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Heartland Financial USA, Inc. Reports 2017 Second Quarter Results

Highlights

  • Quarterly net income available to common stockholders of $21.9 million in comparison with $20.9 million for the second quarter of the prior year
  • Diluted earnings per common share of $0.81 in comparison with $0.84 for the second quarter of the prior year
  • Net interest margin of 3.94%, fully tax-equivalent (non-GAAP)(1) of 4.14%
  • Return on average common equity of 11.13% and return on average tangible common equity (non-GAAP)(2) of 14.07%
  • Tangible common equity ratio (non-GAAP)(3) of 7.97%
  • Efficiency ratio, fully tax-equivalent (non-GAAP)(4) of 65.61% compared to 67.95% for the second quarter of 2016
  • Demand deposits increased $36.2 million during the quarter and represent 34% of total deposits
  • Completed acquisition of Citywide Banks of Colorado, Inc. on July 7, 2017

Quarter Ended
June 30,
Six Months Ended
June 30,
2017 2016 2017 2016
Net income (in millions)$22.0 $21.0 $40.0 $41.0
Net income available to common stockholders (in millions) 21.9 20.9 39.9 40.8
Diluted earnings per common share0.81 0.84 1.49 1.66
Return on average assets1.06% 1.03% 0.97% 1.01%
Return on average common equity11.13 12.58 10.44 12.63
Return on average tangible common equity (non-GAAP)(2)14.07 16.32 13.18 16.38
Net interest margin3.94 3.95 3.95 3.98
Net interest margin, fully tax-equivalent (non-GAAP)(1)4.14 4.12 4.15 4.15


"Heartland’s second quarter 2017 financial performance was excellent. Net income available to common stockholders of nearly $22.0 million exceeded the same quarter last year by 5 percent. Results were fueled in part by a solid net interest margin of 4.14 percent on a fully tax-equivalent basis and improvement in our efficiency ratio."
Lynn B. Fuller, chairman and chief executive officer, Heartland Financial USA, Inc.

(1) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table included in this earnings release.
(2) Refer to the "Reconciliation of Return on Average Tangible Common Equity (non-GAAP)" table included in this earnings release.
(3) Refer to the "Reconciliation of Tangible Common Equity Ratio (non-GAAP)" table included in this earnings release.
(4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table include in this earnings release.

DUBUQUE, Iowa, July 31, 2017 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $21.9 million, or $0.81 per diluted common share, for the quarter ended June 30, 2017, compared to $20.9 million, or $0.84 per diluted common share, for the second quarter of 2016. Return on average common equity was 11.13% and return on average assets was 1.06% for the second quarter of 2017, compared to 12.58% and 1.03%, respectively, for the same quarter in 2016.

Net income available to common stockholders for the six months ended June 30, 2017, was $39.9 million or $1.49 per diluted common share, compared to $40.8 million or $1.66 per diluted common share for the six months ended June 30, 2016. Return on average common equity was 10.44%, and return on average assets was 0.97% for the first six months of 2017, compared to 12.63% and 1.01%, respectively, for the same period in 2016.

Commenting on Heartland’s second quarter results, Lynn B. Fuller, Heartland’s chairman and chief executive officer said, "Heartland’s second quarter 2017 financial performance was excellent. Net income available to common stockholders of nearly $22.0 million exceeded the same quarter last year by 5 percent. Results were fueled in part by a solid net interest margin of 4.14 percent on a fully tax-equivalent basis and improvement in our efficiency ratio."

On February 28, 2017, Heartland completed the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. Based on Heartland's closing common stock price of $49.55 per share as of February 28, 2017, the aggregate consideration was $31.0 million, with 30% of the consideration paid in cash and 70% by delivery of Heartland common stock. Simultaneous with the closing of the transaction, Founders Community Bank merged into Heartland's Premier Valley Bank subsidiary. As of the close date, Founders Community Bank had, at fair value, total assets of $213.3 million, total loans of $96.4 million and total deposits of $181.5 million. The systems conversion for this transaction occurred two weeks after the closing.

On July 7, 2017, Heartland completed the acquisition of Citywide Banks of Colorado, Inc., parent company of Citywide Banks, headquartered in Aurora, Colorado. Simultaneous with the close, Citywide Banks merged into Heartland's Centennial Bank and Trust subsidiary. The aggregate consideration was approximately $211.2 million, of which $58.6 million was cash, and the remainder was settled by delivery of 3,216,161 shares of Heartland common stock. The combined entity operates as Citywide Banks. As of June 30, 2017, Citywide Banks had total assets of $1.38 billion, including $1.00 billion in net loans outstanding, and $1.20 billion of deposits. The systems conversion for this transaction is scheduled to be completed in the fourth quarter of 2017.

Commenting on merger and acquisition activity, Fuller stated, "Earlier this month, we announced the completion of our acquisition of Citywide Banks of Colorado with $1.4 billion in assets. This transaction represents the largest acquisition in our history and adds sizable market share in Denver, one of America's best growth markets."

Fully Tax-Equivalent Net Interest Margin Remains Above 4.00%

Net interest margin, expressed as a percentage of average earning assets, was 3.94% (4.14% on a fully tax-equivalent basis) during the second quarter of 2017, compared to 3.95% (4.16% on a fully tax-equivalent basis) during the first quarter of 2017 and 3.95% (4.12% on a fully tax-equivalent basis) during the second quarter of 2016.

Fuller said, "We are very pleased to see net interest margin remained strong at 4.14 percent on a fully tax-equivalent basis reflecting reductions in funding costs and improved yields in the securities portfolio."

