Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HEARTLAND FINANCIAL USA INC | |
Entity Central Index Key | 0000920112 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 34,604,462 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 174,198 | $ 223,135 |
Interest bearing deposits with other banks and other short-term investments | 318,303 | 50,495 |
Cash and cash equivalents | 492,501 | 273,630 |
Time deposits in other financial institutions | 4,675 | 4,672 |
Securities: | ||
Carried at fair value (cost of $2,415,641 at March 31, 2019, and $2,492,620 at December 31, 2018) | 2,400,460 | 2,450,709 |
Held to maturity, at cost (fair value of $95,240 at March 31, 2019, and $245,341 at December 31, 2018) | 88,089 | 236,283 |
Other investments, at cost | 27,506 | 28,396 |
Trade and Loans Receivables Held-for-sale, Net, Not Part of Disposal Group | 69,716 | 119,801 |
Loans receivable: | ||
Held to maturity | 7,331,544 | 7,407,697 |
Allowance for loan and lease losses | (62,639) | (61,963) |
Loans receivable, net | 7,268,905 | 7,345,734 |
Premises, furniture and equipment, net | 183,185 | 187,418 |
Premises, furniture and equipment held for sale | 7,030 | 7,258 |
Other real estate, net | 5,391 | 6,153 |
Goodwill | 391,668 | 391,668 |
Core deposit intangibles and customer relationship intangibles, net | 44,637 | 47,479 |
Servicing rights, net | 28,968 | 31,072 |
Cash surrender value on life insurance | 163,764 | 162,892 |
Other assets | 136,000 | 114,841 |
TOTAL ASSETS | 11,312,495 | 11,408,006 |
Deposits: | ||
Demand | 3,118,909 | 3,264,737 |
Savings | 5,145,929 | 5,107,962 |
Time | 1,088,104 | 1,023,730 |
Total deposits | 9,352,942 | 9,396,429 |
Deposits held for sale | 118,564 | 106,409 |
Short-term borrowings | 104,314 | 227,010 |
Other borrowings | 268,312 | 274,905 |
Accrued expenses and other liabilities | 96,261 | 78,078 |
TOTAL LIABILITIES | 9,940,393 | 10,082,831 |
STOCKHOLDERS' EQUITY: | ||
Common stock (par value $1 per share; 40,000,000 shares authorized at both March 31, 2019, and December 31, 2018; issued 34,603,611 shares at March 31, 2019, and 34,477,499 shares at December 31, 2018) | 34,604 | 34,477 |
Capital surplus | 745,596 | 743,095 |
Retained earnings | 603,506 | 579,252 |
Accumulated other comprehensive loss | (11,604) | (31,649) |
TOTAL STOCKHOLDERS' EQUITY | 1,372,102 | 1,325,175 |
TOTAL LIABILITIES AND EQUITY | 11,312,495 | 11,408,006 |
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 Convertible Preferred Stock | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Cost of available for sale securities | $ 2,415,641 | $ 2,492,620 |
Fair value of held to maturity securities | $ 95,240 | $ 245,341 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 34,603,611 | 34,477,499 |
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 Convertible 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) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INTEREST INCOME: | ||
Interest and fees on loans | $ 100,456 | $ 85,651 |
Interest on securities: | ||
Taxable | 15,876 | 11,577 |
Nontaxable | 3,093 | 3,579 |
Interest on federal funds sold | 4 | 0 |
Interest on interest bearing deposits in other financial institutions | 1,292 | 407 |
TOTAL INTEREST INCOME | 120,721 | 101,214 |
INTEREST EXPENSE: | ||
Interest on deposits | 13,213 | 5,766 |
Interest on short-term borrowings | 889 | 268 |
Interest on other borrowings (includes $165 and $197 of interest expense related to derivatives reclassified from accumulated other comprehensive income for the three months ended March 31, 2019 and 2018, respectively) | 3,664 | 3,596 |
TOTAL INTEREST EXPENSE | 17,766 | 9,630 |
NET INTEREST INCOME | 102,955 | 91,584 |
Provision for loan losses | 1,635 | 4,263 |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 101,320 | 87,321 |
NONINTEREST INCOME: | ||
Revenue from contract with customers | 18,002 | 15,666 |
Loan servicing income | 1,729 | 1,754 |
Securities gains, net (includes $1,575 and $1,441 of net security gains reclassified from accumulated other comprehensive income for the three months ended March 31, 2019 and 2018, respectively) | 1,575 | 1,441 |
Unrealized gain/(loss) on equity securities, net | 258 | (28) |
Net gains on sale of loans held for sale | 3,176 | 4,051 |
Servicing Rights Impairment (Recovery) | (589) | (2) |
Income on bank owned life insurance | 899 | 614 |
Other noninterest income | 1,667 | 1,220 |
TOTAL NONINTEREST INCOME | 26,717 | 24,716 |
NONINTEREST EXPENSES: | ||
Salaries and employee benefits | 50,285 | 48,710 |
Occupancy | 6,607 | 6,043 |
Furniture and equipment | 2,692 | 2,749 |
Professional fees | 11,379 | 9,448 |
Advertising | 2,325 | 1,940 |
Core deposit intangibles and customer relationship intangibles amortization | 2,842 | 1,863 |
Other real estate and loan collection expenses | 701 | 732 |
Gain on sales/valuations of assets, net | (3,004) | (197) |
Restructuring expenses | 3,227 | 2,564 |
Other noninterest expenses | 11,176 | 9,794 |
TOTAL NONINTEREST EXPENSES | 88,230 | 83,646 |
INCOME BEFORE INCOME TAXES | 39,807 | 28,391 |
Income taxes (includes $358 and $261 of income tax expense reclassified from accumulated other comprehensive income for the three months ended March 31, 2019 and 2018, respectively) | 8,310 | 5,123 |
NET INCOME | 31,497 | 23,268 |
Preferred dividends | 0 | (13) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 31,497 | $ 23,255 |
EARNINGS PER COMMON SHARE - BASIC (in dollars per share) | $ 0.91 | $ 0.76 |
EARNINGS PER COMMON SHARE - DILUTED (in dollars per share) | 0.91 | 0.76 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.16 | $ 0.13 |
Service charges and fees | ||
NONINTEREST INCOME: | ||
Revenue from contract with customers | $ 12,794 | $ 10,079 |
Trust fees | ||
NONINTEREST INCOME: | ||
Revenue from contract with customers | 4,474 | 4,680 |
Brokerage and insurance commissions | ||
NONINTEREST INCOME: | ||
Revenue from contract with customers | $ 734 | $ 907 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest expense related to derivatives reclassified from accumulated other comprehensive income | $ 3,664 | $ 3,596 |
Net security gains reclassified from accumulated other comprehensive income | 1,575 | 1,441 |
Income tax expense (benefit) reclassified from accumulated other comprehensive income | 8,310 | 5,123 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Gain (Loss) from Derivatives | ||
Interest expense related to derivatives reclassified from accumulated other comprehensive income | 165 | 197 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Unrealized Investment Gain (Loss) | ||
Net security gains reclassified from accumulated other comprehensive income | 1,575 | 1,441 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) | ||
Income tax expense (benefit) reclassified from accumulated other comprehensive income | $ 358 | $ 261 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 31,497 | $ 23,268 |
Securities: | ||
Net change in unrealized gain/(loss) on securities | 29,965 | (19,834) |
Reclassification adjustment for net gains realized in net income | (1,575) | (1,441) |
Income taxes | (7,281) | 5,391 |
Other comprehensive income/(loss) on securities | 21,109 | (15,884) |
Derivatives used in cash flow hedging relationships: | ||
Net change in unrealized gain/(loss) on derivatives | (1,505) | 1,699 |
Reclassification adjustment for net losses on derivatives realized in net income | 158 | 197 |
Income taxes | 283 | (708) |
Other comprehensive income/(loss) on cash flow hedges | (1,064) | 1,188 |
Other comprehensive income/(loss) | 20,045 | (14,696) |
TOTAL COMPREHENSIVE INCOME | $ 51,542 | $ 8,572 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 31,497 | $ 23,268 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 8,155 | 6,802 | |
Provision for loan losses | 1,635 | 4,263 | |
Net amortization of premium on securities | 5,692 | 5,823 | |
Securities gains, net | (1,575) | (1,441) | |
Unrealized (gain)/loss on equity securities, net | (258) | 28 | |
Stock based compensation | 2,375 | 1,858 | |
Loans originated for sale | (61,348) | (112,433) | |
Proceeds on sales of loans held for sale | 64,941 | 135,506 | |
Net gains on sale of loans held for sale | (2,978) | (2,889) | |
Decrease in accrued interest receivable | 682 | 3,239 | |
(Increase) decrease in prepaid expenses | (1,708) | 194 | |
Increase in accrued interest payable | 1,261 | 1,029 | |
Capitalization of servicing rights | (266) | (1,183) | |
Valuation allowance on servicing rights | 589 | 2 | |
(Gain)/loss on sales/valuations of assets, net | 1,512 | (197) | |
Net excess tax benefit from stock based compensation | 336 | 611 | |
Other, net | (16,493) | (5,441) | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 34,049 | 59,039 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of time deposits in other financial institutions | (248) | 0 | |
Proceeds from the sale of securities available for sale | 434,154 | 392,246 | |
Proceeds from the redemption of time deposits in other financial institutions | 0 | 8,767 | |
Proceeds from the maturity of and principal paydowns on securities available for sale | 86,727 | 49,603 | |
Proceeds from the maturity of and principal paydowns on securities held to maturity | 2,156 | 3,570 | |
Proceeds from the maturity of and principal paydowns on time deposits in other financial institutions | 245 | 4,368 | |
Proceeds from the sale, maturity of and principal paydowns on other investments | 2,730 | 677 | |
Purchase of securities available for sale | (299,105) | (244,289) | |
Purchase of other investments | (1,779) | (644) | |
Net (increase) decrease in loans | 43,925 | (32,314) | |
Purchase of bank owned life insurance policies | (5) | 0 | |
Capital expenditures | (1,123) | (2,356) | |
Net cash and cash equivalents received in acquisitions | 0 | 5,543 | |
Proceeds from the sale of equipment | 117 | 615 | |
Net cash received in divestitures | 28,142 | 0 | |
Proceeds on sale of OREO and other repossessed assets | 2,537 | 668 | |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 298,473 | 186,454 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net increase/(decrease) in demand deposits | (131,876) | 5,834 | |
Net increase in savings deposits | 74,016 | 100,608 | |
Net (increase) decrease in time deposit accounts | 75,141 | (69,143) | |
Proceeds on short-term revolving credit line | 0 | 15,000 | |
Net decrease in short-term borrowings | (43,000) | (168,451) | |
Proceeds from short term FHLB advances | 430,888 | 220,000 | |
Repayments of short term FHLB advances | (506,725) | (260,000) | |
Proceeds from other borrowings | 50 | 0 | |
Repayments of other borrowings | (6,868) | (14,995) | |
Purchase of treasury stock | 0 | (97) | |
Proceeds from issuance of common stock | 253 | 14 | |
Dividends paid | (5,530) | (3,920) | |
NET CASH USED BY FINANCING ACTIVITIES | (113,651) | (175,150) | |
Net increase in cash and cash equivalents | 218,871 | 70,343 | |
Cash and cash equivalents at beginning of year | 273,630 | 196,003 | $ 196,003 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 492,501 | 266,346 | $ 273,630 |
Supplemental disclosures: | |||
Cash paid for income/franchise taxes | 84 | 2 | |
Cash paid for interest | 16,537 | 8,601 | |
Loans transferred to OREO | 1,694 | 939 | |
Transfer of premises from premises, furniture and equipment, net, to premises, furniture and equipment held for sale | 654 | 0 | |
Deposits transferred to held for sale | 76,968 | 0 | |
Loans transferred to held for sale | 32,111 | 0 | |
Securities transferred from held to maturity to available for sale | 148,030 | 0 | |
Purchases of securities available for sale, accrued, not settled | 2,019 | 0 | |
Maturity of securities available for sale, accrued, not settled | 1,000 | 0 | |
Stock consideration granted for acquisitions | $ 0 | $ 53,621 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
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: | |||||||
Series D Preferred, $17.50 per share | (13) | (13) | |||||
Common | (3,907) | (3,907) | |||||
Purchase of 1,761 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 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Reclassification of unrealized net gain on equity securities | (1,713) | (1,713) | |||||
Balance at beginning of period at Dec. 31, 2018 | 1,325,175 | 0 | 34,477 | 743,095 | 579,252 | (31,649) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income | 51,542 | 31,497 | 20,045 | ||||
Cash dividends declared: | |||||||
Common | (5,530) | (5,530) | |||||
Issuance of shares of common stock | 253 | 127 | 126 | ||||
Stock based compensation | 2,375 | 2,375 | |||||
Balance at end of period at Mar. 31, 2019 | $ 1,372,102 | $ 0 | $ 34,604 | $ 745,596 | $ 603,506 | $ (11,604) | $ 0 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash dividends per share common stock (in dollars per share) | $ 0.16 | $ 0.13 |
Shares of common stock purchased (in shares) | 1,761 | |
Shares of common stock issued (in shares) | 126,112 | 1,116,644 |
Series D Preferred Stock | ||
Cash dividends per share preferred stock (in dollars per share) | $ 17.50 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 , included in the Form 10-K of Heartland Financial USA, Inc. ("Heartland") filed with the Securities and Exchange Commission ("SEC") on February 27, 2019 . 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, 2019 , are not necessarily indicative of the results expected for the year ending December 31, 2019 . 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, 2019 , and 2018 , are shown in the table below: Three Months Ended (Dollars and number of shares in thousands, except per share data) 2019 2018 Net income $ 31,497 $ 23,268 Preferred dividends — (13 ) Net income available to common stockholders $ 31,497 $ 23,255 Weighted average common shares outstanding for basic earnings per share 34,564 30,442 Assumed incremental common shares issued upon vesting of outstanding restricted stock units 136 203 Weighted average common shares for diluted earnings per share 34,700 30,645 Earnings per common share — basic $ 0.91 $ 0.76 Earnings per common share — diluted $ 0.91 $ 0.76 Number of antidilutive common stock equivalents excluded from diluted earnings per share computation 2 — 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. On April 26, 2019, Heartland signed an agreement to sell the mortgage servicing rights portfolio of Dubuque Bank and Trust Company, and the transaction closed on April 30, 2019. See Note 6, "Goodwill, Core Deposit Premium and Other Intangible Assets," for further details on this transaction. Effect of New Financial Accounting Standards 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 is 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. In July 2018, the FASB issued ASU 2018-11, " Leases - Targeted Improvements " to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, Specifically, under the amendments in ASU 2018-11, entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02. Heartland adopted the accounting standard on January 1, 2019, on a modified retrospective basis, as required, and will not restate comparative periods. Heartland adopted the practical expedients, which allow for existing leases to be accounted for under previous guidance with the exception of balance sheet recognition for lessees. The adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $25.9 million and $27.6 million , respectively, on January 1, 2019. The difference between the lease assets and lease liabilities, which was $ 1.7 million , was recorded as an adjustment to retained earnings. The adoption of the standard did not impact Heartland's results of operations or liquidity. See Note 11, "Leases", for more information on Heartland's leases. 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. 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. Heartland has entered into an agreement with a third party vendor to evaluate potential methodologies and data and has started designing its financial models to estimate credit losses in accordance with the new standard. Further development, testing and evaluation of the models is required to determine the impact that the adoption of this standard will have 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 adopted this ASU on January 1, 2019, as required, and the adoption did not have a material impact on its results of operations, financial position and liquidity. 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. For a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments, this ASU permits an entity to designate an amount that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flows (the “last-of-layer” method). Under this designation, prepayment risk is not incorporated into the measurement of the hedged item. 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 on the balance sheet as of the date of adoption. Heartland adopted this ASU on January 1, 2019, as required, and as a result of the adoption, $148.0 million of held to maturity securities were reclassified to available for sale debt securities carried at fair value. See Note 3, "Securities," for further details. There was no impact to Heartland's results of operations, or liquidity as a result of the adoption of this amendment. In August 2018, the FASB issued ASU 2018-13, " Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. " This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. Heartland intends to adopt this ASU in 2020, as required, and because the ASU only revises disclosure requirements, the adoption of this ASU is not expected to have a material impact on results of operations, financial position and liquidity. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Blue Valley Ban Corp. On January 16, 2019, Heartland entered into a definitive merger agreement to acquire Blue Valley Ban Corp., and its wholly-owned subsidiary, Bank of Blue Valley, headquartered in Overland Park, Kansas. As of the announcement date, the transaction, in which all of the issued and outstanding shares of Blue Valley Ban Corp. stock will be exchanged for shares of Heartland common stock, was valued at approximately $93.9 million . Simultaneous with the closing of the transaction, Bank of Blue Valley will merge into Heartland's Kansas-based subsidiary, Morrill & Janes Bank and Trust Company, and the combined entity will operate as Bank of Blue Valley. The amount of the merger consideration is subject to fluctuations in the price of Heartland common stock and certain potential adjustments, and the transaction is subject to customary closing conditions. The transaction is expected to close in the second quarter of 2019 with a systems conversion planned for the third quarter of 2019. As of March 31, 2019, Bank of Blue Valley had total assets of approximately $ 711.6 million , which included approximately $ 564.1 million of gross loans outstanding, and approximately $ 587.2 million of deposits. First Bank Lubbock Bancshares, Inc. On May 18, 2018, Heartland completed the acquisition of Lubbock, Texas based First Bank Lubbock Bancshares, Inc. ("FBLB"), parent company of First Bank & Trust, and PrimeWest Mortgage Corporation, which is a wholly-owned subsidiary of First Bank & Trust. Under the terms of the definitive merger agreement, Heartland acquired FBLB in a transaction valued at approximately $189.9 million , of which $ 5.5 million was cash, and the remainder was settled by delivery of 3,350,664 shares of Heartland common stock. On the closing date, in addition to this merger consideration, Heartland provided FBLB the funds necessary to repay outstanding debt of $3.9 million , and Heartland assumed $8.2 million of trust preferred securities at fair value. Immediately after the close of the transaction, Heartland paid $13.3 million to the holders of FBLB's stock appreciation rights. The transaction included, at fair value, total assets of $1.12 billion , including $681.1 million of gross loans held to maturity, and deposits of $893.8 million . Upon closing of the transaction, First Bank & Trust became a wholly-owned subsidiary of Heartland and continues to operate under its current name and management team as Heartland's eleventh state-chartered bank. The transaction was a tax-free reorganization with respect to the stock consideration received by the stockholders of FBLB. 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 . On the closing date, Heartland provided Signature Bancshares, Inc. the funds necessary to repay outstanding subordinated debt of $5.9 million . The transaction was a tax-free reorganization with respect to the stock consideration received by the stockholders of Signature Bancshares, Inc. |
SECURITIES
SECURITIES | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
SECURITIES | SECURITIES The amortized cost, gross unrealized gains and losses, and estimated fair values of debt securities available for sale and equity securities with a readily determinable fair value that are carried at fair value as of March 31, 2019 , and December 31, 2018 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2019 U.S. government corporations and agencies $ 26,873 $ 10 $ (115 ) $ 26,768 Mortgage and asset-backed securities 1,889,977 6,476 (25,055 ) 1,871,398 Obligations of states and political subdivisions 481,452 6,146 (2,643 ) 484,955 Total debt securities 2,398,302 12,632 (27,813 ) 2,383,121 Equity securities with a readily determinable fair value 17,339 — — 17,339 Total $ 2,415,641 $ 12,632 $ (27,813 ) $ 2,400,460 December 31, 2018 U.S. government corporations and agencies $ 32,075 $ 3 $ (127 ) $ 31,951 Mortgage and asset-backed securities 2,061,358 3,740 (38,400 ) 2,026,698 Obligations of states and political subdivisions 382,101 919 (8,046 ) 374,974 Total debt securities 2,475,534 4,662 (46,573 ) 2,433,623 Equity securities with a readily determinable fair value 17,086 — — 17,086 Total $ 2,492,620 $ 4,662 $ (46,573 ) $ 2,450,709 On January 1, 2019, Heartland adopted ASU 2017-12, and as a result of the adoption, $148.0 million of held to maturity debt securities were transferred to debt securities available for sale. The securities were transferred at book value on the date of the transfer. The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of March 31, 2019 , and December 31, 2018 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2019 Obligations of states and political subdivisions $ 88,089 $ 7,151 $ — $ 95,240 Total $ 88,089 $ 7,151 $ — $ 95,240 December 31, 2018 Obligations of states and political subdivisions $ 236,283 $ 9,554 $ (496 ) $ 245,341 Total $ 236,283 $ 9,554 $ (496 ) $ 245,341 The amortized cost and estimated fair value of investment securities carried at fair value at March 31, 2019 , 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, 2019 Amortized Cost Estimated Fair Value Due in 1 year or less $ 29,138 $ 29,100 Due in 1 to 5 years 51,367 50,972 Due in 5 to 10 years 123,062 123,289 Due after 10 years 304,758 308,362 Total debt securities 508,325 511,723 Mortgage and asset-backed securities 1,889,977 1,871,398 Equity securities with a readily determinable fair value 17,339 17,339 Total investment securities $ 2,415,641 $ 2,400,460 The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2019 , 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, 2019 Amortized Cost Estimated Fair Value Due in 1 year or less $ 6 $ 6 Due in 1 to 5 years 12,966 13,200 Due in 5 to 10 years 58,150 61,138 Due after 10 years 16,967 20,896 Total investment securities $ 88,089 $ 95,240 As of March 31, 2019 , and December 31, 2018 , securities with a fair value of $455.6 million and $524.8 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 carried at fair value for the three -month periods ended March 31, 2019 and 2018 , are summarized as follows, in thousands: Three Months Ended 2019 2018 Proceeds from sales $ 434,154 $ 392,246 Gross security gains 2,408 3,013 Gross security losses 833 1,572 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, 2019 , and December 31, 2018 . 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, 2018 , and December 31, 2017 , 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. Debt securities available for sale Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2019 U.S. government corporations and agencies $ 18,742 $ (95 ) $ 4,541 $ (20 ) $ 23,283 $ (115 ) Mortgage and asset-backed securities 227,902 (2,075 ) 926,176 (22,980 ) 1,154,078 (25,055 ) Obligations of states and political subdivisions 26,161 (98 ) 132,515 (2,545 ) 158,676 (2,643 ) Total temporarily impaired securities $ 272,805 $ (2,268 ) $ 1,063,232 $ (25,545 ) $ 1,336,037 $ (27,813 ) December 31, 2018 U.S. government corporations and agencies $ 24,902 $ (83 ) $ 4,577 $ (44 ) $ 29,479 $ (127 ) Mortgage and asset-backed securities 733,826 (9,060 ) 805,089 (29,340 ) 1,538,915 (38,400 ) Obligations of states and political subdivisions 34,990 (390 ) 258,143 (7,656 ) 293,133 (8,046 ) Total temporarily impaired securities $ 793,718 $ (9,533 ) $ 1,067,809 $ (37,040 ) $ 1,861,527 $ (46,573 ) Securities held to maturity Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2019 Obligations of states and political subdivisions $ — $ — $ — $ — $ — $ — Total temporarily impaired securities $ — $ — $ — $ — $ — $ — December 31, 2018 Obligations of states and political subdivisions $ 10,802 $ (17 ) $ 19,508 $ (479 ) $ 30,310 $ (496 ) Total temporarily impaired securities $ 10,802 $ (17 ) $ 19,508 $ (479 ) $ 30,310 $ (496 ) 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 securities carried at fair value or held to maturity securities with OTTI write-downs for the three -month periods ended March 31, 2019 , and March 31, 2018 , respectively. Other investments, at cost, include equity securities without a readily determinable fair value. Equity securities without a readily determinable fair value totaled $17.3 million and $17.1 million at March 31, 2019 , and December 31, 2018, respectively. At March 31, 2019 , and December 31, 2018 , other investments at cost included 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 $15.4 million and $ 16.6 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, 2019 , did not consider the investments to be other than temporarily impaired. |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
