Fair Value (Tables)

12 Months Ended

Dec. 31, 2012

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 December 31, 2012, and December 31, 2011, 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
December 31, 2012
Trading securities	$	380	$	380	$	—	$	—
Securities available for sale	1,506,075		12,811		1,488,924		4,340
Derivative assets	9,815		—		9,815		—
Total assets at fair value	$	1,516,270	$	13,191	$	1,498,739	$	4,340
Derivative liabilities	$	7,846	$	—	$	7,846	$	—
Total liabilities at fair value	$	7,846	$	—	$	7,846	$	—
December 31, 2011
Trading securities	$	333	$	333	$	—	$	—
Securities available for sale	1,267,999		107,147		1,157,609		3,243
Derivative assets	2,828		—		2,828		—
Total assets at fair value	$	1,271,160	$	107,480	$	1,160,437	$	3,243
Derivative liabilities	$	6,405	$	—	$	6,405	$	—
Total liabilities at fair value	$	6,405	$	—	$	6,405	$	—

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 December 31, 2012
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Losses
Assets:
Collateral dependent impaired loans:
Commercial	$	7,681	$	—	$	—	$	7,681	$	1,799
Commercial real estate	44,471		—		—		44,471		6,898
Agricultural and agricultural real estate	16,019		—		—		16,019		1
Residential real estate	6,660		—		—		6,660		988
Consumer	4,121		—		—		4,121		4,818
Total collateral dependent impaired loans	$	78,952	$	—	$	—	$	78,952	$	14,504
Other real estate owned	$	35,822	$	—	$	—	$	35,822	$	6,953
Mortgage servicing rights	$	15,956	$	—	$	—	$	15,956	$	477

	Fair Value Measurements at December 31, 2011
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)		Losses
Assets:
Collateral dependent impaired loans	$	94,961	$	—	$	—	$	94,961	$	32,640
Other real estate owned	44,387		—		—		44,387		7,079
Mortgage servicing rights	11,505		—		—		11,505		19

Fair Value Inputs, Liabilities, Quantitative Information

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Heartland has utilized Level 3 inputs to determine fair value, in thousands:

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value at 12/31/12		Valuation Technique	Unobservable Input	Range (Weighted Average)
Z-Tranche Securities	$	4,340	Discounted cash flows	Pretax discount rate	8 - 10%
				Actual defaults	13.94-20.94% (15.52%)
				Actual deferrals	6.30-23.71% (11.32%)
Collateral dependent impaired loans:
Commercial	7,681		Modified appraised value	Third party appraisal	NM*
				Appraisal discount	NM*
Commercial real estate	44,471		Modified appraised value	Third party appraisal	NM*
				Appraisal discount	NM*
Agricultural and agricultural real estate	16,019		Modified appraised value	Third party appraisal	NM*
				Appraisal discount	NM*
Residential real estate	6,660		Modified appraised value	Third party appraisal	NM*
				Appraisal discount	NM*
Consumer	4,121		Modified appraised value	Third party appraisal	NM*
				Appraisal discount	NM*
Other real estate owned	35,822		Modified appraised value	Disposal costs	NM*
Mortgage servicing rights	15,956		Discounted cash flows	Prepayment speeds, servicing costs and escrow analysis	Average CPR Life 12.99 - 18.71% (18.05%)
* Not Meaningful. Third party appraisals are obtained as to the value of the underlying asset, but disclosure of this information would not provide meaningful information, as the range will vary widely from loan to loan. Types of discounts considered included age of the appraisal, local market conditions, current condition of the property, and estimated sales costs. These discounts will also vary from loan to loan, thus providing range would not be meaningful.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The changes in Level 3 assets that are measured at fair value on a recurring basis are summarized in the following table, in thousands:

	For the Years Ended
	December 31, 2012			December 31, 2011
	Fair Value			Fair Value
Balance at January 1,	$	3,243		$	4,676
Total gains (losses):
Included in earnings	—			(1,424		)
Included in other comprehensive income	938			12
Purchases, issuances, sales and settlements:
Purchases	195			—
Sales	—			(11		)
Settlements	(36		)	(10		)
Balance at period end,	$	4,340		$	3,243

Fair Value, by Balance Sheet Grouping

The following analysis, which is inherently limited in depicting fair value, also does not consider any value associated with either existing customer relationships or the ability of Heartland to create value through loan origination, deposit gathering or fee generating activities. Many of the estimates presented below 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  December 31, 2012						December 31, 2011
	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)		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	168,054	$	168,054	$	168,054	$	—	$	—	$	129,834	$	129,834
Securities:
Trading	380		380		380		—		—		333		333
Available for sale	1,506,075		1,506,075		12,811		1,488,924		4,340		1,267,999		1,267,999
Held to maturity	55,502		55,982		—		55,982		—		58,260		57,486
Total securities	1,561,957		1,562,437		13,191		1,544,906		4,340		1,326,592		1,325,818
Loans held for sale	96,165		96,165		—		96,165		—		53,528		53,999
Loans, net:
Commercial	700,060		691,457		—		683,776		7,681
Commercial real estate	1,275,770		1,281,031		—		1,236,560		44,471
Agricultural and agricultural real estate	326,867		329,443		—		313,424		16,019
Residential real estate	248,608		237,050		—		230,390		6,660
Consumer	238,617		241,978		—		237,857		4,121
Leases	165		148		—		148		—
Total Loans, net	2,790,087		2,781,107		—		2,702,155		78,952		2,494,631		2,488,881
Mortgage derivatives	9,815		9,815		—		9,815		—		2,828		2,828
Financial liabilities
Deposits
Demand deposits	974,232		974,232		—		974,232		—		737,323		737,323
Savings deposits	2,004,438		2,004,438		—		2,004,438		—		1,678,154		1,678,154
Time deposits	866,990		866,990		—		866,990		—		794,636		794,636
Short term borrowings	224,626		224,626		—		224,626		—		270,081		270,081
Other borrowings	389,025		376,422		—		376,422		—		372,820		352,847
Derivatives	7,846		7,846		—		7,846		—		6,405		6,405