Interest income for the second quarter of 2017 was $82.1 million compared to $81.3 million recorded in the second quarter of 2016. The taxable equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $3.8 million for the second quarter of 2017 and $3.1 million for the second quarter of 2016. With these adjustments, interest income on a tax-equivalent basis was $85.9 million for the second quarter of 2017, an increase of $1.4 million or 2%, compared to $84.5 million for the second quarter of 2016. The increase in interest income on a fully tax-equivalent basis in the second quarter of 2017, as compared to the second quarter of 2016, was primarily due to an increase in average earning assets, which totaled $7.59 billion during the second quarter of 2017 compared to $7.45 billion during the second quarter of 2016, a $139.4 million or 2% increase. This growth is attributable to the Founders Bancorp acquisition completed on February 28, 2017, and an increase in the average balance of the securities portfolio.

Interest expense for the second quarter of 2017 was $7.5 million, a decrease of $732,000 or 9% from $8.2 million in the second quarter of 2016. Average interest bearing liabilities decreased $217.2 million or 4% to $5.15 billion for the quarter ended June 30, 2017, from $5.36 billion in the same quarter in 2016, while the average interest rate paid on Heartland's interest bearing deposits and borrowings declined 4 basis points from 0.62% in the second quarter of 2016 to 0.58% in the second quarter of 2017.

Net interest income was $74.6 million during the second quarter of 2017 compared to $73.1 million during the second quarter of 2016, an increase of $1.5 million or 2%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $78.4 million during the second quarter of 2017 compared to $76.3 million during the second quarter of 2016, an increase of $2.1 million or 3%.

Noninterest Income and Noninterest Expenses Decrease From Second Quarter 2016

Noninterest income totaled $25.6 million during the second quarter of 2017 compared to $31.0 million during the second quarter of 2016, a decrease of $5.4 million or 17%. Service charges and fees totaled $9.7 million during the second quarter of 2017 compared to $8.0 million during the second quarter of 2016, an increase of $1.7 million or 21%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which was the result of the CIC Bancshares, Inc. acquisition completed during the first quarter of 2016 and the Founders Bancorp acquisition completed in the first quarter of 2017, and increased interchange revenue from commercial card activity. Securities gains, net, were $1.4 million during the second quarter of 2017 compared to $4.6 million recorded during the same quarter in 2016, a decrease of $3.2 million or 70%. Net gains on sale of loans held for sale totaled $6.8 million during the second quarter of 2017 compared to $11.3 million during the second quarter of 2016, a decrease of $4.5 million or 40%, due to lower mortgage loan activity.

For the second quarter of 2017, noninterest expenses totaled $69.3 million compared to $71.0 million during the second quarter of 2016, a decrease of $1.7 million or 2%. The category with the most significant decrease was salaries and employee benefits, which decreased $859,000 or 2%. At June 30, 2017, Heartland had 1,862 full time equivalent employees compared to 1,888 full time equivalent employees at June 30, 2016.

"Heartland continues to carefully manage noninterest expenses, and we are pleased to see positive results as reflected in our efficiency ratio, which dropped into the 65% range for the quarter," added Fuller.

Heartland's effective tax rate was 26.85% for the second quarter of 2017 compared to 32.37% for the second quarter of 2016. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $310,000 during the second quarter of 2017 compared to $304,000 for the second quarter of 2016. Also included in the second quarter of 2017 tax computation was a state tax credit of $830,000 related to a partnership investment in tax credit projects. Heartland's effective tax rate was also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 23.49% during the second quarter of 2017 compared to 18.86% during the second quarter of 2016.

Loans Decrease and Deposits Increase Since December 31, 2016

Total assets were $8.20 billion at June 30, 2017, a decrease of $42.4 million or 1% from $8.25 billion at year-end 2016. Exclusive of the $213.9 million of assets acquired at fair value in the Founders Bancorp transaction, total assets decreased $256.3 million or 3% since December 31, 2016. Securities represented 25% and 26% of total assets at June 30, 2017, and December 31, 2016, respectively.

Total loans held to maturity were $5.33 billion at June 30, 2017, compared to $5.35 billion at year-end 2016, a decrease of $26.6 million or less than 1%. This change includes $96.4 million of total loans held to maturity acquired at fair value in the Founders Bancorp transaction. Exclusive of this transaction, total loans held to maturity decreased $123.1 million or 2% since December 31, 2016.

Total deposits were $6.93 billion as of June 30, 2017, compared to $6.85 billion at year-end 2016, an increase of $82.8 million or 1%. This increase included $181.5 million of deposits, at fair value, acquired in the Founders Bancorp transaction. Exclusive of this transaction, total deposits decreased $98.7 million since December 31, 2016. Demand deposits totaled $2.36 billion at June 30, 2017, which increased $153.4 million or 7% since year-end 2016, with $94.4 million of the increase attributable to the Founders Bancorp transaction. Savings deposits decreased $83.5 million or 2% to $3.70 billion at June 30, 2017 from $3.79 billion at December 31, 2016. Excluding savings deposits of $63.3 million acquired in the Founders Bancorp transaction, savings deposits decreased $146.8 million since year-end 2016.

Fuller said, "Total deposits eased a bit in the second quarter, though the key category, demand deposits, increased and now represents 34% of total deposits."

Nonperforming Assets Increase Since December 31, 2016

Nonperforming assets were $76.0 million or 0.93% of total assets at June 30, 2017, compared to $74.8 million or 0.91% of total assets at December 31, 2016. Nonperforming loans were $66.1 million or 1.24% of total loans at June 30, 2017, compared to $64.4 million or 1.20% of total loans at December 31, 2016.