LOANS | LOANS Loans as of March 31, 2019 , and December 31, 2018 , were as follows, in thousands: March 31, 2019 December 31, 2018 Loans receivable held to maturity: Commercial $ 2,042,594 $ 2,020,231 Commercial real estate 3,702,457 3,711,481 Agricultural and agricultural real estate 544,805 565,408 Residential real estate 630,433 673,603 Consumer 412,573 440,158 Gross loans receivable held to maturity 7,332,862 7,410,881 Unearned discount (288 ) (1,624 ) Deferred loan fees (1,030 ) (1,560 ) Total net loans receivable held to maturity 7,331,544 7,407,697 Allowance for loan losses (62,639 ) (61,963 ) Loans receivable, net $ 7,268,905 $ 7,345,734 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. 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. 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, 2019 , and December 31, 2018 , 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 the quarter ended March 31, 2019. 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, 2019 Commercial $ 6,301 $ 17,520 $ 23,821 $ 24,498 $ 2,018,096 $ 2,042,594 Commercial real estate 353 26,434 26,787 18,150 3,684,307 3,702,457 Agricultural and agricultural real estate 1,099 4,499 5,598 20,475 524,330 544,805 Residential real estate 153 1,452 1,605 18,619 611,814 630,433 Consumer 653 4,175 4,828 5,826 406,747 412,573 Total $ 8,559 $ 54,080 $ 62,639 $ 87,568 $ 7,245,294 $ 7,332,862 December 31, 2018 Commercial $ 5,733 $ 18,772 $ 24,505 $ 24,202 $ 1,996,029 $ 2,020,231 Commercial real estate 218 25,320 25,538 14,388 3,697,093 3,711,481 Agricultural and agricultural real estate 686 4,267 4,953 15,951 549,457 565,408 Residential real estate 168 1,617 1,785 20,251 653,352 673,603 Consumer 749 4,433 5,182 7,004 433,154 440,158 Total $ 7,554 $ 54,409 $ 61,963 $ 81,796 $ 7,329,085 $ 7,410,881 The following table presents nonaccrual loans, accruing loans past due 90 days or more and performing troubled debt restructured loans at March 31, 2019 , and December 31, 2018 , in thousands: March 31, 2019 December 31, 2018 Nonaccrual loans $ 72,670 $ 67,833 Nonaccrual troubled debt restructured loans 4,624 4,110 Total nonaccrual loans $ 77,294 $ 71,943 Accruing loans past due 90 days or more $ 1,706 $ 726 Performing troubled debt restructured loans $ 3,460 $ 4,026 The following tables provide information on troubled debt restructured loans that were modified during the three -month periods ended March 31, 2019 , and March 31, 2018 , dollars in thousands: Three Months Ended 2019 2018 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial — $ — $ — — $ — $ — Commercial real estate — — — — — — Total commercial and commercial real estate — — — — — — Agricultural and agricultural real estate — — — — — — Residential real estate 1 36 42 5 877 752 Consumer — — — — — — Total 1 $ 36 $ 42 5 $ 877 $ 752 The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The difference between the pre-modification investment and post-modification investment amounts on Heartland's residential real estate trouble debt restructured loans for the three -months ended March 31, 2019 , is due to principal deferment collected from government guarantees and capitalized interest and escrow. At March 31, 2019 , 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, 2019 , and March 31, 2018 , that had been modified during the twelve-month period prior to default, in thousands: With Payment Defaults During the Three Months Ended March 31, 2019 2018 Number of Loans Recorded Investment Number of Loans Recorded Investment Commercial — $ — — $ — Commercial real estate — — — — Total commercial and commercial real estate — — — — Agricultural and agricultural real estate — — — — Residential real estate 1 42 3 519 Consumer — — — — Total 1 $ 42 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, 2019 . 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, 2019 , and December 31, 2018 , in thousands: Pass Nonpass Total March 31, 2019 Commercial $ 1,907,620 $ 134,974 $ 2,042,594 Commercial real estate 3,510,161 192,296 3,702,457 Total commercial and commercial real estate 5,417,781 327,270 5,745,051 Agricultural and agricultural real estate 440,927 103,878 544,805 Residential real estate 603,647 26,786 630,433 Consumer 398,695 13,878 412,573 Total gross loans receivable held to maturity $ 6,861,050 $ 471,812 $ 7,332,862 December 31, 2018 Commercial $ 1,880,579 $ 139,652 $ 2,020,231 Commercial real estate 3,524,344 187,137 3,711,481 Total commercial and commercial real estate 5,404,923 326,789 5,731,712 Agricultural and agricultural real estate 471,642 93,766 565,408 Residential real estate 645,478 28,125 673,603 Consumer 425,451 14,707 440,158 Total gross loans receivable held to maturity $ 6,947,494 $ 463,387 $ 7,410,881 The nonpass category in the table above is comprised of approximately 48% special mention loans and 52% substandard loans as of March 31, 2019 . The percent of nonpass loans on nonaccrual status as of March 31, 2019 , was 16% . As of December 31, 2018 , 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, 2018 , was 16% . Loans delinquent 30 to 89 days as a percent of total loans were 0.47% at March 31, 2019 , compared to 0 .21% at December 31, 2018 . Changes in credit risk are monitored on a continuous basis and changes in risk ratings are made when identified. All impaired loans are reviewed at least annually. As of March 31, 2019 , Heartland had $ 2.8 million of loans secured by residential real estate property that were in the process of foreclosure. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Heartland’s policy is to discontinue the accrual of interest income on any loan when, in the opinion of management, there is a reasonable doubt as to the timely collection of the interest and principal, normally when a loan is 90 days past due. When interest accruals are deemed uncollectible, interest credited to income in the current year is reversed and interest accrued in prior years is charged to the allowance for loan losses. A loan can be restored to accrual status if the borrower has resumed paying the full amount of the scheduled contractual interest and principal payments on the loan, and (1) all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within a reasonable period of time, and (2) that there is a sustained period of repayment performance (generally a minimum of six months) by the borrower in accordance with the scheduled contractual terms. The following table sets forth information regarding Heartland's accruing and nonaccrual loans at March 31, 2019 , and December 31, 2018 , 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, 2019 Commercial $ 8,253 $ 2,859 $ 325 $ 11,437 $ 2,006,358 $ 24,799 $ 2,042,594 Commercial real estate 5,870 4,942 1,264 12,076 3,674,676 15,705 3,702,457 Total commercial and commercial real estate 14,123 7,801 1,589 23,513 5,681,034 40,504 5,745,051 Agricultural and agricultural real estate 2,179 800 31 3,010 521,621 20,174 544,805 Residential real estate 4,224 110 — 4,334 613,667 12,432 630,433 Consumer 4,835 536 86 5,457 402,932 4,184 412,573 Total gross loans receivable held to maturity $ 25,361 $ 9,247 $ 1,706 $ 36,314 $ 7,219,254 $ 77,294 $ 7,332,862 December 31, 2018 Commercial $ 2,574 $ 205 $ — $ 2,779 $ 1,991,525 $ 25,927 $ 2,020,231 Commercial real estate 4,819 — 726 5,545 3,694,259 11,677 3,711,481 Total commercial and commercial real estate 7,393 205 726 8,324 5,685,784 37,604 5,731,712 Agricultural and agricultural real estate 99 — — 99 549,376 15,933 565,408 Residential real estate 5,147 49 — 5,196 655,329 13,078 673,603 Consumer 2,724 307 — 3,031 431,799 5,328 440,158 Total gross loans receivable held to maturity $ 15,363 $ 561 $ 726 $ 16,650 $ 7,322,288 $ 71,943 $ 7,410,881 The majority of Heartland's impaired loans are those that are nonaccrual, are past due 90 days or more and still accruing or have had their terms restructured in a troubled debt restructuring. The following tables present the unpaid principal balance that was contractually due at March 31, 2019 , and December 31, 2018 , the outstanding loan balance recorded on the consolidated balance sheets at March 31, 2019 , and December 31, 2018 , any related allowance recorded for those loans as of March 31, 2019 , and December 31, 2018 , the average outstanding loan balances recorded on the consolidated balance sheets during the three months ended March 31, 2019 , and year ended December 31, 2018 , and the interest income recognized on the impaired loans during the three -month period ended March 31, 2019 , and year ended December 31, 2018 , in thousands: Unpaid Principal Balance Loan Balance Related Allowance Recorded Year- to- Date Avg. Loan Balance Year- to- Date Interest Income Recognized March 31, 2019 Impaired loans with a related allowance: Commercial $ 12,107 $ 12,096 $ 6,301 $ 12,046 $ 7 Commercial real estate 1,421 1,421 353 1,201 6 Total commercial and commercial real estate 13,528 13,517 6,654 13,247 13 Agricultural and agricultural real estate 3,280 3,280 1,099 2,225 1 Residential real estate 1,253 1,253 153 1,012 — Consumer 1,272 1,270 653 1,275 6 Total loans held to maturity $ 19,333 $ 19,320 $ 8,559 $ 17,759 $ 20 Impaired loans without a related allowance: Commercial $ 14,467 $ 12,402 $ — $ 11,928 $ 330 Commercial real estate 16,809 16,729 — 14,008 54 Total commercial and commercial real estate 31,276 29,131 — 25,936 384 Agricultural and agricultural real estate 19,538 17,195 — 14,373 16 Residential real estate 17,370 17,366 — 17,933 76 Consumer 4,620 4,556 — 4,820 25 Total loans held to maturity $ 72,804 $ 68,248 $ — $ 63,062 $ 501 Total impaired loans held to maturity: Commercial $ 26,574 $ 24,498 $ 6,301 $ 23,974 $ 337 Commercial real estate 18,230 18,150 353 15,209 60 Total commercial and commercial real estate 44,804 42,648 6,654 39,183 397 Agricultural and agricultural real estate 22,818 20,475 1,099 16,598 17 Residential real estate 18,623 18,619 153 18,945 76 Consumer 5,892 5,826 653 6,095 31 Total impaired loans held to maturity $ 92,137 $ 87,568 $ 8,559 $ 80,821 $ 521 Unpaid Principal Balance Loan Balance Related Allowance Recorded Year-to- Date Avg. Loan Balance Year-to- Date Interest Income Recognized December 31, 2018 Impaired loans with a related allowance: Commercial $ 12,376 $ 12,366 $ 5,733 $ 4,741 $ 33 Commercial real estate 891 891 218 4,421 25 Total commercial and commercial real estate 13,267 13,257 5,951 9,162 58 Agricultural and agricultural real estate 1,718 1,718 686 2,165 2 Residential real estate 647 647 168 1,138 12 Consumer 1,373 1,373 749 2,934 29 Total loans held to maturity $ 17,005 $ 16,995 $ 7,554 $ 15,399 $ 101 Impaired loans without a related allowance: Commercial $ 13,616 $ 11,836 $ — $ 10,052 $ 299 Commercial real estate 13,578 13,497 — 13,000 249 Total commercial and commercial real estate 27,194 25,333 — 23,052 548 Agricultural and agricultural real estate 16,836 14,233 — 14,781 5 Residential real estate 19,604 19,604 — 23,950 308 Consumer 5,631 5,631 — 5,117 97 Total loans held to maturity $ 69,265 $ 64,801 $ — $ 66,900 $ 958 Total impaired loans held to maturity: Commercial $ 25,992 $ 24,202 $ 5,733 $ 14,793 $ 332 Commercial real estate 14,469 14,388 218 17,421 274 Total commercial and commercial real estate 40,461 38,590 5,951 32,214 606 Agricultural and agricultural real estate 18,554 15,951 686 16,946 7 Residential real estate 20,251 20,251 168 25,088 320 Consumer 7,004 7,004 749 8,051 126 Total impaired loans held to maturity $ 86,270 $ 81,796 $ 7,554 $ 82,299 $ 1,059 On May 18, 2018, Heartland completed the acquisition of First Bank Lubbock Bancshares, Inc., parent company of First Bank & Trust, headquartered in Lubbock, Texas. As of May 18, 2018, First Bank Lubbock Bancshares, Inc. had gross loans of $696.9 million , and the estimated fair value of the loans acquired was $681.1 million . 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 . 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, 2019 , and December 31, 2018 , the carrying amount of loans acquired since 2015 consist of purchased impaired and nonimpaired purchased loans as summarized in the following table, in thousands: March 31, 2019 December 31, 2018 Impaired Non Impaired Total Loans Impaired Non Impaired Total Loans Commercial $ 3,804 $ 197,958 $ 201,762 $ 3,801 $ 243,693 $ 247,494 Commercial real estate 156 986,926 987,082 158 1,098,171 1,098,329 Agricultural and agricultural real estate — 14,942 14,942 — 27,115 27,115 Residential real estate 227 168,167 168,394 231 184,389 184,620 Consumer loans — 63,090 63,090 — 75,773 75,773 Total covered loans $ 4,187 $ 1,431,083 $ 1,435,270 $ 4,190 $ 1,629,141 $ 1,633,331 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, 2019 , and March 31, 2018 , were as follows, in thousands: Three Months Ended 2019 2018 Balance at beginning of period $ 227 $ 57 Original yield discount, net, at date of acquisition — (56 ) Accretion (257 ) (199 ) Reclassification from nonaccretable difference (1) 218 198 Balance at period end $ 188 $ — (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 $36.9 million , and the estimated fair value of these loans was $21.8 million . At March 31, 2019 , 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, 2019 , there was $ 64,000 of allowance recorded and $57,000 of allowance recorded at December 31, 2018, related to these ASC 310-30 loans. Provision expense of $7,000 and $0 was recorded for the three -month periods ended March 31, 2019 , and 2018 , 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 $3.67 billion , and the estimated fair value of the loans was $3.59 billion . |
ALLOWANCE FOR LOAN LOSSES
ALLOWANCE FOR LOAN LOSSES | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 , and March 31, 2018 , were as follows, in thousands: Commercial Commercial Real Estate Agricultural and Agricultural Real Estate Residential Real Estate Consumer Total Balance at December 31, 2018 $ 24,505 $ 25,538 $ 4,953 $ 1,785 $ 5,182 $ 61,963 Charge-offs (644 ) (39 ) (379 ) (163 ) (725 ) (1,950 ) Recoveries 175 151 330 13 322 991 Provision (215 ) 1,137 694 (30 ) 49 1,635 Balance at March 31, 2019 $ 23,821 $ 26,787 $ 5,598 $ 1,605 $ 4,828 $ 62,639 Commercial Commercial Real Estate Agricultural and Agricultural Real Estate Residential Real Estate Consumer Total Balance at December 31, 2017 $ 18,098 $ 21,950 $ 4,258 $ 2,224 $ 9,156 $ 55,686 Charge-offs (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 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, 2019 | |
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 $ 391.7 million at both March 31, 2019 , and December 31, 2018 . 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 $121.4 million of goodwill and $13.9 million of core deposit intangibles in connection with the acquisition of First Bank Lubbock Bancshares, Inc., parent company of First Bank & Trust Company, headquartered in Lubbock, Texas on May 18, 2018. 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. The core deposit intangibles recorded with the First Bank Lubbock Bancshares, Inc. and Signature Bancshares, Inc. 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 First Bank Lubbock Bancshares, Inc. and Signature Bancshares, Inc. 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, 2019 , and December 31, 2018 , are presented in the table below, in thousands: March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing intangible assets: Core deposit intangibles $ 83,640 $ 39,236 $ 44,404 $ 83,640 $ 36,403 $ 47,237 Customer relationship intangibles 1,177 944 233 1,177 935 242 Mortgage servicing rights 41,473 14,001 27,472 42,228 12,865 29,363 Commercial servicing rights 6,902 5,406 1,496 6,834 5,125 1,709 Total $ 133,192 $ 59,587 $ 73,605 $ 133,879 $ 55,328 $ 78,551 On April 26, 2019, Dubuque Bank and Trust Company signed an agreement to sell substantially all its servicing rights to PNC Bank, N.A., headquartered in Pittsburgh, Pennsylvania. The servicing portfolio had a book value of $21.0 million , and the portfolio contained approximately 20,300 serviced residential mortgage loans with unpaid principal balances of $3.35 billion as of March 31, 2019. The serviced loans are primarily owned by Fannie Mae and Freddie Mac. The transaction was approved by Fannie Mae and Freddie Mac and closed on April 30, 2019. Based upon the terms of the agreement, proceeds from the transaction were approximately $37.0 million . As part of the agreement, Dubuque Bank and Trust Company will subservice the loans until the transfer date in August 2019. The transaction qualified as a sale, and $21.0 million of mortgage servicing rights were de-recognized on the consolidated balance sheet as of April 30, 2019 when the transaction closed. The following table shows the estimated future amortization expense for amortizable intangible assets, excluding the mortgage servicing rights portfolio for Dubuque Bank and Trust Company, in thousands: Core Deposit Intangibles Customer Relationship Intangibles Mortgage Servicing Rights Commercial Servicing Rights Total Nine months ending December 31, 2019 $ 6,949 $ 28 $ 736 $ 310 $ 8,023 Year ending December 31, 2020 8,230 36 1,431 331 10,028 2021 7,036 35 1,226 293 8,590 2022 5,634 35 1,022 246 6,937 2023 4,933 34 818 159 5,944 2024 4,008 33 613 86 4,740 Thereafter 7,614 32 613 71 8,330 Total $ 44,404 $ 233 $ 6,459 $ 1,496 $ 52,592 Projections of amortization expense for mortgage servicing rights are based on existing asset balances and the existing interest rate environment as of March 31, 2019 . Heartland's actual experience may be significantly different depending upon changes in mortgage interest rates and market conditions. Mortgage loans serviced for others at First Bank & Trust were approximately $692.3 million at March 31, 2019 compared to $648.9 million at December 31, 2018 . Mortgage loans serviced for others at Dubuque Bank and Trust Company were $3.35 billion and $ 3.45 billion at March 31, 2019 and December 31, 2018 , respectively. Custodial escrow balances maintained in connection with the mortgage loan servicing portfolio for First Bank & Trust were approximately $8.7 million at March 31, 2019 and $5.9 million at December 31, 2018 . Custodial escrow balances maintained in connection with the mortgage loan servicing portfolio for Dubuque Bank and Trust Company totaled $23.3 million at March 31, 2019 and $17.7 million at December 31, 2018 . At March 31, 2019 , the fair value of First Bank and Trust's mortgage servicing rights was estimated at $6.5 million compared to $7.1 million at December 31, 2018 . The fair value of Dubuque Bank and Trust Company's mortgage servicing rights at March 31, 2019 was estimated at $37.1 million compared to $41.5 million at December 31, 2018 . 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 for the First Bank & Trust valuation was 12.00% as of March 31, 2019 compared to 10.30% at December 31, 2018 . The discount rate for the First Bank & Trust valuation was 9.03% at both March 31, 2019 and December 31, 2018 . The average capitalization rate for First Bank & Trust during the first three m onths of 2019 ranged from 92 to 98 b asis points compared to a range of 93 to 117 basis points since acquisition on May 18, 2018. Fees collected for the servicing of mortgage loans for others were $427,000 for the three -months ended March 31, 2019 . The following table summarizes, in thousands, the changes in capitalized mortgage servicing rights for the three months ended March 31, 2019 , and March 31, 2018 : 2019 2018 Balance at January 1, $ 29,363 $ 23,248 Originations 198 1,162 Amortization (1,500 ) (1,245 ) Valuation adjustment (589 ) — Balance at period end $ 27,472 $ 23,165 Mortgage servicing rights, net to servicing portfolio 0.68 % 0.72 % 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 $95.0 million at March 31, 2019 and $107.4 million at December 31, 2018. 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 $380,000 and $420,000 for the three -months ended March 31, 2019 , and March 31, 2018 , 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 11.37% to 14.44% as of March 31, 2019 , compared to 11.01% to 13.50% as of December 31, 2018 . The discount rate range was 12.71% to 16.13% for the March 31, 2019 , valuations compared to 13.44% to 16.96% for the December 31, 2018 , valuations. The capitalization rate for both 2019 and 2018 ranged from 310 to 445 basis points. The total fair value of Heartland's commercial servicing rights was estimated at $1.9 million as of March 31, 2019 , and $ 2.1 million as of December 31, 2018. The following table summarizes, in thousands, the changes in capitalized commercial servicing rights for the three -months ended March 31, 2019 , and March 31, 2018 : 2019 2018 Balance at January 1, $ 1,709 $ 2,609 Originations 68 21 Amortization (281 ) (322 ) Valuation allowance on commercial servicing rights — (2 ) Balance at period end $ 1,496 $ 2,306 Fair value of commercial servicing rights $ 1,926 $ 2,781 Commercial servicing rights, net to servicing portfolio 1.58 % 1.84 % 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, 2019 , a $589,000 valuation allowance was required on mortgage servicing rights and at December 31, 2018 , a $58,000 valuation allowance was required on mortgage servicing rights. At March 31, 2019 , no valuation allowance was required on commercial servicing rights with a term less than 20 years and no valuation allowance was required on commercial servicing rights with a term greater than 20 years . At December 31, 2018 , no valuation allowance was required on commercial servicing rights with a term less than 20 years and no 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 mortgage servicing rights and any recorded valuation allowance at each respective subsidiary at March 31, 2019 , and December 31, 2018 : March 31, 2019 Book Value 15-Year Tranche Fair Value 15-Year Tranche Impairment 15-Year Tranche Book Value 30-Year Tranche Fair Value 30-Year Tranche Impairment 30-Year Tranche Dubuque Bank and Trust Company $ 1,982 $ 4,648 $ — $ 19,031 $ 32,420 $ — First Bank & Trust 1,644 1,519 125 5,462 4,940 522 Total $ 3,626 $ 6,167 $ 125 $ 24,493 $ 37,360 $ 522 December 31, 2018 Dubuque Bank and Trust Company $ 2,195 $ 4,636 $ — $ 20,025 $ 36,901 $ — First Bank & Trust 1,685 1,665 20 5,516 5,478 38 Total $ 3,880 $ 6,301 $ 20 $ 25,541 $ 42,379 $ 38 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, 2019 , and December 31, 2018 : March 31, 2019 Book Value Less than 20 Years Fair Value Less than 20 Years Impairment Less than 20 Years Book Value More than 20 Years Fair Value More than 20 Years Impairment More than 20 Years Citywide Banks $ — $ — $ — $ — $ — $ — Premier Valley Bank 37 65 — 168 178 — Wisconsin Bank & Trust 212 387 — 1,079 1,296 — Total $ 249 $ 452 $ — $ 1,247 $ 1,474 $ — December 31, 2018 Citywide Banks $ 1 $ 6 $ — $ 18 $ 20 $ — Premier Valley Bank 45 74 — 178 184 — Wisconsin Bank & Trust 249 411 — 1,218 1,439 — Total $ 295 $ 491 $ — $ 1,414 $ 1,643 $ — |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
