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Heartland Financial USA, Inc. ("HTLF") Reports Quarterly Results as of March 31, 2024

First Quarter Highlights

Quarterly net income available to common stockholders of $49.7 million or $1.16 per common share
Adjusted earnings available to common stockholders of $52.4 million or $1.22 adjusted diluted earnings per common share, which excludes $1.4 million of acquisition, integration and restructuring costs and $2.0 million of FDIC special assessment expense
Common equity ratio increased to 9.76%; Tangible common equity ratio (non-GAAP) improved 35 basis points to 6.88%
Net interest margin, full tax-equivalent (non-GAAP) increased to 3.57% for the quarter ended March 31, 2024 from 3.52% for the quarter ended December 31, 2024
Annualized loan yield increased to 6.63% for the quarter ended March 31, 2024 from 6.49% for the quarter ended December 31, 2024
Annualized cost of deposits stable at 2.11%
Customer deposit growth of $9.2 million, excluding the impact of Rocky Mountain Bank deposits, while wholesale and institutional deposits decreased $312.4 million
Nonperforming assets decreased $12.5 million or 11% to 0.51% of total assets


 For the Quarter Ended
 3/31/2024 12/31/2023 3/31/2023
Earnings Summary:     
Net income/(loss) available to common stockholders (in millions)$49.7  $(72.4) $50.8 
Diluted earnings/(loss) per common share 1.16   (1.69)  1.19 
Return on average assets 1.08% (1.42)%  1.06%
Return on average common equity 10.90   (16.61)  12.43 
Return on average tangible common equity (non-GAAP)(1) 16.49   (24.89)  20.03 
Net interest margin 3.52   3.47   3.36 
Net interest margin, fully tax-equivalent (non-GAAP)(1) 3.57   3.52   3.40 
Efficiency ratio 62.46   293.86   60.94 
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)(1) 58.77   59.31   57.16 
      
Adjusted Earnings Summary (1):     
Adjusted earnings available to common stockholders (in millions)$52.4  $45.6  $53.7 
Adjusted diluted earnings per common share 1.22   1.06   1.26 
Adjusted annualized return on average assets 1.13%  0.96%  1.12%
Adjusted annualized return on average common equity 11.50   10.46   13.16 
Adjusted annualized return on average tangible common equity 17.38   16.38   21.17 

(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

"HTLF delivered another solid quarter. We grew customer deposits while continuing to pay down high cost wholesale deposits and our credit quality remains stable. The announced sale of Rocky Mountain Bank in Montana aligns with HTLF 3.0, our connected set of initiatives that will drive efficiency, enhance EPS growth, deliver higher return on assets and more efficient use of capital. We intend to strategically reinvest sales proceeds in talent, technology and our other markets where we have the greatest growth potential."
Bruce K. Lee, President and Chief Executive Officer, HTLF

DENVER, April 29, 2024 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023:

  • Net income available to common stockholders of $49.7 million compared to $50.8 million, a decrease of $1.1 million or 2%.
  • Earnings per diluted common share of $1.16 compared to $1.19, a decrease of $0.03 or 3%.
  • Adjusted earnings available to common stockholders of $52.4 million or $1.22 per diluted common share compared to $53.7 million or $1.26 per diluted common share.
  • Net interest income of $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.
  • Return on average assets was 1.08% compared to 1.06%.
  • Return on average common equity was 10.90% compared to 12.43%.
  • Return on average tangible common equity (non-GAAP) was 16.49% compared to 20.03%.

HTLF 3.0 Highlights

HTLF’s new strategic plan, HTLF 3.0, was announced and initiated in the fourth quarter of 2023. HTLF 3.0's initiatives include:

  • Investing in growth through banker expansion and talent acquisition in the Central Valley of California, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix.
  • Expanding Treasury Management products and capabilities.
  • Creation of consumer and small business digital platforms.
  • Footprint and facilities optimization, with a focus on efficient return on capital.

In the quarter we took the following actions as part of HTLF 3.0:

  • Reduced wholesale and institutional deposits by $312.4 million.
  • Announced sale of Rocky Mountain Bank division.
  • Completed key hires and promotions in wealth management and commercial and middle market banking.