The allowance for loan losses at June 30, 2017, was 1.02% of loans and 81.78% of nonperforming loans, compared to 1.02% of loans and 84.37% of nonperforming loans at December 31, 2016. The provision for loan losses was $889,000 for the second quarter of 2017 compared to $2.1 million for the second quarter of 2016. For the six months ended June 30, 2017, provision expense was $4.5 million compared to $4.2 million recorded for the six months ended June 30, 2016.

Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, log on to www.htlf.com at least 15 minutes before start time. A replay will be available until July 30, 2018, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a diversified financial services company with assets of approximately $9.6 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 121 banking locations serving 88 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.

Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war; (iii) changes in state and federal laws, regulations and governmental policies concerning the company's general business; (iv) changes in interest rates and prepayment rates of the company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the company; and (xi) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.

-FINANCIAL TABLES FOLLOW-


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
June 30,
For the Six Months Ended
June 30,
2017 2016 2017 2016
Interest Income
Interest and fees on loans$68,094 $69,809 $134,992 $138,234
Interest on securities:
Taxable8,599 7,903 16,852 16,547
Nontaxable5,020 3,566 10,211 7,076
Interest on federal funds sold3 1 3 11
Interest bearing deposits with the Federal Reserve Bank and other
banks and other short-term investments
345 52 554 147
Total Interest Income82,061 81,331 162,612 162,015
Interest Expense
Interest on deposits4,163 4,021 7,893 8,194
Interest on short-term borrowings90 519 227 848
Interest on other borrowings3,228 3,673 6,884 7,148
Total Interest Expense7,481 8,213 15,004 16,190
Net Interest Income74,580 73,118 147,608 145,825
Provision for loan losses889 2,118 4,530 4,185
Net Interest Income After Provision for Loan Losses73,691 71,000 143,078 141,640
Noninterest Income
Service charges and fees9,696 8,022 19,153 15,184
Loan servicing income1,351 1,292 3,075 2,560
Trust fees3,979 3,625 7,610 7,438
Brokerage and insurance commissions976 886 2,012 1,908
Securities gains, net1,392 4,622 3,874 8,148
Net gains on sale of loans held for sale6,817 11,270 12,964 22,335
Valuation adjustment on commercial servicing rights19 (46) 24 (46)
Income on bank owned life insurance656 591 1,273 1,113
Other noninterest income738 764 1,532 1,964
Total Noninterest Income25,624 31,026 51,517 60,604
Noninterest Expense
Salaries and employee benefits41,126 41,985 82,893 83,699
Occupancy5,056 5,220 10,129 10,223
Furniture and equipment2,586 2,442 5,087 4,555
Professional fees7,583 7,486 15,892 14,496
FDIC insurance assessments909 1,120 1,716 2,288
Advertising1,359 1,551 3,783 2,835
Core deposit intangibles and customer relationship intangibles amortization 1,218 1,297 2,389 3,192
Other real estate and loan collection expenses365 659 1,193 1,231
(Gain)/loss on sales/valuations of assets, net(112) (43) 300 270
Other noninterest expenses9,208 9,303 17,656 18,540
Total Noninterest Expense69,298 71,020 141,038 141,329
Income Before Income Taxes30,017 31,006 53,557 60,915
Income taxes8,059 10,036 13,589 19,936
Net Income21,958 20,970 39,968 40,979
Preferred dividends(13) (52) (32) (220)
Interest expense on convertible preferred debt4 31 9 31
Net Income Available to Common Stockholders$21,949 $20,949 $39,945 $40,790
Earnings per common share-diluted$0.81 $0.84 $1.49 $1.66
Weighted average shares outstanding-diluted26,972,580 24,974,995 26,798,134 24,541,356


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Interest Income
Interest and fees on loans$68,094 $66,898 $69,848 $70,046 $69,809
Interest on securities:
Taxable8,599 8,253 8,480 7,831 7,903
Nontaxable5,020 5,191 4,292 3,717 3,566
Interest on federal funds sold3 1 1
Interest bearing deposits with the Federal Reserve Bank and other
banks and other short-term investments
345 209 157 92 52
Total Interest Income82,061 80,551 82,777 81,687 81,331
Interest Expense
Interest on deposits4,163 3,730 3,744 4,001 4,021
Interest on short-term borrowings90 137 119 235 519
Interest on other borrowings3,228 3,656 3,754 3,770 3,673
Total Interest Expense7,481 7,523 7,617 8,006 8,213
Net Interest Income74,580 73,028 75,160 73,681 73,118
Provision for loan losses889 3,641 2,181 5,328 2,118
Net Interest Income After Provision for Loan Losses73,691 69,387 72,979 68,353 71,000
Noninterest Income
Service charges and fees9,696 9,457 8,128 8,278 8,022
Loan servicing income1,351 1,724 1,068 873 1,292
Trust fees3,979 3,631 3,718 3,689 3,625
Brokerage and insurance commissions976 1,036 955 1,006 886
Securities gains, net1,392 2,482 1,608 1,584 4,622
Net gains on sale of loans held for sale6,817 6,147 5,840 11,459 11,270
Valuation adjustment on commercial servicing rights19 5 8 5 (46)
Income on bank owned life insurance656 617 542 620 591
Other noninterest income738 794 2,588 1,028 764
Total Noninterest Income25,624 25,893 24,455 28,542 31,026
Noninterest Expense
Salaries and employee benefits41,126 41,767 39,115 40,733 41,985
Occupancy5,056 5,073 5,076 5,099 5,220
Furniture and equipment2,586 2,501 2,944 2,746 2,442
Professional fees7,583 8,309 7,195 5,985 7,486
FDIC insurance assessments909 807 717 1,180 1,120
Advertising1,359 2,424 2,274 1,339 1,551
Core deposit intangibles and customer relationship intangibles amortization 1,218 1,171 1,147 1,291 1,297
Other real estate and loan collection expenses365 828 572 640 659
(Gain)/loss on sales/valuations of assets, net(112) 412 414 794 (43)
Other noninterest expenses9,208 8,448 10,458 8,620 9,303
Total Noninterest Expense69,298 71,740 69,912 68,427 71,020
Income Before Income Taxes30,017 23,540 27,522 28,468 31,006
Income taxes8,059 5,530 8,360 8,260 10,036
Net Income21,958 18,010 19,162 20,208 20,970
Preferred dividends(13) (19) (19) (53) (52)
Interest expense on convertible preferred debt4 5 3 17 31
Net Income Available to Common Stockholders$21,949 $17,996 $19,146 $20,172 $20,949
Earnings per common share-diluted$0.81 $0.68 $0.74 $0.81 $0.84
Weighted average shares outstanding-diluted26,972,580 26,627,830 25,800,472 24,922,946 24,974,995