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 $540,000 cash as collateral at March 31, 2019 , and no cash at December 31, 2018 . At March 31, 2019 , no collateral was required to be pledged by Heartland's counterparties, compared to $770,000 collateral at December 31, 2018 . 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, 2019 , 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 $165,000 . For the next twelve months, Heartland estimates that cash receipts and reclassification from accumulated other comprehensive income to reduce interest expense will total $660,000 . Heartland entered into six forward starting interest rate swap transactions to effectively convert Heartland Financial Statutory Trust IV, V, VI, and VII, which total $ 85.0 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 six 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 $105.0 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. During the first quarter of 2019, the interest rate swap transactions associated with Morrill Statutory Trust I and II, totaling $20.0 million , matured and the fixed rate debt has been converted to variable rate subordinated debentures. On May 18, 2018, Heartland acquired cash flow hedges related to OCGI Statutory Trust III and OCGI Capital Trust IV with notional amounts of $3.0 million and $6.0 million , respectively, in the First Bank Lubbock Bancshares, Inc. transaction. The cash flow hedges effectively convert OCGI Statutory Trust III and OGCI Capital Trust IV from variable rate subordinated debentures to fixed rate debt. These swaps are designated as cash flow hedges of the changes in LIBOR, the benchmark interest rate being hedged, associated with the interest payments made on $9.0 million of Heartland's subordinated debentures that reset quarterly on a specified reset date. The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as cash flow hedges at March 31, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category Receive Rate Weighted Average Pay Rate Maturity March 31, 2019 Interest rate swap $ 25,000 $ 50 Other assets 2.615 % 2.255 % 03/17/2021 Interest rate swap 20,000 (153 ) Other liabilities 2.795 3.355 01/07/2020 Interest rate swap 28,667 563 Other assets 4.993 3.674 05/10/2021 Interest rate swap 28,000 (897 ) Other liabilities 4.986 5.425 07/24/2028 Interest rate swap 20,000 (141 ) Other liabilities 2.611 2.390 06/15/2024 Interest rate swap 20,000 (99 ) Other liabilities 2.626 2.352 03/01/2024 Interest rate swap 6,000 62 Other assets 2.611 1.866 06/15/2021 Interest rate swap 3,000 35 Other assets 2.787 1.878 06/30/2021 December 31, 2018 Interest rate swap $ 25,000 $ 191 Other assets 2.788 % 2.255 % 03/17/2021 Interest rate swap 20,000 (177 ) Other liabilities 2.408 3.355 01/07/2020 Interest rate swap 10,000 29 Other assets 2.822 1.674 03/26/2019 Interest rate swap 10,000 28 Other assets 2.788 1.658 03/18/2019 Interest rate swap 29,667 763 Other assets 4.887 3.674 05/10/2021 Interest rate swap 28,750 (572 ) Other liabilities 5.004 5.425 07/24/2028 Interest rate swap 20,000 157 Other assets 2.788 2.390 06/15/2024 Interest rate swap 20,000 185 Other assets 2.738 2.352 03/01/2024 Interest rate swap 6,000 105 Other Assets 2.788 1.866 06/15/2021 Interest rate swap 3,000 51 Other assets 2.787 1.878 06/30/2021 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, 2019 , and March 31, 2018 , 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, 2019 Interest rate swaps $ (1,340 ) Interest expense $ (165 ) Other income $ — Three Months Ended March 31, 2018 Interest rate swaps $ 1,896 Interest expense $ (197 ) 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 $2.5 million of cash as collateral for these fair value hedges at March 31, 2019 , and December 31, 2018 , respectively. The table below identifies the notional amount, fair value and balance sheet category of Heartland's fair value hedges at March 31, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2019 Fair value hedges $ 670 $ 5 Other assets Fair value hedges 28,749 (900 ) Other liabilities December 31, 2018 Fair value hedges $ 19,820 $ 74 Other assets Fair value hedges $ 15,064 $ (339 ) 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, 2019 , and March 31, 2018 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2019 Fair value hedges $ (630 ) Interest income Three Months Ended March 31, 2018 Fair value hedges $ 894 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, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2019 Embedded derivatives $ 2,216 $ 17 Other assets Embedded derivatives $ 9,785 $ (507 ) Other liabilities December 31, 2018 Embedded derivatives $ 11,266 $ 453 Other assets Embedded derivatives $ 2,231 $ (54 ) Other liabilities The table below identifies the gains and losses recognized on Heartland's embedded derivatives for the three -month periods ended March 31, 2019 , and March 31, 2018 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2019 Embedded derivatives $ 889 Other noninterest income Three Months Ended March 31, 2018 Embedded derivatives $ 277 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 $7.2 million and $2.0 million as of March 31, 2019 , and December 31, 2018 , respectively, as collateral related to these back-to-back swaps. Heartland's counterparties were required to pledge $140,000 at March 31, 2019 , and $680,000 at December 31, 2018 . 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, 2019 and March 31, 2018 , 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, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category Weighted Average Receive Rate Weighted Average Pay Rate March 31, 2019 Customer interest rate swaps $ 233,665 $ 7,654 Other assets 5.15 % 5.05 % Customer interest rate swaps 233,665 (7,654 ) Other liabilities 5.05 5.15 December 31, 2018 Customer interest rate swaps $ 211,246 $ 4,449 Other assets 5.10 % 4.96 % Customer interest rate swaps 211,246 (4,449 ) Other liabilities 4.96 5.10 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 $0 at March 31, 2019 , and $35,000 at December 31, 2018 . Heartland's counterparties were required to pledge no collateral at both March 31, 2019 and December 31, 2018 , 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, 2019 , and December 31, 2018 , in thousands: Balance Sheet Category Notional Amount Fair Value March 31, 2019 Interest rate lock commitments (mortgage) Other assets $ 25,318 $ 800 Forward commitments Other assets 1,000 — Forward commitments Other liabilities 46,000 (282 ) Undesignated interest rate swaps Other liabilities 9,785 (507 ) Undesignated interest rate swaps Other assets 2,216 17 December 31, 2018 Interest rate lock commitments (mortgage) Other assets $ 22,451 $ 725 Forward commitments Other assets — — Forward commitments Other liabilities 51,500 (399 ) Undesignated interest rate swaps Other liabilities 11,266 (453 ) Undesignated interest rate swaps Other assets 2,231 54 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, 2019 , and March 31, 2018 , in thousands: Income Statement Category Gain (Loss) Recognized Three Months Ended March 31, 2019 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 264 Forward commitments Net gains on sale of loans held for sale 117 Undesignated interest rate swaps Other noninterest income 889 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 |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2019 | |
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 carried at fair value, which include available for sale, trading securities and equity securities with a readily determinable fair value, 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. Equity Securities with a Readily Determinable Fair Value Equity securities with a readily determinable fair value generally include Community Reinvestment Act mutual funds and are classified as Level 2 due to the infrequent trading of these securities. The fair value is based on the price per share. 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. 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, 2019 , and December 31, 2018 , 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, 2019 , and December 31, 2018 , 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, 2019 Assets Securities available for sale U.S. government corporations and agencies $ 26,768 $ 20,458 $ 6,310 $ — Mortgage and asset-backed securities 1,871,398 — 1,871,398 — Obligations of states and political subdivisions 484,955 — 484,955 — Equity securities with a readily determinable fair value 17,339 — 17,339 — Derivative financial instruments (1) 8,403 — 8,403 — Interest rate lock commitments 800 — — 800 Total assets at fair value $ 2,409,663 $ 20,458 $ 2,388,405 $ 800 Liabilities Derivative financial instruments (2) $ 10,858 $ — $ 10,858 $ — Forward commitments 282 — 282 — Total liabilities at fair value $ 11,140 $ — $ 11,140 $ — December 31, 2018 Assets Securities available for sale U.S. government corporations and agencies $ 31,951 $ 25,414 $ 6,537 $ — Mortgage and asset-backed securities 2,026,698 — 2,026,698 — Obligations of states and political subdivisions 374,974 — 374,974 — Equity securities 17,086 — 17,086 — Derivative financial instruments (1) 6,539 — 6,539 — Interest rate lock commitments 725 — — 725 Total assets at fair value $ 2,457,973 $ 25,414 $ 2,431,834 $ 725 Liabilities Derivative financial instruments (2) $ 6,044 $ — $ 6,044 $ — Forward commitments 399 — 399 — Total liabilities at fair value $ 6,443 $ — $ 6,443 $ — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives 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 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 $ 9,998 $ — $ — $ 9,998 $ 285 Commercial real estate 717 — — 717 — Agricultural and agricultural real estate 8,932 — — 8,932 379 Residential real estate 1,207 — — 1,207 4 Consumer 633 — — 633 — Total collateral dependent impaired loans $ 21,487 $ — $ — $ 21,487 $ 668 Loans held for sale $ 69,716 $ — $ 69,716 $ — $ (1,107 ) Other real estate owned $ 5,391 $ — $ — $ 5,391 $ 452 Premises, furniture and equipment held for sale $ 7,030 $ — $ — $ 7,030 $ — Servicing rights $ 6,459 $ — $ — $ 6,459 $ 589 Fair Value Measurements at December 31, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Year-to- Collateral dependent impaired loans: Commercial $ 12,932 $ — $ — $ 12,932 $ 660 Commercial real estate 405 — — 405 72 Agricultural and agricultural real estate 11,070 — — 11,070 575 Residential real estate 478 — — 478 — Consumer 624 — — 624 — Total collateral dependent impaired loans $ 25,509 $ — $ — $ 25,509 $ 1,307 Loans held for sale $ 119,801 $ — $ 52,577 $ 67,224 $ (1,870 ) Other real estate owned $ 6,153 $ — $ — $ 6,153 $ 2,647 Premises, furniture and equipment held for sale $ 7,258 $ — $ — $ 7,258 $ 59 Servicing rights $ 7,143 $ — $ — $ 7,143 $ 58 The following tables present additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which Heartland has utilized Level 3 inputs to determine fair value, in thousands: Fair Value at 3/31/2019 Valuation Unobservable Range Interest rate lock commitments $ 800 Discounted cash flows Closing ratio 0-99% (89%) (1) Other real estate owned 5,391 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (3) Servicing rights 6,459 Discounted cash flows Third party valuation (4) Premises, furniture and equipment held for sale 7,030 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (3) Collateral dependent impaired loans: Commercial 9,998 Modified appraised value Third party appraisal (2) Appraisal discount 0-18% (3) Commercial real estate 717 Modified appraised value Third party appraisal (2) Appraisal discount 0-9% (3) Agricultural and agricultural real estate 8,932 Modified appraised value Third party appraisal (2) Appraisal discount 0-15% (3) Residential real estate 1,207 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (3) Consumer 633 Modified appraised value Third party valuation (2) Valuation discount 0-9% (3) (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. The weighted average closing ratio for PrimeWest Mortgage Corporation is 89%. (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) 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. (4) 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. Fair Value at 12/31/2018 Valuation Technique Unobservable Input Range (Weighted Average) Loans held for sale $ 67,224 Discounted cash flows Sales contract (1) Interest rate lock commitments 725 Discounted cash flows Closing ratio 0-99% (91%) (2) Other real estate owned 6,153 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Servicing rights 7,143 Discounted cash flows Third party valuation (5) Premises, furniture and equipment held for sale 7,258 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Other real estate owned 6,153 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Collateral dependent impaired loans: Commercial 12,932 Modified appraised value Third party appraisal (3) Appraisal discount 0-8% (4) Commercial real estate 405 Modified appraised value Third party appraisal (3) Appraisal discount 0-19% (4) Agricultural and agricultural real estate 11,070 Modified appraised value Third party appraisal (3) Appraisal discount 0-24% (4) Residential real estate 478 Modified appraised value Third party appraisal (3) Appraisal discount 0-24% (4) Consumer 624 Modified appraised value Third party valuation (3) Valuation discount 0-14% (4) (1) The significant unobservable input related to the loans held for sale was the third party sales contract Heartland entered into prior to December 31, 2018. The sale of these consumer loans closed on January 11, 2019. (2) 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. (3) 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. (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. (5) 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. 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, 2018 Balance at January 1, $ 725 $ 1,738 Acquired interest rate lock commitments — 1,383 Total gains (losses) included in earnings 264 (3,269 ) Issuances 2,081 2,962 Settlements (2,270 ) (2,089 ) Balance at period end $ 800 $ 725 Gains included in gains (losses) on sale of loans held for sale attributable to interest rate lock commitments held at March 31, 2019 , and December 31, 2018 , were $800,000 and $725,000 , respectively. The table below is a summary of the estimated fair value of Heartland's financial instruments (as defined by ASC 825) as of March 31, 2019 , and December 31, 2018 , 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, including 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 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 $ 492,501 $ 492,501 $ 492,501 $ — $ — Time deposits in other financial institutions 4,675 4,675 4,675 — — Securities: Carried at fair value 2,400,460 2,400,460 20,458 2,380,002 — Held to maturity 88,089 95,240 — 95,240 — Other investments 27,506 27,506 — 27,506 — Loans held for sale 69,716 69,716 — 69,716 — Loans, net: Commercial 2,018,438 1,972,580 — 1,962,582 9,998 Commercial real estate 3,675,063 3,644,142 — 3,643,425 717 Agricultural and agricultural real estate 540,022 531,817 — 522,885 8,932 Residential real estate 627,619 613,086 — 611,879 1,207 Consumer 407,763 405,120 — 404,487 633 Total Loans, net 7,268,905 7,166,745 — 7,145,258 21,487 Cash surrender value on life insurance 163,764 163,764 — 163,764 — Derivative financial instruments (1) 8,403 8,403 — 8,403 — Interest rate lock commitments 800 800 — — 800 Financial liabilities: Deposits Demand deposits 3,118,909 3,118,909 — 3,118,909 — Savings deposits 5,145,929 5,145,929 — 5,145,929 — Time deposits 1,008,104 1,088,104 — 1,088,104 — Deposits held for sale 118,564 111,742 — 111,742 — Short term borrowings 104,314 104,314 — 104,314 — Other borrowings 268,312 268,528 — 268,528 — Derivative financial instruments (2) 10,858 10,858 — 10,858 — Forward commitments 282 282 — 282 — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives and free standing derivative instruments. Fair Value Measurements at December 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 $ 273,630 $ 273,630 $ 273,630 $ — $ — Time deposits in other financial institutions 4,672 4,672 4,672 — — Securities: Carried at fair value 2,450,709 2,450,709 25,414 2,425,295 — Held to maturity 236,283 245,341 — 245,341 — Other investments 28,396 28,396 — 28,396 — Loans held for sale 119,801 119,801 — 52,577 67,224 Loans, net: Commercial 1,994,785 1,955,607 — 1,942,675 12,932 Commercial real estate 3,684,213 3,667,138 — 3,666,733 405 Agricultural and agricultural real estate 561,265 553,112 — 542,042 11,070 Residential real estate 670,473 654,596 — 654,118 478 Consumer 434,998 432,016 — 431,392 624 Total Loans, net 7,345,734 7,262,469 — 7,236,960 25,509 Cash surrender value on life insurance 162,892 162,892 — 162,892 — Derivative financial instruments (1) 6,539 6,539 — 6,539 — Interest rate lock commitments 725 725 — — 725 Financial liabilities: Deposits Demand deposits 3,264,737 3,264,737 — 3,264,737 — Savings deposits 5,107,962 5,107,962 — 5,107,962 — Time deposits 1,023,730 1,023,730 — 1,023,730 — Deposits held for sale 106,409 100,241 — — 100,241 Short term borrowings 227,010 227,010 — 227,010 — Other borrowings 274,905 276,966 — 276,966 — Derivative financial instruments (2) 6,044 6,044 — 6,044 — Forward commitments 399 399 — 399 — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives 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 equity securities with a readily determinable fair value and debt 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 — The fair value of loans is 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. 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. Cash surrender value on life insurance — Life insurance policies are held on certain officers. The carrying value of these policies approximates fair value as it is based on the cash surrender value adjusted for other charges or amounts due that are probable at settlement. As such, Heartland classifies the estimated fair value of the cash surrender value on life insurance as Level 2. 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. 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. 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. Deposits Held for Sale — Heartland entered into agreements with third parties to sell the deposits of five branch locations, which totaled $118.6 million as of March 31, 2019. The estimated fair value in the table above is based on the carrying value of the deposits less the premium Heartland expects to receive in accordance with the sales contract when the transactions are completed, which is expected to be in 2019. 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, 2019 | |
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. 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, 2019 , and 2018 , in thousands: Three Months Ended March 31, 2019 2018 In-scope of Topic 606 Service charges and fees Service charges and fees on deposit accounts $ 2,977 $ 2,618 Overdraft fees 2,744 2,208 Customer service fees 81 77 Credit card fee income 3,349 2,190 Debit card income 3,642 2,985 Other service charges 1 1 Total service charges and fees $ 12,794 $ 10,079 Trust fees 4,474 4,680 Brokerage and insurance commissions 734 907 Total noninterest income in-scope of Topic 606 $ 18,002 $ 15,666 Out-of-scope of Topic 606 Loan servicing income $ 1,729 $ 1,754 Securities gains/(losses), net 1,575 1,441 Unrealized gain/(loss) on equity securities, net 258 (28 ) Net gains on sale of loans held for sale 3,176 4,051 Valuation adjustment on servicing rights (589 ) (2 ) Income on bank owned life insurance 899 614 Other noninterest income 1,667 1,220 Total noninterest income out-of-scope of Topic 606 8,715 9,050 Total noninterest income $ 26,717 $ 24,716 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, 2019 , and December 31, 2018 , 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. |
STOCK COMPENSATION
STOCK COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION | STOCK 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, 2019 , 368,071 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 $ 336,000 and $ 611,000 during the three months ended March 31, 2019 and 2018, respectively. Restricted Stock Units The Plan permits the Compensation Committee to grant restricted stock units ("RSUs"). In the first quarter of 2019, the Compensation Committee granted time-based RSUs with respect to 90,073 shares of common stock, and in the first quarter of 2018, the Compensation Committee granted time-based RSUs with respect to 52,153 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 2019 and 2018 vest over three years in equal installments on March 6 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. The Compensation Committee also granted three -year performance-based RSUs with respect to 34,848 shares and 16,108 shares of common stock in the first quarter of 2019 and 2018, respectively. These performance-based RSUs will be earned based on satisfaction of performance targets for the three -year performance period ended December 31, 2021, and December 31, 2020, respectively. These performance-based RSUs or a portion thereof may vest in 2022 and 2021, respectively, after measurement of performance in relation to the performance targets. The 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 2019 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, 2019 , and March 31, 2018 , 1,045 and 0 time-based RSUs, respectively, were granted to directors and new employees. A summary of the RSUs outstanding as of March 31, 2019 , and 2018 , and changes during the three months ended March 31, 2019 and 2018 , follows: 2019 2018 Shares Weighted-Average Grant Date Shares Weighted-Average Grant Date Outstanding at January 1, 266,995 $ 43.89 301,578 $ 34.74 Granted 125,966 45.77 87,249 55.25 Vested (117,122 ) 35.84 (107,553 ) 30.79 Forfeited (13,364 ) 49.89 (19,113 ) 43.62 Outstanding at March 31, 262,475 $ 48.07 262,161 $ 42.60 Total compensation costs recorded for RSUs were $ 2.4 million and $ 1.9 million for the three -month periods ended March 31, 2019 and 2018 . As of March 31, 2019 , there were $ 7.5 million of total unrecognized compensation costs related to the Plan for RSUs that are expected to be recognized through 2022. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, Heartland adopted ASU No. 2016-02 "Leases" (Topic 842) and all subsequent ASUs that modified Topic 842. For Heartland, Topic 842 primarily affected the accounting treatment for operating lease agreements in which Heartland is the lessee. Lessee Accounting Substantially all of the leases in which Heartland is the lessee are comprised of real estate property for branches, ATM locations, and office space with terms extending through 2034. All of Heartland's leases are classified as operating leases, and therefore, were previously not recognized on the consolidated balance sheet. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheet as a right-of-use ("ROU") asset and a corresponding lease liability. Heartland elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated balance sheet. The table below presents Heartland's ROU assets and lease liabilities as of March 31, 2019 , (in thousands): Assets Classification March 31, 2019 Operating lease assets Other assets $ 24,664 Total lease right-of-use assets $ 24,664 Liabilities Operating lease liabilities Accrued expenses and other liabilities $ 26,333 Total lease liabilities $ 26,333 The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. Heartland’s lease agreements often include one or more options to renew at Heartland’s discretion. If at lease inception, Heartland considers the exercising of a renewal option to be reasonably certain, Heartland will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, Heartland utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used. The variable lease cost primarily represents variable payments such as common area maintenance and utilities. The table below presents the lease costs and supplemental information as of March 31, 2019 , in thousands: Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 1,405 Variable lease cost 35 Total lease cost $ 1,440 Supplemental Information Non-cash information on lease liabilities arising from obtaining ROU assets $ 1,209 Weighted-average remaining lease term (in years) Operating leases 7.04 Weighted-average discount rate Operating leases 3.00 % As defined by Topic 842, future minimum payments for operating leases with initial or remaining terms of one year or more are presented in the table below as of March 31, 2019 , in thousands: Nine months ending December 31, 2019 $ 3,859 Year ending December 31, 2020 5,174 2021 4,855 2022 3,351 2023 1,947 Thereafter 7,147 Total lease payments $ 26,333 As defined by Topic 840, Heartland's minimum future rental commitments at December 31, 2018, for all non-cancelable leases were as follows, in thousands: 2019 $ 5,776 2020 5,493 2021 5,102 2022 3,241 2023 2,297 Thereafter 12,419 $ 34,328 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2018 , included in the Form 10-K of Heartland Financial USA, Inc. ("Heartland") filed with the Securities and Exchange Commission ("SEC") on February 27, 2019 . 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, 2019 , are not necessarily indicative of the results expected for the year ending December 31, 2019 . |
