 Interest rate swap 20,000 339 Other assets 2.006 2.352 03/01/2024 December 31, 2017 Interest rate swap $ 25,000 $ (106 ) Other liabilities 1.600 % 2.255 % 03/17/2021 Interest rate swap 20,000 (621 ) Other liabilities 1.350 3.355 01/07/2020 Interest rate swap 10,000 30 Other assets 1.329 1.674 03/26/2019 Interest rate swap 10,000 29 Other assets 1.600 1.658 03/18/2019 Interest rate swap 33,667 759 Other assets 3.932 3.674 05/10/2021 Interest rate swap (1) 20,000 (177 ) Other liabilities 1.588 2.390 06/15/2024 Interest rate swap (2) 20,000 (149 ) Other Liabilities 1.481 2.352 03/01/2024 The table below identifies the gains and losses recognized on Heartland's derivative instruments designated as cash flow hedges for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: 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 March 31, 2018 Interest rate swaps $ 1,896 Interest expense $ (197 ) Other income $ — Three Months Ended March 31, 2017 Interest rate swaps $ 533 Interest expense $ (397 ) Other income $ — Fair Value Hedges Heartland uses interest rate swaps to convert certain long term fixed rate loans to floating rates to hedge interest rate risk exposure. Heartland uses hedge accounting in accordance with ASC 815, with the unrealized gains and losses, representing the change in fair value of the derivative and the change in fair value of the risk being hedged on the related loan, being recorded in the consolidated statements of income. The ineffective portions of the unrealized gains or losses, if any, are recorded in interest income and interest expense in the consolidated statements of income. Heartland uses statistical regression to assess hedge effectiveness, both at the inception of the hedge as well as on a continual basis. The regression analysis involves regressing the periodic change in the fair value of the hedging instrument against the periodic changes in the fair value of the asset being hedged due to changes in the hedge risk. Heartland was required to pledge $3.2 million and $3.9 million of cash as collateral for these fair value hedges at March 31, 2018 , and December 31, 2017, respectively. The table below identifies the notional amount, fair value and balance sheet category of Heartland's fair value hedges at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2018 Fair value hedges $ 35,436 $ (105 ) Other liabilities December 31, 2017 Fair value hedges $ 35,635 $ (999 ) Other liabilities The table below identifies the gains and losses recognized on Heartland's fair value hedges for the three month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Fair value hedges $ 894 Interest income Three Months Ended March 31, 2017 Fair value hedges $ 194 Interest income Embedded Derivatives Heartland has fixed rate loans with embedded derivatives. The loans contain terms that affect the cash flows or value of the loan similar to a derivative instrument, and therefore are considered to contain an embedded derivative. The embedded derivatives are bifurcated from the loans because the terms of the derivative instrument are not clearly and closely related to the loans. The embedded derivatives are recorded at fair value on the consolidated balance sheets as a part of other assets, and changes in the fair value are a component of noninterest income. The table below identifies the notional amount, fair value and balance sheet category of Heartland's embedded derivatives at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2018 Embedded derivatives $ 13,907 $ 461 Other assets December 31, 2017 Embedded derivatives $ 14,045 $ 738 Other assets The table below identifies the gains and losses recognized on Heartland's embedded derivatives for the three month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Embedded derivatives $ 277 Other noninterest income Three Months Ended March 31, 2017 Embedded derivatives $ 117 Other noninterest income In conjunction with the CIC Bancshares, Inc. transaction on February 5, 2016, Heartland assumed convertible subordinated debt. The subordinated debt has a face value of $2.0 million , and the embedded conversion option allows the holder to convert the debt to Heartland common equity in any increment and at the discretion of the holder. The conversion option is bifurcated from the debt because the terms of the conversion option are not clearly and closely related to the terms of the debt. On February 5, 2016, the total number of shares to be issued upon conversion was 73,394 . At March 31, 2018, and December 31, 2017, the remaining shares to be issued upon conversion totaled zero . During 2017, all of the remaining convertible subordinated debt was converted to common stock, resulting in the issuance of 20,481 shares of common stock. The embedded conversion option was reported at fair value on the consolidated balance sheets using the Black-Scholes model. The following table identifies, in thousands, the notional amount, fair value, balance sheet category and income statement category for the change in fair value of the embedded conversion option as of March 31, 2018 , and December 31, 2017 : Notional Amount Fair Value Balance Sheet Category March 31, 2018 Embedded conversion option $ — $ — Other liabilities December 31, 2017 Embedded conversion option $ — $ — Other liabilities The table below identifies the gains and losses recognized on Heartland's embedded conversion options for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Embedded conversion option $ — Other noninterest income Three Months Ended March 31, 2017 Embedded conversion option $ 97 Other noninterest income Back-to-Back Loan Swaps Heartland has interest rate swap loan relationships with customers to meet their financing needs. Upon entering into these loan swaps, Heartland enters into offsetting positions with counterparties in order to minimize interest rate risk. These back-to-back loan swaps qualify as free standing financial derivatives with the fair values reported in other assets and other liabilities on the consolidated balance sheets. Heartland was required to post $495,000 and $1.6 million as of March 31, 2018 , and December 31, 2017 , respectively, as collateral related to these back-to-back swaps. Heartland's counterparties were required to pledge $1.6 million at March 31, 2018 , and $190,000 at December 31, 2017 . Any gains and losses on these back-to-back swaps are recorded in noninterest income on the consolidated statements of income, and for the three months ended March 31, 2018 and March 31, 2017 , no gain or loss was recognized. The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as loan swaps at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category Weighted Average Receive Rate Weighted Average Pay Rate March 31, 2018 Customer interest rate swaps $ 162,882 $ 3,763 Other assets 4.82 % 4.73 % Customer interest rate swaps 162,882 (3,763 ) Other liabilities 4.73 4.82 December 31, 2017 Customer interest rate swaps $ 126,766 $ 2,377 Other assets 4.70 % 4.03 % Customer interest rate swaps 126,766 (2,377 ) Other liabilities 4.03 4.70 Other Free Standing Derivatives Heartland has entered into interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans and mortgage backed securities that are considered derivative instruments. Heartland enters into forward commitments for the future delivery of residential mortgage loans when interest rate lock commitments are entered into in order to economically hedge the effect of future changes in interest rates on the commitments to fund the loans as well as on residential mortgage loans available for sale. The fair value of these commitments is recorded on the consolidated balance sheets, with the changes in fair value recorded in the consolidated statements of income as a component of gains on sale of loans held for sale. These derivative contracts are designated as free standing derivative contracts and are not designated against specific assets and liabilities on the consolidated balance sheets or forecasted transactions and therefore do not qualify for hedge accounting treatment. Heartland was required to pledge collateral of $203,000 at March 31, 2018 , and $20,000 at December 31, 2017 . Heartland's counterparties were required to pledge $0 and $29,000 at March 31, 2018 , and December 31, 2017 , respectively, as collateral for these forward commitments. Heartland acquired undesignated interest rate swaps in 2015. These swaps were entered into primarily for the benefit of customers seeking to manage their interest rate risk and are not designated against specific assets or liabilities on the consolidated balance sheet or forecasted transactions and therefore do not qualify for hedge accounting in accordance with ASC 815. These swaps are carried at fair value on the consolidated balance sheets as a component of other liabilities, with changes in the fair value recorded as a component of other noninterest income. The table below identifies the balance sheet category and fair values of Heartland's other free standing derivative instruments not designated as hedging instruments at March 31, 2018 , and December 31, 2017 , in thousands: Balance Sheet Category Notional Amount Fair Value March 31, 2018 Interest rate lock commitments (mortgage) Other assets $ 65,591 $ 1,959 Forward commitments Other assets 55,118 283 Forward commitments Other liabilities 91,625 (320 ) Undesignated interest rate swaps Other liabilities 13,907 (461 ) December 31, 2017 Interest rate lock commitments (mortgage) Other assets $ 53,588 $ 1,738 Forward commitments Other assets 37,286 80 Forward commitments Other liabilities 118,632 (232 ) Undesignated interest rate swaps Other liabilities 14,045 (738 ) The table below identifies the income statement category of the gains and losses recognized in income on Heartland's other free standing derivative instruments not designated as hedging instruments for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Income Statement Category Gain (Loss) Recognized Three Months Ended March 31, 2018 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 17 Forward commitments Net gains on sale of loans held for sale 115 Undesignated interest rate swaps Other noninterest income 277 Three Months Ended March 31, 2017 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 1,062 Forward commitments Net gains on sale of loans held for sale (2,739 ) Undesignated interest rate swaps Other noninterest income 117 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Heartland utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available for sale, trading securities and derivatives are recorded in the consolidated balance sheets at fair value on a recurring basis. Additionally, from time to time, Heartland may be required to record at fair value other assets on a nonrecurring basis such as loans held for sale, loans held to maturity and certain other assets including, but not limited to, mortgage servicing rights, commercial servicing rights and other real estate owned. These nonrecurring fair value adjustments typically involve application of the lower of cost or fair value accounting or write-downs of individual assets. Fair Value Hierarchy Under ASC 820, assets and liabilities are grouped at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 — Valuation is based upon quoted prices for identical instruments in active markets. Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, or similar instruments in markets that are not active, and model-based valuation techniques for all significant assumptions are observable in the market. Level 3 — Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring or non-recurring basis. Assets Securities Available for Sale and Held to Maturity Securities available for sale are recorded at fair value on a recurring basis. Securities held to maturity are generally recorded at cost and are recorded at fair value only to the extent a decline in fair value is determined to be other-than-temporary. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, as well as U.S. Treasury securities. Level 2 securities include U.S. government and agency securities, mortgage and asset-backed securities and private collateralized mortgage obligations, municipal bonds and corporate debt securities. On a quarterly basis, a secondary independent pricing service is used for the securities portfolio to validate the pricing from Heartland's primary pricing service. Loans Held for Sale Loans held for sale are carried at the lower of cost or fair value on an aggregate basis. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, Heartland classifies loans held for sale subjected to nonrecurring fair value adjustments as Level 2. Loans Held to Maturity Heartland does not record loans held to maturity at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC 310. The fair value of impaired loans is measured using one of the following impairment methods: 1) the present value of expected future cash flows discounted at the loan's effective interest rate or 2) the observable market price of the loan or 3) the fair value of the collateral if the loan is collateral dependent. In accordance with ASC 820, impaired loans measured at fair value are classified as nonrecurring Level 3 in the fair value hierarchy. Premises, Furniture and Equipment Held for Sale Heartland values premises, furniture and equipment held for sale based on third-party appraisals less estimated disposal costs. Heartland considers third party appraisals, as well as independent fair value assessments from Realtors or persons involved in selling bank premises, furniture and equipment, in determining the fair value of particular properties. Accordingly, the valuation of premises, furniture and equipment held for sale is subject to significant external and internal judgment. Heartland periodically reviews premises, furniture and equipment held for sale to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. Premises, furniture and equipment held for sale are classified as nonrecurring Level 3 in the fair value hierarchy. Mortgage Servicing Rights Mortgage servicing rights assets represent the value associated with servicing residential real estate loans that have been sold to outside investors with servicing retained. Heartland uses the amortization method (i.e., the lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, to determine the carrying value of its mortgage servicing rights. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes discount rates, prepayment speeds and delinquency rate assumptions as inputs. All of the assumptions in the discounted cash flow analysis require a significant degree of management estimation and judgment. Mortgage servicing rights are subject to impairment testing. The carrying values of these rights are reviewed quarterly for impairment based upon the calculation of fair value as performed by an outside third party. For purposes of measuring impairment, the rights are stratified into certain risk characteristics including note type and note term. If the valuation model reflects a fair value less than the carrying value, mortgage servicing rights are adjusted to fair value through a valuation allowance. Heartland classifies mortgage servicing rights as nonrecurring with Level 3 measurement inputs. Commercial Servicing Rights Commercial servicing rights assets represent the value associated with servicing commercial loans guaranteed by the Small Business Administration and the United States Department of Agriculture that have been sold with servicing retained by Heartland. Heartland uses the amortization method (i.e., the lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, to determine the carrying value of its commercial servicing rights. The fair value for servicing assets is determined through market prices for comparable servicing contracts, when available, or through a valuation model that calculates the present value of estimated future net servicing income. Inputs utilized include discount rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management estimation and judgment. Commercial servicing rights are subject to impairment testing, and the carrying values of these rights are reviewed quarterly for impairment based upon the calculation of fair value as performed by an outside third party. If the valuation model reflects a fair value less than the carrying value, commercial servicing rights are adjusted to fair value through a valuation allowance. Heartland classifies commercial servicing rights as nonrecurring with Level 3 measurement inputs. Derivative Financial Instruments Heartland's current interest rate risk strategy includes interest rate swaps. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, Heartland incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, Heartland has considered the impact of netting any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although Heartland has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2018 , and December 31, 2017 , Heartland has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, Heartland has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Interest rate lock commitments Heartland uses an internal valuation model that relies on internally developed inputs to estimate the fair value of its interest rate lock commitments which is based on unobservable inputs that reflect management's assumptions and specific information about each borrower. Interest rate lock commitments are classified in Level 3 of the fair value hierarchy. Forward commitments The fair value of forward commitments are estimated using an internal valuation model, which includes current trade pricing for similar financial instruments in active markets that Heartland has the ability to access and are classified in Level 2 of the fair value hierarchy. Other Real Estate Owned Other real estate owned ("OREO") represents property acquired through foreclosures and settlements of loans. Property acquired is carried at the fair value of the property at the time of acquisition (representing the property's cost basis), plus any acquisition costs, or the estimated fair value of the property, less disposal costs. Heartland considers third party appraisals, as well as independent fair value assessments from realtors or persons involved in selling OREO, in determining the fair value of particular properties. Accordingly, the valuation of OREO is subject to significant external and internal judgment. Heartland periodically reviews OREO to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. OREO is classified as nonrecurring Level 3 of the fair value hierarchy. The table below presents Heartland's assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2018 , and December 31, 2017 , in thousands, aggregated by the level in the fair value hierarchy within which those measurements fall: Total Fair Value Level 1 Level 2 Level 3 March 31, 2018 Assets Securities available for sale U.S. government corporations and agencies $ 11,188 $ 9,421 $ 1,767 $ — Mortgage and asset-backed securities 1,647,604 — 1,647,604 — Obligations of states and political subdivisions 352,180 — 352,180 — Corporate debt securities — — — — Equity securities 16,693 — 16,693 — Derivative financial instruments (1) 6,265 — 6,265 — Interest rate lock commitments 1,959 — — 1,959 Forward commitments 283 — 283 — Total assets at fair value $ 2,036,172 $ 9,421 $ 2,024,792 $ 1,959 Liabilities Derivative financial instruments (2) $ 4,709 $ — $ 4,709 $ — Forward commitments 320 — 320 — Total liabilities at fair value $ 5,029 $ — $ 5,029 $ — December 31, 2017 Assets Securities available for sale U.S. government corporations and agencies $ 5,328 $ 3,484 $ 1,844 $ — Mortgage and asset-backed securities 1,753,736 — 1,753,736 — Obligations of states and political subdivisions 441,015 — 441,015 — Equity securities 16,674 — 16,674 — Derivative financial instruments (1) 3,933 — 3,933 — Interest rate lock commitments 1,738 — — 1,738 Forward commitments 80 — 80 — Total assets at fair value $ 2,222,504 $ 3,484 $ 2,217,282 $ 1,738 Liabilities Derivative financial instruments (2) $ 5,167 $ — $ 5,167 $ — Forward commitments 232 — 232 — Total liabilities at fair value $ 5,399 $ — $ 5,399 $ — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments The tables below present Heartland's assets that are measured at fair value on a nonrecurring basis, in thousands: Fair Value Measurements at March 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 $ 2,923 $ — $ — $ 2,923 $ — Commercial real estate 8,316 — — 8,316 — Agricultural and agricultural real estate 8,041 — — 8,041 — Residential real estate 1,421 — — 1,421 4 Consumer 1,721 — — 1,721 — Total collateral dependent impaired loans $ 22,422 $ — $ — $ 22,422 $ 4 Loans held for sale $ 24,376 $ — $ 24,376 $ — $ 288 Other real estate owned $ 11,801 $ — $ — $ 11,801 $ 16 Premises, furniture and equipment held for sale $ 1,477 $ — $ — $ 1,477 $ (115 ) Commercial servicing rights $ 272 $ — $ — $ 272 $ 2 Fair Value Measurements at December 31, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Year-to- Collateral dependent impaired loans: Commercial $ 3,212 $ — $ — $ 3,212 $ 1,119 Commercial real estate 9,480 — — 9,480 322 Agricultural and agricultural real estate 8,406 — — 8,406 2,028 Residential real estate 1,137 — — 1,137 — Consumer 1,234 — — 1,234 — Total collateral dependent impaired loans $ 23,469 $ — $ — — $ 23,469 $ 3,469 Loans held for sale $ 44,560 $ — $ 44,560 $ — $ 190 Other real estate owned $ 10,777 $ — $ — $ 10,777 $ 737 Premises, furniture and equipment held for sale $ 1,977 $ — $ — $ 1,977 $ 192 Commercial servicing rights $ 291 $ — $ — $ 291 $ (21 ) The following tables present additional quantitative information about assets measured at fair value and for which Heartland has utilized Level 3 inputs to determine fair value, in thousands: Fair Value at 3/31/2018 Valuation Technique Unobservable Input Range (Weighted Average) Interest rate lock commitments $ 1,959 Discounted cash flows Closing ratio 0-99% (89%) (1) Premises, furniture and equipment held for sale 1,477 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Commercial servicing rights 272 Discounted cash flows Third party valuation (3) Other real estate owned 11,801 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% Collateral dependent impaired loans: Commercial 2,923 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Commercial real estate 8,316 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Agricultural and agricultural real estate 8,041 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Residential real estate 1,421 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Consumer 1,721 Modified appraised value Third party valuation (2) Valuation discount 0-14% (4) (1) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. (2) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. (3) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. (4) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. Fair Value at 12/31/2017 Valuation Technique Unobservable Input Range (Weighted Average) Interest rate lock commitments $ 1,738 Discounted cash flows Closing ratio 0-99% (89%) (1) Premises, furniture and equipment held for sale 1,977 Modified appraised value Third party appraisal (2) 0-10% (4) Commercial servicing rights 291 Discounted cash flows Third party valuation (3) Other real estate owned 10,777 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% Collateral dependent impaired loans: Commercial 3,212 Modified appraised value Third party appraisal (2) Appraisal discount 0-15% (4) Commercial real estate 9,480 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Agricultural and agricultural real estate 8,406 