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As Of
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Assets
Cash and due from banks$141,100 $129,386 $151,290 $196,234 $222,718
Interest bearing deposits with the Federal Reserve Bank and other
banks and other short-term investments
40,676 43,765 7,434 5,855 7,232
Cash and cash equivalents181,776 173,151 158,724 202,089 229,950
Time deposits in other financial institutions30,241 41,539 2,105 2,105 2,105
Securities:
Available for sale, at fair value1,789,441 1,893,528 1,845,864 1,655,696 1,566,592
Held to maturity, at cost259,586 260,616 263,662 265,302 270,423
Other investments, at cost21,094 21,557 21,560 22,082 22,680
Loans held for sale48,848 49,009 61,261 78,317 82,538
Loans:
Held to maturity5,325,082 5,361,604 5,351,719 5,438,715 5,482,258
Allowance for loan losses(54,051) (54,999) (54,324) (54,653) (51,756)
Loans, net5,271,031 5,306,605 5,297,395 5,384,062 5,430,502
Premises, furniture and equipment, net163,003 165,425 164,028 165,841 168,701
Goodwill141,461 141,461 127,699 127,699 127,699
Core deposit intangibles and customer relationship intangibles, net22,850 24,068 22,775 23,922 25,213
Servicing rights, net34,736 35,441 35,778 35,906 35,654
Cash surrender value on life insurance120,281 117,613 112,615 112,060 111,425
Other real estate, net9,269 11,188 9,744 10,740 11,003
Other assets111,104 120,644 123,869 116,394 119,916
Total Assets$8,204,721 $8,361,845 $8,247,079 $8,202,215 $8,204,401
Liabilities and Equity
Liabilities
Deposits:
Demand$2,355,410 $2,319,256 $2,202,036 $2,238,736 $2,149,911
Savings3,704,579 3,940,146 3,788,089 3,753,300 3,691,791
Time870,180 830,459 857,286 920,657 995,870
Total deposits6,930,169 7,089,861 6,847,411 6,912,693 6,837,572
Short-term borrowings139,130 155,025 306,459 214,105 303,707
Other borrowings281,096 282,051 288,534 294,493 296,895
Accrued expenses and other liabilities48,356 53,596 63,759 76,536 78,264
Total Liabilities7,398,751 7,580,533 7,506,163 7,497,827 7,516,438
Stockholders' Equity
Preferred equity938 938 1,357 1,357 3,777
Common stock26,701 26,674 26,120 24,683 24,544
Capital surplus352,500 351,423 328,376 279,316 274,682
Retained earnings450,228 431,219 416,109 402,179 384,479
Accumulated other comprehensive income (loss)(24,397) (28,942) (31,046) (3,079) 513
Treasury stock at cost (68) (32)
Total Equity805,970 781,312 740,916 704,388 687,963
Total Liabilities and Equity$8,204,721 $8,361,845 $8,247,079 $8,202,215 $8,204,401