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. |
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 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 is 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. In July 2018, the FASB issued ASU 2018-11, " Leases - Targeted Improvements " to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, Specifically, under the amendments in ASU 2018-11, entities may elect not to recast the comparative periods presented when transitioning to the new leasing standard, and lessors may elect not to separate lease and non-lease components when certain conditions are met. The amendments have the same effective date as ASU 2016-02. Heartland adopted the accounting standard on January 1, 2019, on a modified retrospective basis, as required, and will not restate comparative periods. Heartland adopted the practical expedients, which allow for existing leases to be accounted for under previous guidance with the exception of balance sheet recognition for lessees. The adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $25.9 million and $27.6 million , respectively, on January 1, 2019. The difference between the lease assets and lease liabilities, which was $ 1.7 million , was recorded as an adjustment to retained earnings. The adoption of the standard did not impact Heartland's results of operations or liquidity. See Note 11, "Leases", for more information on Heartland's leases. 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. 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. Heartland has entered into an agreement with a third party vendor to evaluate potential methodologies and data and has started designing its financial models to estimate credit losses in accordance with the new standard. Further development, testing and evaluation of the models is required to determine the impact that the adoption of this standard will have 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 adopted this ASU on January 1, 2019, as required, and the adoption did not have a material impact on its results of operations, financial position and liquidity. 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. For a closed portfolio of prepayable financial assets or one or more beneficial interests secured by a portfolio of prepayable financial instruments, this ASU permits an entity to designate an amount that is not expected to be affected by prepayments, defaults, and other events affecting the timing and amount of cash flows (the “last-of-layer” method). Under this designation, prepayment risk is not incorporated into the measurement of the hedged item. 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 on the balance sheet as of the date of adoption. Heartland adopted this ASU on January 1, 2019, as required, and as a result of the adoption, $148.0 million of held to maturity securities were reclassified to available for sale debt securities carried at fair value. See Note 3, "Securities," for further details. There was no impact to Heartland's results of operations, or liquidity as a result of the adoption of this amendment. In August 2018, the FASB issued ASU 2018-13, " Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. " This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. Heartland intends to adopt this ASU in 2020, as required, and because the ASU only revises disclosure requirements, the adoption of this ASU is not expected to have a material impact on results of operations, financial position and liquidity. |
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. Equity Securities with a Readily Determinable Fair Value Equity securities with a readily determinable fair value generally include Community Reinvestment Act mutual funds and are classified as Level 2 due to the infrequent trading of these securities. The fair value is based on the price per share. 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. 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, 2019 , and December 31, 2018 , 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 | 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, 2019 , and December 31, 2018 , 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, 2019 | |
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, 2019 , and 2018 , are shown in the table below: Three Months Ended (Dollars and number of shares in thousands, except per share data) 2019 2018 Net income $ 31,497 $ 23,268 Preferred dividends — (13 ) Net income available to common stockholders $ 31,497 $ 23,255 Weighted average common shares outstanding for basic earnings per share 34,564 30,442 Assumed incremental common shares issued upon vesting of outstanding restricted stock units 136 203 Weighted average common shares for diluted earnings per share 34,700 30,645 Earnings per common share — basic $ 0.91 $ 0.76 Earnings per common share — diluted $ 0.91 $ 0.76 Number of antidilutive common stock equivalents excluded from diluted earnings per share computation 2 — |
SECURITIES (Tables)
SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 debt securities available for sale and equity securities with a readily determinable fair value that are carried at fair value as of March 31, 2019 , and December 31, 2018 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2019 U.S. government corporations and agencies $ 26,873 $ 10 $ (115 ) $ 26,768 Mortgage and asset-backed securities 1,889,977 6,476 (25,055 ) 1,871,398 Obligations of states and political subdivisions 481,452 6,146 (2,643 ) 484,955 Total debt securities 2,398,302 12,632 (27,813 ) 2,383,121 Equity securities with a readily determinable fair value 17,339 — — 17,339 Total $ 2,415,641 $ 12,632 $ (27,813 ) $ 2,400,460 December 31, 2018 U.S. government corporations and agencies $ 32,075 $ 3 $ (127 ) $ 31,951 Mortgage and asset-backed securities 2,061,358 3,740 (38,400 ) 2,026,698 Obligations of states and political subdivisions 382,101 919 (8,046 ) 374,974 Total debt securities 2,475,534 4,662 (46,573 ) 2,433,623 Equity securities with a readily determinable fair value 17,086 — — 17,086 Total $ 2,492,620 $ 4,662 $ (46,573 ) $ 2,450,709 |
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, 2019 , and December 31, 2018 , are summarized in the table below, in thousands: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value March 31, 2019 Obligations of states and political subdivisions $ 88,089 $ 7,151 $ — $ 95,240 Total $ 88,089 $ 7,151 $ — $ 95,240 December 31, 2018 Obligations of states and political subdivisions $ 236,283 $ 9,554 $ (496 ) $ 245,341 Total $ 236,283 $ 9,554 $ (496 ) $ 245,341 |
Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of investment securities carried at fair value at March 31, 2019 , 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, 2019 Amortized Cost Estimated Fair Value Due in 1 year or less $ 29,138 $ 29,100 Due in 1 to 5 years 51,367 50,972 Due in 5 to 10 years 123,062 123,289 Due after 10 years 304,758 308,362 Total debt securities 508,325 511,723 Mortgage and asset-backed securities 1,889,977 1,871,398 Equity securities with a readily determinable fair value 17,339 17,339 Total investment securities $ 2,415,641 $ 2,400,460 The amortized cost and estimated fair value of debt securities held to maturity at March 31, 2019 , 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, 2019 Amortized Cost Estimated Fair Value Due in 1 year or less $ 6 $ 6 Due in 1 to 5 years 12,966 13,200 Due in 5 to 10 years 58,150 61,138 Due after 10 years 16,967 20,896 Total investment securities $ 88,089 $ 95,240 |
Schedule of Realized Gross Gains (Losses) | Gross gains and losses realized related to the sales of securities carried at fair value for the three -month periods ended March 31, 2019 and 2018 , are summarized as follows, in thousands: Three Months Ended 2019 2018 Proceeds from sales $ 434,154 $ 392,246 Gross security gains 2,408 3,013 Gross security losses 833 1,572 |
Schedule of Debt Securities Available-for-sale | 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, 2019 , and December 31, 2018 . 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, 2018 , and December 31, 2017 , 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. Debt securities available for sale Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2019 U.S. government corporations and agencies $ 18,742 $ (95 ) $ 4,541 $ (20 ) $ 23,283 $ (115 ) Mortgage and asset-backed securities 227,902 (2,075 ) 926,176 (22,980 ) 1,154,078 (25,055 ) Obligations of states and political subdivisions 26,161 (98 ) 132,515 (2,545 ) 158,676 (2,643 ) Total temporarily impaired securities $ 272,805 $ (2,268 ) $ 1,063,232 $ (25,545 ) $ 1,336,037 $ (27,813 ) December 31, 2018 U.S. government corporations and agencies $ 24,902 $ (83 ) $ 4,577 $ (44 ) $ 29,479 $ (127 ) Mortgage and asset-backed securities 733,826 (9,060 ) 805,089 (29,340 ) 1,538,915 (38,400 ) Obligations of states and political subdivisions 34,990 (390 ) 258,143 (7,656 ) 293,133 (8,046 ) Total temporarily impaired securities $ 793,718 $ (9,533 ) $ 1,067,809 $ (37,040 ) $ 1,861,527 $ (46,573 ) |
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, 2019 Obligations of states and political subdivisions $ — $ — $ — $ — $ — $ — Total temporarily impaired securities $ — $ — $ — $ — $ — $ — December 31, 2018 Obligations of states and political subdivisions $ 10,802 $ (17 ) $ 19,508 $ (479 ) $ 30,310 $ (496 ) Total temporarily impaired securities $ 10,802 $ (17 ) $ 19,508 $ (479 ) $ 30,310 $ (496 ) |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Loans | Loans as of March 31, 2019 , and December 31, 2018 , were as follows, in thousands: March 31, 2019 December 31, 2018 Loans receivable held to maturity: Commercial $ 2,042,594 $ 2,020,231 Commercial real estate 3,702,457 3,711,481 Agricultural and agricultural real estate 544,805 565,408 Residential real estate 630,433 673,603 Consumer 412,573 440,158 Gross loans receivable held to maturity 7,332,862 7,410,881 Unearned discount (288 ) (1,624 ) Deferred loan fees (1,030 ) (1,560 ) Total net loans receivable held to maturity 7,331,544 7,407,697 Allowance for loan losses (62,639 ) (61,963 ) Loans receivable, net $ 7,268,905 $ 7,345,734 |
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, 2019 , and December 31, 2018 , 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 the quarter ended March 31, 2019. 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, 2019 Commercial $ 6,301 $ 17,520 $ 23,821 $ 24,498 $ 2,018,096 $ 2,042,594 Commercial real estate 353 26,434 26,787 18,150 3,684,307 3,702,457 Agricultural and agricultural real estate 1,099 4,499 5,598 20,475 524,330 544,805 Residential real estate 153 1,452 1,605 18,619 611,814 630,433 Consumer 653 4,175 4,828 5,826 406,747 412,573 Total $ 8,559 $ 54,080 $ 62,639 $ 87,568 $ 7,245,294 $ 7,332,862 December 31, 2018 Commercial $ 5,733 $ 18,772 $ 24,505 $ 24,202 $ 1,996,029 $ 2,020,231 Commercial real estate 218 25,320 25,538 14,388 3,697,093 3,711,481 Agricultural and agricultural real estate 686 4,267 4,953 15,951 549,457 565,408 Residential real estate 168 1,617 1,785 20,251 653,352 673,603 Consumer 749 4,433 5,182 7,004 433,154 440,158 Total $ 7,554 $ 54,409 $ 61,963 $ 81,796 $ 7,329,085 $ 7,410,881 |
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, 2019 , and December 31, 2018 , in thousands: March 31, 2019 December 31, 2018 Nonaccrual loans $ 72,670 $ 67,833 Nonaccrual troubled debt restructured loans 4,624 4,110 Total nonaccrual loans $ 77,294 $ 71,943 Accruing loans past due 90 days or more $ 1,706 $ 726 Performing troubled debt restructured loans $ 3,460 $ 4,026 |
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, 2019 , and March 31, 2018 , dollars in thousands: Three Months Ended 2019 2018 Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial — $ — $ — — $ — $ — Commercial real estate — — — — — — Total commercial and commercial real estate — — — — — — Agricultural and agricultural real estate — — — — — — Residential real estate 1 36 42 5 877 752 Consumer — — — — — — Total 1 $ 36 $ 42 5 $ 877 $ 752 The following table shows troubled debt restructured loans for which there was a payment default during the three month periods ended March 31, 2019 , and March 31, 2018 , that had been modified during the twelve-month period prior to default, in thousands: With Payment Defaults During the Three Months Ended March 31, 2019 2018 Number of Loans Recorded Investment Number of Loans Recorded Investment Commercial — $ — — $ — Commercial real estate — — — — Total commercial and commercial real estate — — — — Agricultural and agricultural real estate — — — — Residential real estate 1 42 3 519 Consumer — — — — Total 1 $ 42 3 $ 519 |
Financing Receivable Credit Quality Indicators | The following table presents loans by credit quality indicator at March 31, 2019 , and December 31, 2018 , in thousands: Pass Nonpass Total March 31, 2019 Commercial $ 1,907,620 $ 134,974 $ 2,042,594 Commercial real estate 3,510,161 192,296 3,702,457 Total commercial and commercial real estate 5,417,781 327,270 5,745,051 Agricultural and agricultural real estate 440,927 103,878 544,805 Residential real estate 603,647 26,786 630,433 Consumer 398,695 13,878 412,573 Total gross loans receivable held to maturity $ 6,861,050 $ 471,812 $ 7,332,862 December 31, 2018 Commercial $ 1,880,579 $ 139,652 $ 2,020,231 Commercial real estate 3,524,344 187,137 3,711,481 Total commercial and commercial real estate 5,404,923 326,789 5,731,712 Agricultural and agricultural real estate 471,642 93,766 565,408 Residential real estate 645,478 28,125 673,603 Consumer 425,451 14,707 440,158 Total gross loans receivable held to maturity $ 6,947,494 $ 463,387 $ 7,410,881 |
Past Due Financing Receivables | The following table sets forth information regarding Heartland's accruing and nonaccrual loans at March 31, 2019 , and December 31, 2018 , 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, 2019 Commercial $ 8,253 $ 2,859 $ 325 $ 11,437 $ 2,006,358 $ 24,799 $ 2,042,594 Commercial real estate 5,870 4,942 1,264 12,076 3,674,676 15,705 3,702,457 Total commercial and commercial real estate 14,123 7,801 1,589 23,513 5,681,034 40,504 5,745,051 Agricultural and agricultural real estate 2,179 800 31 3,010 521,621 20,174 544,805 Residential real estate 4,224 110 — 4,334 613,667 12,432 630,433 Consumer 4,835 536 86 5,457 402,932 4,184 412,573 Total gross loans receivable held to maturity $ 25,361 $ 9,247 $ 1,706 $ 36,314 $ 7,219,254 $ 77,294 $ 7,332,862 December 31, 2018 Commercial $ 2,574 $ 205 $ — $ 2,779 $ 1,991,525 $ 25,927 $ 2,020,231 Commercial real estate 4,819 — 726 5,545 3,694,259 11,677 3,711,481 Total commercial and commercial real estate 7,393 205 726 8,324 5,685,784 37,604 5,731,712 Agricultural and agricultural real estate 99 — — 99 549,376 15,933 565,408 Residential real estate 5,147 49 — 5,196 655,329 13,078 673,603 Consumer 2,724 307 — 3,031 431,799 5,328 440,158 Total gross loans receivable held to maturity $ 15,363 $ 561 $ 726 $ 16,650 $ 7,322,288 $ 71,943 $ 7,410,881 |
Summary of Impaired Loans | At March 31, 2019 , and December 31, 2018 , the carrying amount of loans acquired since 2015 consist of purchased impaired and nonimpaired purchased loans as summarized in the following table, in thousands: March 31, 2019 December 31, 2018 Impaired Non Impaired Total Loans Impaired Non Impaired Total Loans Commercial $ 3,804 $ 197,958 $ 201,762 $ 3,801 $ 243,693 $ 247,494 Commercial real estate 156 986,926 987,082 158 1,098,171 1,098,329 Agricultural and agricultural real estate — 14,942 14,942 — 27,115 27,115 Residential real estate 227 168,167 168,394 231 184,389 184,620 Consumer loans — 63,090 63,090 — 75,773 75,773 Total covered loans $ 4,187 $ 1,431,083 $ 1,435,270 $ 4,190 $ 1,629,141 $ 1,633,331 The following tables present the unpaid principal balance that was contractually due at March 31, 2019 , and December 31, 2018 , the outstanding loan balance recorded on the consolidated balance sheets at March 31, 2019 , and December 31, 2018 , any related allowance recorded for those loans as of March 31, 2019 , and December 31, 2018 , the average outstanding loan balances recorded on the consolidated balance sheets during the three months ended March 31, 2019 , and year ended December 31, 2018 , and the interest income recognized on the impaired loans during the three -month period ended March 31, 2019 , and year ended December 31, 2018 , in thousands: Unpaid Principal Balance Loan Balance Related Allowance Recorded Year- to- Date Avg. Loan Balance Year- to- Date Interest Income Recognized March 31, 2019 Impaired loans with a related allowance: Commercial $ 12,107 $ 12,096 $ 6,301 $ 12,046 $ 7 Commercial real estate 1,421 1,421 353 1,201 6 Total commercial and commercial real estate 13,528 13,517 6,654 13,247 13 Agricultural and agricultural real estate 3,280 3,280 1,099 2,225 1 Residential real estate 1,253 1,253 153 1,012 — Consumer 1,272 1,270 653 1,275 6 Total loans held to maturity $ 19,333 $ 19,320 $ 8,559 $ 17,759 $ 20 Impaired loans without a related allowance: Commercial $ 14,467 $ 12,402 $ — $ 11,928 $ 330 Commercial real estate 16,809 16,729 — 14,008 54 Total commercial and commercial real estate 31,276 29,131 — 25,936 384 Agricultural and agricultural real estate 19,538 17,195 — 14,373 16 Residential real estate 17,370 17,366 — 17,933 76 Consumer 4,620 4,556 — 4,820 25 Total loans held to maturity $ 72,804 $ 68,248 $ — $ 63,062 $ 501 Total impaired loans held to maturity: Commercial $ 26,574 $ 24,498 $ 6,301 $ 23,974 $ 337 Commercial real estate 18,230 18,150 353 15,209 60 Total commercial and commercial real estate 44,804 42,648 6,654 39,183 397 Agricultural and agricultural real estate 22,818 20,475 1,099 16,598 17 Residential real estate 18,623 18,619 153 18,945 76 Consumer 5,892 5,826 653 6,095 31 Total impaired loans held to maturity $ 92,137 $ 87,568 $ 8,559 $ 80,821 $ 521 Unpaid Principal Balance Loan Balance Related Allowance Recorded Year-to- Date Avg. Loan Balance Year-to- Date Interest Income Recognized December 31, 2018 Impaired loans with a related allowance: Commercial $ 12,376 $ 12,366 $ 5,733 $ 4,741 $ 33 Commercial real estate 891 891 218 4,421 25 Total commercial and commercial real estate 13,267 13,257 5,951 9,162 58 Agricultural and agricultural real estate 1,718 1,718 686 2,165 2 Residential real estate 647 647 168 1,138 12 Consumer 1,373 1,373 749 2,934 29 Total loans held to maturity $ 17,005 $ 16,995 $ 7,554 $ 15,399 $ 101 Impaired loans without a related allowance: Commercial $ 13,616 $ 11,836 $ — $ 10,052 $ 299 Commercial real estate 13,578 13,497 — 13,000 249 Total commercial and commercial real estate 27,194 25,333 — 23,052 548 Agricultural and agricultural real estate 16,836 14,233 — 14,781 5 Residential real estate 19,604 19,604 — 23,950 308 Consumer 5,631 5,631 — 5,117 97 Total loans held to maturity $ 69,265 $ 64,801 $ — $ 66,900 $ 958 Total impaired loans held to maturity: Commercial $ 25,992 $ 24,202 $ 5,733 $ 14,793 $ 332 Commercial real estate 14,469 14,388 218 17,421 274 Total commercial and commercial real estate 40,461 38,590 5,951 32,214 606 Agricultural and agricultural real estate 18,554 15,951 686 16,946 7 Residential real estate 20,251 20,251 168 25,088 320 Consumer 7,004 7,004 749 8,051 126 Total impaired loans held to maturity $ 86,270 $ 81,796 $ 7,554 $ 82,299 $ 1,059 |
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, 2019 , and March 31, 2018 , were as follows, in thousands: Three Months Ended 2019 2018 Balance at beginning of period $ 227 $ 57 Original yield discount, net, at date of acquisition — (56 ) Accretion (257 ) (199 ) Reclassification from nonaccretable difference (1) 218 198 Balance at period end $ 188 $ — (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, 2019 | |
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, 2019 , and March 31, 2018 , were as follows, in thousands: Commercial Commercial Real Estate Agricultural and Agricultural Real Estate Residential Real Estate Consumer Total Balance at December 31, 2018 $ 24,505 $ 25,538 $ 4,953 $ 1,785 $ 5,182 $ 61,963 Charge-offs (644 ) (39 ) (379 ) (163 ) (725 ) (1,950 ) Recoveries 175 151 330 13 322 991 Provision (215 ) 1,137 694 (30 ) 49 1,635 Balance at March 31, 2019 $ 23,821 $ 26,787 $ 5,598 $ 1,605 $ 4,828 $ 62,639 Commercial Commercial Real Estate Agricultural and Agricultural Real Estate Residential Real Estate Consumer Total Balance at December 31, 2017 $ 18,098 $ 21,950 $ 4,258 $ 2,224 $ 9,156 $ 55,686 Charge-offs (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 |
GOODWILL, CORE DEPOSIT PREMIU_2
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 , and December 31, 2018 , are presented in the table below, in thousands: March 31, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing intangible assets: Core deposit intangibles $ 83,640 $ 39,236 $ 44,404 $ 83,640 $ 36,403 $ 47,237 Customer relationship intangibles 1,177 944 233 1,177 935 242 Mortgage servicing rights 41,473 14,001 27,472 42,228 12,865 29,363 Commercial servicing rights 6,902 5,406 1,496 6,834 5,125 1,709 Total $ 133,192 $ 59,587 $ 73,605 $ 133,879 $ 55,328 $ 78,551 |
Schedule of Estimated Future Amortization Expense of Amortizable Intangible Assets | The following table shows the estimated future amortization expense for amortizable intangible assets, excluding the mortgage servicing rights portfolio for Dubuque Bank and Trust Company, in thousands: Core Deposit Intangibles Customer Relationship Intangibles Mortgage Servicing Rights Commercial Servicing Rights Total Nine months ending December 31, 2019 $ 6,949 $ 28 $ 736 $ 310 $ 8,023 Year ending December 31, 2020 8,230 36 1,431 331 10,028 2021 7,036 35 1,226 293 8,590 2022 5,634 35 1,022 246 6,937 2023 4,933 34 818 159 5,944 2024 4,008 33 613 86 4,740 Thereafter 7,614 32 613 71 8,330 Total $ 44,404 $ 233 $ 6,459 $ 1,496 $ 52,592 |
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, 2019 , and March 31, 2018 : 2019 2018 Balance at January 1, $ 29,363 $ 23,248 Originations 198 1,162 Amortization (1,500 ) (1,245 ) Valuation adjustment (589 ) — Balance at period end $ 27,472 $ 23,165 Mortgage servicing rights, net to servicing portfolio 0.68 % 0.72 % The following table summarizes, in thousands, the changes in capitalized commercial servicing rights for the three -months ended March 31, 2019 , and March 31, 2018 : 2019 2018 Balance at January 1, $ 1,709 $ 2,609 Originations 68 21 Amortization (281 ) (322 ) Valuation allowance on commercial servicing rights — (2 ) Balance at period end $ 1,496 $ 2,306 Fair value of commercial servicing rights $ 1,926 $ 2,781 Commercial servicing rights, net to servicing portfolio 1.58 % 1.84 % |