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Residential real estate 1,137 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Consumer 1,234 Modified appraised value Third party valuation (2) Valuation discount 0-12% (4) (1) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. (2) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. (3) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. (4) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. The changes in fair value of the interest rate lock commitments, which are Level 3 financial instruments measured on a recurring basis, are summarized in the following table, in thousands: For the Three Months Ended For the Year Ended December 31, 2017 Balance at January 1, $ 1,738 $ 2,790 Total gains (losses) included in earnings 17 (1,479 ) Issuances 492 1,875 Settlements (288 ) (1,448 ) Balance at period end $ 1,959 $ 1,738 Gains included in gains (losses) on sale of loans held for sale attributable to interest rate lock commitments held at March 31, 2018 , and December 31, 2017 , were $2.0 million and $1.7 million , respectively. The tables below summarize the estimated fair value of Heartland's financial instruments as defined by ASC 825 as of March 31, 2018 , and December 31, 2017 , in thousands. The carrying amounts in the following tables are recorded in the consolidated balance sheets under the indicated captions. In accordance with ASC 825, the assets and liabilities that are not financial instruments are not included in the disclosure, such as the value of the commercial and mortgage servicing rights, premises, furniture and equipment, premises, furniture and equipment held for sale, OREO, goodwill, and other intangibles and other liabilities. Heartland does not believe that the estimated information presented herein is representative of the earnings power or value of Heartland. The following analysis, which is inherently limited in depicting fair value, also does not consider any value associated with either existing customer relationships or the ability of Heartland to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different. Fair Value Measurements at March 31, 2018 Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets: Cash and cash equivalents $ 266,346 $ 266,346 $ 266,346 $ — $ — Time deposits in other financial institutions 6,297 6,297 6,297 — — Securities: Available for sale 2,027,665 2,027,665 9,421 2,018,244 — Held to maturity 249,766 258,638 — 258,638 — Other investments 22,982 22,982 — 22,982 — Loans held for sale 24,376 24,376 — 24,376 — Loans, net: Commercial 1,786,838 1,766,760 — 1,763,837 2,923 Commercial real estate 3,298,798 3,280,785 — 3,272,469 8,316 Agricultural and agricultural real estate 514,471 508,582 — 500,541 8,041 Residential real estate 621,295 614,234 — 612,813 1,421 Consumer 465,957 464,793 — 463,072 1,721 Total Loans, net 6,687,359 6,635,154 — 6,612,732 22,422 Cash surrender value on life insurance 143,444 143,444 — 143,444 — Derivative financial instruments (1) 6,265 6,265 — 6,265 — Interest rate lock commitments 1,959 1,959 — — 1,959 Forward commitments 283 283 — 283 — Financial liabilities: Deposits Demand deposits 3,094,457 3,094,457 — 3,094,457 — Savings deposits 4,536,106 4,536,106 — 4,536,106 — Time deposits 910,977 910,977 — 910,977 — Short term borrowings 131,240 131,240 — 131,240 — Other borrowings 276,118 276,193 — 276,193 — Derivative financial instruments (2) 4,709 4,709 — 4,709 — Forward commitments 320 320 — 320 — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments Fair Value Measurements at December 31, 2017 Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets: Cash and cash equivalents $ 196,003 $ 196,003 $ 196,003 $ — $ — Time deposits in other financial institutions 9,820 9,820 9,820 — — Securities: Available for sale 2,216,753 2,216,753 3,484 2,213,269 — Held to maturity 253,550 265,494 — 265,494 — Other investments 22,563 22,563 — 22,563 — Loans held for sale 44,560 44,560 — 44,560 — Loans, net: Commercial 1,628,043 1,617,956 — 1,614,744 3,212 Commercial real estate 3,140,427 3,132,542 — 3,123,062 9,480 Agricultural and agricultural real estate 508,075 508,987 — 500,581 8,406 Residential real estate 620,939 614,667 — 613,530 1,137 Consumer 438,294 440,820 — 439,586 1,234 Total Loans, net 6,335,778 6,314,972 — 6,291,503 23,469 Cash surrender value on life insurance 142,818 142,818 — 142,818 — Derivative financial instruments (1) 3,933 3,933 — 3,933 — Interest rate lock commitments 1,738 1,738 — — 1,738 Forward commitments 80 80 — 80 — Financial liabilities: Deposits Demand deposits 2,983,128 2,983,128 — 2,983,128 — Savings deposits 4,240,328 4,240,328 — 4,240,328 — Time deposits 923,453 923,453 — 923,453 — Short term borrowings 324,691 324,691 — 324,691 — Other borrowings 285,011 285,609 — 285,609 — Derivative financial instruments (2) 5,167 5,167 — 5,167 — Forward commitments 232 232 — 232 — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments Cash and Cash Equivalents — The carrying amount is a reasonable estimate of fair value due to the short-term nature of these instruments. Time Deposits in Other Financial Institutions — The carrying amount is a reasonable estimate of fair value due to the short-term nature of these instruments. Securities — For securities either held to maturity, available for sale or trading, fair value equals quoted market price if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. For Level 3 securities, Heartland utilizes independent pricing provided by third party vendors or brokers. Other Investments — Fair value measurement of other investments, which consists primarily of FHLB stock, are based on their redeemable value, which is at cost due to the restrictions placed on their transferability. The market for these securities is restricted to the issuer of the stock and subject to impairment evaluation. Loans — Beginning in the first quarter of 2018, the fair value of loans were determined using an exit price methodology as prescribed by ASU 2016-01, which was effective on January 1, 2018. The exit price estimation of fair value is based on the present value of the expected cash flows. The projected cash flows are based on the contractual terms of the loans, adjusted for prepayments and a discount rate based on the relative risk of the cash flows. Other considerations include the loan type, remaining life of the loan and credit risk. In comparison, loan fair values as of December 31, 2017, were estimated based on an entrance price methodology, which discounts future cash flows using the current rates at which a similar loan would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of non-impaired loans as of March 31, 2018, and December 31, 2017, are not comparable. The fair value of impaired loans is measured using the fair value of the underlying collateral. The fair value of loans held for sale is estimated using quoted market prices. Interest Rate Lock Commitments — The fair value of interest rate lock commitments is estimated using an internal valuation model, which includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated closing ratio based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment group. Forward Commitments — The fair value of these instruments is estimated using an internal valuation model, which includes current trade pricing for similar financial instruments. Derivative Financial Instruments — The fair value of all derivatives is estimated based on the amount that Heartland would pay or would be paid to terminate the contract or agreement, using current rates and prices, and, when appropriate, the current creditworthiness of the counter-party. Deposits — The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities. If the fair value of the fixed maturity certificates of deposit is calculated at less than the carrying amount, the carrying value of these deposits is reported as the fair value. Short-term and Other Borrowings — Rates currently available to Heartland for debt with similar terms and remaining maturities are used to estimate fair value of existing debt. Commitments to Extend Credit, Unused Lines of Credit and Standby Letters of Credit — Based upon management's analysis of the off balance sheet financial instruments, there are no significant unrealized gains or losses associated with these financial instruments based upon review of the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE On January 1, 2018, Heartland adopted ASU 2014-09, "Revenue from Contracts with Customers" (Topic 606), and all subsequent ASUs that modified Topic 606. As stated in Note 1, the implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with loan servicing income, bank owned life insurance, derivatives and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as service charges and fees, trust fees, and brokerage and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of Heartland's revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges and Fees Service charges and fees consist of revenue generated from deposit account related service charges and fees, overdraft fees, customer service fees, credit card fee income, debit card income and other service charges and fees. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders and other deposit account related fees. Heartland's performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees, including overdraft fees, are largely transactional based, and therefore, the performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Customer service fees and other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. Heartland's performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Credit card fee income and debit card income are comprised of interchange fees, ATM fees, and merchant services income. Credit card fee income and debit card income are earned whenever the banks' debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a bank cardholder uses an ATM that is not owned by one of Heartland's banks or a non-bank cardholder uses Heartland-owned ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Trust Fees Trust fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. Heartland's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the average daily market value or month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days before or after month end through a direct charge to customers’ accounts. Heartland does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. Heartland's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Brokerage and Insurance Commissions Brokerage commission primarily consist of commissions related to broker-dealer contracts. The contracts are between the customer and the broker-dealer, and Heartland satisfies its performance obligation and earns commission when the transactions are completed. The recognition of revenue is based on a defined fee schedule and does not require significant judgment. Payment is received shortly after services are rendered. Insurance commissions are related to commissions received directly from the insurance carrier. Heartland acts as an insurance agent between the customer and the insurance carrier. Heartland's performance obligations and associated fee and commission income are defined with each insurance product with the insurance company. When insurance payments are received from customers, a portion of the payment is recognized as commission revenue. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three months ended March 31, 2018, and 2017, in thousands: Three Months Ended March 31, 2018 2017 In-scope of Topic 606 Service charges and fees Service charges and fees on deposit accounts $ 2,618 $ 2,160 Overdraft fees 2,208 2,193 Customer service fees 77 49 Credit card fee income 2,190 2,033 Debit card income 2,985 3,021 Other service charges 1 1 Total service charges and fees 10,079 9,457 Trust fees 4,680 3,631 Brokerage and insurance commissions 907 1,036 Total noninterest income in-scope of Topic 606 15,666 14,124 Out-of-scope of Topic 606 Loan servicing income 1,754 1,724 Securities gains, net 1,441 2,482 Unrealized loss on equity securities, net (28 ) — Net gains on sale of loans held for sale 4,051 6,147 Valuation adjustment on commercial servicing rights (2 ) 5 Income on bank owned life insurance 614 617 Other noninterest income 1,220 794 Total noninterest income out-of-scope of Topic 606 9,050 11,769 Total noninterest income $ 24,716 $ 25,893 Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. Heartland's noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after Heartland satisfies its performance obligation and revenue is recognized. Heartland does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2018, and December 31, 2017, Heartland did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). Heartland utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, Heartland did not capitalize any contract acquisition costs. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The interim unaudited consolidated financial statements contained herein should be read in conjunction with the audited consolidated financial statements and accompanying notes to the consolidated financial statements for the fiscal year ended December 31, 2017 , included in the Form 10-K of Heartland Financial USA, Inc. ("Heartland") filed with the Securities and Exchange Commission ("SEC") on February 28, 2018 . Foot note disclosures to the interim unaudited consolidated financial statements which would substantially duplicate the disclosure contained in the footnotes to the audited consolidated financial statements have been omitted. The financial information of Heartland included herein has been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and has been prepared pursuant to the rules and regulations for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Such information reflects all adjustments (consisting of normal recurring adjustments), that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the periods presented. The results of the interim period ended March 31, 2018 , are not necessarily indicative of the results expected for the year ending December 31, 2018 . |
Earnings Per Share | Basic earnings per share is determined using net income available to common stockholders and weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income available to common stockholders by the weighted average common shares and assumed incremental common shares issued. |
Stock-Based Compensation | Heartland may grant, through its Nominating and Compensation Committee (the "Compensation Committee"), non-qualified and incentive stock options, stock appreciation rights, stock awards, restricted stock, restricted stock units and cash incentive awards, under its 2012 Long-Term Incentive Plan (the "Plan"). The Plan was originally approved by stockholders in May 2012 and was amended effective March 8, 2016, to increase the number of shares of common stock authorized for issuance and make certain other changes to the Plan. As of March 31, 2018 , 459,893 shares of common stock were available for issuance under future awards that may be granted under the Plan to employees and directors of, and service providers to, Heartland or its subsidiaries. Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, "Compensation-Stock Compensation" requires the measurement of the cost of employee services received in exchange for an award of equity instruments based upon the fair value of the award on the grant date. The cost of the award is based upon its fair value estimated on the date of grant and recognized in the consolidated statements of income over the vesting period of the award. The fair market value of restricted stock and restricted stock units is based on the fair value of the underlying shares of common stock on the date of grant. The fair value of stock options is estimated on the date of grant using the Black-Scholes model. Forfeitures are accounted for as they occur. The amount of tax benefit related to the exercise, vesting and forfeiture of equity-based awards reflected as a tax benefit in Heartland's income tax expense was $611,000 and $ 888,000 during the three months ended March 31, 2018 and 2017, respectively. Restricted Stock Units The Plan permits the Compensation Committee to grant restricted stock units ("RSUs"). In the first quarter of 2018, the Compensation Committee granted time-based RSUs with respect to 52,153 shares of common stock, and in the first quarter of 2017, the Compensation Committee granted time-based RSUs with respect to 55,665 shares of common stock to selected officers and employees. The time-based RSUs represent the right, without payment, to receive shares of Heartland common stock on a specified date in the future. The time-based RSUs granted in 2018 vest over three years in equal installments on March 6 of each of the three years following the year of the grant, while the 2017 time-based RSUs vest in equal installments on January 19 of each of the three years following the year of the grant. The time-based RSUs may also vest upon death or disability, upon a change in control or upon a "qualified retirement" (as defined in the RSU agreement). The retiree is required to sign a non-solicitation agreement as a condition to vesting. In addition to the time-based RSUs referenced in the preceding paragraph, the Compensation Committee granted one -year performance-based RSUs with respect to 18,988 shares of common stock in the first quarter of 2018, and 27,570 shares of common stock in the first quarter of 2017. These performance-based RSUs are earned based on satisfaction of performance targets for the fiscal years ended December 31, 2018, and December 31, 2017, respectively, and then fully vest on a specified date in the third calendar year following the year of the initial grant. The Compensation Committee also granted three -year performance-based RSUs with respect to 16,108 shares and 9,032 shares of common stock in the first quarter of 2018 and 2017, respectively. These performance-based RSUs will be earned based on satisfaction of performance targets for the three -year performance period ended December 31, 2020, and December 31, 2019, respectively. These performance-based RSUs or a portion thereof may vest in 2021 and 2020, respectively, after measurement of performance in relation to the performance targets. The one -year and three -year performance-based RSUs vest to the extent that they are earned upon death or disability or upon a "qualified retirement." Upon a change in control, performance-based RSUs shall become vested at 100% of target if the RSU obligations are not assumed by the successor company. If the successor company does assume the RSU obligations, the 2017 and 2018 performance-based RSUs will vest at 100% of target upon a "Termination of Service" within the period beginning six months prior to a change in control and ending twenty-four months after a change in control. All of Heartland's RSUs will be settled in common stock upon vesting and are not entitled to dividends until vested. The Compensation Committee may grant RSUs under the Plan to directors as part of their compensation, to new management level employees at commencement of employment, and to other employees and service providers as incentives. |
Subsequent Events | Heartland has evaluated subsequent events that may require recognition or disclosure through the filing date of this Quarterly Report on Form 10-Q with the SEC. |
Effect of New Financial Accounting Standards | In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, " Revenue from Contracts with Customers." The amendment clarifies the principles for recognizing revenue and develops a common revenue standard. The amendment outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." In applying the revenue model to contracts within its scope, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance does not apply to certain contracts within the scope of other ASC Topics, such as lease contracts, insurance contracts, financing arrangements, financial instruments, guarantees other than product or service warranties and nonmonetary exchanges between entities in the same line of business to facilitate sales to customers. Heartland evaluates noninterest income contracts affected by the new guidance by analyzing contracts and current accounting practices to determine if a change is appropriate. The amendment is largely consistent with existing guidance and current practices; however Heartland had to change the recognition of certain recurring revenue streams within trust and investment management fees. Heartland adopted the accounting standard effective January 1, 2018, as required, using a modified retrospective approach. However, the adoption of these amendments did not have a significant effect on Heartland's results of operations, financial position and liquidity other than expanded disclosure requirements. See Note 9, "Revenue," for further details regarding Heartland's revenue. In January 2016, the FASB issued guidance ASU 2016-01, " Recognition and Measurement of Financial Assets and Financial Liabilitie s." The amendments in ASU 2016-01 to Subtopic 825-10, Financial Instruments, contain the following elements: (1) require equity investments to be measured at fair value with changes in fair value recognized in net income; (2) simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (3) eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (4) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (5) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or accompanying notes to the financial statements; and (7) clarifies that the entity should evaluate the need for a valuation allowance on a deferred tax asset related to available for sale securities in combination with the entity's other deferred tax assets. The amendments are effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Except for the early application of the amendment noted in item (5) above, early adoption of the amendments in this update is not permitted. Entities are required to and Heartland applied the amendment by means of a cumulative-effect adjustment as of the beginning of the fiscal year of adoption, with the exception of the amendment related to equity securities without readily determinable fair values, which are to be applied prospectively to equity investments that exist as of the adoption date. Heartland adopted the accounting standard on January 1, 2018, as required, and the adoption of these amendments did not have a material impact on its results of operations, financial position and liquidity. Heartland reclassified $280,000 from accumulated other comprehensive income to retained earnings on January 1, 2018, related to the fair value of its equity investments. In February 2016, the FASB issued ASU 2016-02, " Leases (Topic 842). " Topic 842 requires a lessee to recognize leases on-balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The amendment is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and will be applied on a modified retrospective basis. Heartland leases certain properties and equipment under operating leases that will result in recognition of lease assets and lease liabilities on the consolidated balance sheets under the ASU; however the majority of Heartland's properties and equipment are owned, not leased. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. Early adoption is permitted. In January 2018, the FASB issued an amendment to provide entities with the optional practical expedient to not evaluate existing or expired land easements that were previously not accounted for as leases under Topic 840. Heartland intends to adopt the accounting standard in 2019, as required, and does not expect the adoption of this standard to have a significant impact on its results of operations, financial position and liquidity. Heartland has signed an agreement with a cloud-based lease software provider, and implementation of the software started in the first quarter of 2018. In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326) ." The amendments in this ASU require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. The amendments in this ASU indicate that an entity should not use the length of time a security has been in an unrealized loss position to avoid recording a credit loss. In addition, in determining whether a credit loss exists, the amendments in this ASU also remove the requirements to consider the historical and implied volatility of the fair value of a security and recoveries or declines in fair value after the balance sheet date. The amendment is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. An entity may adopt the amendments earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Heartland intends to adopt the accounting standard in 2020, as required, and is currently evaluating the potential impact of this guidance on its results of operations, financial position and liquidity. Upon adoption of ASU 2016-13, a cumulative-effect adjustment to retained earnings will be recorded as of the beginning of the first reporting period in which the guidance is effective. Heartland has formed an internal committee to assess and implement the standard, and Heartland has entered into an agreement with a third party vendor to evaluate potential methodologies and data. In August 2016, the FASB issued ASU 2016-15, " Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. " The amendments in this update address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this update should be applied using a retrospective transition method to each period presented. Heartland adopted this ASU on January 1, 2018, as required, and the adoption of these amendments did not have a material impact on Heartland's results of operations, financial position and liquidity. In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other Than Inventory." The amendment requires an entity to recognize income tax consequences on an intra-entity transfer of an asset other than inventory at the time the transaction occurs. The amendment is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments must be applied and Heartland applied these amendments using a modified retrospective basis. Heartland adopted this ASU on January 1, 2018, as required, and the adoption of this amendment did not have a material impact on Heartland's results of operations, financial position and liquidity. In January 2017, the FASB issued ASU No. 2017-01, " Business Combinations (Topic 805): Clarifying the Definition of a Business ," which narrows the definition of a business and provides a framework that gives entities a basis for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 is effective for public business entities in annual periods beginning after December 15, 2017, including interim periods therein. Heartland adopted ASU 2017-01 on January 1, 2018, as required, and the adoption did not have a material impact on Heartland's results of operations, financial position, and liquidity. In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350)." This amendment is to simplify the subsequent measurement of goodwill by eliminating step two from the goodwill impairment test. Instead, an entity will perform only step one of its quantitative goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing the impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. An entity will still have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative step one impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied prospectively. Early adoption is permitted, including in an interim period for impairment tests performed after January 1, 2017. Heartland intends to adopt this ASU in the third quarter of 2020, consistent with the annual impairment test as of September 30, 2020, and is currently evaluating the potential impact of this guidance on its results of operations, financial position and liquidity. In March 2017, the FASB issued ASU 2017-08, "Receivables - Nonrefundable Fee and Other Costs (Subtopic 310-20)." These amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount. Discounts continue to be amortized to maturity. These amendments are effective for public business entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. If any entity early adopts the amendments in an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes the interim period. The amendments must be applied and Heartland intends to apply these amendments on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Heartland intends to adopt this ASU in 2019, as required, and is currently evaluating the potential impact on its results of operations, financial position and liquidity. In May 2017, the FASB issued ASU 2017-09, " Compensation - Stock Compensation (Topic 718) ." The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments are effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim periods for public business entities for reporting periods for which financial statements have not yet been issued. The amendments should be applied and Heartland applied these amendments prospectively to an award modified on or after the adoption date. Heartland adopted this ASU on January 1, 2018, as required, the adoption did not have a material impact to its results of operations, financial position and liquidity because Heartland has not typically modified share-based payment awards after the original award has been granted. In August 2017, the FASB issued ASU 2017-12, " Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities ." The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption, including adoption in an interim period, permitted. ASU 2017-12 requires a modified retrospective transition method in which Heartland will recognize the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated balance sheet as of the date of adoption. Heartland intends to adopt this ASU in 2019, as required, and does not believe there will be a material impact to its results of operations, financial position and liquidity. In February 2018, the FASB issued ASU 2018-02, " Income Statement-Reporting Comprehensive Income (Topic 220). " This ASU allows for the option to reclassify from accumulated other comprehensive income ("AOCI") to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017, which was enacted on December 22, 2017. The legislation included a reduction to the corporate income tax rate from 35 percent to 21 percent effective January 1, 2018. The amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21 percent corporate income tax rate. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for public businesses for reporting periods for which financial statements have not yet been issued. Heartland adopted the guidance as of December 31, 2017. The adoption of this ASU was accounted for as a cumulative-effect adjustment to the balance sheet resulting in a $4.5 million increase to retained earnings and a corresponding decrease to AOCI on December 31, 2017. |
Fair Value Hierarchy | Under ASC 820, assets and liabilities are grouped at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1 — Valuation is based upon quoted prices for identical instruments in active markets. Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, or similar instruments in markets that are not active, and model-based valuation techniques for all significant assumptions are observable in the market. Level 3 — Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring or non-recurring basis. Assets Securities Available for Sale and Held to Maturity Securities available for sale are recorded at fair value on a recurring basis. Securities held to maturity are generally recorded at cost and are recorded at fair value only to the extent a decline in fair value is determined to be other-than-temporary. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security's credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, as well as U.S. Treasury securities. Level 2 securities include U.S. government and agency securities, mortgage and asset-backed securities and private collateralized mortgage obligations, municipal bonds and corporate debt securities. On a quarterly basis, a secondary independent pricing service is used for the securities portfolio to validate the pricing from Heartland's primary pricing service. Loans Held for Sale Loans held for sale are carried at the lower of cost or fair value on an aggregate basis. The fair value of loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, Heartland classifies loans held for sale subjected to nonrecurring fair value adjustments as Level 2. Loans Held to Maturity Heartland does not record loans held to maturity at fair value on a recurring basis. However, from time to time, a loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC 310. The fair value of impaired loans is measured using one of the following impairment methods: 1) the present value of expected future cash flows discounted at the loan's effective interest rate or 2) the observable market price of the loan or 3) the fair value of the collateral if the loan is collateral dependent. In accordance with ASC 820, impaired loans measured at fair value are classified as nonrecurring Level 3 in the fair value hierarchy. Premises, Furniture and Equipment Held for Sale Heartland values premises, furniture and equipment held for sale based on third-party appraisals less estimated disposal costs. Heartland considers third party appraisals, as well as independent fair value assessments from Realtors or persons involved in selling bank premises, furniture and equipment, in determining the fair value of particular properties. Accordingly, the valuation of premises, furniture and equipment held for sale is subject to significant external and internal judgment. Heartland periodically reviews premises, furniture and equipment held for sale to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. Premises, furniture and equipment held for sale are classified as nonrecurring Level 3 in the fair value hierarchy. Mortgage Servicing Rights Mortgage servicing rights assets represent the value associated with servicing residential real estate loans that have been sold to outside investors with servicing retained. Heartland uses the amortization method (i.e., the lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, to determine the carrying value of its mortgage servicing rights. The fair value for servicing assets is determined through discounted cash flow analysis and utilizes discount rates, prepayment speeds and delinquency rate assumptions as inputs. All of the assumptions in the discounted cash flow analysis require a significant degree of management estimation and judgment. Mortgage servicing rights are subject to impairment testing. The carrying values of these rights are reviewed quarterly for impairment based upon the calculation of fair value as performed by an outside third party. For purposes of measuring impairment, the rights are stratified into certain risk characteristics including note type and note term. If the valuation model reflects a fair value less than the carrying value, mortgage servicing rights are adjusted to fair value through a valuation allowance. Heartland classifies mortgage servicing rights as nonrecurring with Level 3 measurement inputs. Commercial Servicing Rights Commercial servicing rights assets represent the value associated with servicing commercial loans guaranteed by the Small Business Administration and the United States Department of Agriculture that have been sold with servicing retained by Heartland. Heartland uses the amortization method (i.e., the lower of amortized cost or estimated fair value measured on a nonrecurring basis), not fair value measurement accounting, to determine the carrying value of its commercial servicing rights. The fair value for servicing assets is determined through market prices for comparable servicing contracts, when available, or through a valuation model that calculates the present value of estimated future net servicing income. Inputs utilized include discount rates, prepayment speeds and delinquency rate assumptions as inputs. All of these assumptions require a significant degree of management estimation and judgment. Commercial servicing rights are subject to impairment testing, and the carrying values of these rights are reviewed quarterly for impairment based upon the calculation of fair value as performed by an outside third party. If the valuation model reflects a fair value less than the carrying value, commercial servicing rights are adjusted to fair value through a valuation allowance. Heartland classifies commercial servicing rights as nonrecurring with Level 3 measurement inputs. Derivative Financial Instruments Heartland's current interest rate risk strategy includes interest rate swaps. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. To comply with the provisions of ASC 820, Heartland incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, Heartland has considered the impact of netting any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although Heartland has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2018 , and December 31, 2017 , Heartland has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, Heartland has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Interest rate lock commitments Heartland uses an internal valuation model that relies on internally developed inputs to estimate the fair value of its interest rate lock commitments which is based on unobservable inputs that reflect management's assumptions and specific information about each borrower. Interest rate lock commitments are classified in Level 3 of the fair value hierarchy. Forward commitments The fair value of forward commitments are estimated using an internal valuation model, which includes current trade pricing for similar financial instruments in active markets that Heartland has the ability to access and are classified in Level 2 of the fair value hierarchy. Other Real Estate Owned Other real estate owned ("OREO") represents property acquired through foreclosures and settlements of loans. Property acquired is carried at the fair value of the property at the time of acquisition (representing the property's cost basis), plus any acquisition costs, or the estimated fair value of the property, less disposal costs. Heartland considers third party appraisals, as well as independent fair value assessments from realtors or persons involved in selling OREO, in determining the fair value of particular properties. Accordingly, the valuation of OREO is subject to significant external and internal judgment. Heartland periodically reviews OREO to determine if the fair value of the property, less disposal costs, has declined below its recorded book value and records any adjustments accordingly. OREO is classified as nonrecurring Level 3 of the fair value hierarchy. |
Revenue Recognition | On January 1, 2018, Heartland adopted ASU 2014-09, "Revenue from Contracts with Customers" (Topic 606), and all subsequent ASUs that modified Topic 606. As stated in Note 1, the implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with loan servicing income, bank owned life insurance, derivatives and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as service charges and fees, trust fees, and brokerage and insurance commissions. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of Heartland's revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below. Service Charges and Fees Service charges and fees consist of revenue generated from deposit account related service charges and fees, overdraft fees, customer service fees, credit card fee income, debit card income and other service charges and fees. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders and other deposit account related fees. Heartland's performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees, including overdraft fees, are largely transactional based, and therefore, the performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Customer service fees and other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. Heartland's performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Credit card fee income and debit card income are comprised of interchange fees, ATM fees, and merchant services income. Credit card fee income and debit card income are earned whenever the banks' debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a bank cardholder uses an ATM that is not owned by one of Heartland's banks or a non-bank cardholder uses Heartland-owned ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Trust Fees Trust fees are primarily comprised of fees earned from the management and administration of trusts and other customer assets. Heartland's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the average daily market value or month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days before or after month end through a direct charge to customers’ accounts. Heartland does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. Heartland's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Brokerage and Insurance Commissions Brokerage commission primarily consist of commissions related to broker-dealer contracts. The contracts are between the customer and the broker-dealer, and Heartland satisfies its performance obligation and earns commission when the transactions are completed. The recognition of revenue is based on a defined fee schedule and does not require significant judgment. Payment is received shortly after services are rendered. Insurance commissions are related to commissions received directly from the insurance carrier. Heartland acts as an insurance agent between the customer and the insurance carrier. Heartland's performance obligations and associated fee and commission income are defined with each insurance product with the insurance company. When insurance payments are received from customers, a portion of the payment is recognized as commission revenue. Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. Heartland's noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after Heartland satisfies its performance obligation and revenue is recognized. Heartland does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2018, and December 31, 2017, Heartland did not have any significant contract balances. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). Heartland utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, Heartland did not capitalize any contract acquisition costs. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Amounts used in the determination of basic and diluted earnings per share for the three -month periods ended March 31, 2018 , and 2017 , are shown in the table below: Three Months Ended (Dollars and number of shares in thousands, except per share data) 2018 2017 Net income $ 23,268 $ 18,010 Preferred dividends (13 ) (19 ) Interest expense on convertible preferred debt — 5 Net income available to common stockholders $ 23,255 $ 17,996 Weighted average common shares outstanding for basic earnings per share 30,442 26,335 Assumed incremental common shares issued upon non-vested restricted stock units 203 293 Weighted average common shares for diluted earnings per share 30,645 26,628 Earnings per common share — basic $ 0.76 $ 0.68 Earnings per common share — diluted $ 0.76 $ 0.68 Number of antidilutive common stock equivalents excluded from diluted earnings per share computation — — |
Summary of Status of RSUs | A summary of the RSUs outstanding as of March 31, 2018 and 2017 , and changes during the three months ended March 31, 2018 and 2017 , follows: 2018 2017 Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Outstanding at January 1 301,578 $ 34.74 346,817 $ 27.61 Granted 87,249 55.25 92,267 47.50 Vested (107,553 ) 30.79 (103,897 ) 24.74 Forfeited (19,113 ) 43.62 (7,765 ) 31.03 Outstanding at March 31 262,161 $ 42.60 327,422 $ 34.04 |
Summary of Status of Stock Options | A summary of the stock options outstanding as of March 31, 2018 and 2017 , and changes during the three months ended March 31, 2018 and 2017 , follows: 2018 2017 Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Outstanding at January 1 6,500 $ 18.60 26,400 $ 18.60 Granted — — — — Exercised (6,500 ) 18.60 (5,500 ) 18.60 Forfeited — — — — Outstanding at March 31 — $ — 20,900 $ 18.60 Options exercisable at March 31 — $ — 20,900 $ 18.60 |
Securities (Tables)
Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available for Sale Securities | The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of March 31, 2018 , and December 31, 2017 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2018 U.S. government corporations and agencies $ 11,254 $ 3 $ (69 ) $ 11,188 Mortgage and asset-backed securities 1,691,092 3,968 (47,456 ) 1,647,604 Obligations of states and political subdivisions 361,475 1,132 (10,427 ) 352,180 Total debt securities 2,063,821 5,103 (57,952 ) 2,010,972 Equity securities 16,693 — — 16,693 Total $ 2,080,514 $ 5,103 $ (57,952 ) $ 2,027,665 December 31, 2017 U.S. government corporations and agencies $ 5,358 $ 8 $ (38 ) $ 5,328 Mortgage and asset-backed securities 1,785,467 5,856 (37,587 ) 1,753,736 Obligations of states and political subdivisions 441,060 4,669 (4,714 ) 441,015 Total debt securities 2,231,885 10,533 (42,339 ) 2,200,079 Equity securities 16,296 378 — 16,674 Total $ 2,248,181 $ 10,911 $ (42,339 ) $ 2,216,753 |
Schedule of Held to Maturity Securities | The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of March 31, 2018 , and December 31, 2017 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2018 Obligations of states and political subdivisions $ 249,766 $ 9,699 $ (827 ) $ 258,638 Total $ 249,766 $ 9,699 $ (827 ) $ 258,638 December 31, 2017 Obligations of states and political subdivisions $ 253,550 $ 12,460 $ (516 ) $ 265,494 Total $ 253,550 $ 12,460 $ (516 ) $ 265,494 |
Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of debt securities available for sale at March 31, 2018 , by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties. March 31, 2018 Amortized Cost Estimated Fair Value Due in 1 year or less $ 5,397 $ 5,392 Due in 1 to 5 years 56,369 56,209 Due in 5 to 10 years 116,517 112,484 Due after 10 years 194,446 189,283 Total debt securities 372,729 363,368 Mortgage and asset-backed securities 1,691,092 1,647,604 Equity securities 16,693 16,693 Total investment securities $ 2,080,514 $ 2,027,665 The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2018 , by contractual maturity, are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties. March 31, 2018 Amortized Cost Estimated Fair Value Due in 1 year or less $ 2,486 $ 2,523 Due in 1 to 5 years 27,627 28,231 Due in 5 to 10 years 104,170 106,538 Due after 10 years 115,483 121,346 Total investment securities $ 249,766 $ 258,638 |
