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Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Balance Sheet Category and Fair Values of Derivative Instruments
The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as cash flow hedges at June 30, 2016, and December 31, 2015, in thousands:
 
Notional
Amount
 
Fair
Value
 
Balance
Sheet
Category
 
Receive
Rate
 
Weighted
Average
Pay Rate
 
Maturity
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap
$
—

 
$
—

 
Other liabilities
 
—
%
 
—
%
 
04/20/2016
Interest rate swap
25,000

 
(1,556
)
 
Other liabilities
 
0.656
%
 
2.255
%
 
03/17/2021
Interest rate swap
20,000

 
(387
)
 
Other liabilities
 
0.673
%
 
3.220
%
 
03/01/2017
Interest rate swap
20,000

 
(1,907
)
 
Other liabilities
 
0.627
%
 
3.355
%
 
01/07/2020
Interest rate swap
10,000

 
(248
)
 
Other liabilities
 
0.640
%
 
1.674
%
 
03/26/2019
Interest rate swap
10,000

 
(244
)
 
Other liabilities
 
0.656
%
 
1.658
%
 
03/18/2019
Interest rate swap
39,667

 
(594
)
 
Other liabilities
 
2.945
%
 
3.674
%
 
05/10/2021
Interest rate swap(1)
20,000

 
(1,481
)
 
Other liabilities
 
—
%
 
2.390
%
 
06/15/2024
Interest rate swap(2)
20,000

 
(1,519
)
 
Other liabilities
 
—
%
 
2.352
%
 
03/01/2024
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap
$
8,947

 
$
(57
)
 
Other liabilities
 
3.152
%
 
5.140
%
 
04/20/2016
Interest rate swap
25,000

 
(713
)
 
Other liabilities
 
0.526
%
 
2.255
%
 
03/17/2021
Interest rate swap
20,000

 
(600
)
 
Other liabilities
 
0.414
%
 
3.220
%
 
03/01/2017
Interest rate swap
20,000

 
(1,582
)
 
Other liabilities
 
0.323
%
 
3.355
%
 
01/07/2020
Interest rate swap
10,000

 
(83
)
 
Other liabilities
 
0.603
%
 
1.674
%
 
03/26/2019
Interest rate swap
10,000

 
(83
)
 
Other liabilities
 
0.526
%
 
1.658
%
 
03/18/2019
Interest rate swap(1)
20,000

 
(146
)
 
Other liabilities
 
—
%
 
2.390
%
 
06/15/2024
Interest rate swap(2)
20,000

 
(176
)
 
Other liabilities
 
—
%
 
2.352
%
 
03/01/2024
 
(1) This swap is a forward starting swap with a weighted average pay rate of 2.390% beginning on June 15, 2017. No interest payments are required related to this swap until September 15, 2017.
(2) This swap is a forward starting swap with a weighted average pay rate of 2.352% beginning on March 1, 2017. No interest payments are required on this swap until June 1, 2017.
The table below identifies the balance sheet category and fair values of Heartland's derivative instruments designated as loan swaps at June 30, 2016 and December 31, 2015, in thousands:
 
 
Notional
Amount
 
Fair
Value
 
Balance Sheet
Category
 
Weighted
Average
Receive
Rate
 
Weighted
Average
Pay
Rate
June 30, 2016
 
 
 
 
 
 
 
 
 
 
Receive fixed-pay floating interest rate swap
 
$
51,505

 
$
3,699

 
Other assets
 
4.82
%
 
3.27
%
Pay fixed-receive floating interest rate swap
 
51,505

 
(3,699
)
 
Other liabilities
 
3.27
%
 
4.82
%
December 31, 2015
 
 
 
 
 
 
 
 
 
 
Receive fixed-pay floating interest rate swap
 
$
15,782

 
$
663

 
Other assets
 
5.08
%
 
3.07
%
Pay fixed-receive floating interest rate swap
 
15,782

 
(663
)
 
Other liabilities
 
3.07
%
 
5.08
%
The table below identifies the notional amount, fair value and balance sheet category of Heartland's fair value hedges at June 30, 2016 and December 31, 2015, in thousands:
 
Notional Amount
 
Fair Value
 
Balance Sheet Category
June 30, 2016
 
 
 
 
 
Fair value hedges
$
41,200

 
$
(4,681
)
 
Other liabilities
December 31, 2015
 
 
 
 
 
Fair value hedges
$
13,805

 
$
(621
)
 
Other liabilities
Gains (Losses) on Derivative Instruments
The table below identifies the gains and losses recognized on Heartland's fair value hedges for the three and six months ended June 30, 2016, and June 30, 2015, in thousands:
 
 
Amount of Gain (Loss)
 