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
June 30,
For the Six Months Ended
June 30,
2017 2016 2017 2016
Average Balances
Assets$8,333,301 $8,211,326 $8,283,681 $8,118,198
Loans, net of unearned5,376,826 5,582,878 5,371,271 5,470,490
Deposits7,050,126 6,806,259 6,973,897 6,742,635
Earning assets7,586,256 7,446,849 7,544,609 7,361,775
Interest bearing liabilities5,146,243 5,363,477 5,168,475 5,318,320
Common stockholders' equity791,039 669,930 771,464 649,612
Total stockholders' equity791,977 673,707 772,575 684,739
Tangible common stockholders' equity(1)625,929 516,347 611,050 500,726
Key Performance Ratios
Annualized return on average assets1.06% 1.03% 0.97% 1.01%
Annualized return on average common equity (GAAP)11.13% 12.58% 10.44% 12.63%
Annualized return on average tangible common equity (non-GAAP)(2)14.07% 16.32% 13.18% 16.38%
Annualized ratio of net charge-offs to average loans0.14% 0.01% 0.18% 0.04%
Annualized net interest margin (GAAP)3.94% 3.95% 3.95% 3.98%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(3)4.14% 4.12% 4.15% 4.15%
Efficiency ratio, fully tax-equivalent(4)65.61% 67.95% 67.75% 67.43%
Reconciliation of Return on Average Tangible Common Equity (non-GAAP)(5)
Net income available to common shareholders (GAAP)$21,949 $20,949 $39,945 $40,790
Average common stockholders' equity (GAAP)$791,039 $669,930 $771,464 $649,612
Less average goodwill141,461 127,700 136,976 123,727
Less average core deposit intangibles and customer relationship
intangibles, net
23,649 25,883 23,438 25,159
Average tangible common equity (non-GAAP)$625,929 $516,347 $611,050 $500,726
Annualized return on average common equity (GAAP)11.13% 12.58% 10.44% 12.63%
Annualized return on average tangible common equity (non-GAAP)14.07% 16.32% 13.18% 16.38%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)(6)
Net Interest Income (GAAP)$74,580 $73,118 $147,608 $145,825
Plus tax-equivalent adjustment(7)3,796 3,146 7,656 6,187
Net interest income, tax-equivalent (non-GAAP)
$78,376 $76,264 $155,264 $152,012
Average earning assets$7,586,256 $7,446,849 $7,544,609 $7,361,775
Annualized net interest margin (GAAP)3.94% 3.95% 3.95% 3.98%
Annualized net interest margin, fully tax-equivalent (non-GAAP)
4.14% 4.12% 4.15% 4.15%
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Tangible Common Equity (non-GAAP)" table.
(3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table.
(4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure.
(5) Return on average tangible common equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles and customer deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(7) Computed on a tax-equivalent basis using an effective tax rate of 35%.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Average Balances
Assets$8,333,301 $8,233,510 $8,280,042 $8,172,683 $8,211,326
Loans, net of unearned5,376,826 5,365,654 5,473,001 5,538,088 5,582,878
Deposits7,050,126 6,896,821 6,928,978 6,839,334 6,806,259
Earning assets7,586,256 7,502,496 7,551,997 7,382,860 7,446,849
Interest bearing liabilities5,146,243 5,190,955 5,206,393 5,224,172 5,363,477
Common stockholders' equity791,039 751,671 726,455 689,637 669,930
Total stockholders' equity791,977 752,958 727,812 692,404 673,707
Tangible common stockholders' equity(1)625,929 596,006 575,412 537,375 516,347
Key Performance Ratios
Annualized return on average assets1.06% 0.89% 0.92% 0.98% 1.03%
Annualized return on average common equity (GAAP)11.13% 9.71% 10.48% 11.64% 12.58%
Annualized return on average tangible common equity (non-GAAP)(2)14.07% 12.25% 13.24% 14.93% 16.32%
Annualized ratio of net charge-offs to average loans0.14% 0.22% 0.18% 0.17% 0.01%
Annualized net interest margin (GAAP)3.94% 3.95% 3.96% 3.97% 3.95%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(3)4.14% 4.16% 4.14% 4.14% 4.12%
Efficiency ratio, fully tax-equivalent(4)65.61% 69.95% 66.29% 63.88% 67.95%
Reconciliation of Return on Average Tangible Common Equity (non-GAAP)(5)
Net income available to common shareholders (GAAP)$21,949 $17,996 $19,146 $20,172 $20,949
Average common stockholders' equity (GAAP)$791,039 $751,671 $726,455 $689,637 $669,930
Less average goodwill141,461 132,440 127,699 127,699 127,699
Less average core deposit intangibles and customer relationship intangibles, net23,649 23,225 23,344 24,563 25,884
Average tangible common equity (non-GAAP)$625,929 $596,006 $575,412 $537,375 $516,347
Annualized return on average common equity (GAAP)11.13% 9.71% 10.48% 11.64% 12.58%
Annualized return on average tangible common equity (non-GAAP)14.07% 12.25% 13.24% 14.93% 16.32%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)(6)
Net Interest Income (GAAP)$74,580 $73,028 $75,160 $73,681 $73,118
Plus tax-equivalent adjustment(7)3,796 3,860 3,511 3,221 3,146
Net interest income, fully tax-equivalent (non-GAAP)$78,376 $76,888 $78,671 $76,902 $76,264
Average earning assets$7,586,256 $7,502,496 $7,551,997 $7,382,860 $7,446,849
Annualized net interest margin (GAAP)3.94% 3.95% 3.96% 3.97% 3.95%
Annualized net interest margin, fully tax-equivalent (non-GAAP)4.14% 4.16% 4.14% 4.14% 4.12%
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Tangible Common Equity (non-GAAP)" table.
(3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table.
(4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure.
(5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(7) Computed on a tax-equivalent basis using an effective tax rate of 35%.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
June 30,
For the Six Months Ended
June 30,
Reconciliation of Non-GAAP Measure-Efficiency Ratio(1)2017 2016 2017 2016
Net interest income$74,580 $73,118 $147,608 $145,825
Tax-equivalent adjustment(2)3,796 3,146 7,656 6,187
Fully tax-equivalent net interest income78,376 76,264 155,264 152,012
Noninterest income25,624 31,026 51,517 60,604
Securities gains, net(1,392) (4,622) (3,874) (8,148)
Adjusted income$102,608 $102,668 $202,907 $204,468
Total noninterest expenses$69,298 $71,020 $141,038 $141,329
Less:
Core deposit intangibles and customer relationship intangibles amortization1,218 1,297 2,389 3,192
Partnership investment in tax credit projects876 876
(Gain)/loss on sales/valuations of assets, net(112) (43) 300 270
Adjusted noninterest expenses$67,316 $69,766 $137,473 $137,867
Efficiency ratio, fully tax-equivalent (non-GAAP)65.61% 67.95% 67.75% 67.43%