Schedule of Realized Gross Gains (Losses) | Gross gains and losses realized related to the sales of securities available for sale for the three -month periods ended March 31, 2018 and 2017 , are summarized as follows, in thousands: Three Months Ended 2018 2017 Proceeds from sales $ 392,246 $ 221,637 Gross security gains 3,013 3,830 Gross security losses 1,572 1,339 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following tables summarize, in thousands, the amount of unrealized losses, defined as the amount by which cost or amortized cost exceeds fair value, and the related fair value of investments with unrealized losses in Heartland's securities portfolio as of March 31, 2018 , and December 31, 2017 . The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or more. The reference point for determining how long an investment was in an unrealized loss position w as March 31, 2017 , and December 31, 2016 , respectively. Securities for which Heartland has taken credit-related other-than-temporary impairment ("OTTI") write-downs are categorized as being "less than 12 months" or "12 months or longer" in a continuous loss position based on the point in time that the fair value declined to below the cost basis and not the period of time since the credit-related OTTI write-down. 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 March 31, 2018 U.S. government corporations and agencies $ 10,685 $ (69 ) $ — $ — $ 10,685 $ (69 ) Mortgage and asset-backed securities 923,293 (18,459 ) 379,672 (28,997 ) 1,302,965 (47,456 ) Obligations of states and political subdivisions 177,100 (3,456 ) 131,574 (6,971 ) 308,674 (10,427 ) Total debt securities 1,111,078 (21,984 ) 511,246 (35,968 ) 1,622,324 (57,952 ) Total temporarily impaired securities $ 1,111,078 $ (21,984 ) $ 511,246 $ (35,968 ) $ 1,622,324 $ (57,952 ) December 31, 2017 U.S. government corporations and agencies $ 4,819 $ (38 ) $ — $ — $ 4,819 $ (38 ) Mortgage and asset-backed securities 851,070 (11,533 ) 399,978 (26,054 ) 1,251,048 (37,587 ) Obligations of states and political subdivisions 93,040 (667 ) 159,180 (4,047 ) 252,220 (4,714 ) Total debt securities 948,929 (12,238 ) 559,158 (30,101 ) 1,508,087 (42,339 ) Total temporarily impaired securities $ 948,929 $ (12,238 ) $ 559,158 $ (30,101 ) $ 1,508,087 $ (42,339 ) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 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 March 31, 2018 Obligations of states and political subdivisions $ 30,496 $ (272 ) $ 7,907 $ (555 ) $ 38,403 $ (827 ) Total temporarily impaired securities $ 30,496 $ (272 ) $ 7,907 $ (555 ) $ 38,403 $ (827 ) December 31, 2017 Obligations of states and political subdivisions $ 8,512 $ (49 ) $ 8,989 $ (467 ) $ 17,501 $ (516 ) Total temporarily impaired securities $ 8,512 $ (49 ) $ 8,989 $ (467 ) $ 17,501 $ (516 ) |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Loans | Loans as of March 31, 2018 , and December 31, 2017 , were as follows, in thousands: March 31, 2018 December 31, 2017 Loans receivable held to maturity: Commercial $ 1,806,683 $ 1,646,606 Commercial real estate 3,323,094 3,163,269 Agricultural and agricultural real estate 518,386 511,588 Residential real estate 624,725 624,279 Consumer 474,929 447,484 Gross loans receivable held to maturity 6,747,817 6,393,226 Unearned discount (1,620 ) (556 ) Deferred loan fees (182 ) (1,206 ) Total net loans receivable held to maturity 6,746,015 6,391,464 Allowance for loan losses (58,656 ) (55,686 ) Loans receivable, net $ 6,687,359 $ 6,335,778 |
Allowance for Loan and Lease Losses, Based on Impairment Methodology | The following table shows the balance in the allowance for loan losses at March 31, 2018 , and December 31, 2017 , and the related loan balances, disaggregated on the basis of impairment methodology, in thousands. Loans evaluated under ASC 310-10-35 include loans on nonaccrual status and troubled debt restructurings, which are individually evaluated for impairment, and other impaired loans deemed to have similar risk characteristics. All other loans are collectively evaluated for impairment under ASC 450-20. Heartland has made no significant changes to the accounting for the allowance for loan losses during 2018. 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 March 31, 2018 Commercial $ 2,425 $ 16,970 $ 19,395 $ 9,005 $ 1,797,678 $ 1,806,683 Commercial real estate 736 22,733 23,469 22,920 3,300,174 3,323,094 Agricultural and agricultural real estate 787 3,929 4,716 16,896 501,490 518,386 Residential real estate 386 1,755 2,141 28,324 596,401 624,725 Consumer 1,137 7,798 8,935 6,427 468,502 474,929 Total $ 5,471 $ 53,185 $ 58,656 $ 83,572 $ 6,664,245 $ 6,747,817 December 31, 2017 Commercial $ 1,613 $ 16,485 $ 18,098 $ 7,415 $ 1,639,191 $ 1,646,606 Commercial real estate 766 21,184 21,950 23,705 3,139,564 3,163,269 Agricultural and agricultural real estate 546 3,712 4,258 13,304 498,284 511,588 Residential real estate 430 1,794 2,224 27,141 597,138 624,279 Consumer 1,400 7,756 9,156 6,903 440,581 447,484 Total $ 4,755 $ 50,931 $ 55,686 $ 78,468 $ 6,314,758 $ 6,393,226 |
Schedule of Financing Receivables, Non Accrual Status | The following table presents nonaccrual loans, accruing loans past due 90 days or more and performing troubled debt restructured loans at March 31, 2018 , and December 31, 2017 , in thousands: March 31, 2018 December 31, 2017 Nonaccrual loans $ 60,644 $ 58,272 Nonaccrual troubled debt restructured loans 4,162 4,309 Total nonaccrual loans $ 64,806 $ 62,581 Accruing loans past due 90 days or more $ 22 $ 830 Performing troubled debt restructured loans $ 3,206 $ 6,617 |
Troubled Debt Restructuring on Loans Modified | The following tables provide information on troubled debt restructured loans that were modified during the three -month periods ended March 31, 2018 , and March 31, 2017 , dollars in thousands: Three Months Ended 2018 2017 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial — $ — $ — — $ — $ — Commercial real estate — — — — — — Total commercial and commercial real estate — — — — — — Agricultural and agricultural real estate — — — — — — Residential real estate 5 877 752 3 348 348 Consumer — — — — — — Total 5 $ 877 $ 752 3 $ 348 $ 348 The following table shows troubled debt restructured loans for which there was a payment default during the three month periods ended March 31, 2018 , and March 31, 2017 , that had been modified during the twelve-month period prior to default, in thousands: With Payment Defaults During the Following Periods Three Months Ended 2018 2017 Number of Loans Recorded Investment Number of Loans Recorded Investment Commercial — $ — — $ — Commercial real estate — — — — Total commercial and commercial real estate — — — — Agricultural and agricultural real estate — — — — Residential real estate 3 519 — — Consumer — — — — Total 3 $ 519 — $ — |
Financing Receivable Credit Quality Indicators | The following table presents loans by credit quality indicator at March 31, 2018 , and December 31, 2017 , in thousands: Pass Nonpass Total March 31, 2018 Commercial $ 1,677,338 $ 129,345 $ 1,806,683 Commercial real estate 3,146,622 176,472 3,323,094 Total commercial and commercial real estate 4,823,960 305,817 5,129,777 Agricultural and agricultural real estate 442,484 75,902 518,386 Residential real estate 585,886 38,839 624,725 Consumer 461,786 13,143 474,929 Total gross loans receivable held to maturity $ 6,314,116 $ 433,701 $ 6,747,817 December 31, 2017 Commercial $ 1,552,783 $ 93,823 $ 1,646,606 Commercial real estate 2,985,501 177,768 3,163,269 Total commercial and commercial real estate 4,538,284 271,591 4,809,875 Agricultural and agricultural real estate 451,539 60,049 511,588 Residential real estate 586,623 37,656 624,279 Consumer 432,936 14,548 447,484 Total gross loans receivable held to maturity $ 6,009,382 $ 383,844 $ 6,393,226 |
Past Due Financing Receivables | The following table sets forth information regarding Heartland's accruing and nonaccrual loans at March 31, 2018 , and December 31, 2017 , in thousands: Accruing Loans 30-59 Days Past Due 60-89 Days 90 Days or More Past Due Total Past Due Current Nonaccrual Total Loans March 31, 2018 Commercial $ 2,906 $ 1,883 $ — $ 4,789 $ 1,793,565 $ 8,329 $ 1,806,683 Commercial real estate 403 740 — 1,143 3,305,043 16,908 3,323,094 Total commercial and commercial real estate 3,309 2,623 — 5,932 5,098,608 25,237 5,129,777 Agricultural and agricultural real estate 1,147 69 22 1,238 500,320 16,828 518,386 Residential real estate 2,891 66 — 2,957 602,927 18,841 624,725 Consumer 2,618 1,477 — 4,095 466,934 3,900 474,929 Total gross loans receivable held to maturity $ 9,965 $ 4,235 $ 22 $ 14,222 $ 6,668,789 $ 64,806 $ 6,747,817 December 31, 2017 Commercial $ 1,246 $ 259 $ 100 $ 1,605 $ 1,637,773 $ 7,228 $ 1,646,606 Commercial real estate 4,769 2,326 — 7,095 3,139,576 16,598 3,163,269 Total commercial and commercial real estate 6,015 2,585 100 8,700 4,777,349 23,826 4,809,875 Agricultural and agricultural real estate 604 134 — 738 497,546 13,304 511,588 Residential real estate 2,022 270 — 2,292 601,120 20,867 624,279 Consumer 4,734 943 730 6,407 436,493 4,584 447,484 Total gross loans receivable held to maturity $ 13,375 $ 3,932 $ 830 $ 18,137 $ 6,312,508 $ 62,581 $ 6,393,226 |
Summary of Impaired Loans | At March 31, 2018 , and December 31, 2017 , the carrying amount of loans acquired since 2015 consist of purchased impaired and nonimpaired loans as summarized in the following table, in thousands: March 31, 2018 December 31, 2017 Impaired Non Impaired Total Loans Impaired Non Impaired Total Loans Commercial $ 3,142 $ 262,107 $ 265,249 $ 952 $ 187,375 $ 188,327 Commercial real estate 2,474 1,078,724 1,081,198 2,572 1,052,469 1,055,041 Agricultural and agricultural real estate — 26 26 — 1,242 1,242 Residential real estate 199 181,020 181,219 214 173,909 174,123 Consumer loans — 78,613 78,613 — 51,292 51,292 Total loans $ 5,815 $ 1,600,490 $ 1,606,305 $ 3,738 $ 1,466,287 $ 1,470,025 The following tables present, by category of loan, impaired loans, the unpaid contractual loan balances at March 31, 2018 , and December 31, 2017 ; the outstanding loan balances recorded on the consolidated balance sheets at March 31, 2018 , and December 31, 2017 ; any related allowance recorded for those loans as of March 31, 2018 , and December 31, 2017 ; the average outstanding loan balances recorded on the consolidated balance sheets during the three -months ended March 31, 2018 , and year ended December 31, 2017 ; and the interest income recognized on the impaired loans during the three -month period ended March 31, 2018 , and year ended December 31, 2017 , in thousands: Unpaid Contractual Balance Loan Balance Related Allowance Recorded Year- to- Date Avg. Loan Balance Year- to- Date Interest Income Recognized March 31, 2018 Impaired loans with a related allowance: Commercial $ 2,816 $ 2,816 $ 2,425 $ 2,472 $ — Commercial real estate 11,180 9,324 736 9,520 8 Total commercial and commercial real estate 13,996 12,140 3,161 11,992 8 Agricultural and agricultural real estate 1,536 1,536 787 1,537 — Residential real estate 1,693 1,693 386 1,608 3 Consumer 2,859 2,859 1,137 3,069 9 Total impaired loans with a related allowance $ 20,084 $ 18,228 $ 5,471 $ 18,206 $ 20 Impaired loans without a related allowance: Commercial $ 7,308 $ 6,189 $ — $ 5,449 $ 49 Commercial real estate 14,202 13,596 — 13,879 97 Total commercial and commercial real estate 21,510 19,785 — 19,328 146 Agricultural and agricultural real estate 17,388 15,360 — 12,954 1 Residential real estate 26,635 26,631 — 26,878 109 Consumer 3,757 3,568 — 3,912 22 Total impaired loans without a related allowance $ 69,290 $ 65,344 $ — $ 63,072 $ 278 Total impaired loans held to maturity: Commercial $ 10,124 $ 9,005 $ 2,425 $ 7,921 $ 49 Commercial real estate 25,382 22,920 736 23,399 105 Total commercial and commercial real estate 35,506 31,925 3,161 31,320 154 Agricultural and agricultural real estate 18,924 16,896 787 14,491 1 Residential real estate 28,328 28,324 386 28,486 112 Consumer 6,616 6,427 1,137 6,981 31 Total impaired loans held to maturity $ 89,374 $ 83,572 $ 5,471 $ 81,278 $ 298 Unpaid Contractual Balance Loan Balance Related Allowance Recorded Year-to- Date Avg. Loan Balance Year-to- Date Interest Income Recognized December 31, 2017 Impaired loans with a related allowance: Commercial $ 2,292 $ 2,292 $ 1,613 $ 3,607 $ 39 Commercial real estate 11,925 10,068 766 11,479 34 Total commercial and commercial real estate 14,217 12,360 2,379 15,086 73 Agricultural and agricultural real estate 1,539 1,539 546 3,437 — Residential real estate 1,568 1,568 430 2,056 15 Consumer 2,634 2,634 1,400 2,370 41 Total impaired loans with a related allowance $ 19,958 $ 18,101 $ 4,755 $ 22,949 $ 129 Impaired loans without a related allowance: Commercial $ 6,243 $ 5,123 $ — $ 2,586 $ 165 Commercial real estate 14,243 13,637 — 20,148 514 Total commercial and commercial real estate 20,486 18,760 — 22,734 679 Agricultural and agricultural real estate 13,793 11,765 — 9,654 — Residential real estate 25,573 25,573 — 26,024 277 Consumer 4,269 4,269 — 3,884 73 Total impaired loans without a related allowance $ 64,121 $ 60,367 $ — $ 62,296 $ 1,029 Total impaired loans held to maturity: Commercial $ 8,535 $ 7,415 $ 1,613 $ 6,193 $ 204 Commercial real estate 26,168 23,705 766 31,627 548 Total commercial and commercial real estate 34,703 31,120 2,379 37,820 752 Agricultural and agricultural real estate 15,332 13,304 546 13,091 — Residential real estate 27,141 27,141 430 28,080 292 Consumer 6,903 6,903 1,400 6,254 114 Total impaired loans held to maturity $ 84,079 $ 78,468 $ 4,755 $ 85,245 $ 1,158 |
Changes in Accretable Yield on Acquired Loans | Changes in accretable yield on acquired loans with evidence of credit deterioration at the date of acquisition for the three -month periods ended March 31, 2018 , and March 31, 2017 , were as follows, in thousands: Three Months Ended 2018 2017 Balance at beginning of period $ 57 $ 182 Original yield premium, net, at date of acquisition (56 ) — Accretion (199 ) (173 ) Reclassification from nonaccretable difference (1) 198 127 Balance at period end $ — $ 136 (1) Represents increases in estimated cash flows expected to be received, primarily due to lower estimated credit losses. |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Changes in the Allowance for Loan and Leases Losses | Changes in the allowance for loan losses for the three -month periods ended March 31, 2018 , and March 31, 2017 , were as follows, in thousands: Commercial Commercial Real Estate Agricultural Residential Real Estate Consumer Total Balance at December 31, 2017 $ 18,098 $ 21,950 $ 4,258 $ 2,224 $ 9,156 $ 55,686 Charge-offs (794 ) (125 ) — (16 ) (1,289 ) (2,224 ) Recoveries 104 448 14 75 290 931 Provision 1,987 1,196 444 (142 ) 778 4,263 Balance at March 31, 2018 $ 19,395 $ 23,469 $ 4,716 $ 2,141 $ 8,935 $ 58,656 Commercial Commercial Real Estate Agricultural Residential Real Estate Consumer Total Balance at December 31, 2016 $ 14,765 $ 24,319 $ 4,210 $ 2,263 $ 8,767 $ 54,324 Charge-offs (230 ) (608 ) (871 ) (265 ) (1,744 ) (3,718 ) Recoveries 234 212 1 2 303 752 Provision 1,411 (126 ) 643 183 1,530 3,641 Balance at March 31, 2017 $ 16,180 $ 23,797 $ 3,983 $ 2,183 $ 8,856 $ 54,999 |
Goodwill, Core Deposit Premiu24
Goodwill, Core Deposit Premium and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets | The gross carrying amount of these intangible assets and the associated accumulated amortization at March 31, 2018 , and December 31, 2017 , are presented in the table below, in thousands: March 31, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing intangible assets: Core deposit intangibles $ 69,731 $ 28,939 $ 40,792 $ 62,008 $ 27,086 $ 34,922 Customer relationship intangibles 1,177 906 271 1,177 896 281 Mortgage servicing rights 42,249 19,084 23,165 42,139 18,891 23,248 Commercial servicing rights 6,740 4,434 2,306 6,719 4,110 2,609 Total $ 119,897 $ 53,363 $ 66,534 $ 112,043 $ 50,983 $ 61,060 |
Schedule of Estimated Future Amortization Expense of Amortizable Intangible Assets | The following table shows the estimated future amortization expense for amortizable intangible assets, in thousands: Core Deposit Intangibles Customer Relationship Intangibles Mortgage Servicing Rights Commercial Servicing Rights Total Nine months ending December 31, 2018 $ 5,957 $ 29 $ 6,776 $ 471 $ 13,233 Year ending December 31, 2019 7,092 38 4,097 522 11,749 2020 6,220 37 3,512 411 10,180 2021 5,323 36 2,927 354 8,640 2022 4,175 34 2,341 290 6,840 2023 3,691 33 1,756 163 5,643 Thereafter 8,334 64 1,756 95 10,249 Total $ 40,792 $ 271 $ 23,165 $ 2,306 $ 66,534 |
Summary of Changes in Servicing Rights | The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the three months ended March 31, 2018 , and March 31, 2017 : 2018 2017 Balance at January 1, $ 23,248 $ 32,088 Originations 1,162 2,132 Amortization (1,245 ) (2,261 ) Balance at period end $ 23,165 $ 31,959 Fair value of mortgage servicing rights $ 40,434 $ 47,564 Mortgage servicing rights, net to servicing portfolio 0.66 % 0.74 % The following table summarizes, in thousands, the changes in capitalized commercial servicing rights for the three months ended March 31, 2018 , and March 31, 2017 : 2018 2017 Balance at January 1, $ 2,609 $ 3,690 Originations 21 93 Amortization (322 ) (306 ) Valuation allowance on commercial servicing rights (2 ) 5 Balance at period end $ 2,306 $ 3,482 Fair value of commercial servicing rights $ 2,781 $ 4,040 Commercial servicing rights, net to servicing portfolio 1.84 % 2.17 % |
Schedule of Servicing Asset at Fair Value and Amortized Cost | The following table summarizes, in thousands, the book value, the fair value of each tranche of the commercial servicing rights and any recorded valuation allowance at each respective subsidiary at March 31, 2018 , and December 31, 2017 : March 31, 2018 Book Value- Less than 20 Years Fair Value- Less than 20 Years Impairment- Less than 20 Years Book Value- More than 20 Years Fair Value- More than 20 Years Impairment- More than 20 Years Citywide Banks $ 6 $ 10 $ — $ 33 $ 36 $ — Premier Valley Bank 72 104 — 286 272 14 Wisconsin Bank & Trust 368 534 — 1,554 1,825 — Total $ 446 $ 648 $ — $ 1,873 $ 2,133 $ 14 December 31, 2017 Citywide Banks $ 8 $ 11 $ — $ 34 $ 37 $ — Premier Valley Bank 83 110 — 303 291 12 Wisconsin Bank & Trust 446 619 — 1,747 2,153 — Total $ 537 $ 740 $ — $ 2,084 $ 2,481 $ 12 |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance Sheet Category and Fair Values of Derivative Instruments | The table below identifies the notional amount, fair value and balance sheet category of Heartland's fair value hedges at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2018 Fair value hedges $ 35,436 $ (105 ) Other liabilities December 31, 2017 Fair value hedges $ 35,635 $ (999 ) Other liabilities The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as cash flow hedges at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category Receive Rate Weighted Average Pay Rate Maturity March 31, 2018 Interest rate swap $ 25,000 $ 239 Other assets 2.178 % 2.255 % 03/17/2021 Interest rate swap 20,000 (380 ) Other liabilities 1.704 3.355 01/07/2020 Interest rate swap 10,000 69 Other assets 2.286 1.674 03/26/2019 Interest rate swap 10,000 68 Other assets 2.178 1.658 03/18/2019 Interest rate swap 32,667 1,010 Other assets 4.240 3.674 05/10/2021 Interest rate swap 20,000 316 Other assets 2.125 2.390 06/15/2024 Interest rate swap 20,000 339 Other assets 2.006 2.352 03/01/2024 December 31, 2017 Interest rate swap $ 25,000 $ (106 ) Other liabilities 1.600 % 2.255 % 03/17/2021 Interest rate swap 20,000 (621 ) Other liabilities 1.350 3.355 01/07/2020 Interest rate swap 10,000 30 Other assets 1.329 1.674 03/26/2019 Interest rate swap 10,000 29 Other assets 1.600 1.658 03/18/2019 Interest rate swap 33,667 759 Other assets 3.932 3.674 05/10/2021 Interest rate swap (1) 20,000 (177 ) Other liabilities 1.588 2.390 06/15/2024 Interest rate swap (2) 20,000 (149 ) Other Liabilities 1.481 2.352 03/01/2024 The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as loan swaps at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category Weighted Average Receive Rate Weighted Average Pay Rate March 31, 2018 Customer interest rate swaps $ 162,882 $ 3,763 Other assets 4.82 % 4.73 % Customer interest rate swaps 162,882 (3,763 ) Other liabilities 4.73 4.82 December 31, 2017 Customer interest rate swaps $ 126,766 $ 2,377 Other assets 4.70 % 4.03 % Customer interest rate swaps 126,766 (2,377 ) Other liabilities 4.03 4.70 |
Gains (Losses) on Derivative Instruments | The table below identifies the gains and losses recognized on Heartland's fair value hedges for the three month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Fair value hedges $ 894 Interest income Three Months Ended March 31, 2017 Fair value hedges $ 194 Interest income The table below identifies the gains and losses recognized on Heartland's derivative instruments designated as cash flow hedges for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: 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 March 31, 2018 Interest rate swaps $ 1,896 Interest expense $ (197 ) Other income $ — Three Months Ended March 31, 2017 Interest rate swaps $ 533 Interest expense $ (397 ) Other income $ — |
Balance Sheet Category and Fair Values of Embedded Derivatives | The table below identifies the notional amount, fair value and balance sheet category of Heartland's embedded derivatives at March 31, 2018 , and December 31, 2017 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2018 Embedded derivatives $ 13,907 $ 461 Other assets December 31, 2017 Embedded derivatives $ 14,045 $ 738 Other assets The table below identifies the gains and losses recognized on Heartland's embedded derivatives for the three month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Embedded derivatives $ 277 Other noninterest income Three Months Ended March 31, 2017 Embedded derivatives $ 117 Other noninterest income The following table identifies, in thousands, the notional amount, fair value, balance sheet category and income statement category for the change in fair value of the embedded conversion option as of March 31, 2018 , and December 31, 2017 : Notional Amount Fair Value Balance Sheet Category March 31, 2018 Embedded conversion option $ — $ — Other liabilities December 31, 2017 Embedded conversion option $ — $ — Other liabilities The table below identifies the gains and losses recognized on Heartland's embedded conversion options for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2018 Embedded conversion option $ — Other noninterest income Three Months Ended March 31, 2017 Embedded conversion option $ 97 Other noninterest income |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Balance Sheet and Income Category | The table below identifies the balance sheet category and fair values of Heartland's other free standing derivative instruments not designated as hedging instruments at March 31, 2018 , and December 31, 2017 , in thousands: Balance Sheet Category Notional Amount Fair Value March 31, 2018 Interest rate lock commitments (mortgage) Other assets $ 65,591 $ 1,959 Forward commitments Other assets 55,118 283 Forward commitments Other liabilities 91,625 (320 ) Undesignated interest rate swaps Other liabilities 13,907 (461 ) December 31, 2017 Interest rate lock commitments (mortgage) Other assets $ 53,588 $ 1,738 Forward commitments Other assets 37,286 80 Forward commitments Other liabilities 118,632 (232 ) Undesignated interest rate swaps Other liabilities 14,045 (738 ) The table below identifies the income statement category of the gains and losses recognized in income on Heartland's other free standing derivative instruments not designated as hedging instruments for the three -month periods ended March 31, 2018 , and March 31, 2017 , in thousands: Income Statement Category Gain (Loss) Recognized Three Months Ended March 31, 2018 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 17 Forward commitments Net gains on sale of loans held for sale 115 Undesignated interest rate swaps Other noninterest income 277 Three Months Ended March 31, 2017 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 1,062 Forward commitments Net gains on sale of loans held for sale (2,739 ) Undesignated interest rate swaps Other noninterest income 117 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below presents Heartland's assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2018 , and December 31, 2017 , in thousands, aggregated by the level in the fair value hierarchy within which those measurements fall: Total Fair Value Level 1 Level 2 Level 3 March 31, 2018 Assets Securities available for sale U.S. government corporations and agencies $ 11,188 $ 9,421 $ 1,767 $ — Mortgage and asset-backed securities 1,647,604 — 1,647,604 — Obligations of states and political subdivisions 352,180 — 352,180 — Corporate debt securities — — — — Equity securities 16,693 — 16,693 — Derivative financial instruments (1) 6,265 — 6,265 — Interest rate lock commitments 1,959 — — 1,959 Forward commitments 283 — 283 — Total assets at fair value $ 2,036,172 $ 9,421 $ 2,024,792 $ 1,959 Liabilities Derivative financial instruments (2) $ 4,709 $ — $ 4,709 $ — Forward commitments 320 — 320 — Total liabilities at fair value $ 5,029 $ — $ 5,029 $ — December 31, 2017 Assets Securities available for sale U.S. government corporations and agencies $ 5,328 $ 3,484 $ 1,844 $ — Mortgage and asset-backed securities 1,753,736 — 1,753,736 — Obligations of states and political subdivisions 441,015 — 441,015 — Equity securities 16,674 — 16,674 — Derivative financial instruments (1) 3,933 — 3,933 — Interest rate lock commitments 1,738 — — 1,738 Forward commitments 80 — 80 — Total assets at fair value $ 2,222,504 $ 3,484 $ 2,217,282 $ 1,738 Liabilities Derivative financial instruments (2) $ 5,167 $ — $ 5,167 $ — Forward commitments 232 — 232 — Total liabilities at fair value $ 5,399 $ — $ 5,399 $ — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments |
Fair Value Measurements, Nonrecurring | The tables below present Heartland's assets that are measured at fair value on a nonrecurring basis, in thousands: Fair Value Measurements at March 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 $ 2,923 $ — $ — $ 2,923 $ — Commercial real estate 8,316 — — 8,316 — Agricultural and agricultural real estate 8,041 — — 8,041 — Residential real estate 1,421 — — 1,421 4 Consumer 1,721 — — 1,721 — Total collateral dependent impaired loans $ 22,422 $ — $ — $ 22,422 $ 4 Loans held for sale $ 24,376 $ — $ 24,376 $ — $ 288 Other real estate owned $ 11,801 $ — $ — $ 11,801 $ 16 Premises, furniture and equipment held for sale $ 1,477 $ — $ — $ 1,477 $ (115 ) Commercial servicing rights $ 272 $ — $ — $ 272 $ 2 Fair Value Measurements at December 31, 2017 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Year-to- Collateral dependent impaired loans: Commercial $ 3,212 $ — $ — $ 3,212 $ 1,119 Commercial real estate 9,480 — — 9,480 322 Agricultural and agricultural real estate 8,406 — — 8,406 2,028 Residential real estate 1,137 — — 1,137 — Consumer 1,234 — — 1,234 — Total collateral dependent impaired loans $ 23,469 $ — $ — — $ 23,469 $ 3,469 Loans held for sale $ 44,560 $ — $ 44,560 $ — $ 190 Other real estate owned $ 10,777 $ — $ — $ 10,777 $ 737 Premises, furniture and equipment held for sale $ 1,977 $ — $ — $ 1,977 $ 192 Commercial servicing rights $ 291 $ — $ — $ 291 $ (21 ) |
Fair Value Inputs, Assets, Quantitative Information | The following tables present additional quantitative information about assets measured at fair value and for which Heartland has utilized Level 3 inputs to determine fair value, in thousands: Fair Value at 3/31/2018 Valuation Technique Unobservable Input Range (Weighted Average) Interest rate lock commitments $ 1,959 Discounted cash flows Closing ratio 0-99% (89%) (1) Premises, furniture and equipment held for sale 1,477 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Commercial servicing rights 272 Discounted cash flows Third party valuation (3) Other real estate owned 11,801 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% Collateral dependent impaired loans: Commercial 2,923 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Commercial real estate 8,316 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Agricultural and agricultural real estate 8,041 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Residential real estate 1,421 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Consumer 1,721 Modified appraised value Third party valuation (2) Valuation discount 0-14% (4) (1) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. (2) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. (3) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. (4) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. Fair Value at 12/31/2017 Valuation Technique Unobservable Input Range (Weighted Average) Interest rate lock commitments $ 1,738 Discounted cash flows Closing ratio 0-99% (89%) (1) Premises, furniture and equipment held for sale 1,977 Modified appraised value Third party appraisal (2) 0-10% (4) Commercial servicing rights 291 Discounted cash flows Third party valuation (3) Other real estate owned 10,777 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% Collateral dependent impaired loans: Commercial 3,212 Modified appraised value Third party appraisal (2) Appraisal discount 0-15% (4) Commercial real estate 9,480 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Agricultural and agricultural real estate 8,406 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (4) Residential real estate 1,137 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (4) Consumer 1,234 Modified appraised value Third party valuation (2) Valuation discount 0-12% (4) (1) The significant unobservable input used in the fair value measurement is the closing ratio, which represents the percentage of loans currently in a lock position which management estimates will ultimately close. The closing ratio calculation takes into consideration historical data and loan-level data. (2) Third party appraisals are obtained and updated at least annually to establish the value of the underlying asset, but the disclosure of the unobservable inputs used by the appraisers would not be meaningful because the range will vary widely from appraisal to appraisal. (3) The significant unobservable input used in the fair value measurement are the value indices, which are weighted-average spreads to LIBOR based on maturity groups. (4) Discounts applied to the appraised values primarily include estimated sales costs, but also consider the age of the appraisal, changes in local market conditions and changes in the current condition of the collateral. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in fair value of the interest rate lock commitments, which are Level 3 financial instruments measured on a recurring basis, are summarized in the following table, in thousands: For the Three Months Ended For the Year Ended December 31, 2017 Balance at January 1, $ 1,738 $ 2,790 Total gains (losses) included in earnings 17 (1,479 ) Issuances 492 1,875 Settlements (288 ) (1,448 ) Balance at period end $ 1,959 $ 1,738 |
Fair Value, by Balance Sheet Grouping | The following analysis, which is inherently limited in depicting fair value, also does not consider any value associated with either existing customer relationships or the ability of Heartland to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented herein are based upon the use of highly subjective information and assumptions and, accordingly, the results may not be precise. Management believes that fair value estimates may not be comparable between financial institutions due to the wide range of permitted valuation techniques and numerous estimates which must be made. Furthermore, because the disclosed fair value amounts were estimated as of the balance sheet date, the amounts actually realized or paid upon maturity or settlement of the various financial instruments could be significantly different. Fair Value Measurements at March 31, 2018 Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets: Cash and cash equivalents $ 266,346 $ 266,346 $ 266,346 $ — $ — Time deposits in other financial institutions 6,297 6,297 6,297 — — Securities: Available for sale 2,027,665 2,027,665 9,421 2,018,244 — Held to maturity 249,766 258,638 — 258,638 — Other investments 22,982 22,982 — 22,982 — Loans held for sale 24,376 24,376 — 24,376 — Loans, net: Commercial 1,786,838 1,766,760 — 1,763,837 2,923 Commercial real estate 3,298,798 3,280,785 — 3,272,469 8,316 Agricultural and agricultural real estate 514,471 508,582 — 500,541 8,041 Residential real estate 621,295 614,234 — 612,813 1,421 Consumer 465,957 464,793 — 463,072 1,721 Total Loans, net 6,687,359 6,635,154 — 6,612,732 22,422 Cash surrender value on life insurance 143,444 143,444 — 143,444 — Derivative financial instruments (1) 6,265 6,265 — 6,265 — Interest rate lock commitments 1,959 1,959 — — 1,959 Forward commitments 283 283 — 283 — Financial liabilities: Deposits Demand deposits 3,094,457 3,094,457 — 3,094,457 — Savings deposits 4,536,106 4,536,106 — 4,536,106 — Time deposits 910,977 910,977 — 910,977 — Short term borrowings 131,240 131,240 — 131,240 — Other borrowings 276,118 276,193 — 276,193 — Derivative financial instruments (2) 4,709 4,709 — 4,709 — Forward commitments 320 320 — 320 — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments Fair Value Measurements at December 31, 2017 Carrying Amount Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial assets: Cash and cash equivalents $ 196,003 $ 196,003 $ 196,003 $ — $ — Time deposits in other financial institutions 9,820 9,820 9,820 — — Securities: Available for sale 2,216,753 2,216,753 3,484 2,213,269 — Held to maturity 253,550 265,494 — 265,494 — Other investments 22,563 22,563 — 22,563 — Loans held for sale 44,560 44,560 — 44,560 — Loans, net: Commercial 1,628,043 1,617,956 — 1,614,744 3,212 Commercial real estate 3,140,427 3,132,542 — 3,123,062 9,480 Agricultural and agricultural real estate 508,075 508,987 — 500,581 8,406 Residential real estate 620,939 614,667 — 613,530 1,137 Consumer 438,294 440,820 — 439,586 1,234 Total Loans, net 6,335,778 6,314,972 — 6,291,503 23,469 Cash surrender value on life insurance 142,818 142,818 — 142,818 — Derivative financial instruments (1) 3,933 3,933 — 3,933 — Interest rate lock commitments 1,738 1,738 — — 1,738 Forward commitments 80 80 — 80 — Financial liabilities: Deposits Demand deposits 2,983,128 2,983,128 — 2,983,128 — Savings deposits 4,240,328 4,240,328 — 4,240,328 — Time deposits 923,453 923,453 — 923,453 — Short term borrowings 324,691 324,691 — 324,691 — Other borrowings 285,011 285,609 — 285,609 — Derivative financial instruments (2) 5,167 5,167 — 5,167 — Forward commitments 232 232 — 232 — (1) Includes cash flow hedges, embedded derivatives and back-to-back loan swaps (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded conversion options and free standing derivative instruments |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of noninterest income in-scope and out-of-scope of Topic 606 | The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three months ended March 31, 2018, and 2017, in thousands: Three Months Ended March 31, 2018 2017 In-scope of Topic 606 Service charges and fees Service charges and fees on deposit accounts $ 2,618 $ 2,160 Overdraft fees 2,208 2,193 Customer service fees 77 49 Credit card fee income 2,190 2,033 Debit card income 2,985 3,021 Other service charges 1 1 Total service charges and fees 10,079 9,457 Trust fees 4,680 3,631 Brokerage and insurance commissions 907 1,036 Total noninterest income in-scope of Topic 606 15,666 14,124 Out-of-scope of Topic 606 Loan servicing income 1,754 1,724 Securities gains, net 1,441 2,482 Unrealized loss on equity securities, net (28 ) — Net gains on sale of loans held for sale 4,051 6,147 Valuation adjustment on commercial servicing rights (2 ) 5 Income on bank owned life insurance 614 617 Other noninterest income 1,220 794 Total noninterest income out-of-scope of Topic 606 9,050 11,769 Total noninterest income $ 24,716 $ 25,893 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 2 |
Basis of Presentation (Earnings
Basis of Presentation (Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share | ||
Net income | $ 23,268 | $ 18,010 |
Preferred dividends | (13) | (19) |
Interest expense on convertible preferred debt | 0 | 5 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 23,255 | $ 17,996 |
Weighted average common shares outstanding for basic earnings per share (in shares) | 30,442 | 26,335 |
Assumed incremental common shares issued upon non-vested restricted stock units (in shares) | 203 | 293 |
Weighted average common shares for diluted earnings per share (in shares) | 30,645 | 26,628 |
Earnings per common share — basic (in dollars per share) | $ 0.76 | $ 0.68 |
Earnings per common share — diluted (in dollars per share) | $ 0.76 | $ 0.68 |
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation (in shares) | 0 | 0 |
Basis of Presentation (Stock-Ba
Basis of Presentation (Stock-Based Compensation) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tax benefit from equity based awards | $ 611,000 | $ 888,000 |
Options granted (in shares) | 0 | 0 |
Intrinsic value for the total of all options exercised | $ 231,000 | |
Cash received from options exercised | $ 121,000 | $ 102,000 |
Options vested during period (in shares) | 0 | 0 |
2017 and 2018 RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, period before change in control | 6 months | |
Prior to 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Typical options expiration period after date of grant | 10 years | |
Time-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 3 years | 3 years |
Performance-Based RSUs | Period One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 1 year | |
Performance-Based RSUs | Period Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 3 years | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation costs | $ 1,900,000 | $ 1,700,000 |
Share-based unrecognized compensation costs | 6,100,000 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation costs | 0 | $ 0 |
Share-based unrecognized compensation costs | $ 0 | |
Stock Options | Prior to 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 5 years | |
Stock Options | Period One | Prior to 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 3 years | |
Stock Options | Period Two | Prior to 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 4 years | |
Stock Options | Period Three | Prior to 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 5 years | |
Long-Term Incentive Plan 2012 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares for issuance under future awards (in shares) | 459,893 | |
Long-Term Incentive Plan 2012 | Time-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 52,153 | 55,665 |
Long-Term Incentive Plan 2012 | Performance-Based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, vesting percentage after change in control | 100.00% | |
Long-Term Incentive Plan 2012 | Performance-Based RSUs | 2017 and 2018 RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, vesting percentage after change in control | 100.00% | |
Share-based compensation, vesting period after change in control | 24 months | |
Long-Term Incentive Plan 2012 | Performance-Based RSUs | Period One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 18,988 | 27,570 |
Long-Term Incentive Plan 2012 | Performance-Based RSUs | Period Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 16,108 | 9,032 |
Long-Term Incentive Plan 2012 | RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 0 | 0 |
Basis of Presentation (Summary
Basis of Presentation (Summary of RSUs Outstanding) (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Outstanding at beginning of period (in shares) | 301,578 | 346,817 |
Granted (in shares) | 87,249 | 92,267 |
Vested (in shares) | (107,553) | (103,897) |
Forfeited (in shares) | (19,113) | (7,765) |
Outstanding at end of period (in shares) | 262,161 | 327,422 |
Weighted-Average Grant Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 34.74 | $ 27.61 |
Granted (in dollars per share) | 55.25 | 47.50 |
Vested (in dollars per share) | 30.79 | 24.74 |
Forfeited (in dollars per share) | 43.62 | 31.03 |
Outstanding at end of period (in dollars per share) | $ 42.60 | $ 34.04 |
Basis of Presentation (Summar32
Basis of Presentation (Summary of Stock Options Outstanding) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Shares | ||
Outstanding at beginning of period (in shares) | 6,500 | 26,400 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | (6,500) | (5,500) |
Forfeited (in shares) | 0 | 0 |
Outstanding at end of period (in shares) | 0 | 20,900 |
Options exercisable at end of period (in shares) | 0 | 20,900 |
Weighted-Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 18.60 | $ 18.60 |
Granted (in dollars per share) | 0 | 0 |
Exercised (in dollars per share) | 18.60 | 18.60 |
Forfeited (in dollars per share) | 0 | 0 |
Outstanding at end of period (in dollars per share) | 0 | 18.60 |
Options exercisable at end of period (in dollars per share) | $ 0 | $ 18.60 |
Basis of Presentation (Effect o
Basis of Presentation (Effect of New Financial Accounting Standards) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of unrealized net gain on equity securities | $ 0 | |
Accumulated Other Comprehensive Income (Loss) | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of unrealized net gain on equity securities | 280 | |
Accumulated Other Comprehensive Income (Loss) | ASU 2016-01 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of unrealized net gain on equity securities | $ (280) | |
Accumulated Other Comprehensive Income (Loss) | ASU 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment | (4,500) | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of unrealized net gain on equity securities | 280 | |
Retained Earnings | ASU 2016-01 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of unrealized net gain on equity securities | $ 280 | |
Retained Earnings | ASU 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative-effect adjustment | $ 4,500 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Feb. 23, 2018USD ($)shares | Jul. 07, 2017USD ($)buildingshares | Feb. 28, 2017USD ($)buildingshares | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||||
Assets | $ 10,055,863 | $ 9,810,739 | |||||
Held to maturity | 6,746,015 | 6,391,464 | |||||
Deposits | 8,541,540 | $ 8,146,909 | |||||
Signature Bancshares, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 61,400 | ||||||
Purchase price in cash | $ 7,800 | ||||||
Purchase price paid by delivery of shares of common stock (in shares) | shares | 1,000,843 | ||||||
Citywide Banks | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 211,200 | ||||||
Purchase price in cash | $ 58,600 | ||||||
Purchase price paid by delivery of shares of common stock (in shares) | shares | 3,216,161 | ||||||
Assets | $ 1,490,000 | ||||||
Held to maturity | 985,400 | ||||||
Deposits | $ 1,210,000 | ||||||
Number of bank buildings sold (building) | building | 1 | ||||||
Fair value of buildings sold | $ 1,400 | ||||||
Founders Bancorp | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 31,000 | ||||||
Purchase price in cash | $ 8,400 | ||||||
Purchase price paid by delivery of shares of common stock (in shares) | shares | 455,877 | ||||||
Assets | $ 213,900 | ||||||
Deposits | $ 181,500 | ||||||
Number of bank buildings sold (building) | building | 1 | ||||||
Fair value of buildings sold | $ 576 | ||||||
Loans | $ 96,400 | ||||||
First Bank Lubbock Bancshares, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Assets | 971,500 | ||||||
Held to maturity | 704,900 | ||||||
Deposits | $ 869,300 | ||||||
Signature Bancshares, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Assets | $ 427,100 | ||||||
Held to maturity | 324,500 | ||||||
Deposits | $ 357,300 | ||||||
Scenario, Forecast [Member] | First Bank Lubbock Bancshares, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 185,600 |
Securities (Securities availabl
Securities (Securities available for sale) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Equity Securities, FV-NI | $ 16,693 | |
Marketable Securities, Amortized Cost Basis | 2,080,514 | |
Gross Unrealized Gains | 5,103 | |
Gross Unrealized Losses | (57,952) | |
Marketable Securities | 2,027,665 | |
Amortized Cost | 2,080,514 | $ 2,248,181 |
Gross Unrealized Gains | 10,911 | |
Gross Unrealized Losses | (42,339) | |
Securities available for sale | 2,027,665 | 2,216,753 |
Total debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,063,821 | |
Gross Unrealized Gains | 5,103 | |
Gross Unrealized Losses | (57,952) | |
Estimated Fair Value | 2,010,972 | |
Amortized Cost | 2,231,885 | |
Gross Unrealized Gains | 10,533 | |
Gross Unrealized Losses | (42,339) | |
Securities available for sale | 2,200,079 | |
U.S. government corporations and agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 11,254 | |
Gross Unrealized Gains | 3 | |
Gross Unrealized Losses | (69) | |
Estimated Fair Value | 11,188 | |
Amortized Cost | 5,358 | |
Gross Unrealized Gains | 8 | |
Gross Unrealized Losses | (38) | |
Securities available for sale | 5,328 | |
Mortgage and asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,691,092 | |
Gross Unrealized Gains | 3,968 | |
Gross Unrealized Losses | (47,456) | |
Estimated Fair Value | 1,647,604 | |
Amortized Cost | 1,785,467 | |
Gross Unrealized Gains | 5,856 | |
Gross Unrealized Losses | (37,587) | |
Securities available for sale | 1,753,736 | |
Obligations of states and political subdivisions | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 361,475 | |
Gross Unrealized Gains | 1,132 | |
Gross Unrealized Losses | (10,427) | |
Estimated Fair Value | $ 352,180 | |
Amortized Cost | 441,060 | |
Gross Unrealized Gains | 4,669 | |
Gross Unrealized Losses | (4,714) | |
Securities available for sale | 441,015 | |
Equity securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 16,296 | |
Gross Unrealized Gains | 378 | |
Gross Unrealized Losses | 0 | |
Securities available for sale | $ 16,674 |
Securities (Held to maturity se
Securities (Held to maturity securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 249,766 | $ 253,550 |
Gross Unrealized Gains | 9,699 | 12,460 |
Gross Unrealized Losses | (827) | (516) |
Estimated Fair Value | 258,638 | 265,494 |
Obligations of states and political subdivisions | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 249,766 | 253,550 |
Gross Unrealized Gains | 9,699 | 12,460 |
Gross Unrealized Losses | (827) | (516) |
Estimated Fair Value | $ 258,638 | $ 265,494 |
Securities (Narrative) (Details
Securities (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Investment [Line Items] | |||
Fair value of securities pledged | $ 594,300,000 | $ 670,300,000 | |
Gross realized gains on available-for-sale securities | 0 | $ 0 | |
FHLB | $ 14,300,000 | $ 14,000,000 | |
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | |||
Investment [Line Items] | |||
Percentage of mortgage and asset-backed securities issued by government-sponsored enterprises | 77.00% |
Securities (Securities availa38
Securities (Securities available for sale (debt maturities)) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due in 1 year or less | $ 5,397 | |
Due in 1 to 5 years | 56,369 | |
Due in 5 to 10 years | 116,517 | |
Due after 10 years | 194,446 | |
Total debt securities | 372,729 | |
Mortgage and asset-backed securities | 1,691,092 | |
Equity securities | 16,693 | |
Amortized Cost | 2,080,514 | $ 2,248,181 |
Estimated Fair Value | ||
Due in 1 year or less | 5,392 | |
Due in 1 to 5 years | 56,209 | |
Due in 5 to 10 years | 112,484 | |
Due after 10 years | 189,283 | |