Income Statement Category
Three Months Ended June 30, 2016
 
 
 
 
Fair value hedges
 
$
(888
)
 
Interest income
Six Months Ended June 30, 2016
 
 
 
 
Fair value hedges
 
$
(2,110
)
 
Interest income
Three Months Ended June 30, 2015
 
 
 
 
Fair value hedges
 
$
—

 
Interest income
Six Months Ended June 30, 2015
 
 
 
 
Fair value hedges
 
$
—

 
Interest income
The table below identifies the gains and losses recognized on Heartland's derivative instruments designated as cash flow hedges for the three and six months ended June 30, 2016, and June 30, 2015, 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 June 30, 2016
 
 
 
 
 
 
 
 
 
Interest rate swaps
$
(1,579
)
 
Interest expense
 
$
(465
)
 
Other income
 
$
—

Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
Interest rate swaps
$
(4,496
)
 
Interest expense
 
$
(971
)
 
Other income
 
$
—

Three Months Ended June 30, 2015
 
 
 
 
 
 
 
 
 
Interest rate swaps
$
2,068

 
Interest expense
 
$
(559
)
 
Other income
 
$
—

Six Months Ended June 30, 2015
 
 
 
 
 
 
 
 
 
Interest rate swaps
$
1,178

 
Interest expense
 
$
(1,123
)
 
Other income
 
$
—
Balance Sheet Category and Fair Values of Embedded Derivatives
The following table identifies, in thousands, the notional amount, fair value, balance sheet category and income statement category for the change in fair value of the convertible debt option as of June 30, 2016:
 
Notional
Amount
 
Fair
Value
 
Balance
Sheet
Category
 
Income
Statement
Category
 
Quarter-
to-Date
Gain (Loss)
Recognized
 
Year-
to-Date
Gain (Loss)
Recognized
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Embedded conversion option
$
2,000

 
$
(619
)
 
Other liabilities
 
Other noninterest income
 
$
(197
)
 
$
(297
)
The table below identifies the notional amount, fair value and balance sheet category of Heartland's embedded derivatives at June 30, 2016 and December 31, 2015, in thousands:
 
Notional
Amount
 
Fair
Value
 
Balance
Sheet
Category
 
Income
Statement
Category
 
Quarter-to-Date
Gain (Loss)
Recognized
 
Year-to-Date
Gain (Loss)
Recognized
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Embedded derivatives
$
14,786

 
$
1,990

 
Other assets
 
Other noninterest income
 
$
144

 
$
416

December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Embedded derivatives
$
15,020

 
$
1,574

 
Other assets
 
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 June 30, 2016, and December 31, 2015, in thousands:
 
Balance Sheet
Category
 
Notional
Amount
 
Fair
Value
June 30, 2016
 
 
 
 
 
Interest rate lock commitments (mortgage)
Other assets
 
$
142,118

 
$
6,864

Forward commitments
Other assets
 
55,000

 
469

Forward commitments
Other liabilities
 
247,171

 
(2,502
)
Undesignated interest rate swaps
Other liabilities
 
22,814

 
(2,213
)
December 31, 2015
 
 


 


Interest rate lock commitments (mortgage)
Other assets
 
$
99,665

 
$
3,168

Forward commitments
Other assets
 
118,378

 
523

Forward commitments
Other liabilities
 
136,709

 
(315
)
Undesignated interest rate swaps
Other liabilities
 
50,975

 
(3,677
)

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 and six months ended June 30, 2016, and June 30, 2015, in thousands:
 
Income Statement Category
 
Gain (Loss) Recognized
Three Months Ended June 30, 2016
 
 
 
Interest rate lock commitments (mortgage)
Gains on sale of loans held for sale
 
$
1,081

Forward commitments
Gains on sale of loans held for sale
 
(753
)
Undesignated interest rate swaps
Other noninterest income
 
(54
)
 
 
 
 
Six Months Ended June 30, 2016
 
 
 
Interest rate lock commitments (mortgage)
Gains on sale of loans held for sale
 
$
5,808

Forward commitments
Gains on sale of loans held for sale
 
(2,242
)
Undesignated interest rate swaps
Other noninterest income
 
(370
)
 
 
 
 
Three Months Ended June 30, 2015
 
 
 
Interest rate lock commitments (mortgage)
Gains on sale of loans held for sale
 
$
(1,712
)
Forward commitments
Gains on sale of loans held for sale
 
3,700

 
 
 
 
Six Months Ended June 30, 2015
 
 
 
Interest rate lock commitments (mortgage)
Gains on sale of loans held for sale
 
$
3,832

Forward commitments
Gains on sale of loans held for sale
 
3,575