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 mortgage servicing rights and any recorded valuation allowance at each respective subsidiary at March 31, 2019 , and December 31, 2018 : March 31, 2019 Book Value 15-Year Tranche Fair Value 15-Year Tranche Impairment 15-Year Tranche Book Value 30-Year Tranche Fair Value 30-Year Tranche Impairment 30-Year Tranche Dubuque Bank and Trust Company $ 1,982 $ 4,648 $ — $ 19,031 $ 32,420 $ — First Bank & Trust 1,644 1,519 125 5,462 4,940 522 Total $ 3,626 $ 6,167 $ 125 $ 24,493 $ 37,360 $ 522 December 31, 2018 Dubuque Bank and Trust Company $ 2,195 $ 4,636 $ — $ 20,025 $ 36,901 $ — First Bank & Trust 1,685 1,665 20 5,516 5,478 38 Total $ 3,880 $ 6,301 $ 20 $ 25,541 $ 42,379 $ 38 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, 2019 , and December 31, 2018 : March 31, 2019 Book Value Less than 20 Years Fair Value Less than 20 Years Impairment Less than 20 Years Book Value More than 20 Years Fair Value More than 20 Years Impairment More than 20 Years Citywide Banks $ — $ — $ — $ — $ — $ — Premier Valley Bank 37 65 — 168 178 — Wisconsin Bank & Trust 212 387 — 1,079 1,296 — Total $ 249 $ 452 $ — $ 1,247 $ 1,474 $ — December 31, 2018 Citywide Banks $ 1 $ 6 $ — $ 18 $ 20 $ — Premier Valley Bank 45 74 — 178 184 — Wisconsin Bank & Trust 249 411 — 1,218 1,439 — Total $ 295 $ 491 $ — $ 1,414 $ 1,643 $ — |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2019 Fair value hedges $ 670 $ 5 Other assets Fair value hedges 28,749 (900 ) Other liabilities December 31, 2018 Fair value hedges $ 19,820 $ 74 Other assets Fair value hedges $ 15,064 $ (339 ) 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, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category Receive Rate Weighted Average Pay Rate Maturity March 31, 2019 Interest rate swap $ 25,000 $ 50 Other assets 2.615 % 2.255 % 03/17/2021 Interest rate swap 20,000 (153 ) Other liabilities 2.795 3.355 01/07/2020 Interest rate swap 28,667 563 Other assets 4.993 3.674 05/10/2021 Interest rate swap 28,000 (897 ) Other liabilities 4.986 5.425 07/24/2028 Interest rate swap 20,000 (141 ) Other liabilities 2.611 2.390 06/15/2024 Interest rate swap 20,000 (99 ) Other liabilities 2.626 2.352 03/01/2024 Interest rate swap 6,000 62 Other assets 2.611 1.866 06/15/2021 Interest rate swap 3,000 35 Other assets 2.787 1.878 06/30/2021 December 31, 2018 Interest rate swap $ 25,000 $ 191 Other assets 2.788 % 2.255 % 03/17/2021 Interest rate swap 20,000 (177 ) Other liabilities 2.408 3.355 01/07/2020 Interest rate swap 10,000 29 Other assets 2.822 1.674 03/26/2019 Interest rate swap 10,000 28 Other assets 2.788 1.658 03/18/2019 Interest rate swap 29,667 763 Other assets 4.887 3.674 05/10/2021 Interest rate swap 28,750 (572 ) Other liabilities 5.004 5.425 07/24/2028 Interest rate swap 20,000 157 Other assets 2.788 2.390 06/15/2024 Interest rate swap 20,000 185 Other assets 2.738 2.352 03/01/2024 Interest rate swap 6,000 105 Other Assets 2.788 1.866 06/15/2021 Interest rate swap 3,000 51 Other assets 2.787 1.878 06/30/2021 The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as loan swaps at March 31, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category Weighted Average Receive Rate Weighted Average Pay Rate March 31, 2019 Customer interest rate swaps $ 233,665 $ 7,654 Other assets 5.15 % 5.05 % Customer interest rate swaps 233,665 (7,654 ) Other liabilities 5.05 5.15 December 31, 2018 Customer interest rate swaps $ 211,246 $ 4,449 Other assets 5.10 % 4.96 % Customer interest rate swaps 211,246 (4,449 ) Other liabilities 4.96 5.10 |
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, 2019 , and March 31, 2018 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2019 Fair value hedges $ (630 ) Interest income Three Months Ended March 31, 2018 Fair value hedges $ 894 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, 2019 , and March 31, 2018 , 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, 2019 Interest rate swaps $ (1,340 ) Interest expense $ (165 ) Other income $ — Three Months Ended March 31, 2018 Interest rate swaps $ 1,896 Interest expense $ (197 ) 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, 2019 , and December 31, 2018 , in thousands: Notional Amount Fair Value Balance Sheet Category March 31, 2019 Embedded derivatives $ 2,216 $ 17 Other assets Embedded derivatives $ 9,785 $ (507 ) Other liabilities December 31, 2018 Embedded derivatives $ 11,266 $ 453 Other assets Embedded derivatives $ 2,231 $ (54 ) Other liabilities The table below identifies the gains and losses recognized on Heartland's embedded derivatives for the three -month periods ended March 31, 2019 , and March 31, 2018 , in thousands: Amount of Gain (Loss) Income Statement Category Three Months Ended March 31, 2019 Embedded derivatives $ 889 Other noninterest income Three Months Ended March 31, 2018 Embedded derivatives $ 277 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, 2019 , and December 31, 2018 , in thousands: Balance Sheet Category Notional Amount Fair Value March 31, 2019 Interest rate lock commitments (mortgage) Other assets $ 25,318 $ 800 Forward commitments Other assets 1,000 — Forward commitments Other liabilities 46,000 (282 ) Undesignated interest rate swaps Other liabilities 9,785 (507 ) Undesignated interest rate swaps Other assets 2,216 17 December 31, 2018 Interest rate lock commitments (mortgage) Other assets $ 22,451 $ 725 Forward commitments Other assets — — Forward commitments Other liabilities 51,500 (399 ) Undesignated interest rate swaps Other liabilities 11,266 (453 ) Undesignated interest rate swaps Other assets 2,231 54 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, 2019 , and March 31, 2018 , in thousands: Income Statement Category Gain (Loss) Recognized Three Months Ended March 31, 2019 Interest rate lock commitments (mortgage) Net gains on sale of loans held for sale $ 264 Forward commitments Net gains on sale of loans held for sale 117 Undesignated interest rate swaps Other noninterest income 889 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 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 , and December 31, 2018 , 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, 2019 Assets Securities available for sale U.S. government corporations and agencies $ 26,768 $ 20,458 $ 6,310 $ — Mortgage and asset-backed securities 1,871,398 — 1,871,398 — Obligations of states and political subdivisions 484,955 — 484,955 — Equity securities with a readily determinable fair value 17,339 — 17,339 — Derivative financial instruments (1) 8,403 — 8,403 — Interest rate lock commitments 800 — — 800 Total assets at fair value $ 2,409,663 $ 20,458 $ 2,388,405 $ 800 Liabilities Derivative financial instruments (2) $ 10,858 $ — $ 10,858 $ — Forward commitments 282 — 282 — Total liabilities at fair value $ 11,140 $ — $ 11,140 $ — December 31, 2018 Assets Securities available for sale U.S. government corporations and agencies $ 31,951 $ 25,414 $ 6,537 $ — Mortgage and asset-backed securities 2,026,698 — 2,026,698 — Obligations of states and political subdivisions 374,974 — 374,974 — Equity securities 17,086 — 17,086 — Derivative financial instruments (1) 6,539 — 6,539 — Interest rate lock commitments 725 — — 725 Total assets at fair value $ 2,457,973 $ 25,414 $ 2,431,834 $ 725 Liabilities Derivative financial instruments (2) $ 6,044 $ — $ 6,044 $ — Forward commitments 399 — 399 — Total liabilities at fair value $ 6,443 $ — $ 6,443 $ — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives 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 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 $ 9,998 $ — $ — $ 9,998 $ 285 Commercial real estate 717 — — 717 — Agricultural and agricultural real estate 8,932 — — 8,932 379 Residential real estate 1,207 — — 1,207 4 Consumer 633 — — 633 — Total collateral dependent impaired loans $ 21,487 $ — $ — $ 21,487 $ 668 Loans held for sale $ 69,716 $ — $ 69,716 $ — $ (1,107 ) Other real estate owned $ 5,391 $ — $ — $ 5,391 $ 452 Premises, furniture and equipment held for sale $ 7,030 $ — $ — $ 7,030 $ — Servicing rights $ 6,459 $ — $ — $ 6,459 $ 589 Fair Value Measurements at December 31, 2018 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Year-to- Collateral dependent impaired loans: Commercial $ 12,932 $ — $ — $ 12,932 $ 660 Commercial real estate 405 — — 405 72 Agricultural and agricultural real estate 11,070 — — 11,070 575 Residential real estate 478 — — 478 — Consumer 624 — — 624 — Total collateral dependent impaired loans $ 25,509 $ — $ — $ 25,509 $ 1,307 Loans held for sale $ 119,801 $ — $ 52,577 $ 67,224 $ (1,870 ) Other real estate owned $ 6,153 $ — $ — $ 6,153 $ 2,647 Premises, furniture and equipment held for sale $ 7,258 $ — $ — $ 7,258 $ 59 Servicing rights $ 7,143 $ — $ — $ 7,143 $ 58 |
Fair Value Inputs, Assets, Quantitative Information | The following tables present additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which Heartland has utilized Level 3 inputs to determine fair value, in thousands: Fair Value at 3/31/2019 Valuation Unobservable Range Interest rate lock commitments $ 800 Discounted cash flows Closing ratio 0-99% (89%) (1) Other real estate owned 5,391 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (3) Servicing rights 6,459 Discounted cash flows Third party valuation (4) Premises, furniture and equipment held for sale 7,030 Modified appraised value Third party appraisal (2) Appraisal discount 0-10% (3) Collateral dependent impaired loans: Commercial 9,998 Modified appraised value Third party appraisal (2) Appraisal discount 0-18% (3) Commercial real estate 717 Modified appraised value Third party appraisal (2) Appraisal discount 0-9% (3) Agricultural and agricultural real estate 8,932 Modified appraised value Third party appraisal (2) Appraisal discount 0-15% (3) Residential real estate 1,207 Modified appraised value Third party appraisal (2) Appraisal discount 0-12% (3) Consumer 633 Modified appraised value Third party valuation (2) Valuation discount 0-9% (3) (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. The weighted average closing ratio for PrimeWest Mortgage Corporation is 89%. (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) 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. (4) 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. Fair Value at 12/31/2018 Valuation Technique Unobservable Input Range (Weighted Average) Loans held for sale $ 67,224 Discounted cash flows Sales contract (1) Interest rate lock commitments 725 Discounted cash flows Closing ratio 0-99% (91%) (2) Other real estate owned 6,153 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Servicing rights 7,143 Discounted cash flows Third party valuation (5) Premises, furniture and equipment held for sale 7,258 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Other real estate owned 6,153 Modified appraised value Third party appraisal (3) Appraisal discount 0-10% (4) Collateral dependent impaired loans: Commercial 12,932 Modified appraised value Third party appraisal (3) Appraisal discount 0-8% (4) Commercial real estate 405 Modified appraised value Third party appraisal (3) Appraisal discount 0-19% (4) Agricultural and agricultural real estate 11,070 Modified appraised value Third party appraisal (3) Appraisal discount 0-24% (4) Residential real estate 478 Modified appraised value Third party appraisal (3) Appraisal discount 0-24% (4) Consumer 624 Modified appraised value Third party valuation (3) Valuation discount 0-14% (4) (1) The significant unobservable input related to the loans held for sale was the third party sales contract Heartland entered into prior to December 31, 2018. The sale of these consumer loans closed on January 11, 2019. (2) 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. (3) 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. (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. (5) 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. |
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, 2018 Balance at January 1, $ 725 $ 1,738 Acquired interest rate lock commitments — 1,383 Total gains (losses) included in earnings 264 (3,269 ) Issuances 2,081 2,962 Settlements (2,270 ) (2,089 ) Balance at period end $ 800 $ 725 |
Fair Value, by Balance Sheet Grouping | 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 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 $ 492,501 $ 492,501 $ 492,501 $ — $ — Time deposits in other financial institutions 4,675 4,675 4,675 — — Securities: Carried at fair value 2,400,460 2,400,460 20,458 2,380,002 — Held to maturity 88,089 95,240 — 95,240 — Other investments 27,506 27,506 — 27,506 — Loans held for sale 69,716 69,716 — 69,716 — Loans, net: Commercial 2,018,438 1,972,580 — 1,962,582 9,998 Commercial real estate 3,675,063 3,644,142 — 3,643,425 717 Agricultural and agricultural real estate 540,022 531,817 — 522,885 8,932 Residential real estate 627,619 613,086 — 611,879 1,207 Consumer 407,763 405,120 — 404,487 633 Total Loans, net 7,268,905 7,166,745 — 7,145,258 21,487 Cash surrender value on life insurance 163,764 163,764 — 163,764 — Derivative financial instruments (1) 8,403 8,403 — 8,403 — Interest rate lock commitments 800 800 — — 800 Financial liabilities: Deposits Demand deposits 3,118,909 3,118,909 — 3,118,909 — Savings deposits 5,145,929 5,145,929 — 5,145,929 — Time deposits 1,008,104 1,088,104 — 1,088,104 — Deposits held for sale 118,564 111,742 — 111,742 — Short term borrowings 104,314 104,314 — 104,314 — Other borrowings 268,312 268,528 — 268,528 — Derivative financial instruments (2) 10,858 10,858 — 10,858 — Forward commitments 282 282 — 282 — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives and free standing derivative instruments. Fair Value Measurements at December 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 $ 273,630 $ 273,630 $ 273,630 $ — $ — Time deposits in other financial institutions 4,672 4,672 4,672 — — Securities: Carried at fair value 2,450,709 2,450,709 25,414 2,425,295 — Held to maturity 236,283 245,341 — 245,341 — Other investments 28,396 28,396 — 28,396 — Loans held for sale 119,801 119,801 — 52,577 67,224 Loans, net: Commercial 1,994,785 1,955,607 — 1,942,675 12,932 Commercial real estate 3,684,213 3,667,138 — 3,666,733 405 Agricultural and agricultural real estate 561,265 553,112 — 542,042 11,070 Residential real estate 670,473 654,596 — 654,118 478 Consumer 434,998 432,016 — 431,392 624 Total Loans, net 7,345,734 7,262,469 — 7,236,960 25,509 Cash surrender value on life insurance 162,892 162,892 — 162,892 — Derivative financial instruments (1) 6,539 6,539 — 6,539 — Interest rate lock commitments 725 725 — — 725 Financial liabilities: Deposits Demand deposits 3,264,737 3,264,737 — 3,264,737 — Savings deposits 5,107,962 5,107,962 — 5,107,962 — Time deposits 1,023,730 1,023,730 — 1,023,730 — Deposits held for sale 106,409 100,241 — — 100,241 Short term borrowings 227,010 227,010 — 227,010 — Other borrowings 274,905 276,966 — 276,966 — Derivative financial instruments (2) 6,044 6,044 — 6,044 — Forward commitments 399 399 — 399 — (1) Includes embedded derivatives, back-to-back loan swaps, fair value hedges, free standing derivative instruments and cash flow hedges. (2) Includes cash flow hedges, fair value hedges, back-to-back loan swaps, embedded derivatives and free standing derivative instruments. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 , and 2018 , in thousands: Three Months Ended March 31, 2019 2018 In-scope of Topic 606 Service charges and fees Service charges and fees on deposit accounts $ 2,977 $ 2,618 Overdraft fees 2,744 2,208 Customer service fees 81 77 Credit card fee income 3,349 2,190 Debit card income 3,642 2,985 Other service charges 1 1 Total service charges and fees $ 12,794 $ 10,079 Trust fees 4,474 4,680 Brokerage and insurance commissions 734 907 Total noninterest income in-scope of Topic 606 $ 18,002 $ 15,666 Out-of-scope of Topic 606 Loan servicing income $ 1,729 $ 1,754 Securities gains/(losses), net 1,575 1,441 Unrealized gain/(loss) on equity securities, net 258 (28 ) Net gains on sale of loans held for sale 3,176 4,051 Valuation adjustment on servicing rights (589 ) (2 ) Income on bank owned life insurance 899 614 Other noninterest income 1,667 1,220 Total noninterest income out-of-scope of Topic 606 8,715 9,050 Total noninterest income $ 26,717 $ 24,716 |
STOCK COMPENSATION (Tables)
STOCK COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Status of RSUs | A summary of the RSUs outstanding as of March 31, 2019 , and 2018 , and changes during the three months ended March 31, 2019 and 2018 , follows: 2019 2018 Shares Weighted-Average Grant Date Shares Weighted-Average Grant Date Outstanding at January 1, 266,995 $ 43.89 301,578 $ 34.74 Granted 125,966 45.77 87,249 55.25 Vested (117,122 ) 35.84 (107,553 ) 30.79 Forfeited (13,364 ) 49.89 (19,113 ) 43.62 Outstanding at March 31, 262,475 $ 48.07 262,161 $ 42.60 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of ROU Assets and Lease Liabilities | The table below presents Heartland's ROU assets and lease liabilities as of March 31, 2019 , (in thousands): Assets Classification March 31, 2019 Operating lease assets Other assets $ 24,664 Total lease right-of-use assets $ 24,664 Liabilities Operating lease liabilities Accrued expenses and other liabilities $ 26,333 Total lease liabilities $ 26,333 |
Schedule of Lease Costs and Supplemental Information | The table below presents the lease costs and supplemental information as of March 31, 2019 , in thousands: Three Months Ended March 31, 2019 Lease Cost Operating lease cost $ 1,405 Variable lease cost 35 Total lease cost $ 1,440 Supplemental Information Non-cash information on lease liabilities arising from obtaining ROU assets $ 1,209 Weighted-average remaining lease term (in years) Operating leases 7.04 Weighted-average discount rate Operating leases 3.00 % |
Schedule of Minimum Payments for Operating Leases | As defined by Topic 842, future minimum payments for operating leases with initial or remaining terms of one year or more are presented in the table below as of March 31, 2019 , in thousands: Nine months ending December 31, 2019 $ 3,859 Year ending December 31, 2020 5,174 2021 4,855 2022 3,351 2023 1,947 Thereafter 7,147 Total lease payments $ 26,333 |
Schedule of Future Minimum Rental Payments for Operating Leases | As defined by Topic 840, Heartland's minimum future rental commitments at December 31, 2018, for all non-cancelable leases were as follows, in thousands: 2019 $ 5,776 2020 5,493 2021 5,102 2022 3,241 2023 2,297 Thereafter 12,419 $ 34,328 |
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, 2019 | Mar. 31, 2018 | |
Earnings Per Share | ||
Net income | $ 31,497 | $ 23,268 |
Preferred dividends | 0 | (13) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 31,497 | $ 23,255 |
Weighted average common shares outstanding for basic earnings per share (in shares) | 34,564 | 30,442 |
Assumed incremental common shares issued upon vesting of outstanding restricted stock units (in shares) | 136 | 203 |
Weighted average common shares for diluted earnings per share (in shares) | 34,700 | 30,645 |
Earnings per common share — basic (in dollars per share) | $ 0.91 | $ 0.76 |
Earnings per common share — diluted (in dollars per share) | $ 0.91 | $ 0.76 |
Number of antidilutive common stock equivalents excluded from diluted earnings per share computation (in shares) | 2 | 0 |
BASIS OF PRESENTATION (Narrativ
BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 24,664 | ||
Operating lease liabilities | 26,333 | ||
Retained earnings | 603,506 | $ 579,252 | |
Securities available for sale | 2,400,460 | 2,450,709 | |
Held to maturity securities | $ 88,089 | $ 236,283 | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease assets | $ 25,900 | ||
Operating lease liabilities | 27,600 | ||
Retained earnings | 1,700 | ||
ASU 2017-12 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Securities available for sale | 148,000 | ||
Held to maturity securities | $ (148,000) |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Jan. 16, 2019 | May 18, 2018 | Feb. 23, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||
Assets acquired | $ 11,312,495 | $ 11,408,006 | |||
Gross loans held to maturity | 7,331,544 | 7,407,697 | |||
Deposits acquired | 9,352,942 | $ 9,396,429 | |||
Blue Valley Ban Corp. | |||||
Business Acquisition [Line Items] | |||||
Common stock exchanged on closing of the transaction | $ 93,900 | ||||
First Bank Lubbock Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Transaction value | $ 189,900 | ||||
Purchase price in cash | $ 5,500 | ||||
Purchase price paid by delivery of shares of common stock (in shares) | 3,350,664 | ||||
Outstanding debt repaid | $ 3,900 | ||||
Total assets acquired | 1,120,000 | ||||
Signature Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Transaction value | $ 61,400 | ||||
Purchase price in cash | $ 7,800 | ||||
Purchase price paid by delivery of shares of common stock (in shares) | 1,000,843 | ||||
Blue Valley Ban Corp. | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | 711,600 | ||||
Gross loans held to maturity | 564,100 | ||||
Deposits acquired | $ 587,200 | ||||
First Bank Lubbock Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Gross loans held to maturity | 681,100 | ||||
Deposits acquired | 893,800 | ||||
Signature Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 427,100 | ||||
Gross loans held to maturity | 324,500 | ||||
Deposits acquired | 357,300 | ||||
Outstanding debt repaid | $ 5,900 | ||||
Stock Appreciation Rights (SARs) | First Bank Lubbock Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Payment to holders of FBLB's stock appreciation rights | 13,300 | ||||
Trust Preferred Securities Subject to Mandatory Redemption | First Bank Lubbock Bancshares, Inc. | |||||
Business Acquisition [Line Items] | |||||
Trust preferred securities assumed | $ 8,200 |
SECURITIES (Securities availabl
SECURITIES (Securities available for sale) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 2,415,641 | $ 2,492,620 |
Gross Unrealized Gains | 12,632 | 4,662 |
Gross Unrealized Losses | (27,813) | (46,573) |
Estimated Fair Value | 2,400,460 | 2,450,709 |
Total debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,398,302 | 2,475,534 |
Gross Unrealized Gains | 12,632 | 4,662 |
Gross Unrealized Losses | (27,813) | (46,573) |
Estimated Fair Value | 2,383,121 | 2,433,623 |
U.S. government corporations and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 26,873 | 32,075 |
Gross Unrealized Gains | 10 | 3 |
Gross Unrealized Losses | (115) | (127) |
Estimated Fair Value | 26,768 | 31,951 |
Mortgage and asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,889,977 | 2,061,358 |
Gross Unrealized Gains | 6,476 | 3,740 |
Gross Unrealized Losses | (25,055) | (38,400) |
Estimated Fair Value | 1,871,398 | 2,026,698 |
Obligations of states and political subdivisions | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 481,452 | 382,101 |
Gross Unrealized Gains | 6,146 | 919 |
Gross Unrealized Losses | (2,643) | (8,046) |
Estimated Fair Value | 484,955 | 374,974 |
Equity securities with a readily determinable fair value | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 17,339 | 17,086 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 17,339 | $ 17,086 |
SECURITIES (Narrative) (Details
SECURITIES (Narrative) (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Investment [Line Items] | ||||
Held to maturity securities | $ (88,089,000) | $ (236,283,000) | ||
Securities available for sale | 2,400,460,000 | 2,450,709,000 | ||
Fair value of securities pledged | 455,600,000 | 524,800,000 | ||
Gross realized gains or losses on sale of securities | 0 | $ 0 | ||
Equity securities without readily determinable fair value | 17,300,000 | 17,100,000 | ||
Amortized cost of FHLBs | $ 15,400,000 | $ 16,600,000 | ||
ASU 2017-12 | ||||
Investment [Line Items] | ||||
Held to maturity securities | $ 148,000,000 | |||
Securities available for sale | $ 148,000,000 |
SECURITIES (Held to maturity se
SECURITIES (Held to maturity securities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 88,089 | $ 236,283 |
Gross Unrealized Gains | 7,151 | 9,554 |