Total debt securities | 363,368 | |
Mortgage and asset-backed securities | 1,647,604 | |
Equity securities | 16,693 | |
Estimated Fair Value | $ 2,027,665 | $ 2,216,753 |
Securities (Securities held to
Securities (Securities held to maturity (debt maturities)) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due in 1 year or less | $ 2,486 | |
Due in 1 to 5 years | 27,627 | |
Due in 5 to 10 years | 104,170 | |
Due after 10 years | 115,483 | |
Amortized Cost | 249,766 | $ 253,550 |
Estimated Fair Value | ||
Due in 1 year or less | 2,523 | |
Due in 1 to 5 years | 28,231 | |
Due in 5 to 10 years | 106,538 | |
Due after 10 years | 121,346 | |
Estimated Fair Value | $ 258,638 | $ 265,494 |
Securities (Gross realized gain
Securities (Gross realized gain (loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales | $ 392,246 | $ 221,637 |
Gross security gains | 3,013 | 3,830 |
Gross security losses | $ 1,572 | $ 1,339 |
Securities (Available for sale
Securities (Available for sale securities losses) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value | ||
Less than 12 months | $ 1,111,078 | $ 948,929 |
12 months or longer | 511,246 | 559,158 |
Total | 1,622,324 | 1,508,087 |
Unrealized Losses | ||
Less than 12 months | (21,984) | (12,238) |
12 months or longer | (35,968) | (30,101) |
Total | (57,952) | (42,339) |
Total debt securities | ||
Fair Value | ||
Less than 12 months | 1,111,078 | 948,929 |
12 months or longer | 511,246 | 559,158 |
Total | 1,622,324 | 1,508,087 |
Unrealized Losses | ||
Less than 12 months | (21,984) | (12,238) |
12 months or longer | (35,968) | (30,101) |
Total | (57,952) | (42,339) |
U.S. government corporations and agencies | ||
Fair Value | ||
Less than 12 months | 10,685 | 4,819 |
12 months or longer | 0 | 0 |
Total | 10,685 | 4,819 |
Unrealized Losses | ||
Less than 12 months | (69) | (38) |
12 months or longer | 0 | 0 |
Total | (69) | (38) |
Mortgage and asset-backed securities | ||
Fair Value | ||
Less than 12 months | 923,293 | 851,070 |
12 months or longer | 379,672 | 399,978 |
Total | 1,302,965 | 1,251,048 |
Unrealized Losses | ||
Less than 12 months | (18,459) | (11,533) |
12 months or longer | (28,997) | (26,054) |
Total | (47,456) | (37,587) |
Obligations of states and political subdivisions | ||
Fair Value | ||
Less than 12 months | 177,100 | 93,040 |
12 months or longer | 131,574 | 159,180 |
Total | 308,674 | 252,220 |
Unrealized Losses | ||
Less than 12 months | (3,456) | (667) |
12 months or longer | (6,971) | (4,047) |
Total | $ (10,427) | $ (4,714) |
Securities (Held to maturity 42
Securities (Held to maturity securities losses) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value | ||
Less than 12 months | $ 30,496 | $ 8,512 |
12 months or longer | 7,907 | 8,989 |
Total | 38,403 | 17,501 |
Unrealized Losses | ||
Less than 12 months | (272) | (49) |
12 months or longer | (555) | (467) |
Total | (827) | (516) |
Obligations of states and political subdivisions | ||
Fair Value | ||
Less than 12 months | 30,496 | 8,512 |
12 months or longer | 7,907 | 8,989 |
Total | 38,403 | 17,501 |
Unrealized Losses | ||
Less than 12 months | (272) | (49) |
12 months or longer | (555) | (467) |
Total | $ (827) | $ (516) |
Loans (Loans receivable) (Detai
Loans (Loans receivable) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | $ 6,747,817 | $ 6,393,226 |
Unearned discount | (1,620) | (556) |
Deferred loan fees | (182) | (1,206) |
Total net loans receivable held to maturity | 6,746,015 | 6,391,464 |
Allowance for loan and lease losses | (58,656) | (55,686) |
Loans receivable, net | 6,687,359 | 6,335,778 |
Commercial | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 5,129,777 | 4,809,875 |
Commercial | Commercial | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 1,806,683 | 1,646,606 |
Commercial | Commercial real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 3,323,094 | 3,163,269 |
Agricultural and agricultural real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 518,386 | 511,588 |
Residential real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 624,725 | 624,279 |
Consumer | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | $ 474,929 | $ 447,484 |
Consumer | Loans and Finance Receivables | Citizens Finance Co | ||
Loans and Leases [Line Items] | ||
Concentration risk, percentage | 15.00% |
Loans (Allowance for credit los
Loans (Allowance for credit losses on financing receivables) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | $ 5,471 | $ 4,755 | ||
Ending Balance Under ASC 450-20 | 53,185 | 50,931 | ||
Total | 58,656 | 55,686 | $ 54,999 | $ 54,324 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 83,572 | 78,468 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 6,664,245 | 6,314,758 | ||
Total | 6,747,817 | 6,393,226 | ||
Commercial | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total | 5,129,777 | 4,809,875 | ||
Commercial | Commercial | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 2,425 | 1,613 | ||
Ending Balance Under ASC 450-20 | 16,970 | 16,485 | ||
Total | 19,395 | 18,098 | 16,180 | 14,765 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 9,005 | 7,415 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 1,797,678 | 1,639,191 | ||
Total | 1,806,683 | 1,646,606 | ||
Commercial | Commercial real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 736 | 766 | ||
Ending Balance Under ASC 450-20 | 22,733 | 21,184 | ||
Total | 23,469 | 21,950 | 23,797 | 24,319 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 22,920 | 23,705 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 3,300,174 | 3,139,564 | ||
Total | 3,323,094 | 3,163,269 | ||
Agricultural and agricultural real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 787 | 546 | ||
Ending Balance Under ASC 450-20 | 3,929 | 3,712 | ||
Total | 4,716 | 4,258 | 3,983 | 4,210 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 16,896 | 13,304 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 501,490 | 498,284 | ||
Total | 518,386 | 511,588 | ||
Residential real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 386 | 430 | ||
Ending Balance Under ASC 450-20 | 1,755 | 1,794 | ||
Total | 2,141 | 2,224 | 2,183 | 2,263 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 28,324 | 27,141 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 596,401 | 597,138 | ||
Total | 624,725 | 624,279 | ||
Consumer | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 1,137 | 1,400 | ||
Ending Balance Under ASC 450-20 | 7,798 | 7,756 | ||
Total | 8,935 | 9,156 | $ 8,856 | $ 8,767 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 6,427 | 6,903 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 468,502 | 440,581 | ||
Total | $ 474,929 | $ 447,484 |
Loans (Financing receivables, n
Loans (Financing receivables, non accrual status) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Nonaccrual loans | $ 60,644 | $ 58,272 |
Nonaccrual troubled debt restructured loans | 4,162 | 4,309 |
Total nonaccrual loans | 64,806 | 62,581 |
Accruing loans past due 90 days or more | 22 | 830 |
Performing troubled debt restructured loans | $ 3,206 | $ 6,617 |
Loans (Troubled debt restructur
Loans (Troubled debt restructuring) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)loan | Mar. 31, 2017USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 5 | 3 |
Pre- Modification Recorded Investment | $ 877 | $ 348 |
Post- Modification Recorded Investment | $ 752 | $ 348 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 3 | 0 |
Recorded Investment | $ 519 | $ 0 |
Commercial | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Pre- Modification Recorded Investment | $ 0 | $ 0 |
Post- Modification Recorded Investment | $ 0 | $ 0 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Commercial | Commercial | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Pre- Modification Recorded Investment | $ 0 | $ 0 |
Post- Modification Recorded Investment | $ 0 | $ 0 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Commercial | Commercial real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Pre- Modification Recorded Investment | $ 0 | $ 0 |
Post- Modification Recorded Investment | $ 0 | $ 0 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Agricultural and agricultural real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Pre- Modification Recorded Investment | $ 0 | $ 0 |
Post- Modification Recorded Investment | $ 0 | $ 0 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Residential real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 5 | 3 |
Pre- Modification Recorded Investment | $ 877 | $ 348 |
Post- Modification Recorded Investment | $ 752 | $ 348 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 3 | 0 |
Recorded Investment | $ 519 | $ 0 |
Consumer | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 0 | 0 |
Pre- Modification Recorded Investment | $ 0 | $ 0 |
Post- Modification Recorded Investment | $ 0 | $ 0 |
With Payment Defaults During the Following Periods | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Loans (Troubled debt) (Narrativ
Loans (Troubled debt) (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)loan | |
Financing Receivable, Recorded Investment [Line Items] | |
Principal deferment collected from government guarantees | $ 142 |
Capitalized interest and escrow | $ 17 |
Doubtful | |
Financing Receivable, Recorded Investment [Line Items] | |
Number of loan relationships | loan | 0 |
Loans (Loans by credit quality
Loans (Loans by credit quality indicator) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 6,747,817 | $ 6,393,226 |
Loans delinquent 30 to 89 days, percentage | 0.21% | 0.27% |
Loans secured by residential real estate property in process of foreclosure | $ 2,800 | |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 6,314,116 | $ 6,009,382 |
Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 433,701 | $ 383,844 |
Percent of nonaccrual loans | 15.00% | 16.00% |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percent of loans | 55.00% | 52.00% |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percent of loans | 45.00% | 48.00% |
Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 5,129,777 | $ 4,809,875 |
Commercial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 4,823,960 | 4,538,284 |
Commercial | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 305,817 | 271,591 |
Commercial | Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 1,806,683 | 1,646,606 |
Commercial | Commercial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 1,677,338 | 1,552,783 |
Commercial | Commercial | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 129,345 | 93,823 |
Commercial | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 3,323,094 | 3,163,269 |
Commercial | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 3,146,622 | 2,985,501 |
Commercial | Commercial real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 176,472 | 177,768 |
Agricultural and agricultural real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 518,386 | 511,588 |
Agricultural and agricultural real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 442,484 | 451,539 |
Agricultural and agricultural real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 75,902 | 60,049 |
Residential real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 624,725 | 624,279 |
Residential real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 585,886 | 586,623 |
Residential real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 38,839 | 37,656 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 474,929 | 447,484 |
Consumer | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 461,786 | 432,936 |
Consumer | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 13,143 | $ 14,548 |
Loans (Past due financing recei
Loans (Past due financing receivables) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | $ 14,222 | $ 18,137 |
Accruing Loans and Leases, Current | 6,668,789 | 6,312,508 |
Nonaccrual | 64,806 | 62,581 |
Total | 6,747,817 | 6,393,226 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 9,965 | 13,375 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 4,235 | 3,932 |
90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 22 | 830 |
Commercial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 5,932 | 8,700 |
Accruing Loans and Leases, Current | 5,098,608 | 4,777,349 |
Nonaccrual | 25,237 | 23,826 |
Total | 5,129,777 | 4,809,875 |
Commercial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 3,309 | 6,015 |
Commercial | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 2,623 | 2,585 |
Commercial | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 0 | 100 |
Commercial | Commercial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 4,789 | 1,605 |
Accruing Loans and Leases, Current | 1,793,565 | 1,637,773 |
Nonaccrual | 8,329 | 7,228 |
Total | 1,806,683 | 1,646,606 |
Commercial | Commercial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 2,906 | 1,246 |
Commercial | Commercial | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 1,883 | 259 |
Commercial | Commercial | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 0 | 100 |
Commercial | Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 1,143 | 7,095 |
Accruing Loans and Leases, Current | 3,305,043 | 3,139,576 |
Nonaccrual | 16,908 | 16,598 |
Total | 3,323,094 | 3,163,269 |
Commercial | Commercial real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 403 | 4,769 |
Commercial | Commercial real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 740 | 2,326 |
Commercial | Commercial real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 0 | 0 |
Agricultural and agricultural real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 1,238 | 738 |
Accruing Loans and Leases, Current | 500,320 | 497,546 |
Nonaccrual | 16,828 | 13,304 |
Total | 518,386 | 511,588 |
Agricultural and agricultural real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 1,147 | 604 |
Agricultural and agricultural real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 69 | 134 |
Agricultural and agricultural real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 22 | 0 |
Residential real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 2,957 | 2,292 |
Accruing Loans and Leases, Current | 602,927 | 601,120 |
Nonaccrual | 18,841 | 20,867 |
Total | 624,725 | 624,279 |
Residential real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 2,891 | 2,022 |
Residential real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 66 | 270 |
Residential real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 0 | 0 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 4,095 | 6,407 |
Accruing Loans and Leases, Current | 466,934 | 436,493 |
Nonaccrual | 3,900 | 4,584 |
Total | 474,929 | 447,484 |
Consumer | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 2,618 | 4,734 |
Consumer | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | 1,477 | 943 |
Consumer | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans and Leases, Past Due | $ 0 | $ 730 |
Loans (Impaired loans) (Details
Loans (Impaired loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | $ 20,084 | $ 19,958 |
Total impaired loans without a related allowance | 69,290 | 64,121 |
Total impaired loans held to maturity | 89,374 | 84,079 |
Loan Balance | ||
Total impaired loans with a related allowance | 18,228 | 18,101 |
Total impaired loans without a related allowance | 65,344 | 60,367 |
Total impaired loans held to maturity | 83,572 | 78,468 |
Related Allowance Recorded | 5,471 | 4,755 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 18,206 | 22,949 |
Total impaired loans without a related allowance | 63,072 | 62,296 |
Total impaired loans held to maturity | 81,278 | 85,245 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 20 | 129 |
Total impaired loans without a related allowance | 278 | 1,029 |
Total impaired loans held to maturity | 298 | 1,158 |
Commercial | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 13,996 | 14,217 |
Total impaired loans without a related allowance | 21,510 | 20,486 |
Total impaired loans held to maturity | 35,506 | 34,703 |
Loan Balance | ||
Total impaired loans with a related allowance | 12,140 | 12,360 |
Total impaired loans without a related allowance | 19,785 | 18,760 |
Total impaired loans held to maturity | 31,925 | 31,120 |
Related Allowance Recorded | 3,161 | 2,379 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 11,992 | 15,086 |
Total impaired loans without a related allowance | 19,328 | 22,734 |
Total impaired loans held to maturity | 31,320 | 37,820 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 8 | 73 |
Total impaired loans without a related allowance | 146 | 679 |
Total impaired loans held to maturity | 154 | 752 |
Commercial | Commercial | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 2,816 | 2,292 |
Total impaired loans without a related allowance | 7,308 | 6,243 |
Total impaired loans held to maturity | 10,124 | 8,535 |
Loan Balance | ||
Total impaired loans with a related allowance | 2,816 | 2,292 |
Total impaired loans without a related allowance | 6,189 | 5,123 |
Total impaired loans held to maturity | 9,005 | 7,415 |
Related Allowance Recorded | 2,425 | 1,613 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 2,472 | 3,607 |
Total impaired loans without a related allowance | 5,449 | 2,586 |
Total impaired loans held to maturity | 7,921 | 6,193 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 0 | 39 |
Total impaired loans without a related allowance | 49 | 165 |
Total impaired loans held to maturity | 49 | 204 |
Commercial | Commercial real estate | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 11,180 | 11,925 |
Total impaired loans without a related allowance | 14,202 | 14,243 |
Total impaired loans held to maturity | 25,382 | 26,168 |
Loan Balance | ||
Total impaired loans with a related allowance | 9,324 | 10,068 |
Total impaired loans without a related allowance | 13,596 | 13,637 |
Total impaired loans held to maturity | 22,920 | 23,705 |
Related Allowance Recorded | 736 | 766 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 9,520 | 11,479 |
Total impaired loans without a related allowance | 13,879 | 20,148 |
Total impaired loans held to maturity | 23,399 | 31,627 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 8 | 34 |
Total impaired loans without a related allowance | 97 | 514 |
Total impaired loans held to maturity | 105 | 548 |
Agricultural and agricultural real estate | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 1,536 | 1,539 |
Total impaired loans without a related allowance | 17,388 | 13,793 |
Total impaired loans held to maturity | 18,924 | 15,332 |
Loan Balance | ||
Total impaired loans with a related allowance | 1,536 | 1,539 |
Total impaired loans without a related allowance | 15,360 | 11,765 |
Total impaired loans held to maturity | 16,896 | 13,304 |
Related Allowance Recorded | 787 | 546 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 1,537 | 3,437 |
Total impaired loans without a related allowance | 12,954 | 9,654 |
Total impaired loans held to maturity | 14,491 | 13,091 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 0 | 0 |
Total impaired loans without a related allowance | 1 | 0 |
Total impaired loans held to maturity | 1 | 0 |
Residential real estate | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 1,693 | 1,568 |
Total impaired loans without a related allowance | 26,635 | 25,573 |
Total impaired loans held to maturity | 28,328 | 27,141 |
Loan Balance | ||
Total impaired loans with a related allowance | 1,693 | 1,568 |
Total impaired loans without a related allowance | 26,631 | 25,573 |
Total impaired loans held to maturity | 28,324 | 27,141 |
Related Allowance Recorded | 386 | 430 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 1,608 | 2,056 |
Total impaired loans without a related allowance | 26,878 | 26,024 |
Total impaired loans held to maturity | 28,486 | 28,080 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 3 | 15 |
Total impaired loans without a related allowance | 109 | 277 |
Total impaired loans held to maturity | 112 | 292 |
Consumer | ||
Unpaid Contractual Balance | ||
Total impaired loans with a related allowance | 2,859 | 2,634 |
Total impaired loans without a related allowance | 3,757 | 4,269 |
Total impaired loans held to maturity | 6,616 | 6,903 |
Loan Balance | ||
Total impaired loans with a related allowance | 2,859 | 2,634 |
Total impaired loans without a related allowance | 3,568 | 4,269 |
Total impaired loans held to maturity | 6,427 | 6,903 |
Related Allowance Recorded | 1,137 | 1,400 |
Year- to- Date Avg. Loan Balance | ||
Total impaired loans with a related allowance | 3,069 | 2,370 |
Total impaired loans without a related allowance | 3,912 | 3,884 |
Total impaired loans held to maturity | 6,981 | 6,254 |
Year- to- Date Interest Income Recognized | ||
Total impaired loans with a related allowance | 9 | 41 |
Total impaired loans without a related allowance | 22 | 73 |
Total impaired loans held to maturity | $ 31 | $ 114 |
Loans (Carrying amount of loans
Loans (Carrying amount of loans acquired) (Narrative) (Details) - USD ($) $ in Millions | Feb. 23, 2018 | Jul. 07, 2017 | Feb. 28, 2017 |
Signature Bancshares, Inc. | |||
Business Acquisition [Line Items] | |||
Loans held to maturity | $ 324.5 | ||
Estimated fair value of loans acquired | 335.1 | ||
Citywide Banks | |||
Business Acquisition [Line Items] | |||
Loans held to maturity | $ 985.4 | ||
Estimated fair value of loans acquired | $ 1,000 | ||
Founders Bancorp | |||
Business Acquisition [Line Items] | |||
Loans held to maturity | $ 96.4 | ||
Estimated fair value of loans acquired | $ 98.9 | ||
Commercial | Signature Bancshares, Inc. | |||
Business Acquisition [Line Items] | |||
Loans held to maturity | $ 16 |
Loans (Carrying amount of loa52
Loans (Carrying amount of loans acquired) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | $ 1,606,305 | $ 1,470,025 |
Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 265,249 | 188,327 |
Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 1,081,198 | 1,055,041 |
Agricultural and agricultural real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 26 | 1,242 |
Residential real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 181,219 | 174,123 |
Consumer | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 78,613 | 51,292 |
Impaired Purchased Loans | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 5,815 | 3,738 |
Impaired Purchased Loans | Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 3,142 | 952 |
Impaired Purchased Loans | Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 2,474 | 2,572 |
Impaired Purchased Loans | Agricultural and agricultural real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 0 | 0 |
Impaired Purchased Loans | Residential real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 199 | 214 |
Impaired Purchased Loans | Consumer | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 0 | 0 |
Non Impaired Purchased Loans | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 1,600,490 | 1,466,287 |
Non Impaired Purchased Loans | Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 262,107 | 187,375 |
Non Impaired Purchased Loans | Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 1,078,724 | 1,052,469 |
Non Impaired Purchased Loans | Agricultural and agricultural real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 26 | 1,242 |
Non Impaired Purchased Loans | Residential real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 181,020 | 173,909 |
Non Impaired Purchased Loans | Consumer | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | $ 78,613 | $ 51,292 |
Loans (Change in accretable yie