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
Reconciliation of Non-GAAP Measure-Efficiency Ratio(1)6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Net interest income$74,580 $73,028 $75,160 $73,681 $73,118
Tax-equivalent adjustment(2)3,796 3,860 3,511 3,221 3,146
Fully tax-equivalent net interest income78,376 76,888 78,671 76,902 76,264
Noninterest income25,624 25,893 24,455 28,542 31,026
Securities gains, net(1,392) (2,482) (1,608) (1,584) (4,622)
Adjusted income$102,608 $100,299 $101,518 $103,860 $102,668
Total noninterest expenses$69,298 $71,740 $69,912 $68,427 $71,020
Less:
Core deposit intangibles and customer relationship intangibles amortization1,218 1,171 1,147 1,291 1,297
Partnership investment in tax credit projects876 1,051
(Gain)/loss on sales/valuation of assets, net(112) 412 414 794 (43)
Adjusted noninterest expenses$67,316 $70,157 $67,300 $66,342 $69,766
Efficiency ratio, fully tax-equivalent (non-GAAP)65.61% 69.95% 66.29% 63.88% 67.95%
(1) Efficiency ratio, fully tax-equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis, which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items, as noted in the table. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(2) Computed on a tax-equivalent basis using an effective tax rate of 35%.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA
As of and for the Quarter Ended
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Common Share Data
Book value per common share$30.15 $29.26 $28.31 $28.48 $27.88
Tangible book value per common share (non-GAAP)(1)$24.00 $23.05 $22.55 $22.34 $21.65
ASC 320 effect on book value per common share$(0.87) $(1.06) $(1.15) $0.03 $0.21
Common shares outstanding, net of treasury stock26,701,226 26,674,121 26,119,929 24,681,380 24,543,376
Tangible common equity ratio (non-GAAP)(2)7.97% 7.50% 7.28% 6.85% 6.60%
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(3)
Common stockholders' equity (GAAP)$805,032 $780,374 $739,559 $703,031 $684,186
Less goodwill141,461 141,461 127,699 127,699 127,699
Less core deposit intangibles and customer relationship intangibles, net22,850 24,068 22,775 23,922 25,213
Tangible common stockholders' equity (non-GAAP)$640,721 $614,845 $589,085 $551,410 $531,274
Common shares outstanding, net of treasury stock26,701,226 26,674,121 26,119,929 24,681,380 24,543,376
Common stockholders' equity (book value) per share (GAAP)$30.15 $29.26 $28.31 $28.48 $27.88
Tangible book value per common share (non-GAAP)$24.00 $23.05 $22.55 $22.34 $21.65
Reconciliation of Tangible Common Equity Ratio(non-GAAP)(4)
Total assets (GAAP)$8,204,721 $8,361,845 $8,247,079 $8,202,215 $8,204,401
Less goodwill141,461 141,461 127,699 127,699 127,699
Less core deposit intangibles and customer relationship intangibles, net22,850 24,068 22,775 23,922 25,213
Total tangible assets (non-GAAP)$8,040,410 $8,196,316 $8,096,605 $8,050,594 $8,051,489
Tangible common equity ratio (non-GAAP)7.97% 7.50% 7.28% 6.85% 6.60%
Loan Data
Loans held to maturity:
Commercial and commercial real estate$3,803,011 $3,849,748 $3,825,847 $3,900,612 $3,930,879
Residential mortgage596,385 604,902 617,924 625,965 644,267
Agricultural and agricultural real estate495,243 481,125 489,318 489,387 480,883
Consumer431,052 427,962 420,613 425,582 428,730
Unearned discount and deferred loan fees(609) (2,133) (1,983) (2,831) (2,501)
Total loans held to maturity$5,325,082 $5,361,604 $5,351,719 $5,438,715 $5,482,258
Other Selected Trend Information
Effective tax rate26.85% 23.49% 30.38% 29.02% 32.37%
Full time equivalent employees1,862 1,896 1,864 1,846 1,888
Total residential mortgage loan applications$308,113 $248,614 $304,018 $445,107 $440,907
Residential mortgage loans originated$216,637 $161,851 $278,065 $324,337 $324,633
Residential mortgage loans sold$180,296 $172,521 $269,333 $315,917 $302,448
Residential mortgage loan servicing portfolio$4,340,243 $4,338,311 $4,308,580 $4,259,459 $4,203,429
(1) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table.
(2) Refer to the "Reconciliation of Tangible Common Equity Ratio (non-GAAP)" table.
(3) Tangible book value per common share is total common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(4) The tangible common equity ratio is total common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net, divided by total assets less goodwill and core deposit intangibles and customer relationship intangibles, net. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As of and for the Quarter Ended
6/30/2017 3/31/2017 12/31/2016 9/30/2016 6/30/2016
Allowance for Loan Losses
Balance, beginning of period$54,999 $54,324 $54,653 $51,756 $49,738
Provision for loan losses889 3,641 2,181 5,328 2,118
Charge-offs(2,766) (3,718) (3,555) (3,283) (2,951)
Recoveries929 752 1,045 852 2,851
Balance, end of period$54,051 $54,999 $54,324 $54,653 $51,756
Asset Quality
Nonaccrual loans$65,393 $62,868 $64,299 $57,799 $57,053
Loans past due ninety days or more as to interest or principal payments698 872 86 105
Other real estate owned9,269 11,188 9,744 10,740 11,003
Other repossessed assets675 739 663 821 564
Total nonperforming assets$76,035 $75,667 $74,792 $69,465 $68,620
Performing troubled debt restructured loans$11,157 $11,010 $10,380 $10,281 $9,923
Nonperforming Assets Activity
Balance, beginning of period$75,667 $74,792 $69,465 $68,620 $60,153
Net loan charge offs(1,837) (2,966) (2,510) (2,431) (100)
New nonperforming loans13,700 14,819 23,035 10,884 19,994
Reduction of nonperforming loans(1)(7,443) (10,037) (13,707) (6,983) (10,313)
OREO/Repossessed assets sales proceeds(3,734) (715) (1,037) (343) (918)
OREO/Repossessed assets writedowns, net(259) (279) (274) (521) (337)
Net activity at Citizens Finance Co.(59) 53 (180) 239 141
Balance, end of period$76,035 $75,667 $74,792 $69,465 $68,620