Gross Unrealized Losses | 0 | (496) |
Estimated Fair Value | 95,240 | 245,341 |
Obligations of states and political subdivisions | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 88,089 | 236,283 |
Gross Unrealized Gains | 7,151 | 9,554 |
Gross Unrealized Losses | 0 | (496) |
Estimated Fair Value | $ 95,240 | $ 245,341 |
SECURITIES (Securities availa_2
SECURITIES (Securities available for sale debt maturities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in 1 year or less | $ 29,138 | |
Due in 1 to 5 years | 51,367 | |
Due in 5 to 10 years | 123,062 | |
Due after 10 years | 304,758 | |
Total debt securities | 508,325 | |
Mortgage and asset-backed securities | 1,889,977 | |
Equity securities with a readily determinable fair value | 17,339 | |
Amortized Cost | 2,415,641 | $ 2,492,620 |
Estimated Fair Value | ||
Due in 1 year or less | 29,100 | |
Due in 1 to 5 years | 50,972 | |
Due in 5 to 10 years | 123,289 | |
Due after 10 years | 308,362 | |
Total debt securities | 511,723 | |
Mortgage and asset-backed securities | 1,871,398 | |
Equity securities with a readily determinable fair value | 17,339 | |
Estimated Fair Value | $ 2,400,460 | $ 2,450,709 |
SECURITIES (Securities held to
SECURITIES (Securities held to maturity debt maturities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in 1 year or less | $ 6 | |
Due in 1 to 5 years | 12,966 | |
Due in 5 to 10 years | 58,150 | |
Due after 10 years | 16,967 | |
Amortized Cost | 88,089 | $ 236,283 |
Estimated Fair Value | ||
Due in 1 year or less | 6 | |
Due in 1 to 5 years | 13,200 | |
Due in 5 to 10 years | 61,138 | |
Due after 10 years | 20,896 | |
Estimated Fair Value | $ 95,240 | $ 245,341 |
SECURITIES (Gross realized gain
SECURITIES (Gross realized gain (loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from sales | $ 434,154 | $ 392,246 |
Gross security gains | 2,408 | 3,013 |
Gross security losses | $ 833 | $ 1,572 |
SECURITIES (Debt securities ava
SECURITIES (Debt securities available for sale) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less than 12 months | $ 272,805 | |
12 months or longer | 1,063,232 | |
Total | 1,336,037 | |
Less than 12 months | $ 793,718 | |
12 months or longer | 1,067,809 | |
Total | 1,861,527 | |
Unrealized Losses | ||
Less than 12 months | (2,268) | |
12 months or longer | (25,545) | |
Total | (27,813) | |
Less than 12 months | (9,533) | |
12 months or longer | (37,040) | |
Total | (46,573) | |
U.S. government corporations and agencies | ||
Fair Value | ||
Less than 12 months | 18,742 | |
12 months or longer | 4,541 | |
Total | 23,283 | |
Less than 12 months | 24,902 | |
12 months or longer | 4,577 | |
Total | 29,479 | |
Unrealized Losses | ||
Less than 12 months | (95) | |
12 months or longer | (20) | |
Total | (115) | |
Less than 12 months | (83) | |
12 months or longer | (44) | |
Total | (127) | |
Mortgage and asset-backed securities | ||
Fair Value | ||
Less than 12 months | 227,902 | |
12 months or longer | 926,176 | |
Total | 1,154,078 | |
Less than 12 months | 733,826 | |
12 months or longer | 805,089 | |
Total | 1,538,915 | |
Unrealized Losses | ||
Less than 12 months | (2,075) | |
12 months or longer | (22,980) | |
Total | (25,055) | |
Less than 12 months | (9,060) | |
12 months or longer | (29,340) | |
Total | (38,400) | |
Obligations of states and political subdivisions | ||
Fair Value | ||
Less than 12 months | 26,161 | |
12 months or longer | 132,515 | |
Total | 158,676 | |
Less than 12 months | 34,990 | |
12 months or longer | 258,143 | |
Total | 293,133 | |
Unrealized Losses | ||
Less than 12 months | (98) | |
12 months or longer | (2,545) | |
Total | $ (2,643) | |
Less than 12 months | (390) | |
12 months or longer | (7,656) | |
Total | $ (8,046) |
SECURITIES (Securities held t_2
SECURITIES (Securities held to maturity) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less than 12 months | $ 0 | $ 10,802 |
12 months or longer | 0 | 19,508 |
Total | 0 | 30,310 |
Unrealized Losses | ||
Less than 12 months | 0 | (17) |
12 months or longer | 0 | (479) |
Total | 0 | (496) |
Obligations of states and political subdivisions | ||
Fair Value | ||
Less than 12 months | 0 | 10,802 |
12 months or longer | 0 | 19,508 |
Total | 0 | 30,310 |
Unrealized Losses | ||
Less than 12 months | 0 | (17) |
12 months or longer | 0 | (479) |
Total | $ 0 | $ (496) |
LOANS (Loans receivable) (Detai
LOANS (Loans receivable) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | $ 7,332,862 | $ 7,410,881 |
Unearned discount | (288) | (1,624) |
Deferred loan fees | (1,030) | (1,560) |
Total net loans receivable held to maturity | 7,331,544 | 7,407,697 |
Allowance for loan losses | (62,639) | (61,963) |
Loans receivable, net | 7,268,905 | 7,345,734 |
Commercial | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 5,745,051 | 5,731,712 |
Commercial | Commercial | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 2,042,594 | 2,020,231 |
Commercial | Commercial real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 3,702,457 | 3,711,481 |
Agricultural and agricultural real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 544,805 | 565,408 |
Residential real estate | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | 630,433 | 673,603 |
Consumer | ||
Loans and Leases [Line Items] | ||
Gross loans receivable held to maturity | $ 412,573 | $ 440,158 |
LOANS (Allowance for credit los
LOANS (Allowance for credit losses on financing receivables) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | $ 8,559 | $ 7,554 | ||
Ending Balance Under ASC 450-20 | 54,080 | 54,409 | ||
Total | 62,639 | 61,963 | $ 58,656 | $ 55,686 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 87,568 | 81,796 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 7,245,294 | 7,329,085 | ||
Total | 7,332,862 | 7,410,881 | ||
Commercial | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Total | 5,745,051 | 5,731,712 | ||
Commercial | Commercial | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 6,301 | 5,733 | ||
Ending Balance Under ASC 450-20 | 17,520 | 18,772 | ||
Total | 23,821 | 24,505 | 19,395 | 18,098 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 24,498 | 24,202 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 2,018,096 | 1,996,029 | ||
Total | 2,042,594 | 2,020,231 | ||
Commercial | Commercial real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 353 | 218 | ||
Ending Balance Under ASC 450-20 | 26,434 | 25,320 | ||
Total | 26,787 | 25,538 | 23,469 | 21,950 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 18,150 | 14,388 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 3,684,307 | 3,697,093 | ||
Total | 3,702,457 | 3,711,481 | ||
Agricultural and agricultural real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 1,099 | 686 | ||
Ending Balance Under ASC 450-20 | 4,499 | 4,267 | ||
Total | 5,598 | 4,953 | 4,716 | 4,258 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 20,475 | 15,951 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 524,330 | 549,457 | ||
Total | 544,805 | 565,408 | ||
Residential real estate | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 153 | 168 | ||
Ending Balance Under ASC 450-20 | 1,452 | 1,617 | ||
Total | 1,605 | 1,785 | 2,141 | 2,224 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 18,619 | 20,251 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 611,814 | 653,352 | ||
Total | 630,433 | 673,603 | ||
Consumer | ||||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||||
Ending Balance Under ASC 310-10-35 | 653 | 749 | ||
Ending Balance Under ASC 450-20 | 4,175 | 4,433 | ||
Total | 4,828 | 5,182 | $ 8,935 | $ 9,156 |
Ending Balance Evaluated for Impairment Under ASC 310-10-35 | 5,826 | 7,004 | ||
Ending Balance Evaluated for Impairment Under ASC 450-20 | 406,747 | 433,154 | ||
Total | $ 412,573 | $ 440,158 |
LOANS (Financing receivables, n
LOANS (Financing receivables, non accrual status) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Nonaccrual loans | $ 72,670 | $ 67,833 |
Nonaccrual troubled debt restructured loans | 4,624 | 4,110 |
Total nonaccrual loans | 77,294 | 71,943 |
Accruing loans past due 90 days or more | 1,706 | 726 |
Performing troubled debt restructured loans | $ 3,460 | $ 4,026 |
LOANS (Troubled debt restructur
LOANS (Troubled debt restructuring) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)loan | Mar. 31, 2018USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 5 |
Pre- Modification Recorded Investment | $ 36 | $ 877 |
Post- Modification Recorded Investment | $ 42 | $ 752 |
With Payment Defaults During the | ||
Number of Loans | loan | 1 | 3 |
Recorded Investment | $ 42 | $ 519 |
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 | ||
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 | ||
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 | ||
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 | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
Residential real estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Loans | loan | 1 | 5 |
Pre- Modification Recorded Investment | $ 36 | $ 877 |
Post- Modification Recorded Investment | $ 42 | $ 752 |
With Payment Defaults During the | ||
Number of Loans | loan | 1 | 3 |
Recorded Investment | $ 42 | $ 519 |
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 | ||
Number of Loans | loan | 0 | 0 |
Recorded Investment | $ 0 | $ 0 |
LOANS (Troubled debt narrative)
LOANS (Troubled debt narrative) (Details) | Mar. 31, 2019loan |
Doubtful | |
Financing Receivable, Recorded Investment [Line Items] | |
Number of loan relationships | 0 |
LOANS (Loans by credit quality
LOANS (Loans by credit quality indicator) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 7,332,862 | $ 7,410,881 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 6,861,050 | 6,947,494 |
Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 471,812 | 463,387 |
Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 5,745,051 | 5,731,712 |
Commercial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 5,417,781 | 5,404,923 |
Commercial | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 327,270 | 326,789 |
Commercial | Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 2,042,594 | 2,020,231 |
Commercial | Commercial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 1,907,620 | 1,880,579 |
Commercial | Commercial | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 134,974 | 139,652 |
Commercial | Commercial real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 3,702,457 | 3,711,481 |
Commercial | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 3,510,161 | 3,524,344 |
Commercial | Commercial real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 192,296 | 187,137 |
Agricultural and agricultural real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 544,805 | 565,408 |
Agricultural and agricultural real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 440,927 | 471,642 |
Agricultural and agricultural real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 103,878 | 93,766 |
Residential real estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 630,433 | 673,603 |
Residential real estate | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 603,647 | 645,478 |
Residential real estate | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 26,786 | 28,125 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 412,573 | 440,158 |
Consumer | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | 398,695 | 425,451 |
Consumer | Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total gross loans receivable held to maturity | $ 13,878 | $ 14,707 |
LOANS (Loans by credit qualit_2
LOANS (Loans by credit quality indicator narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans delinquent 30 to 89 days, percentage | 0.47% | 0.21% |
Loans secured by residential real estate property in process of foreclosure | $ 2.8 | |
Threshold period past due, nonperforming status of loans and leases | 90 days | |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percent of loans | 48.00% | 52.00% |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percent of loans | 52.00% | 48.00% |
Nonpass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Percent of nonaccrual loans | 16.00% | 16.00% |
LOANS (Past due financing recei
LOANS (Past due financing receivables) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | $ 36,314 | $ 16,650 |
Accruing Loans, Current | 7,219,254 | 7,322,288 |
Nonaccrual | 77,294 | 71,943 |
Total | 7,332,862 | 7,410,881 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 25,361 | 15,363 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 9,247 | 561 |
90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 1,706 | 726 |
Commercial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 23,513 | 8,324 |
Accruing Loans, Current | 5,681,034 | 5,685,784 |
Nonaccrual | 40,504 | 37,604 |
Total | 5,745,051 | 5,731,712 |
Commercial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 14,123 | 7,393 |
Commercial | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 7,801 | 205 |
Commercial | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 1,589 | 726 |
Commercial | Commercial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 11,437 | 2,779 |
Accruing Loans, Current | 2,006,358 | 1,991,525 |
Nonaccrual | 24,799 | 25,927 |
Total | 2,042,594 | 2,020,231 |
Commercial | Commercial | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 8,253 | 2,574 |
Commercial | Commercial | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 2,859 | 205 |
Commercial | Commercial | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 325 | 0 |
Commercial | Commercial real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 12,076 | 5,545 |
Accruing Loans, Current | 3,674,676 | 3,694,259 |
Nonaccrual | 15,705 | 11,677 |
Total | 3,702,457 | 3,711,481 |
Commercial | Commercial real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 5,870 | 4,819 |
Commercial | Commercial real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 4,942 | 0 |
Commercial | Commercial real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 1,264 | 726 |
Agricultural and agricultural real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 3,010 | 99 |
Accruing Loans, Current | 521,621 | 549,376 |
Nonaccrual | 20,174 | 15,933 |
Total | 544,805 | 565,408 |
Agricultural and agricultural real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 2,179 | 99 |
Agricultural and agricultural real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 800 | 0 |
Agricultural and agricultural real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 31 | 0 |
Residential real estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 4,334 | 5,196 |
Accruing Loans, Current | 613,667 | 655,329 |
Nonaccrual | 12,432 | 13,078 |
Total | 630,433 | 673,603 |
Residential real estate | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 4,224 | 5,147 |
Residential real estate | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 110 | 49 |
Residential real estate | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 0 | 0 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 5,457 | 3,031 |
Accruing Loans, Current | 402,932 | 431,799 |
Nonaccrual | 4,184 | 5,328 |
Total | 412,573 | 440,158 |
Consumer | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 4,835 | 2,724 |
Consumer | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | 536 | 307 |
Consumer | 90 Days or More Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Accruing Loans, Past Due | $ 86 | $ 0 |
LOANS (Impaired loans) (Details
LOANS (Impaired loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Receivables [Abstract] | ||
Threshold period past due, nonperforming status of loans and leases | 90 days | |
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | $ 19,333 | $ 17,005 |
Total impaired loans without a related allowance | 72,804 | 69,265 |
Total impaired loans held to maturity | 92,137 | 86,270 |
Loan Balance | ||
Total impaired loans with a related allowance | 19,320 | 16,995 |
Total impaired loans without a related allowance | 68,248 | 64,801 |
Total impaired loans held to maturity | 87,568 | 81,796 |
Related Allowance Recorded | 8,559 | 7,554 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 17,759 | 15,399 |
Total impaired loans without a related allowance | 63,062 | 66,900 |
Total impaired loans held to maturity | 80,821 | 82,299 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 20 | 101 |
Total impaired loans without a related allowance | 501 | 958 |
Total impaired loans held to maturity | 521 | 1,059 |
Commercial | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 13,528 | 13,267 |
Total impaired loans without a related allowance | 31,276 | 27,194 |
Total impaired loans held to maturity | 44,804 | 40,461 |
Loan Balance | ||
Total impaired loans with a related allowance | 13,517 | 13,257 |
Total impaired loans without a related allowance | 29,131 | 25,333 |
Total impaired loans held to maturity | 42,648 | 38,590 |
Related Allowance Recorded | 6,654 | 5,951 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 13,247 | 9,162 |
Total impaired loans without a related allowance | 25,936 | 23,052 |
Total impaired loans held to maturity | 39,183 | 32,214 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 13 | 58 |
Total impaired loans without a related allowance | 384 | 548 |
Total impaired loans held to maturity | 397 | 606 |
Commercial | Commercial | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 12,107 | 12,376 |
Total impaired loans without a related allowance | 14,467 | 13,616 |
Total impaired loans held to maturity | 26,574 | 25,992 |
Loan Balance | ||
Total impaired loans with a related allowance | 12,096 | 12,366 |
Total impaired loans without a related allowance | 12,402 | 11,836 |
Total impaired loans held to maturity | 24,498 | 24,202 |
Related Allowance Recorded | 6,301 | 5,733 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 12,046 | 4,741 |
Total impaired loans without a related allowance | 11,928 | 10,052 |
Total impaired loans held to maturity | 23,974 | 14,793 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 7 | 33 |
Total impaired loans without a related allowance | 330 | 299 |
Total impaired loans held to maturity | 337 | 332 |
Commercial | Commercial real estate | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 1,421 | 891 |
Total impaired loans without a related allowance | 16,809 | 13,578 |
Total impaired loans held to maturity | 18,230 | 14,469 |
Loan Balance | ||
Total impaired loans with a related allowance | 1,421 | 891 |
Total impaired loans without a related allowance | 16,729 | 13,497 |
Total impaired loans held to maturity | 18,150 | 14,388 |
Related Allowance Recorded | 353 | 218 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 1,201 | 4,421 |
Total impaired loans without a related allowance | 14,008 | 13,000 |
Total impaired loans held to maturity | 15,209 | 17,421 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 6 | 25 |
Total impaired loans without a related allowance | 54 | 249 |
Total impaired loans held to maturity | 60 | 274 |
Agricultural and agricultural real estate | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 3,280 | 1,718 |
Total impaired loans without a related allowance | 19,538 | 16,836 |
Total impaired loans held to maturity | 22,818 | 18,554 |
Loan Balance | ||
Total impaired loans with a related allowance | 3,280 | 1,718 |
Total impaired loans without a related allowance | 17,195 | 14,233 |
Total impaired loans held to maturity | 20,475 | 15,951 |
Related Allowance Recorded | 1,099 | 686 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 2,225 | 2,165 |
Total impaired loans without a related allowance | 14,373 | 14,781 |
Total impaired loans held to maturity | 16,598 | 16,946 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 1 | 2 |
Total impaired loans without a related allowance | 16 | 5 |
Total impaired loans held to maturity | 17 | 7 |
Residential real estate | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 1,253 | 647 |
Total impaired loans without a related allowance | 17,370 | 19,604 |
Total impaired loans held to maturity | 18,623 | 20,251 |
Loan Balance | ||
Total impaired loans with a related allowance | 1,253 | 647 |
Total impaired loans without a related allowance | 17,366 | 19,604 |
Total impaired loans held to maturity | 18,619 | 20,251 |
Related Allowance Recorded | 153 | 168 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 1,012 | 1,138 |
Total impaired loans without a related allowance | 17,933 | 23,950 |
Total impaired loans held to maturity | 18,945 | 25,088 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 0 | 12 |
Total impaired loans without a related allowance | 76 | 308 |
Total impaired loans held to maturity | 76 | 320 |
Consumer | ||
Unpaid Principal Balance | ||
Total impaired loans with a related allowance | 1,272 | 1,373 |
Total impaired loans without a related allowance | 4,620 | 5,631 |
Total impaired loans held to maturity | 5,892 | 7,004 |
Loan Balance | ||
Total impaired loans with a related allowance | 1,270 | 1,373 |
Total impaired loans without a related allowance | 4,556 | 5,631 |
Total impaired loans held to maturity | 5,826 | 7,004 |
Related Allowance Recorded | 653 | 749 |
Avg. Loan Balance | ||
Total impaired loans with a related allowance | 1,275 | 2,934 |
Total impaired loans without a related allowance | 4,820 | 5,117 |
Total impaired loans held to maturity | 6,095 | 8,051 |
Interest Income Recognized | ||
Total impaired loans with a related allowance | 6 | 29 |
Total impaired loans without a related allowance | 25 | 97 |
Total impaired loans held to maturity | $ 31 | $ 126 |
LOANS (Carrying amount of loans
LOANS (Carrying amount of loans acquired narrative) (Details) - USD ($) $ in Millions | May 18, 2018 | Feb. 23, 2018 |
First Bank Lubbock Bancshares, Inc. | ||
Business Acquisition [Line Items] | ||
Estimated fair value of loans acquired | $ 696.9 | |
Loans held to maturity | $ 681.1 | |
Signature Bancshares, Inc. | ||
Business Acquisition [Line Items] | ||
Estimated fair value of loans acquired | $ 335.1 | |
Loans held to maturity | $ 324.5 |
LOANS (Carrying amount of loa_2
LOANS (Carrying amount of loans acquired) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | $ 1,435,270 | $ 1,633,331 |
Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 201,762 | 247,494 |
Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 987,082 | 1,098,329 |
Agricultural and agricultural real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 14,942 | 27,115 |
Residential real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 168,394 | 184,620 |
Consumer | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 63,090 | 75,773 |
Impaired Purchased Loans | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 4,187 | 4,190 |
Impaired Purchased Loans | Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 3,804 | 3,801 |
Impaired Purchased Loans | Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 156 | 158 |
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 | 227 | 231 |
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 | 1,431,083 | 1,629,141 |
Non Impaired Purchased Loans | Commercial | Commercial | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 197,958 | 243,693 |
Non Impaired Purchased Loans | Commercial | Commercial real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 986,926 | 1,098,171 |
Non Impaired Purchased Loans | Agricultural and agricultural real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 14,942 | 27,115 |
Non Impaired Purchased Loans | Residential real estate | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | 168,167 | 184,389 |
Non Impaired Purchased Loans | Consumer | ||
Loans covered by loss share agreement (carrying amount) [Line Items] | ||
Purchased loans | $ 63,090 | $ 75,773 |
LOANS (Change in accretable yie
LOANS (Change in accretable yield on acquired loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance at beginning of period | $ 227 | $ 57 |
Original yield discount, net, at date of acquisition | 0 | (56) |
Accretion | (257) | (199) |
Reclassification from nonaccretable difference | 218 | 198 |
Balance at period end | $ 188 | $ 0 |
LOANS (Change in accretable y_2
LOANS (Change in accretable yield on acquired loans narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for loan and lease losses | $ 62,639 | $ 61,963 | |