Loans (Change in accretable yield on acquired loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance at beginning of period | $ 57 | $ 182 |
Original yield premium, net, at date of acquisition | (56) | 0 |
Accretion | (199) | (173) |
Reclassification from nonaccretable difference | 198 | 127 |
Balance at end of period | $ 0 | $ 136 |
Loans (Change in accretable y54
Loans (Change in accretable yield on acquired loans) (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for loan and lease losses | $ 58,656,000 | $ 55,686,000 | |
Provision for loan losses | 4,263,000 | $ 3,641,000 | |
2015, 2016 and 2017 Acquisitions | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractually required payments of loans acquired | 26,000,000 | ||
Estimated fair value of loans acquired | 15,000,000 | ||
Allowance for loan and lease losses | 0 | $ 139,000 | |
Provision for loan losses | 0 | $ 1,000 | |
Non Impaired Purchased Loans | Two Thousand Fifteen Acquisitions [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractually required payments of loans acquired | 2,990,000,000 | ||
Estimated fair value of loans acquired | $ 2,910,000,000 |
Allowance for Loan Losses (Deta
Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | $ 55,686 | $ 54,324 |
Charge-offs | (2,224) | (3,718) |
Recoveries | 931 | 752 |
Provision | 4,263 | 3,641 |
Ending Balance | 58,656 | 54,999 |
Agricultural and agricultural real estate | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 4,258 | 4,210 |
Charge-offs | 0 | (871) |
Recoveries | 14 | 1 |
Provision | 444 | 643 |
Ending Balance | 4,716 | 3,983 |
Residential real estate | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 2,224 | 2,263 |
Charge-offs | (16) | (265) |
Recoveries | 75 | 2 |
Provision | (142) | 183 |
Ending Balance | 2,141 | 2,183 |
Consumer | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 9,156 | 8,767 |
Charge-offs | (1,289) | (1,744) |
Recoveries | 290 | 303 |
Provision | 778 | 1,530 |
Ending Balance | 8,935 | 8,856 |
Commercial | Commercial | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 18,098 | 14,765 |
Charge-offs | (794) | (230) |
Recoveries | 104 | 234 |
Provision | 1,987 | 1,411 |
Ending Balance | 19,395 | 16,180 |
Commercial real estate | Commercial | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 21,950 | 24,319 |
Charge-offs | (125) | (608) |
Recoveries | 448 | 212 |
Provision | 1,196 | (126) |
Ending Balance | $ 23,469 | $ 23,797 |
Goodwill, Core Deposit Premiu56
Goodwill, Core Deposit Premium and Other Intangible Assets (Goodwill) (Narrative) (Details) - USD ($) | Sep. 30, 2017 | Mar. 31, 2018 | Feb. 23, 2018 | Dec. 31, 2017 | Jul. 07, 2017 | Feb. 28, 2017 |
Goodwill [Line Items] | ||||||
Goodwill | $ 270,305,000 | $ 236,615,000 | ||||
Goodwill impairment | $ 0 | |||||
Core Deposits | ||||||
Goodwill [Line Items] | ||||||
Intangibles, amortization period | 10 years | |||||
Signature Bancshares, Inc. | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 33,700,000 | |||||
Signature Bancshares, Inc. | Core Deposits | ||||||
Goodwill [Line Items] | ||||||
Intangibles recognized | $ 7,700,000 | |||||
Citywide Banks | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 95,200,000 | |||||
Citywide Banks | Core Deposits | ||||||
Goodwill [Line Items] | ||||||
Intangibles recognized | $ 16,000,000 | |||||
Founders Bancorp | ||||||
Goodwill [Line Items] | ||||||
Goodwill | $ 13,800,000 | |||||
Founders Bancorp | Core Deposits | ||||||
Goodwill [Line Items] | ||||||
Intangibles recognized | $ 2,500,000 |
Goodwill, Core Deposit Premiu57
Goodwill, Core Deposit Premium and Other Intangible Assets (Carrying amount of intangible assets (incl accumulated amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 119,897 | $ 112,043 |
Accumulated Amortization | 53,363 | 50,983 |
Net Carrying Amount | 66,534 | 61,060 |
Core deposit intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 69,731 | 62,008 |
Accumulated Amortization | 28,939 | 27,086 |
Net Carrying Amount | 40,792 | 34,922 |
Customer relationship intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,177 | 1,177 |
Accumulated Amortization | 906 | 896 |
Net Carrying Amount | 271 | 281 |
Mortgage servicing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 42,249 | 42,139 |
Accumulated Amortization | 19,084 | 18,891 |
Net Carrying Amount | 23,165 | 23,248 |
Commercial servicing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,740 | 6,719 |
Accumulated Amortization | 4,434 | 4,110 |
Net Carrying Amount | $ 2,306 | $ 2,609 |
Goodwill, Core Deposit Premiu58
Goodwill, Core Deposit Premium and Other Intangible Assets (Estimated future amortization expense for amortizable intangible assets) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2018 | $ 13,233 |
Year ending December 31, | |
2,019 | 11,749 |
2,020 | 10,180 |
2,021 | 8,640 |
2,022 | 6,840 |
2,023 | 5,643 |
Thereafter | 10,249 |
Total | 66,534 |
Core deposit intangibles | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2018 | 5,957 |
Year ending December 31, | |
2,019 | 7,092 |
2,020 | 6,220 |
2,021 | 5,323 |
2,022 | 4,175 |
2,023 | 3,691 |
Thereafter | 8,334 |
Total | 40,792 |
Customer relationship intangibles | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2018 | 29 |
Year ending December 31, | |
2,019 | 38 |
2,020 | 37 |
2,021 | 36 |
2,022 | 34 |
2,023 | 33 |
Thereafter | 64 |
Total | 271 |
Mortgage servicing rights | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2018 | 6,776 |
Year ending December 31, | |
2,019 | 4,097 |
2,020 | 3,512 |
2,021 | 2,927 |
2,022 | 2,341 |
2,023 | 1,756 |
Thereafter | 1,756 |
Total | 23,165 |
Commercial servicing rights | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2018 | 471 |
Year ending December 31, | |
2,019 | 522 |
2,020 | 411 |
2,021 | 354 |
2,022 | 290 |
2,023 | 163 |
Thereafter | 95 |
Total | $ 2,306 |
Goodwill, Core Deposit Premiu59
Goodwill, Core Deposit Premium and Other Intangible Assets (Mortgage and commercial loans servicing) (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Valuation servicing rights in tranches [Line Items] | ||||
Mortgage loans serviced for others | $ 3,540,000,000 | $ 3,560,000,000 | ||
Custodial escrow balances maintained | 23,200,000 | 17,300,000 | ||
Total net loans receivable held to maturity | $ 773,900,000 | |||
Amount derecognized | 6,900,000 | |||
Loans serviced | 25,471,000 | 25,857,000 | ||
Mortgage Servicing Rights | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset at amortized value | $ 40,434,000 | $ 47,564,000 | $ 37,100,000 | |
Prepayment rate (percent) | 8.23% | 9.73% | ||
Discount rate (percent) | 9.04% | 9.06% | ||
Fees collected for servicing of mortgage loans | $ 2,200,000 | $ 3,200,000 | ||
Mortgage Servicing Rights | Minimum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average cap rate (percent) | 0.96% | 0.91% | ||
Mortgage Servicing Rights | Maximum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average cap rate (percent) | 1.25% | 1.50% | ||
Mortgage Servicing Rights 15-year Tranche | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset, agreement term | 15 years | |||
Mortgage Servicing Rights 30-year Tranche | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset, agreement term | 30 years | |||
Commercial Servicing Rights | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset at amortized value | $ 2,781,000 | $ 4,040,000 | $ 3,200,000 | |
Loans serviced | $ 125,500,000 | $ 139,900,000 | ||
Commercial Servicing Rights | Minimum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Prepayment rate (percent) | 8.27% | 7.27% | ||
Discount rate (percent) | 13.09% | 13.04% | ||
Average cap rate (percent) | 3.10% | 3.10% | ||
Commercial Servicing Rights | Maximum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Prepayment rate (percent) | 9.89% | 8.88% | ||
Discount rate (percent) | 16.71% | 15.49% | ||
Average cap rate (percent) | 4.45% | 4.45% | ||
Commercial Servicing Rights Less Than 20 Years | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset at amortized value | $ 648,000 | $ 740,000 | ||
Servicing asset, agreement term | 20 years | |||
Fees collected for servicing of mortgage loans | $ 420,000 | $ 415,000 | ||
Valuation allowance | 0 | 0 | ||
Commercial Servicing Rights More Than 20 Years | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Servicing asset at amortized value | $ 2,133,000 | 2,481,000 | ||
Servicing asset, agreement term | 20 years | |||
Valuation allowance | $ 14,000 | $ 12,000 |
Goodwill, Core Deposit Premiu60
Goodwill, Core Deposit Premium and Other Intangible Assets (Changes in capitalized mortgage and commercial servicing rights) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Valuation allowance on commercial servicing rights | $ (2) | $ 5 | |
Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Balance at beginning of period | 23,248 | 32,088 | |
Originations | 1,162 | 2,132 | |
Amortization | (1,245) | (2,261) | |
Balance at end of period | 23,165 | 31,959 | |
Fair value of mortgage servicing rights | $ 40,434 | $ 47,564 | $ 37,100 |
Mortgage servicing rights, net to servicing portfolio (percent) | 0.66% | 0.74% | |
Commercial servicing rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Balance at beginning of period | $ 2,609 | $ 3,690 | |
Originations | 21 | 93 | |
Amortization | (322) | (306) | |
Valuation allowance on commercial servicing rights | (2) | 5 | |
Balance at end of period | 2,306 | 3,482 | |
Fair value of mortgage servicing rights | $ 2,781 | $ 4,040 | $ 3,200 |
Mortgage servicing rights, net to servicing portfolio (percent) | 1.84% | 2.17% |
Goodwill, Core Deposit Premiu61
Goodwill, Core Deposit Premium and Other Intangible Assets (Book value, fair value of commercial serving rights and impairment) (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Less than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | $ 446,000 | $ 537,000 |
Fair Value | 648,000 | 740,000 |
Impairment | 0 | 0 |
More than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,873,000 | 2,084,000 |
Fair Value | 2,133,000 | 2,481,000 |
Impairment | 14,000 | 12,000 |
Citywide Banks | Less than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 6,000 | 8,000 |
Fair Value | 10,000 | 11,000 |
Impairment | 0 | 0 |
Citywide Banks | More than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 33,000 | 34,000 |
Fair Value | 36,000 | 37,000 |
Impairment | 0 | 0 |
Premier Valley Bank | Less than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 72,000 | 83,000 |
Fair Value | 104,000 | 110,000 |
Impairment | 0 | 0 |
Premier Valley Bank | More than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 286,000 | 303,000 |
Fair Value | 272,000 | 291,000 |
Impairment | 14,000 | 12,000 |
Wisconsin Bank & Trust | Less than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 368,000 | 446,000 |
Fair Value | 534,000 | 619,000 |
Impairment | 0 | 0 |
Wisconsin Bank & Trust | More than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,554,000 | 1,747,000 |
Fair Value | 1,825,000 | 2,153,000 |
Impairment | $ 0 | $ 0 |
Derivative Financial Instrume62
Derivative Financial Instruments (Cash collateral on derivative financial instruments) (Narrative) (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | $ 1,200,000 |
Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 860,000 | $ 0 |
Derivative Financial Instrume63
Derivative Financial Instruments (Cash flow hedges) (Narrative) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)transaction | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Change in net unrealized losses on cash flow hedges | $ 197 |
Estimated amount to be reclassified from accumulated other comprehensive income to interest expense within the next twelve months | $ 789 |
Interest Rate Swap | Cash Flow Hedges | |
Derivative [Line Items] | |
Number of swap transactions | transaction | 5 |
Derivative, notional amount | $ 85,000 |
Interest Rate Swap | Cash Flow Hedges | Heartland Financial Statutory Trust IV, V and VII | |
Derivative [Line Items] | |
Derivative, notional amount | 65,000 |
Interest Rate Swap | Cash Flow Hedges | Morrill Statutory Trust I and II | |
Derivative [Line Items] | |
Derivative, notional amount | $ 20,000 |
Derivative Financial Instrume64
Derivative Financial Instruments (Cash flow hedges) (Balance sheet category and fair values) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other assets | Interest Rate Swap due March 17, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 25,000 | |
Fair Value, Other Assets | $ 239 | |
Receive Rate | 2.178% | |
Weighted Average Pay Rate | 2.255% | |
Other assets | Interest Rate Swap due March 26, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 10,000 | $ 10,000 |
Fair Value, Other Assets | $ 69 | $ 30 |
Receive Rate | 2.286% | 1.329% |
Weighted Average Pay Rate | 1.674% | 1.674% |
Other assets | Interest Rate Swap due March 18, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 10,000 | $ 10,000 |
Fair Value, Other Assets | $ 68 | $ 29 |
Receive Rate | 2.178% | 1.60% |
Weighted Average Pay Rate | 1.658% | 1.658% |
Other assets | Interest Rate Swap due May 10, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 32,667 | $ 33,667 |
Fair Value, Other Assets | $ 1,010 | $ 759 |
Receive Rate | 4.24% | 3.932% |
Weighted Average Pay Rate | 3.674% | 3.674% |
Other assets | Interest Rate Swap due June 15, 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 20,000 | |
Fair Value, Other Assets | $ 316 | |
Receive Rate | 2.125% | |
Weighted Average Pay Rate | 2.39% | |
Other assets | Interest Rate Swap due March 1, 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 20,000 | |
Fair Value, Other Assets | $ 339 | |
Receive Rate | 2.006% | |
Weighted Average Pay Rate | 2.352% | |
Other liabilities | Interest Rate Swap due March 17, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 25,000 | |
Fair Value, Other Liabilities | $ (106) | |
Receive Rate | 1.60% | |
Weighted Average Pay Rate | 2.255% | |
Other liabilities | Interest Rate Swap due January 7, 2020 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 20,000 | $ 20,000 |
Fair Value, Other Liabilities | $ (380) | $ (621) |
Receive Rate | 1.704% | 1.35% |
Weighted Average Pay Rate | 3.355% | 3.355% |
Other liabilities | Interest Rate Swap due June 15, 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 20,000 | |
Fair Value, Other Liabilities | $ (177) | |
Receive Rate | 1.588% | |
Weighted Average Pay Rate | 2.39% | |
Other liabilities | Interest Rate Swap due March 1, 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 20,000 | |
Fair Value, Other Liabilities | $ (149) | |
Receive Rate | 1.481% | |
Weighted Average Pay Rate | 2.352% |
Derivative Financial Instrume65
Derivative Financial Instruments (Cash flow hedges) (Gains (losses) recognized) (Details) - Interest rate swaps - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Trading Activity, Gains and Losses, Net [Line Items] | ||
Effective Portion, Recognized in OCI, Amount of Gain (Loss) | $ 1,896 | $ 533 |
Interest expense | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Effective Portion, Reclassified from AOCI into Income, Amount of Gain (Loss) | (197) | (397) |
Other income | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Ineffective Portion, Recognized in Income on Derivatives, Amount of Gain (Loss) | $ 0 | $ 0 |
Derivative Financial Instrume66
Derivative Financial Instruments (Fair value hedges) (Narrative) (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | $ 1,200,000 |
Fair Value Hedging | Interest Rate Swap | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 3,200,000 | $ 3,900,000 |
Derivative Financial Instrume67
Derivative Financial Instruments (Fair value hedges) (Balance sheet category and fair values) (Details) - Other liabilities - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Feb. 05, 2016 |
Derivative [Line Items] | |||
Notional Amount | $ 2,000,000 | ||
Fair value hedges | |||
Derivative [Line Items] | |||
Notional Amount | $ 35,436,000 | $ 35,635,000 | |
Fair Value | $ (105,000) | $ (999,000) |
Derivative Financial Instrume68
Derivative Financial Instruments (Fair value hedges) (Gains (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair value hedges | Interest income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) | $ 894 | $ 194 |
Derivative Financial Instrume69
Derivative Financial Instruments (Embedded derivatives) (Balance sheet category and fair values) (Details) - Embedded derivatives - Other assets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Notional Amount | $ 13,907 | $ 14,045 |
Fair Value | $ 461 | $ 738 |
Derivative Financial Instrume70
Derivative Financial Instruments (Embedded derivatives) (Gain (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other noninterest income | Embedded derivatives | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) | $ 277 | $ 117 |
Derivative Financial Instrume71
Derivative Financial Instruments (Embedded derivatives) (Narrative) (Details) | Feb. 05, 2016USD ($)shares | Mar. 31, 2018shares | Dec. 31, 2017shares |
Derivative [Line Items] | |||
Number of shares to be issued upon conversion (in shares) | 73,394 | 0 | 0 |
Number of shares issued upon conversion (in shares) | 20,481 | ||
Other liabilities | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ | $ 2,000,000 |
Derivative Financial Instrume72
Derivative Financial Instruments (Embedded derivatives) (Embedded conversion options) (Balance sheet category and fair values) (Details) - Other liabilities - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Feb. 05, 2016 |
Derivative [Line Items] | |||
Notional Amount | $ 2,000,000 | ||
Embedded conversion option | |||
Derivative [Line Items] | |||
Notional Amount | $ 0 | $ 0 | |
Fair Value | $ 0 | $ 0 |
Derivative Financial Instrume73
Derivative Financial Instruments (Embedded derivatives) (Embedded conversion options) (Gain (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other noninterest income | Embedded conversion option | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) | $ 0 | $ 97 |
Derivative Financial Instrume74
Derivative Financial Instruments (Back-to-back loan swaps) (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Cash pledged as collateral | $ 0 | $ 1,200,000 | |
Counterparties | |||
Derivative [Line Items] | |||
Cash pledged as collateral | 860,000 | 0 | |
Back-to-Back Loan Swaps | Interest Rate Swap | |||
Derivative [Line Items] | |||
Cash pledged as collateral | 495,000 | 1,600,000 | |
Back-to-Back Loan Swaps | Interest Rate Swap | Interest income | |||
Derivative [Line Items] | |||
Gain (loss) recognized | 0 | $ 0 | |
Back-to-Back Loan Swaps | Interest Rate Swap | Counterparties | |||
Derivative [Line Items] | |||
Cash pledged as collateral | $ 1,600,000 | $ 190,000 |
Derivative Financial Instrume75
Derivative Financial Instruments (Back-to-back loan swaps) (Balance sheet category and fair values) (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Feb. 05, 2016 |
Other liabilities | |||
Derivative [Line Items] | |||
Notional Amount | $ 2,000,000 | ||
Back-to-Back Loan Swaps | Other assets | |||
Derivative [Line Items] | |||
Notional Amount | $ 162,882,000 | $ 126,766,000 | |
Fair Value, Receive fixed-pay floating interest rate swap | 3,763,000 | 2,377,000 | |
Back-to-Back Loan Swaps | Other liabilities | |||
Derivative [Line Items] | |||
Notional Amount | 162,882,000 | 126,766,000 | |
Fair Value, Pay fixed-receive floating interest rate swap | $ (3,763,000) | $ (2,377,000) | |
Long | Back-to-Back Loan Swaps | Other assets | |||
Derivative [Line Items] | |||
Derivative, Average Variable Interest Rate | 4.82% | 4.70% | |
Long | Back-to-Back Loan Swaps | Other liabilities | |||
Derivative [Line Items] | |||
Derivative, Average Variable Interest Rate | 4.73% | 4.03% | |
Short | Back-to-Back Loan Swaps | Other assets | |||
Derivative [Line Items] | |||
Derivative, Average Variable Interest Rate | 4.73% | 4.03% | |
Short | Back-to-Back Loan Swaps | Other liabilities | |||
Derivative [Line Items] | |||
Derivative, Average Variable Interest Rate | 4.82% | 4.70% |
Derivative Financial Instrume76
Derivative Financial Instruments (Other free standing derivatives) (Narrative) (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | $ 1,200,000 |
Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | 860,000 | 0 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Cash pledged as collateral | 203,000 | 20,000 |
Not Designated as Hedging Instrument | Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | $ 29,000 |
Derivative Financial Instrume77
Derivative Financial Instruments (Other free standing derivatives) (Balance sheet category and fair values) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other assets | Interest rate lock commitments (mortgage) | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 65,591 | $ 53,588 |
Fair Value, Other Assets | 1,959 | 1,738 |
Other assets | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | 55,118 | 37,286 |
Fair Value, Other Assets | 283 | 80 |
Other liabilities | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | 91,625 | 118,632 |
Fair Value, Other Liabilities | (320) | (232) |
Other liabilities | Undesignated interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | 13,907 | 14,045 |
Fair Value, Other Liabilities | $ (461) | $ (738) |
Derivative Financial Instrume78
Derivative Financial Instruments (Other free standing derivatives) (Gains (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net gains on sale of loans held for sale | Interest rate lock commitments (mortgage) | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Gain (Loss) Recognized | $ 17 | $ 1,062 |
Net gains on sale of loans held for sale | Forward commitments | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Gain (Loss) Recognized | 115 | (2,739) |
Other noninterest income | Undesignated interest rate swaps | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Gain (Loss) Recognized | $ 277 | $ 117 |
Fair Value (Fair value measurem
Fair Value (Fair value measurement recurring) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Securities available for sale | $ 2,027,665 | $ 2,216,753 |
Level 1 | ||
Assets | ||
Securities available for sale | 9,421 | 3,484 |
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Securities available for sale | 2,018,244 | 2,213,269 |
Derivative assets | 6,265 | 3,933 |
Liabilities | ||
Derivative liabilities | 4,709 | 5,167 |
Level 3 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Interest rate lock commitments | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Interest rate lock commitments | Level 2 | ||
Assets | ||
Derivative assets | 0 | 0 |
Interest rate lock commitments | Level 3 | ||
Assets | ||
Derivative assets | 1,959 | 1,738 |
Forward commitments | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Forward commitments | Level 2 | ||
Assets | ||
Derivative assets | 283 | 80 |
Liabilities | ||
Derivative liabilities | 320 | 232 |
Forward commitments | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
U.S. government corporations and agencies | ||
Assets | ||
Securities available for sale | 5,328 | |
Mortgage and asset-backed securities | ||
Assets | ||
Securities available for sale | 1,753,736 | |
Obligations of states and political subdivisions | ||
Assets | ||
Securities available for sale | 441,015 | |
Equity securities | ||
Assets | ||
Securities available for sale | 16,674 | |
Recurring Basis | ||
Assets | ||
Total assets at fair value | 2,036,172 | 2,222,504 |
Liabilities | ||
Total liabilities at fair value | 5,029 | 5,399 |
Recurring Basis | Level 1 | ||
Assets | ||
Total assets at fair value | 9,421 | 3,484 |
Liabilities | ||
Total liabilities at fair value | 0 | 0 |
Recurring Basis | Level 2 | ||
Assets | ||
Total assets at fair value | 2,024,792 | 2,217,282 |