Asset Quality Ratios
Ratio of nonperforming loans to total loans1.24% 1.19% 1.20% 1.06% 1.04%
Ratio of nonperforming assets to total assets0.93% 0.90% 0.91% 0.85% 0.84%
Annualized ratio of net loan charge-offs to average loans0.14% 0.22% 0.18% 0.17% 0.01%
Allowance for loan losses as a percent of loans1.02% 1.03% 1.02% 1.00% 0.94%
Allowance for loan losses as a percent of nonperforming loans81.78% 86.29% 84.37% 94.39% 90.72%
Loans delinquent 30-89 days as a percent of total loans0.38% 0.44% 0.37% 0.40% 0.73%
(1) Includes principal reductions, transfers to performing status and transfers to OREO.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
For the Quarter Ended
June 30, 2017 June 30, 2016
Average
Balance
Interest Rate Average
Balance
Interest Rate
Earning Assets
Securities:
Taxable$1,516,745 $8,599 2.27% $1,468,896 $7,903 2.16%
Nontaxable(1)624,915 7,723 4.96 430,086 5,486 5.13
Total securities2,141,660 16,322 3.06 1,898,982 13,389 2.84
Interest bearing deposits with the Federal Reserve Bank and other
banks and other short-term investments
121,778 345 1.14 10,727 52 1.95
Federal funds sold1,262 3 0.95 5,114 1 0.08
Loans:(2)
Commercial and commercial real estate(1)3,824,061 46,912 4.92 3,866,861 46,889 4.88
Residential mortgage633,344 6,509 4.12 803,952 8,286 4.15
Agricultural and agricultural real estate(1)488,222 5,807 4.77 481,625 5,504 4.60
Consumer431,199 8,289 7.71 430,440 8,273 7.73
Fees on loans 1,670 2,083
Less: allowance for loan losses(55,270) (50,852)
Net loans5,321,556 69,187 5.21 5,532,026 71,035 5.16
Total earning assets7,586,256 85,857 4.54% 7,446,849 84,477 4.56%
Nonearning Assets747,045 764,477
Total Assets$8,333,301 $8,211,326
Interest Bearing Liabilities
Savings$3,881,219 $2,505 0.26% $3,699,971 $2,028 0.22%
Time, $100,000 and over350,786 727 0.83 421,151 733 0.70
Other time deposits479,164 931 0.78 586,810 1,260 0.86
Short-term borrowings153,565 90 0.24 373,768 519 0.56
Other borrowings281,509 3,228 4.60 281,777 3,673 5.24
Total interest bearing liabilities5,146,243 7,481 0.58% 5,363,477 8,213 0.62%
Noninterest Bearing Liabilities
Noninterest bearing deposits2,338,957 2,098,327
Accrued interest and other liabilities56,124 75,815
Total noninterest bearing liabilities2,395,081 2,174,142
Stockholders' Equity791,977 673,707
Total Liabilities and Stockholders' Equity$8,333,301 $8,211,326
Net interest income, fully tax-equivalent (non-GAAP)(1) $78,376 $76,264
Net interest spread(1) 3.96% 3.94%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(3) 4.14% 4.12%
Interest bearing liabilities to earning assets67.84% 72.02%
Reconciliation of annualized net interest margin, fully tax-equivalent (non-GAAP)(3)
Net interest income, fully tax-equivalent (non-GAAP) $78,376 $76,264
Adjustments for tax-equivalent interest(1) (3,796) (3,146)
Net interest income (GAAP) $74,580 $73,118
Average earning assets$7,586,256 $7,446,849
Annualized net interest margin (GAAP) 3.94% 3.95%
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.14% 4.12%
(1) Computed on a tax-equivalent basis using an effective tax rate of 35%
(2) Nonaccrual loans are included in the average loans outstanding.
(3) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
For the Six Months Ended
June 30, 2017 June 30, 2016
Average
Balance
Interest Rate Average
Balance
Interest Rate
Earning Assets
Securities:
Taxable$1,483,087 $16,852 2.29% $1,488,664 $16,547 2.24%
Nontaxable(1)635,168 15,709 4.99 423,655 10,886 5.17
Total securities2,118,255 32,561 3.10 1,912,319 27,433 2.88
Interest bearing deposits with the Federal Reserve Bank and other
banks and other short-term investments
109,095 554 1.02 11,180 147 2.64
Federal funds sold791 3 0.76 18,120 11 0.12
Loans:(2)
Commercial and commercial real estate(1)3,818,689 92,825 4.90 3,805,401 93,643 4.95
Residential mortgage639,902 13,192 4.16 769,043 15,885 4.15
Agricultural and agricultural real estate(1)485,665 11,361 4.72 474,801 11,233 4.76
Consumer427,015 16,342 7.72 421,245 16,196 7.73
Fees on loans 3,430 3,654
Less: allowance for loan losses(54,803) (50,334)
Net loans5,316,468 137,150 5.20 5,420,156 140,611 5.22
Total earning assets7,544,609 170,268 4.55% 7,361,775 168,202 4.59%
Nonearning Assets739,072 756,423
Total Assets$8,283,681 $8,118,198
Interest Bearing Liabilities
Savings$3,859,730 $4,610 0.24% $3,628,089 $3,922 0.22%
Time, $100,000 and over349,789 1,452 0.84 459,885 1,604 0.70
Other time deposits481,736 1,831 0.77 614,556 2,668 0.87
Short-term borrowings194,272 227 0.24 342,464 848 0.50
Other borrowings282,948 6,884 4.91 273,326 7,148 5.26
Total interest bearing liabilities5,168,475 15,004 0.59% 5,318,320 16,190 0.61%
Noninterest Bearing Liabilities
Noninterest bearing deposits2,282,642 2,040,105
Accrued interest and other liabilities59,989 75,034
Total noninterest bearing liabilities2,342,631 2,115,139
Stockholders' Equity772,575 684,739
Total Liabilities and Stockholders' Equity$8,283,681 $8,118,198
Net interest income, fully tax-equivalent (non-GAAP)(1) $155,264 $152,012
Net interest spread(1) 3.96% 3.98%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(3) 4.15% 4.15%
Interest bearing liabilities to earning assets68.51% 72.24%
Reconciliation of annualized net interest margin, fully tax-equivalent (non-GAAP)(3)
Net interest income, fully tax-equivalent (non-GAAP) $155,264 $152,012
Adjustments for tax-equivalent interest(1) (7,656) (6,187)
Net interest income (GAAP) $147,608 $145,825
Average earning assets$7,544,609 $7,361,775
Annualized net interest margin (GAAP) 3.95% 3.98%
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.15% 4.15%
(1) Computed on a tax-equivalent basis using an effective tax rate of 35%.
(2) Nonaccrual loans are included in the average loans outstanding.
(3) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.


HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
As of and For the Quarter Ended
6/30/20173/31/201712/31/20169/30/20166/30/2016
Total Assets
Dubuque Bank and Trust Company$1,441,655 $1,436,038 $1,497,775 $1,448,796 $1,473,461
New Mexico Bank & Trust1,407,991 1,382,480 1,374,647 1,318,203 1,321,113
Wisconsin Bank & Trust1,035,628 1,033,633 1,065,715 1,068,288 1,080,224
Premier Valley Bank850,956 854,838 640,684 635,620 629,423
Centennial Bank and Trust817,859 839,505 901,782 892,723 909,697
Morrill & Janes Bank and Trust Company748,286 871,819 863,544 862,767 843,069
Illinois Bank & Trust740,153 746,669 742,173 748,801 742,697
Arizona Bank & Trust566,339 578,597 582,266 574,561 577,002
Rocky Mountain Bank476,829 479,121 477,063 481,346 473,583
Minnesota Bank & Trust216,957 213,789 229,114 238,745 230,004
Total Portfolio Loans
Dubuque Bank and Trust Company$884,640 $903,617 $905,242 $906,347 $928,869
New Mexico Bank & Trust934,734 906,477 924,249 917,679 870,109
Wisconsin Bank & Trust662,502 644,380 650,254 711,714 732,503
Premier Valley Bank447,148 440,406 348,879 354,610 376,275
Centennial Bank and Trust558,573 572,254 609,760 638,006 668,547
Morrill & Janes Bank and Trust Company 515,896 546,123 548,544 538,666 522,518
Illinois Bank & Trust447,887 469,105 473,008 469,236 466,983
Arizona Bank & Trust377,358 384,028 384,706 385,926 390,078
Rocky Mountain Bank335,173 330,921 347,839 357,346 362,475
Minnesota Bank & Trust144,112 142,736 144,098 139,581 144,009
Total Deposits
Dubuque Bank and Trust Company$1,178,368 $1,212,899 $1,231,016 $1,182,947 $1,159,942
New Mexico Bank & Trust1,190,758 1,184,675 1,091,436 1,101,550 1,062,410
Wisconsin Bank & Trust874,845 868,033 899,676 889,957 911,915
Premier Valley Bank681,298 708,226 510,142 520,814 514,522
Centennial Bank and Trust682,872 712,377 733,449 767,128 775,417
Morrill & Janes Bank and Trust Company627,857 721,075 738,036 676,176 696,073
Illinois Bank & Trust669,532 641,750 636,419 671,104 653,582
Arizona Bank & Trust493,419 501,111 477,213 493,331 497,599
Rocky Mountain Bank416,436 420,067 414,344 420,581 405,888
Minnesota Bank & Trust193,365 189,324 194,368 214,651 207,228
Net Income
Dubuque Bank and Trust Company$3,477 $2,056 $806 $5,112 $4,475
New Mexico Bank & Trust5,855 4,419 4,061 3,824 5,642
Wisconsin Bank & Trust3,448 1,968 2,970 3,368 3,399
Premier Valley Bank2,573 1,306 2,969 1,804 1,695
Centennial Bank and Trust746 1,366 1,572 925 256
Morrill & Janes Bank and Trust Company2,210 2,227 2,519 1,707 2,133
Illinois Bank & Trust1,984 1,991 1,917 2,179 2,397
Arizona Bank & Trust1,073 1,486 1,305 2,034 2,121
Rocky Mountain Bank1,732 1,521 1,229 1,456 1,484
Minnesota Bank & Trust563 591 888 675 559

CONTACT: Bryan R. McKeag Executive Vice President Chief Financial Officer (563) 589-1994 bmckeag@htlf.com

Source:Heartland Financial USA, Inc.