Provision for loan losses | 1,635 | $ 4,263 | |
2015, 2016 and 2017 Acquisitions | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractually required payments of loans acquired | 36,900 | ||
Estimated fair value of loans acquired | 21,800 | ||
Allowance for loan and lease losses | 64 | $ 57 | |
Provision for loan losses | 7 | $ 0 | |
2015 Acquisitions | Non Impaired Purchased Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractually required payments of loans acquired | 3,670,000 | ||
Estimated fair value of loans acquired | $ 3,590,000 |
ALLOWANCE FOR LOAN LOSSES (Deta
ALLOWANCE FOR LOAN LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | $ 61,963 | $ 55,686 |
Charge-offs | (1,950) | (2,224) |
Recoveries | 991 | 931 |
Provision | 1,635 | 4,263 |
Ending Balance | 62,639 | 58,656 |
Agricultural and Agricultural Real Estate | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 4,953 | 4,258 |
Charge-offs | (379) | 0 |
Recoveries | 330 | 14 |
Provision | 694 | 444 |
Ending Balance | 5,598 | 4,716 |
Residential Real Estate | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 1,785 | 2,224 |
Charge-offs | (163) | (16) |
Recoveries | 13 | 75 |
Provision | (30) | (142) |
Ending Balance | 1,605 | 2,141 |
Consumer | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 5,182 | 9,156 |
Charge-offs | (725) | (1,289) |
Recoveries | 322 | 290 |
Provision | 49 | 778 |
Ending Balance | 4,828 | 8,935 |
Commercial | Commercial | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 24,505 | 18,098 |
Charge-offs | (644) | (794) |
Recoveries | 175 | 104 |
Provision | (215) | 1,987 |
Ending Balance | 23,821 | 19,395 |
Commercial Real Estate | Commercial | ||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | ||
Beginning Balance | 25,538 | 21,950 |
Charge-offs | (39) | (125) |
Recoveries | 151 | 448 |
Provision | 1,137 | 1,196 |
Ending Balance | $ 26,787 | $ 23,469 |
GOODWILL, CORE DEPOSIT PREMIU_3
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Goodwill narrative) (Details) - USD ($) | Sep. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | May 18, 2018 | Feb. 23, 2018 |
Goodwill [Line Items] | |||||
Goodwill | $ 391,668,000 | $ 391,668,000 | |||
Goodwill impairment | $ 0 | ||||
Core Deposits | |||||
Goodwill [Line Items] | |||||
Intangibles, amortization period | 10 years | ||||
First Bank Lubbock Bancshares, Inc. | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 121,400,000 | ||||
First Bank Lubbock Bancshares, Inc. | Core Deposits | |||||
Goodwill [Line Items] | |||||
Intangibles recognized | $ 13,900,000 | ||||
Signature Bancshares, Inc. | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 33,700,000 | ||||
Signature Bancshares, Inc. | Core Deposits | |||||
Goodwill [Line Items] | |||||
Intangibles recognized | $ 7,700,000 |
GOODWILL, CORE DEPOSIT PREMIU_4
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Carrying amount of intangible assets (incl accumulated amortization) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 133,192 | $ 133,879 |
Accumulated Amortization | 59,587 | 55,328 |
Net Carrying Amount | 73,605 | 78,551 |
Core deposit intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 83,640 | 83,640 |
Accumulated Amortization | 39,236 | 36,403 |
Net Carrying Amount | 44,404 | 47,237 |
Customer relationship intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,177 | 1,177 |
Accumulated Amortization | 944 | 935 |
Net Carrying Amount | 233 | 242 |
Mortgage servicing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 41,473 | 42,228 |
Accumulated Amortization | 14,001 | 12,865 |
Net Carrying Amount | 27,472 | 29,363 |
Commercial servicing rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,902 | 6,834 |
Accumulated Amortization | 5,406 | 5,125 |
Net Carrying Amount | $ 1,496 | $ 1,709 |
GOODWILL, CORE DEPOSIT PREMIU_5
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Mortgage and commercial loans servicing narrative) (Details) | Apr. 30, 2019USD ($) | Mar. 31, 2019USD ($)loan | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) |
Valuation servicing rights in tranches [Line Items] | ||||
Book value of servicing portfolio | $ 73,605,000 | $ 78,551,000 | ||
Loans guaranteed and sold with servicing retained | 28,968,000 | 31,072,000 | ||
Valuation allowance | 589,000 | 58,000 | ||
Dubuque Bank and Trust Company | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Mortgage loans serviced for others | 3,350,000,000 | 3,450,000,000 | ||
Custodial escrow balances maintained | 23,300,000 | 17,700,000 | ||
First Bank & Trust | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Mortgage loans serviced for others | 692,300,000 | 648,900,000 | ||
Custodial escrow balances maintained | 8,700,000 | 5,900,000 | ||
Mortgage servicing rights | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Book value of servicing portfolio | 27,472,000 | 29,363,000 | ||
Fair value of mortgage servicing rights | $ 6,500,000 | $ 7,100,000 | ||
Average constant prepayment rate | 12.00% | 10.30% | ||
Servicing assets, discount rate | 9.03% | 9.03% | ||
Fees collected for servicing of mortgage loans | $ 427,000 | |||
Mortgage servicing rights | Measurement Input, Cap Rate | Minimum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average capitalization rate (percent) | 0.0092 | 0.0093 | ||
Mortgage servicing rights | Measurement Input, Cap Rate | Maximum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average capitalization rate (percent) | 0.0098 | 0.0117 | ||
Mortgage servicing rights | Dubuque Bank and Trust Company | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Book value of servicing portfolio | $ 21,000,000 | |||
Number of serviced residential mortgage loans | loan | 20,300 | |||
Unpaid principal balance | $ 3,350,000,000 | |||
Fair value of mortgage servicing rights | 37,100,000 | $ 41,500,000 | ||
Mortgage servicing rights | Dubuque Bank and Trust Company | Subsequent Event | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Unpaid principal balance | $ 37,000,000 | |||
Amount derecognized | $ 21,000,000 | |||
Commercial servicing rights | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Book value of servicing portfolio | 1,496,000 | 1,709,000 | ||
Fair value of mortgage servicing rights | 1,926,000 | $ 2,781,000 | 2,100,000 | |
Loans guaranteed and sold with servicing retained | $ 95,000,000 | $ 107,400,000 | ||
Commercial servicing rights | Minimum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average constant prepayment rate | 11.37% | 11.01% | ||
Servicing assets, discount rate | 12.71% | 13.44% | ||
Commercial servicing rights | Maximum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average constant prepayment rate | 14.44% | 13.50% | ||
Servicing assets, discount rate | 16.13% | 16.96% | ||
Commercial servicing rights | Measurement Input, Cap Rate | Minimum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average capitalization rate (percent) | 0.0310 | 0.0310 | ||
Commercial servicing rights | Measurement Input, Cap Rate | Maximum | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Average capitalization rate (percent) | 0.0445 | 0.0445 | ||
Less Than 20 Years | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Fair value of mortgage servicing rights | $ 452,000 | $ 491,000 | ||
Fees collected for servicing of mortgage loans | $ 380,000 | $ 420,000 | ||
Period of tranche | 20 years | |||
Valuation allowance | $ 0 | $ 0 | ||
Amortization period | 20 years | 20 years | ||
More Than 20 Years | ||||
Valuation servicing rights in tranches [Line Items] | ||||
Fair value of mortgage servicing rights | $ 1,474,000 | $ 1,643,000 | ||
Period of tranche | 20 years | |||
Valuation allowance | $ 0 | $ 0 | ||
Amortization period | 20 years | 20 years |
GOODWILL, CORE DEPOSIT PREMIU_6
GOODWILL, CORE DEPOSIT PREMIUM AND OTHER INTANGIBLE ASSETS (Estimated future amortization expense for amortizable intangible assets) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2019 | $ 8,023 |
Year ending December 31, | |
2020 | 10,028 |
2021 | 8,590 |
2022 | 6,937 |
2023 | 5,944 |
2024 | 4,740 |
Thereafter | 8,330 |
Total | 52,592 |
Core Deposit Intangibles | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2019 | 6,949 |
Year ending December 31, | |
2020 | 8,230 |
2021 | 7,036 |
2022 | 5,634 |
2023 | 4,933 |
2024 | 4,008 |
Thereafter | 7,614 |
Total | 44,404 |
Customer Relationship Intangibles | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2019 | 28 |
Year ending December 31, | |
2020 | 36 |
2021 | 35 |
2022 | 35 |
2023 | 34 |
2024 | 33 |
Thereafter | 32 |
Total | 233 |
Mortgage Servicing Rights | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2019 | 736 |
Year ending December 31, | |
2020 | 1,431 |
2021 | 1,226 |
2022 | 1,022 |
2023 | 818 |
2024 | 613 |
Thereafter | 613 |
Total | 6,459 |
Commercial Servicing Rights | |
Future amortization expense for amortizable intangible assets [Line Items] | |
Nine months ending December 31, 2019 | 310 |
Year ending December 31, | |
2020 | 331 |
2021 | 293 |
2022 | 246 |
2023 | 159 |
2024 | 86 |
Thereafter | 71 |
Total | $ 1,496 |
GOODWILL, CORE DEPOSIT PREMIU_7
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, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Mortgage servicing rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Balance at beginning of period | $ 29,363 | $ 23,248 | |
Originations | 198 | 1,162 | |
Amortization | (1,500) | (1,245) | |
Valuation adjustment | (589) | 0 | |
Balance at end of period | 27,472 | $ 23,165 | |
Fair value of servicing rights | $ 6,500 | $ 7,100 | |
Servicing rights, net to servicing portfolio | 0.68% | 0.72% | |
Commercial servicing rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Balance at beginning of period | $ 1,709 | $ 2,609 | |
Originations | 68 | 21 | |
Amortization | (281) | (322) | |
Valuation allowance on commercial servicing rights | 0 | (2) | |
Balance at end of period | 1,496 | 2,306 | |
Fair value of servicing rights | $ 1,926 | $ 2,781 | $ 2,100 |
Servicing rights, net to servicing portfolio | 1.58% | 1.84% |
GOODWILL, CORE DEPOSIT PREMIU_8
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, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment | $ 589,000 | $ 58,000 |
15 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 3,626,000 | 3,880,000 |
Fair Value | 6,167,000 | 6,301,000 |
Impairment | 125,000 | 20,000 |
30 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 24,493,000 | 25,541,000 |
Fair Value | 37,360,000 | 42,379,000 |
Impairment | 522,000 | 38,000 |
Less Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 249,000 | 295,000 |
Fair Value | 452,000 | 491,000 |
Impairment | 0 | 0 |
More Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,247,000 | 1,414,000 |
Fair Value | 1,474,000 | 1,643,000 |
Impairment | 0 | 0 |
Dubuque Bank and Trust Company | 15 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,982,000 | 2,195,000 |
Fair Value | 4,648,000 | 4,636,000 |
Impairment | 0 | 0 |
Dubuque Bank and Trust Company | 30 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 19,031,000 | 20,025,000 |
Fair Value | 32,420,000 | 36,901,000 |
Impairment | 0 | 0 |
First Bank & Trust | 15 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,644,000 | 1,685,000 |
Fair Value | 1,519,000 | 1,665,000 |
Impairment | 125,000 | 20,000 |
First Bank & Trust | 30 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 5,462,000 | 5,516,000 |
Fair Value | 4,940,000 | 5,478,000 |
Impairment | 522,000 | 38,000 |
Citywide Banks | Less Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 0 | 1,000 |
Fair Value | 0 | 6,000 |
Impairment | 0 | 0 |
Citywide Banks | More Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 0 | 18,000 |
Fair Value | 0 | 20,000 |
Impairment | 0 | 0 |
Premier Valley Bank | Less Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 37,000 | 45,000 |
Fair Value | 65,000 | 74,000 |
Impairment | 0 | 0 |
Premier Valley Bank | More Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 168,000 | 178,000 |
Fair Value | 178,000 | 184,000 |
Impairment | 0 | 0 |
Wisconsin Bank & Trust | Less Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 212,000 | 249,000 |
Fair Value | 387,000 | 411,000 |
Impairment | 0 | 0 |
Wisconsin Bank & Trust | More Than 20 Years | ||
Finite-Lived Intangible Assets [Line Items] | ||
Book Value | 1,079,000 | 1,218,000 |
Fair Value | 1,296,000 | 1,439,000 |
Impairment | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Cash collateral on derivative financial instruments narrative) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 540,000 | $ 0 |
Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | $ 770,000 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS (Cash flow hedges narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)transaction | May 18, 2018USD ($) | |
Derivative [Line Items] | ||
Change in net unrealized losses on cash flow hedges | $ (165) | |
Estimated amount to be reclassified from accumulated other comprehensive income to interest expense | $ 660 | |
Interest Rate Swap | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Number of swap transactions | transaction | 6 | |
Derivative, notional amount | $ 105,000 | $ 9,000 |
Interest Rate Swap | Cash Flow Hedges | Heartland Financial Statutory Trust IV, V and VII | ||
Derivative [Line Items] | ||
Derivative, notional amount | 85,000 | |
Interest Rate Swap | Cash Flow Hedges | Morrill Statutory Trust I and II | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 20,000 | |
Interest Rate Swap | Cash Flow Hedges | OCGI Statutory Trust III | ||
Derivative [Line Items] | ||
Derivative, notional amount | 3,000 | |
Interest Rate Swap | Cash Flow Hedges | OCGI Capital Trust IV | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 6,000 |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS (Cash flow hedges balance sheet category and fair values) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other assets | Interest Rate Swap due March 17, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 25,000 | $ 25,000 |
Fair Value, Other Assets | $ 50 | $ 191 |
Receive Rate | 2.615% | 2.788% |
Weighted Average Pay Rate | 2.255% | 2.255% |
Other assets | Interest Rate Swap due March 26, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 10,000 | |
Fair Value, Other Assets | $ 29 | |
Receive Rate | 2.822% | |
Weighted Average Pay Rate | 1.674% | |
Other assets | Interest Rate Swap due March 18, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 10,000 | |
Fair Value, Other Assets | $ 28 | |
Receive Rate | 2.788% | |
Weighted Average Pay Rate | 1.658% | |
Other assets | Interest Rate Swap due May 10, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 28,667 | $ 29,667 |
Fair Value, Other Assets | $ 563 | $ 763 |
Receive Rate | 4.993% | 4.887% |
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 | $ 157 | |
Receive Rate | 2.788% | |
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 | $ 185 | |
Receive Rate | 2.738% | |
Weighted Average Pay Rate | 2.352% | |
Other assets | Interest Rate Swap Due June 15, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 6,000 | $ 6,000 |
Fair Value, Other Assets | $ 62 | $ 105 |
Receive Rate | 2.611% | 2.788% |
Weighted Average Pay Rate | 1.866% | 1.866% |
Other assets | Interest Rate Swap Due June 30, 2021 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 3,000 | $ 3,000 |
Fair Value, Other Assets | $ 35 | $ 51 |
Receive Rate | 2.787% | 2.787% |
Weighted Average Pay Rate | 1.878% | 1.878% |
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 | $ (153) | $ (177) |
Receive Rate | 2.795% | 2.408% |
Weighted Average Pay Rate | 3.355% | 3.355% |
Other liabilities | Interest Rate Swap Due July 24, 2028 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 28,000 | $ 28,750 |
Fair Value, Other Liabilities | $ (897) | $ (572) |
Receive Rate | 4.986% | 5.004% |
Weighted Average Pay Rate | 5.425% | 5.425% |
Other liabilities | Interest Rate Swap due June 15, 2024 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | $ 20,000 | |
Fair Value, Other Liabilities | $ (141) | |
Receive Rate | 2.611% | |
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 | $ (99) | |
Receive Rate | 2.626% | |
Weighted Average Pay Rate | 2.352% |
DERIVATIVE FINANCIAL INSTRUME_6
DERIVATIVE FINANCIAL INSTRUMENTS (Cash flow hedges gains (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Trading Activity, Gains and Losses, Net [Line Items] | ||
Effective Portion, Recognized in OCI, Amount of Gain (Loss) | $ (1,505) | $ 1,699 |
Interest rate swaps | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Effective Portion, Recognized in OCI, Amount of Gain (Loss) | (1,340) | 1,896 |
Interest rate swaps | Interest expense | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Effective Portion, Reclassified from AOCI into Income, Amount of Gain (Loss) | (165) | (197) |
Interest rate swaps | 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 INSTRUME_7
DERIVATIVE FINANCIAL INSTRUMENTS (Fair value hedges narrative) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 540,000 | $ 0 |
Fair Value Hedging | Interest Rate Swap | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 3,200,000 | $ 2,500,000 |
DERIVATIVE FINANCIAL INSTRUME_8
DERIVATIVE FINANCIAL INSTRUMENTS (Fair value hedges balance sheet category and fair values) (Details) - Fair value hedges - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other assets | ||
Derivative [Line Items] | ||
Notional Amount | $ 670 | $ 19,820 |
Fair Value, Other assets | 5 | 74 |
Other liabilities | ||
Derivative [Line Items] | ||
Notional Amount | 28,749 | 15,064 |
Fair Value, Other liabilities | $ (900) | $ (339) |
DERIVATIVE FINANCIAL INSTRUME_9
DERIVATIVE FINANCIAL INSTRUMENTS (Fair value hedges gans (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair value hedges | Interest income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) | $ (630) | $ 894 |
DERIVATIVE FINANCIAL INSTRUM_10
DERIVATIVE FINANCIAL INSTRUMENTS (Embedded derivatives blance sheet category and fair values) (Details) - Embedded derivatives - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other assets | ||
Derivative [Line Items] | ||
Notional Amount | $ 2,216 | $ 11,266 |
Fair Value | 17 | 453 |
Other liabilities | ||
Derivative [Line Items] | ||
Notional Amount | 9,785 | 2,231 |
Fair Value | $ (507) | $ (54) |
DERIVATIVE FINANCIAL INSTRUM_11
DERIVATIVE FINANCIAL INSTRUMENTS (Embedded derivatives gain (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Other noninterest income | Embedded derivatives | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) | $ 889 | $ 277 |
DERIVATIVE FINANCIAL INSTRUM_12
DERIVATIVE FINANCIAL INSTRUMENTS (Back-to-back loan swaps narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Cash pledged as collateral | $ 540,000 | $ 0 | |
Counterparties | |||
Derivative [Line Items] | |||
Cash pledged as collateral | 0 | 770,000 | |
Back-to-Back Loan Swaps | Interest Rate Swap | |||
Derivative [Line Items] | |||
Cash pledged as collateral | 7,200,000 | 2,000,000 | |
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 | $ 140,000 | $ 680,000 |
DERIVATIVE FINANCIAL INSTRUM_13
DERIVATIVE FINANCIAL INSTRUMENTS (Back-to-back loan swaps balance sheet category and fair values) (Details) - Back-to-Back Loan Swaps - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other assets | ||
Derivative [Line Items] | ||
Notional Amount | $ 233,665 | $ 211,246 |
Fair Value, Other Assets | 7,654 | 4,449 |
Other liabilities | ||
Derivative [Line Items] | ||
Notional Amount | 233,665 | 211,246 |
Fair Value, Other Liabilities | $ (7,654) | $ (4,449) |
Receive Rate | Other assets | ||
Derivative [Line Items] | ||
Weighted Average Rate | 5.15% | 5.10% |
Receive Rate | Other liabilities | ||
Derivative [Line Items] | ||
Weighted Average Rate | 5.05% | 4.96% |
Pay Rate | Other assets | ||
Derivative [Line Items] | ||
Weighted Average Rate | 5.05% | 4.96% |
Pay Rate | Other liabilities | ||
Derivative [Line Items] | ||
Weighted Average Rate | 5.15% | 5.10% |
DERIVATIVE FINANCIAL INSTRUM_14
DERIVATIVE FINANCIAL INSTRUMENTS (Other free standing derivatives narrative) (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Cash pledged as collateral | $ 540,000 | $ 0 |
Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | 0 | 770,000 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 | 35,000 |
Not Designated as Hedging Instrument | Counterparties | ||
Derivative [Line Items] | ||
Cash pledged as collateral | $ 0 |
DERIVATIVE FINANCIAL INSTRUM_15
DERIVATIVE FINANCIAL INSTRUMENTS (Other free standing derivatives balance sheet category and fair values) (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Other assets | Interest rate lock commitments (mortgage) | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | $ 25,318 | $ 22,451 |
Fair Value, Other Assets | 800 | 725 |
Other assets | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | 1,000 | 0 |
Fair Value, Other Assets | 0 | 0 |
Other assets | Undesignated interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Assets | 2,216 | 2,231 |
Fair Value, Other Assets | 17 | 54 |
Other liabilities | Forward commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | 46,000 | 51,500 |
Fair Value, Other Liabilities | (282) | (399) |
Other liabilities | Undesignated interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Other Liabilities | 9,785 | 11,266 |
Fair Value, Other Liabilities | $ (507) | $ (453) |
DERIVATIVE FINANCIAL INSTRUM_16
DERIVATIVE FINANCIAL INSTRUMENTS (Other free standing derivatives gains (losses) recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
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 | $ 264 | $ 17 |
Net gains on sale of loans held for sale | Forward commitments | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Gain (Loss) Recognized | 117 | 115 |
Other noninterest income | Undesignated interest rate swaps | ||
Trading Activity, Gains and Losses, Net [Line Items] | ||
Gain (Loss) Recognized | $ 889 | $ 277 |
FAIR VALUE (Fair value measurem
FAIR VALUE (Fair value measurement recurring) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Securities available for sale | $ 2,400,460 | $ 2,450,709 |
Equity securities with a readily determinable fair value | 17,339 | |
Level 1 | ||
Assets | ||
Securities available for sale | 20,458 | 25,414 |
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Assets | ||
Securities available for sale | 2,380,002 | 2,425,295 |
Derivative assets | 8,403 | 6,539 |
Liabilities | ||
Derivative liabilities | 10,858 | 6,044 |
Level 3 | ||
Assets | ||
Securities available for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | ||
Assets | ||
Equity securities with a readily determinable fair value | 17,339 | 17,086 |
Total assets at fair value | 2,409,663 | 2,457,973 |
Liabilities | ||
Total liabilities at fair value | 11,140 | 6,443 |
Recurring Basis | Level 1 | ||
Assets | ||
Equity securities with a readily determinable fair value | 0 | 0 |
Total assets at fair value | 20,458 | 25,414 |
Liabilities | ||
Total liabilities at fair value | 0 | 0 |
Recurring Basis | Level 2 | ||
Assets | ||
Equity securities with a readily determinable fair value | 17,339 | 17,086 |
Total assets at fair value | 2,388,405 | 2,431,834 |
Liabilities | ||
Total liabilities at fair value | 11,140 | 6,443 |
Recurring Basis | Level 3 | ||
Assets | ||
Equity securities with a readily determinable fair value | 0 | 0 |
Total assets at fair value | 800 | 725 |
Liabilities | ||
Total liabilities at fair value | 0 | 0 |
Recurring Basis | Derivative financial instruments | ||
Assets | ||
Derivative assets | 8,403 | 6,539 |
Liabilities | ||
Derivative liabilities | 10,858 | 6,044 |
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 | 8,403 | 6,539 |
Liabilities | ||
Derivative liabilities | 10,858 | 6,044 |
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 | 800 | 725 |
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 | 800 | 725 |
Recurring Basis | Forward commitments | ||
Liabilities | ||
Derivative liabilities | 282 | 399 |
Recurring Basis | Forward commitments | Level 1 | ||
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | Forward commitments | Level 2 | ||
Liabilities | ||
Derivative liabilities | 282 | 399 |
Recurring Basis | Forward commitments | Level 3 | ||
Liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring Basis | U.S. government corporations and agencies | ||
Assets | ||
Securities available for sale | 26,768 | 31,951 |
Recurring Basis | U.S. government corporations and agencies | Level 1 | ||
Assets | ||
Securities available for sale | 20,458 | 25,414 |
Recurring Basis | U.S. government corporations and agencies | Level 2 | ||
Assets | ||
Securities available for sale | 6,310 | 6,537 |
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 | 1,871,398 | 2,026,698 |
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 | 1,871,398 | 2,026,698 |
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 | 484,955 | 374,974 |
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 | 484,955 | 374,974 |
Recurring Basis | Obligations of states and political subdivisions | Level 3 | ||
Assets | ||
Securities available for sale | $ 0 | $ 0 |
FAIR VALUE (Fair value measur_2
FAIR VALUE (Fair value measurement non-recurring) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate, net | $ 5,391 | $ 6,153 |
Premises, furniture and equipment held for sale | 7,030 | 7,258 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 69,716 | 52,577 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for sale | 0 | 67,224 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 21,487 | 25,509 |
Loans held for sale | 69,716 | 119,801 |
Other real estate, net | 5,391 | 6,153 |
Fair Value, Measurements, Nonrecurring | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing rights | 6,459 | 7,143 |
Fair Value, Measurements, Nonrecurring | 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 | 7,030 | 7,258 |
Fair Value, Measurements, Nonrecurring | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 668 | 1,307 |
Loans held for sale | (1,107) | (1,870) |
Other real estate, net | 452 | 2,647 |
Fair Value, Measurements, Nonrecurring | Changes Measurement | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing rights | 589 | 58 |
Fair Value, Measurements, Nonrecurring | Changes Measurement | 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 | 0 | 59 |
Fair Value, Measurements, Nonrecurring | 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, net | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 1 | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing rights | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 1 | 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 | 0 | 0 |
Fair Value, Measurements, Nonrecurring | 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 | 69,716 | 52,577 |
Other real estate, net | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 2 | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing rights | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 2 | 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 | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 21,487 | 25,509 |
Loans held for sale | 0 | 67,224 |
Other real estate, net | 5,391 | 6,153 |
Fair Value, Measurements, Nonrecurring | Level 3 | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Servicing rights | 6,459 | 7,143 |
Fair Value, Measurements, Nonrecurring | Level 3 | 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 | 7,030 | 7,258 |
Fair Value, Measurements, Nonrecurring | Agricultural and agricultural real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,932 | 11,070 |
Fair Value, Measurements, Nonrecurring | Agricultural and agricultural real estate | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 379 | 575 |
Fair Value, Measurements, Nonrecurring | Agricultural and agricultural real estate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Agricultural and agricultural real estate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Agricultural and agricultural real estate | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 8,932 | 11,070 |
Fair Value, Measurements, Nonrecurring | Residential real estate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,207 | 478 |
Fair Value, Measurements, Nonrecurring | Residential real estate | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 4 | 0 |
Fair Value, Measurements, Nonrecurring | Residential real estate | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Residential real estate | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Residential real estate | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 1,207 | 478 |
Fair Value, Measurements, Nonrecurring | Consumer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 633 | 624 |
Fair Value, Measurements, Nonrecurring | Consumer | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Consumer | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Consumer | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Consumer | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 633 | 624 |
Commercial | Fair Value, Measurements, Nonrecurring | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 9,998 | 12,932 |
Commercial | Fair Value, Measurements, Nonrecurring | Commercial | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 285 | 660 |
Commercial | Fair Value, Measurements, Nonrecurring | Commercial | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Commercial | Fair Value, Measurements, Nonrecurring | Commercial | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Commercial | Fair Value, Measurements, Nonrecurring | Commercial | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 9,998 | 12,932 |
Commercial real estate | Fair Value, Measurements, Nonrecurring | Commercial | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 717 | 405 |
Commercial real estate | Fair Value, Measurements, Nonrecurring | Commercial | Changes Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 72 |
Commercial real estate | Fair Value, Measurements, Nonrecurring | Commercial | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Commercial real estate | Fair Value, Measurements, Nonrecurring | Commercial | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | 0 | 0 |
Commercial real estate | Fair Value, Measurements, Nonrecurring | Commercial | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Collateral dependent impaired loans | $ 717 | $ 405 |
FAIR VALUE (Quantitative Inform
FAIR VALUE (Quantitative Information about Level 3 fair value measurements) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Premises, furniture and equipment held for sale | $ 7,030 | $ 7,258 |
Interest rate lock commitments | Recurring Basis | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative assets | 800 | 725 |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans held for sale | 0 | 67,224 |
Derivative assets | 0 | 0 |
Level 3 | Interest rate lock commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative assets | 800 | 725 |
Level 3 | Discounted cash flows | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans held for sale | 67,224 | |
Commercial servicing rights | 6,459 | 7,143 |
Level 3 | Modified appraised value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned | 5,391 | 6,153 |
Level 3 | Modified appraised value | Commercial | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | 9,998 | 12,932 |
Level 3 | Modified appraised value | Commercial Real Estate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | 717 | 405 |
Level 3 | Modified appraised value | Agricultural and agricultural real estate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | 8,932 | 11,070 |
Level 3 | Modified appraised value | Residential real estate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | 1,207 | 478 |
Level 3 | Modified appraised value | Consumer | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Collateral dependent impaired loans | 633 | 624 |
Level 3 | Modified appraised value | Recurring Basis | Premises, furniture and equipment held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Premises, furniture and equipment held for sale | 7,030 | 7,258 |
Level 3 | Interest rate lock commitments | Recurring Basis | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative assets | 800 | 725 |
Level 3 | Interest rate lock commitments | Discounted cash flows | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative assets | $ 800 | $ 725 |
Closing ratio | Level 3 | Weighted Average | Interest rate lock commitments | PrimeWest Mortgage Corporation | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.89 | |
Closing ratio | Level 3 | Discounted cash flows | Weighted Average | Interest rate lock commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.89 | 0.91 |
Closing ratio | Level 3 | Discounted cash flows | Minimum | Interest rate lock commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0 | 0 |
Closing ratio | Level 3 | Discounted cash flows | Maximum | Interest rate lock commitments | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative asset, measurement input | 0.99 | 0.99 |
Appraisal discount | Level 3 | Modified appraised value | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Appraisal discount | Level 3 | Modified appraised value | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 10.00% | 10.00% |
Appraisal discount | Level 3 | Modified appraised value | Premises, furniture and equipment held for sale | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Appraisal discount | Level 3 | Modified appraised value | Premises, furniture and equipment held for sale | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 10.00% | 10.00% |
Agricultural and agricultural real estate | Appraisal discount | Level 3 | Modified appraised value | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Agricultural and agricultural real estate | Appraisal discount | Level 3 | Modified appraised value | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 15.00% | 24.00% |
Residential real estate | Appraisal discount | Level 3 | Modified appraised value | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Residential real estate | Appraisal discount | Level 3 | Modified appraised value | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 12.00% | 24.00% |
Consumer | Valuation discount | Level 3 | Modified appraised value | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Consumer | Valuation discount | Level 3 | Modified appraised value | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 9.00% | 14.00% |
Commercial | Appraisal discount | Level 3 | Modified appraised value | Commercial | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Commercial | Appraisal discount | Level 3 | Modified appraised value | Commercial | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 18.00% | 8.00% |
Commercial | Appraisal discount | Level 3 | Modified appraised value | Commercial Real Estate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 0.00% | 0.00% |
Commercial | Appraisal discount | Level 3 | Modified appraised value | Commercial Real Estate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Servicing assets, discount rate | 9.00% | 19.00% |
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, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Gains included in gains (losses) on sale of loans held for sale attributable to interest rate lock commitments | $ 2,978 | $ 2,889 | |
Interest rate lock commitments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 725 | $ 1,738 | $ 1,738 |
Acquired interest rate lock commitments | 0 | 1,383 | |
Total gains (losses) included in earnings | 264 | (3,269) | |
Issuances | 2,081 | 2,962 | |
Settlements | (2,270) | (2,089) | |
Balance at period end | 800 | 725 | |
Gains included in gains (losses) on sale of loans held for sale attributable to interest rate lock commitments | $ 800 | $ 725 |
FAIR VALUE (Estimated fair valu
FAIR VALUE (Estimated fair value financial instruments incl. carrying amounts) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Securities: | ||
Carried at fair value | $ 2,400,460 | $ 2,450,709 |
Held to maturity | 95,240 | 245,341 |
Financial liabilities: | ||
Deposits held for sale | 118,564 | 106,409 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Financial assets: | ||
Cash and cash equivalents | 492,501 | 273,630 |
Time deposits in other financial institutions | 4,675 | 4,672 |
Securities: | ||
Carried at fair value | 20,458 | 25,414 |
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 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate lock commitments | ||
Securities: | ||
Derivative assets | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Demand deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Savings deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Time deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Deposits held for sale | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Forward commitments | ||
Financial liabilities: | ||
Derivative liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Time deposits in other financial institutions | 0 | 0 |
Securities: | ||
Carried at fair value | 2,380,002 | 2,425,295 |
Held to maturity | 95,240 | 245,341 |
Other investments | 27,506 | 28,396 |
Loans held for sale | 69,716 | 52,577 |
Loans, net | 7,145,258 | 7,236,960 |
Cash surrender value on life insurance | 163,764 | 162,892 |
Derivative assets | 8,403 | 6,539 |
Financial liabilities: | ||
Short term borrowings | 104,314 | 227,010 |
Other borrowings | 268,528 | 276,966 |
Derivative liabilities | 10,858 | 6,044 |
Significant Other Observable Inputs (Level 2) | Interest rate lock commitments | ||
Securities: | ||
Derivative assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Demand deposits | ||
Financial liabilities: | ||
Deposits | 3,118,909 | 3,264,737 |
Significant Other Observable Inputs (Level 2) | Savings deposits | ||
Financial liabilities: | ||
Deposits | 5,145,929 | 5,107,962 |
Significant Other Observable Inputs (Level 2) | Time deposits | ||
Financial liabilities: | ||
Deposits | 1,088,104 | 1,023,730 |
Deposits held for sale | 111,742 | 0 |
Significant Other Observable Inputs (Level 2) | Forward commitments | ||
Financial liabilities: | ||
Derivative liabilities | 282 | 399 |
Significant Unobservable Inputs (Level 3) | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Time deposits in other financial institutions | 0 | 0 |
Securities: | ||
Carried at fair value | 0 | 0 |
Held to maturity | 0 | 0 |
Other investments | 0 | 0 |
Loans held for sale | 0 | 67,224 |
Loans, net | 21,487 | 25,509 |
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 Unobservable Inputs (Level 3) | Interest rate lock commitments | ||
Securities: | ||
Derivative assets | 800 | 725 |
Significant Unobservable Inputs (Level 3) | Demand deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Savings deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Time deposits | ||
Financial liabilities: | ||
Deposits | 0 | 0 |
Deposits held for sale | 0 | 100,241 |
Significant Unobservable Inputs (Level 3) | Forward commitments | ||
Financial liabilities: | ||
Derivative liabilities | 0 | 0 |
Commercial | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial | ||
Securities: | ||
Loans, net | 0 | 0 |
Commercial | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate | ||
Securities: | ||
Loans, net | 0 | 0 |
Commercial | Significant Other Observable Inputs (Level 2) | Commercial | ||
Securities: | ||
Loans, net | 1,962,582 | 1,942,675 |
Commercial | Significant Other Observable Inputs (Level 2) | Commercial real estate | ||
Securities: | ||
Loans, net | 3,643,425 | 3,666,733 |
Commercial | Significant Unobservable Inputs (Level 3) | Commercial | ||
Securities: | ||
Loans, net | 9,998 | 12,932 |
Commercial | Significant Unobservable Inputs (Level 3) | Commercial real estate | ||
Securities: | ||
Loans, net | 717 | 405 |
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 | 522,885 | 542,042 |
Agricultural and agricultural real estate | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 8,932 | 11,070 |
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 | 611,879 | 654,118 |
Residential real estate | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 1,207 | 478 |
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 | 404,487 | 431,392 |
Consumer | Significant Unobservable Inputs (Level 3) | ||
Securities: | ||
Loans, net | 633 | 624 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 492,501 | 273,630 |
Time deposits in other financial institutions | 4,675 | 4,672 |
Securities: | ||
Carried at fair value | 2,400,460 | 2,450,709 |
Held to maturity | 88,089 | 236,283 |
Other investments | 27,506 | 28,396 |
Loans held for sale | 69,716 | 119,801 |
Loans, net | 7,268,905 | 7,345,734 |
Cash surrender value on life insurance | 163,764 | 162,892 |
Derivative assets | 8,403 | 6,539 |
Financial liabilities: | ||
Short term borrowings | 104,314 | 227,010 |
Other borrowings | 268,312 | 274,905 |
Derivative liabilities | 10,858 | 6,044 |
Carrying Amount | Interest rate lock commitments | ||
Securities: | ||
Derivative assets | 800 | 725 |
Carrying Amount | Demand deposits | ||
Financial liabilities: | ||
Deposits | 3,118,909 | 3,264,737 |
Carrying Amount | Savings deposits | ||
Financial liabilities: | ||
Deposits | 5,145,929 | 5,107,962 |
Carrying Amount | Time deposits | ||
Financial liabilities: | ||
Deposits | 1,008,104 | 1,023,730 |
Deposits held for sale | 118,564 | 106,409 |
Carrying Amount | Forward commitments | ||
Financial liabilities: | ||
Derivative liabilities | 282 | 399 |
Carrying Amount | Commercial | Commercial | ||
Securities: | ||
Loans, net | 2,018,438 | 1,994,785 |
Carrying Amount | Commercial | Commercial real estate | ||
Securities: | ||
Loans, net | 3,675,063 | 3,684,213 |
Carrying Amount | Agricultural and agricultural real estate | ||
Securities: | ||
Loans, net | 540,022 | 561,265 |
Carrying Amount | Residential real estate | ||
Securities: | ||
Loans, net | 627,619 | 670,473 |
Carrying Amount | Consumer | ||
Securities: | ||
Loans, net | 407,763 | 434,998 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 492,501 | 273,630 |
Time deposits in other financial institutions | 4,675 | 4,672 |
Securities: | ||
Carried at fair value | 2,400,460 | 2,450,709 |
Held to maturity | 95,240 | 245,341 |
Other investments | 27,506 | 28,396 |
Loans held for sale | 69,716 | 119,801 |
Loans, net | 7,166,745 | 7,262,469 |
Cash surrender value on life insurance | 163,764 | 162,892 |
Derivative assets | 8,403 | 6,539 |
Financial liabilities: | ||
Short term borrowings | 104,314 | 227,010 |
Other borrowings | 268,528 | 276,966 |
Derivative liabilities | 10,858 | 6,044 |
Estimated Fair Value | Interest rate lock commitments | ||
Securities: | ||
Derivative assets | 800 | 725 |
Estimated Fair Value | Demand deposits | ||
Financial liabilities: | ||
Deposits | 3,118,909 | 3,264,737 |
Estimated Fair Value | Savings deposits | ||
Financial liabilities: | ||
Deposits | 5,145,929 | 5,107,962 |
Estimated Fair Value | Time deposits | ||
Financial liabilities: | ||
Deposits | 1,088,104 | 1,023,730 |
Deposits held for sale | 111,742 | 100,241 |
Estimated Fair Value | Forward commitments | ||
Financial liabilities: | ||
Derivative liabilities | 282 | 399 |
Estimated Fair Value | Commercial | Commercial | ||
Securities: | ||
Loans, net | 1,972,580 | 1,955,607 |
Estimated Fair Value | Commercial | Commercial real estate | ||
Securities: | ||
Loans, net | 3,644,142 | 3,667,138 |
Estimated Fair Value | Agricultural and agricultural real estate | ||
Securities: | ||
Loans, net | 531,817 | 553,112 |
Estimated Fair Value | Residential real estate | ||
Securities: | ||
Loans, net | 613,086 | 654,596 |
Estimated Fair Value | Consumer | ||
Securities: | ||
Loans, net | $ 405,120 | $ 432,016 |
FAIR VALUE (Deposits held for s
FAIR VALUE (Deposits held for sale narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)branch | Dec. 31, 2018USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Deposits held for sale | $ 118,564 | $ 106,409 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Number of branch locations | branch | 5 | |
Deposits held for sale | $ 118,600 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | $ 18,002 | $ 15,666 |
Loan servicing income | 1,729 | 1,754 |
Securities gains/(losses), net | 1,575 | 1,441 |
Unrealized gain/(loss) on equity securities, net | 258 | (28) |
Net gains on sale of loans held for sale | 3,176 | 4,051 |
Valuation adjustment on servicing rights | (589) | (2) |
Income on bank owned life insurance | 899 | 614 |
Other noninterest income | 1,667 | 1,220 |
Total noninterest income out-of-scope of Topic 606 | 8,715 | 9,050 |
TOTAL NONINTEREST INCOME | 26,717 | 24,716 |
Service charges and fees on deposit accounts | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 2,977 | 2,618 |
Overdraft fees | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 2,744 | 2,208 |
Customer service fees | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 81 | 77 |
Credit card fee income | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 3,349 | 2,190 |
Debit card income | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 3,642 | 2,985 |
Other service charges | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 1 | 1 |
Total service charges and fees | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 12,794 | 10,079 |
Trust fees | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | 4,474 | 4,680 |
Brokerage and insurance commissions | ||
Disaggregation of Revenue [Line Items] | ||
Service charges and fees on deposit accounts | $ 734 | $ 907 |
STOCK COMPENSATION (Narrative)
STOCK COMPENSATION (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Excess tax benefit related to share-based payment awards | $ 336 | $ 611 |
Share-based compensation, period before change in control | 6 months | |
Time-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, award vesting periods | 3 years | |
Performance-based RSUs | ||
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 | $ 2,400 | $ 1,900 |
Share-based unrecognized compensation costs | $ 7,500 | |
Long-Term Incentive Plan 2012 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance (in shares) | 368,071 | |
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) | 90,073 | 52,153 |
Long-Term Incentive Plan 2012 | Performance-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 34,848 | 16,108 |
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 | RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, granted (in shares) | 1,045 | 0 |
STOCK COMPENSATION (Summary of
STOCK COMPENSATION (Summary of RSUs Activity) (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shares | ||
Outstanding at beginning of period (in shares) | 266,995 | 301,578 |
Granted (in shares) | 125,966 | 87,249 |
Vested (in shares) | (117,122) | (107,553) |
Forfeited (in shares) | (13,364) | (19,113) |
Outstanding at end of period (in shares) | 262,475 | 262,161 |
Weighted-Average Grant Date Fair Value | ||
Outstanding at beginning of period (in dollars per share) | $ 43.89 | $ 34.74 |
Granted (in dollars per share) | 45.77 | 55.25 |
Vested (in dollars per share) | 35.84 | 30.79 |
Forfeited (in dollars per share) | 49.89 | 43.62 |
Outstanding at end of period (in dollars per share) | $ 48.07 | $ 42.60 |
LEASES (Schedule of ROU Assets
LEASES (Schedule of ROU Assets and Lease Liabilities) (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease assets | $ 24,664 |
Operating lease liabilities | $ 26,333 |
LEASES (Schedule of Lease Costs
LEASES (Schedule of Lease Costs and Supplemental Information) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 1,405 |
Variable lease cost | 35 |
Total lease cost | 1,440 |
Non-cash information on lease liabilities arising from obtaining ROU assets | $ 1,209 |
Weighted-average remaining lease term (in years) | 7 years 15 days |
Weighted-average discount rate | 3.00% |
LEASES (Schedule of Minimum Pay
LEASES (Schedule of Minimum Payments for Operating Leases) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
Nine months ending December 31, 2019 | $ 3,859 | |
2020 | 5,174 | |
2021 | 4,855 | |
2022 | 3,351 | |
2023 | 1,947 | |
Thereafter | 7,147 | |
Total lease payments | $ 26,333 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2019 | $ 5,776 | |
2020 | 5,493 | |
2021 | 5,102 | |
2022 | 3,241 | |
2023 | 2,297 | |
Thereafter | 12,419 | |
Total lease payments | $ 34,328 |