Liabilities | ||
Total liabilities at fair value | 5,029 | 5,399 |
Recurring Basis | Level 3 | ||
Assets | ||
Total assets at fair value | 1,959 | 1,738 |
Liabilities | ||
Total liabilities at fair value | 0 | 0 |
Recurring Basis | Derivative Financial Instruments | ||
Assets | ||
Derivative assets | 6,265 | 3,933 |
Liabilities | ||
Derivative liabilities | 4,709 | 5,167 |
Recurring Basis | Derivative Financial Instruments | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | Derivative Financial Instruments | Level 2 | ||
Assets | ||
Derivative assets | 6,265 | 3,933 |
Liabilities | ||
Derivative liabilities | 4,709 | 5,167 |
Recurring Basis | Derivative Financial Instruments | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | Interest rate lock commitments | ||
Assets | ||
Derivative assets | 1,959 | 1,738 |
Recurring Basis | Interest rate lock commitments | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Recurring Basis | Interest rate lock commitments | Level 2 | ||
Assets | ||
Derivative assets | 0 | 0 |
Recurring Basis | Interest rate lock commitments | Level 3 | ||
Assets | ||
Derivative assets | 1,959 | 1,738 |
Recurring Basis | Forward commitments | ||
Assets | ||
Derivative assets | 283 | 80 |
Liabilities | ||
Derivative liabilities | 320 | 232 |
Recurring Basis | Forward commitments | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | Forward commitments | Level 2 | ||
Assets | ||
Derivative assets | 283 | 80 |
Liabilities | ||
Derivative liabilities | 320 | 232 |
Recurring Basis | Forward commitments | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | U.S. government corporations and agencies | ||
Assets | ||
Securities available for sale | 11,188 | 5,328 |
Recurring Basis | U.S. government corporations and agencies | Level 1 | ||
Assets | ||
Securities available for sale | 9,421 | 3,484 |
Recurring Basis | U.S. government corporations and agencies | Level 2 | ||
Assets | ||
Securities available for sale | 1,767 | 1,844 |
Recurring Basis | U.S. government corporations and agencies | Level 3 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Mortgage and asset-backed securities | ||
Assets | ||
Securities available for sale | 1,647,604 | 1,753,736 |
Recurring Basis | Mortgage and asset-backed securities | Level 1 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Mortgage and asset-backed securities | Level 2 | ||
Assets | ||
Securities available for sale | 1,647,604 | 1,753,736 |
Recurring Basis | Mortgage and asset-backed securities | Level 3 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Obligations of states and political subdivisions | ||
Assets | ||
Securities available for sale | 352,180 | 441,015 |
Recurring Basis | Obligations of states and political subdivisions | Level 1 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Obligations of states and political subdivisions | Level 2 | ||
Assets | ||
Securities available for sale | 352,180 | 441,015 |
Recurring Basis | Obligations of states and political subdivisions | Level 3 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Corporate debt securities | ||
Assets | ||
Securities available for sale | 0 | |
Recurring Basis | Corporate debt securities | Level 1 | ||
Assets | ||
Securities available for sale | 0 | |
Recurring Basis | Corporate debt securities | Level 2 | ||
Assets | ||
Securities available for sale | 0 | |
Recurring Basis | Corporate debt securities | Level 3 | ||
Assets | ||
Securities available for sale | 0 | |
Recurring Basis | Equity securities | ||
Assets | ||
Securities available for sale | 16,693 | 16,674 |
Recurring Basis | Equity securities | Level 1 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Recurring Basis | Equity securities | Level 2 | ||
Assets | ||
Securities available for sale | 16,693 | 16,674 |
Recurring Basis | Equity securities | Level 3 | ||
Assets | ||
Securities available for sale | $ 0 | $ 0 |
Fair Value (Fair value measur80
Fair Value (Fair value measurement non-recurring) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | $ 11,801 | $ 10,777 |
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 24,376 | 44,560 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Other real estate owned | 11,801 | 10,777 |
Commercial servicing rights | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 272 | 291 |
Premises, furniture and equipment held for sale | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Commercial | Commercial | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 2,923 | 3,212 |
Commercial | Commercial real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,316 | 9,480 |
Agricultural and agricultural real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,041 | 8,406 |
Residential real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,421 | 1,137 |
Consumer | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,721 | 1,234 |
Nonrecurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 22,422 | 23,469 |
Loans held for sale | 24,376 | 44,560 |
Other real estate owned | 11,801 | 10,777 |
Nonrecurring Basis | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 4 | 3,469 |
Loans held for sale | 288 | 190 |
Other real estate owned | 16 | 737 |
Nonrecurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Loans held for sale | 0 | 0 |
Other real estate owned | 0 | 0 |
Nonrecurring Basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Loans held for sale | 24,376 | 44,560 |
Other real estate owned | 0 | 0 |
Nonrecurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 22,422 | 23,469 |
Loans held for sale | 0 | 0 |
Other real estate owned | 11,801 | 10,777 |
Nonrecurring Basis | Commercial servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 272 | 291 |
Nonrecurring Basis | Commercial servicing rights | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 2 | (21) |
Nonrecurring Basis | Commercial servicing rights | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 0 | 0 |
Nonrecurring Basis | Commercial servicing rights | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 0 | 0 |
Nonrecurring Basis | Commercial servicing rights | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commercial servicing rights | 272 | 291 |
Nonrecurring Basis | Premises, furniture and equipment held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Nonrecurring Basis | Premises, furniture and equipment held for sale | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | (115) | 192 |
Nonrecurring Basis | Premises, furniture and equipment held for sale | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | 0 | 0 |
Nonrecurring Basis | Premises, furniture and equipment held for sale | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | 0 | 0 |
Nonrecurring Basis | Premises, furniture and equipment held for sale | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Nonrecurring Basis | Commercial | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 2,923 | 3,212 |
Nonrecurring Basis | Commercial | Commercial | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 1,119 |
Nonrecurring Basis | Commercial | Commercial | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Commercial | Commercial | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Commercial | Commercial | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 2,923 | 3,212 |
Nonrecurring Basis | Commercial | Commercial real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,316 | 9,480 |
Nonrecurring Basis | Commercial | Commercial real estate | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 322 |
Nonrecurring Basis | Commercial | Commercial real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Commercial | Commercial real estate | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Commercial | Commercial real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,316 | 9,480 |
Nonrecurring Basis | Agricultural and agricultural real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,041 | 8,406 |
Nonrecurring Basis | Agricultural and agricultural real estate | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 2,028 |
Nonrecurring Basis | Agricultural and agricultural real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Agricultural and agricultural real estate | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Agricultural and agricultural real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,041 | 8,406 |
Nonrecurring Basis | Residential real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,421 | 1,137 |
Nonrecurring Basis | Residential real estate | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 4 | 0 |
Nonrecurring Basis | Residential real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Residential real estate | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Residential real estate | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,421 | 1,137 |
Nonrecurring Basis | Consumer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,721 | 1,234 |
Nonrecurring Basis | Consumer | Year-to- Date (Gains) Losses | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Consumer | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Consumer | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Nonrecurring Basis | Consumer | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | $ 1,721 | $ 1,234 |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information about Level 3 fair value measurements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Securities available for sale | $ 2,027,665 | $ 2,216,753 |
Premises, furniture and equipment held for sale | 1,477 | 1,977 |
Other real estate owned | $ 11,801 | $ 10,777 |
Commercial servicing rights | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 13.09% | 13.04% |
Commercial servicing rights | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 16.71% | 15.49% |
Level 3 | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Securities available for sale | $ 0 | $ 0 |
Derivative assets | 0 | 0 |
Other real estate owned | $ 11,801 | $ 10,777 |
Level 3 | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 10.00% | 10.00% |
Level 3 | Commercial | Commercial | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | $ 2,923 | $ 3,212 |
Level 3 | Commercial | Commercial | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Commercial | Commercial | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 10.00% | 15.00% |
Level 3 | Commercial | Commercial real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | $ 8,316 | $ 9,480 |
Level 3 | Commercial | Commercial real estate | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Commercial | Commercial real estate | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 10.00% | 12.00% |
Level 3 | Agricultural and agricultural real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | $ 8,041 | $ 8,406 |
Level 3 | Agricultural and agricultural real estate | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Agricultural and agricultural real estate | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 10.00% | 10.00% |
Level 3 | Residential real estate | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | $ 1,421 | $ 1,137 |
Level 3 | Residential real estate | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Residential real estate | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 12.00% | 12.00% |
Level 3 | Consumer | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | $ 1,721 | $ 1,234 |
Level 3 | Consumer | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Consumer | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 14.00% | 12.00% |
Level 3 | Commercial servicing rights | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Commercial servicing rights | $ 272 | $ 291 |
Level 3 | Premises, furniture and equipment held for sale | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Premises, furniture and equipment held for sale | $ 1,477 | $ 1,977 |
Level 3 | Premises, furniture and equipment held for sale | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 0.00% | 0.00% |
Level 3 | Premises, furniture and equipment held for sale | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Pretax discount rate (percent) | 10.00% | 10.00% |
Level 3 | Interest rate lock commitments | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative assets | $ 1,959 | $ 1,738 |
Level 3 | Interest rate lock commitments | Minimum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Closing ratio | 0.00% | 0.00% |
Level 3 | Interest rate lock commitments | Maximum | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Closing ratio | 99.00% | 99.00% |
Level 3 | Interest rate lock commitments | Weighted Average | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Closing ratio | 89.00% | 89.00% |
Fair Value (Changes Level 3 ass
Fair Value (Changes Level 3 assets (fair value, recurring)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Gains included in net gains on sale of loans held for sale | $ 2,889 | $ 3,828 | |
Interest rate lock commitments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 1,738 | $ 2,790 | $ 2,790 |
Total gains (losses) included in earnings | 17 | (1,479) | |
Issuances | 492 | 1,875 | |
Settlements | (288) | (1,448) | |
Balance at period end | 1,959 | 1,738 | |
Gains included in net gains on sale of loans held for sale | $ 2,000 | $ 1,700 |
Fair Value (Estimated fair valu
Fair Value (Estimated fair value financial instruments (incl. carrying amounts)) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Securities: | ||
Securities available for sale | $ 2,027,665 | $ 2,216,753 |
Held to maturity | 258,638 | 265,494 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 266,346 | 196,003 |
Securities: | ||
Securities available for sale | 9,421 | 3,484 |
Held to maturity | 0 | 0 |
Other investments | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans, net | 0 | 0 |
Cash surrender value on life insurance | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities: | ||
Short term borrowings | 0 | 0 |
Other borrowings | 0 | 0 |
Derivative liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Securities: | ||
Securities available for sale | 2,018,244 | 2,213,269 |
Held to maturity | 258,638 | 265,494 |
Other investments | 22,982 | 22,563 |
Loans held for sale | 24,376 | 44,560 |
Loans, net | 6,612,732 | 6,291,503 |
Cash surrender value on life insurance | 143,444 | 142,818 |
Derivative assets | 6,265 | 3,933 |
Financial liabilities: | ||
Short term borrowings | 131,240 | 324,691 |
Other borrowings | 276,193 | 285,609 |
Derivative liabilities | 4,709 | 5,167 |
Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Securities: | ||
Securities available for sale | 0 | 0 |
Held to maturity | 0 | 0 |
Other investments | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans, net | 22,422 | 23,469 |
Cash surrender value on life insurance | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities: | ||
Short term borrowings | 0 | 0 |
Other borrowings | 0 | 0 |
Derivative liabilities | 0 | 0 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 266,346 | 196,003 |
Securities: | ||
Securities available for sale | 2,027,665 | 2,216,753 |
Held to maturity | 249,766 | 253,550 |
Other investments | 22,982 | 22,563 |
Loans held for sale | 24,376 | 44,560 |
Loans, net | 6,687,359 | 6,335,778 |
Cash surrender value on life insurance | 143,444 | 142,818 |
Derivative assets | 6,265 | 3,933 |
Financial liabilities: | ||
Short term borrowings | 131,240 | 324,691 |
Other borrowings | 276,118 | 285,011 |
Derivative liabilities | 4,709 | 5,167 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 266,346 | 196,003 |
Securities: | ||
Securities available for sale | 2,027,665 | 2,216,753 |
Held to maturity | 258,638 | 265,494 |
Other investments | 22,982 | 22,563 |
Loans held for sale | 24,376 | 44,560 |
Loans, net | 6,635,154 | 6,314,972 |
Cash surrender value on life insurance | 143,444 | 142,818 |
Derivative assets | 6,265 | 3,933 |
Financial liabilities: | ||
Short term borrowings | 131,240 | 324,691 |
Other borrowings | 276,193 | 285,609 |
Derivative liabilities | 4,709 | 5,167 |
Interest rate lock commitments | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Derivative assets | 0 | 0 |
Interest rate lock commitments | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Derivative assets | 0 | 0 |
Interest rate lock commitments | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Derivative assets | 1,959 | 1,738 |
Interest rate lock commitments | Carrying Amount | ||
Securities: | ||
Derivative assets | 1,959 | 1,738 |
Interest rate lock commitments | Estimated Fair Value | ||
Securities: | ||
Derivative assets | 1,959 | 1,738 |
Forward commitments | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Derivative assets | 0 | 0 |
Financial liabilities: | ||
Derivative liabilities | 0 | 0 |
Forward commitments | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Derivative assets | 283 | 80 |
Financial liabilities: | ||
Derivative liabilities | 320 | 232 |
Forward commitments | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Derivative assets | 0 | 0 |
Financial liabilities: | ||
Derivative liabilities | 0 | 0 |
Forward commitments | Carrying Amount | ||
Securities: | ||
Derivative assets | 283 | 80 |
Financial liabilities: | ||
Derivative liabilities | 320 | 232 |
Forward commitments | Estimated Fair Value | ||
Securities: | ||
Derivative assets | 283 | 80 |
Financial liabilities: | ||
Derivative liabilities | 320 | 232 |
Commercial | Commercial | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Loans, net | 0 | 0 |
Commercial | Commercial | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Loans, net | 1,763,837 | 1,614,744 |
Commercial | Commercial | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 2,923 | 3,212 |
Commercial | Commercial | Carrying Amount | ||
Securities: | ||
Loans, net | 1,786,838 | 1,628,043 |
Commercial | Commercial | Estimated Fair Value | ||
Securities: | ||
Loans, net | 1,766,760 | 1,617,956 |
Commercial | Commercial real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Loans, net | 0 | 0 |
Commercial | Commercial real estate | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Loans, net | 3,272,469 | 3,123,062 |
Commercial | Commercial real estate | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 8,316 | 9,480 |
Commercial | Commercial real estate | Carrying Amount | ||
Securities: | ||
Loans, net | 3,298,798 | 3,140,427 |
Commercial | Commercial real estate | Estimated Fair Value | ||
Securities: | ||
Loans, net | 3,280,785 | 3,132,542 |
Agricultural and agricultural real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Loans, net | 0 | 0 |
Agricultural and agricultural real estate | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Loans, net | 500,541 | 500,581 |
Agricultural and agricultural real estate | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 8,041 | 8,406 |
Agricultural and agricultural real estate | Carrying Amount | ||
Securities: | ||
Loans, net | 514,471 | 508,075 |
Agricultural and agricultural real estate | Estimated Fair Value | ||
Securities: | ||
Loans, net | 508,582 | 508,987 |
Residential real estate | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Loans, net | 0 | 0 |
Residential real estate | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Loans, net | 612,813 | 613,530 |
Residential real estate | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 1,421 | 1,137 |
Residential real estate | Carrying Amount | ||
Securities: | ||
Loans, net | 621,295 | 620,939 |
Residential real estate | Estimated Fair Value | ||
Securities: | ||
Loans, net | 614,234 | 614,667 |
Consumer | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Securities: | ||
Loans, net | 0 | 0 |
Consumer | Significant Other Observable Inputs (Level 2) | ||
Securities: | ||
Loans, net | 463,072 | 439,586 |
Consumer | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 1,721 | 1,234 |
Consumer | Carrying Amount | ||
Securities: | ||
Loans, net | 465,957 | 438,294 |
Consumer | Estimated Fair Value | ||
Securities: | ||
Loans, net | 464,793 | 440,820 |
Time deposits in other financial institutions | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Time deposits in other financial institutions | 6,297 | 9,820 |
Time deposits in other financial institutions | Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Time deposits in other financial institutions | 0 | 0 |
Time deposits in other financial institutions | Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Time deposits in other financial institutions | 0 | 0 |
Time deposits in other financial institutions | Carrying Amount | ||
Financial assets: | ||
Time deposits in other financial institutions | 6,297 | 9,820 |
Time deposits in other financial institutions | Estimated Fair Value | ||
Financial assets: | ||
Time deposits in other financial institutions | 6,297 | 9,820 |
Demand deposits | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Demand deposits | Significant Other Observable Inputs (Level 2) | ||
Financial liabilities: | ||
Deposits | 3,094,457 | 2,983,128 |
Demand deposits | Significant Unobservable Inputs (Level 3) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Demand deposits | Carrying Amount | ||
Financial liabilities: | ||
Deposits | 3,094,457 | 2,983,128 |
Demand deposits | Estimated Fair Value | ||
Financial liabilities: | ||
Deposits | 3,094,457 | 2,983,128 |
Savings deposits | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Savings deposits | Significant Other Observable Inputs (Level 2) | ||
Financial liabilities: | ||
Deposits | 4,536,106 | 4,240,328 |
Savings deposits | Significant Unobservable Inputs (Level 3) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Savings deposits | Carrying Amount | ||
Financial liabilities: | ||
Deposits | 4,536,106 | 4,240,328 |
Savings deposits | Estimated Fair Value | ||
Financial liabilities: | ||
Deposits | 4,536,106 | 4,240,328 |
Time deposits | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Time deposits | Significant Other Observable Inputs (Level 2) | ||
Financial liabilities: | ||
Deposits | 910,977 | 923,453 |
Time deposits | Significant Unobservable Inputs (Level 3) | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Time deposits | Carrying Amount | ||
Financial liabilities: | ||
Deposits | 910,977 | 923,453 |
Time deposits | Estimated Fair Value | ||
Financial liabilities: | ||
Deposits | $ 910,977 | $ 923,453 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Trust fees | $ 4,680 | $ 3,631 |
Brokerage and insurance commissions | 907 | 1,036 |
Total noninterest income | 15,666 | 14,124 |
Loan servicing income | 1,754 | 1,724 |
Securities gains, net | 1,441 | 2,482 |
Unrealized loss on equity securities, net | (28) | 0 |
Net gains on sale of loans held for sale | 4,051 | 6,147 |
Valuation adjustment on commercial servicing rights | (2) | 5 |
Income on bank owned life insurance | 614 | 617 |
Other noninterest income | 1,220 | 794 |
Total noninterest income out-of-scope of Topic 606 | 9,050 | 11,769 |
TOTAL NONINTEREST INCOME | 24,716 | 25,893 |
Service charges and fees on deposit accounts | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 2,618 | 2,160 |
Overdraft fees | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 2,208 | 2,193 |
Customer service fees | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 77 | 49 |
Credit card fee income | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 2,190 | 2,033 |
Debit card income | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 2,985 | 3,021 |
Other service charges | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | 1 | 1 |
Total service charges and fees | ||
Disaggregation of Revenue [Line Items] | ||
Total noninterest income | $ 10,079 | $ 9,457 |