HeartLand Financial USA, Dubuque, Iowa, has hired a former Bear Stearns Residential Mortgage (BSRM) executive and his team from a failed Arizona thrift to lead what it hopes will be a growing mortgage operation.

HeartLand named Jeff Walton, a former senior managing director at BSRM and president of the mortgage divisions of First National Bank of Arizona and the First National Bank of Nevada, to lead a unit branded as National Residential Mortgage (NRM).

NRM will get off the ground by offering mortgages at Heartland's Arizona Bank & Trust subsidiary. It may expand into both Heartland and non-Heartland markets over time.

Walton is responsible for oversight of the unit's mortgage functions and has a staff of 24. Dubuque Bank and Trust, a Heartland affiliate, will provide administrative and back office support.

Heartland's chairman and CEO Lynn B. Fuller said in a statement that he sees an opportunity in the mortgage space for local banks to provide retail originations because legislative changes are leading to the demise of nonbanks. He described the type of lending the company is doing as traditional mortgage banking. A call for more immediate comment had not been returned at press time.

Heartland's shares are publicly traded on the NASDAQ exchange. In recent weeks the stock has traded between $16 and $18 per share. The shares remained within that range on the heels of the announcement about the mortgage unit. The company conducts business in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota.

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