Rocky Mountain Bank Sale

HTLF Bank has signed definitive agreements to sell all nine Rocky Mountain Bank branches in Montana along with all associated deposits and certain related assets to two purchasers. Per the terms of the agreements, six branches will be sold to Glacier Bank and three branches will be sold to Stockman Bank of Montana. Loans of $352.7 million, deposits of $596.3 million and fixed assets of $13.2 million have been moved to available for sale categories as of March 31, 2024. The transactions are expected to close early in the third quarter of this year with an estimated pre-tax premium of $30-$35 million based upon current deposit balances.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.52% (3.57% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2024 compared to 3.47% (3.52% on a fully tax-equivalent basis, non-GAAP) for the fourth quarter of 2023, and 3.36% (3.40% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2023.

Total interest income and average earning asset changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Total interest income was $251.7 million compared to $217.0 million, an increase of $34.7 million or 16% and primarily attributable to an increase in yields on average earning assets.
  • Total interest income on a tax-equivalent basis (non-GAAP) was $253.7 million, an increase of $34.5 million or 16% from $219.2 million.
  • Average earning assets decreased $795.6 million or 4% to $17.60 billion compared to $18.39 billion.
  • The average rate on earning assets increased 97 basis points to 5.80% from 4.83%, primarily due to recent interest rate increases.

Total interest expense and average interest bearing liability changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Total interest expense was $97.5 million, an increase of $32.7 million from $64.8 million, due to increases in the average interest rate paid and the average balance of interest bearing liabilities.
  • The average interest rate paid on interest bearing liabilities increased 102 basis points to 3.11% from 2.09%.
  • Average interest bearing deposits decreased $395.8 million or 3% to $11.59 billion from $11.99 billion.
  • The average interest rate paid on interest bearing deposits increased 100 basis points to 2.92% from 1.92%.
  • Average borrowings increased $421.3 million or 71% to $1.02 billion from $594.7 million, and the average interest rate paid on borrowings was 5.29% compared to 5.37%.

Net interest income changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Net interest income totaled $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.
  • Net interest income on a tax-equivalent basis (non-GAAP) totaled $156.2 million compared to $154.4 million, an increase of $1.8 million or 1%.

Noninterest Income and Noninterest Expense

Total noninterest income was $27.7 million during the first quarter of 2024 compared to $30.0 million during the first quarter of 2023, a decrease of $2.3 million or 8%. Significant changes within the noninterest income category for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Trust fees decreased $614,000 or 11% to $5.0 million from $5.7 million, primarily attributable to reduced retirement plan services income following the sale of the recordkeeping and administrative functions of HTLF Retirement Plan Services in May of 2023.
  • Capital market fees decreased $1.6 million or 64% to $891,000 from $2.4 million due to lower capital markets activity.
  • Net security gains totaled $58,000 compared to net losses of $1.1 million.
  • Net gains on sales of loans held for sale decreased $1.7 million or 94% to $104,000 from $1.8 million, primarily attributable to a decrease in residential mortgage loans sold to the secondary market as HTLF exited mortgage loan originations through PrimeWest.
  • Other noninterest income increased $884,000 or 60% to $2.3 million compared to $1.5 million. HTLF recorded $715,000 of income on assets associated with its deferred compensation plan which was largely offset with additional salaries and benefits expenses.

Total noninterest expense was $113.6 million during the first quarter of 2024 compared to $111.0 million during the first quarter of 2023, which was an increase of $2.6 million or 2%. Significant changes within the noninterest expense category for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Salaries and employee benefits totaled $64.0 million compared to $62.1 million, an increase of $1.8 million or 3%. The increase was attributable to higher benefit costs including incentive compensation and retirement plans partially offset by a reduction of full-time equivalent employees. Full-time equivalent employees totaled 1,888 compared to 1,991, a decrease of 103 or 5%.
  • Other professional fees totaled $15.5 million compared to $12.8 million, an increase of $2.7 million or 21% which was primarily driven by increases in consulting and legal expenses.
  • FDIC insurance assessments totaled $5.0 million compared to $3.3 million, an increase of $1.7 million due to a special assessment expense of $2.0 million. This special assessment is in addition to the $8.1 million HTLF recorded in the fourth quarter of 2023 based upon additional FDIC expected losses.
  • Other noninterest expenses totaled $14.1 million compared to $15.4 million, a decrease of $1.3 million or 9% in conjunction with HTLF's 3.0 efficiency efforts.

The effective tax rate was 23.17% for the first quarter of 2024 compared to 22.50% for first quarter of 2023. The following items impacted the first quarter 2024 and 2023 tax calculations:

  • Various tax credits of $935,000 compared to $969,000.
  • Tax expense of $1.3 million compared to $929,000 resulting from the disallowed interest expense related to tax-exempt loans and securities, aligning with increases in total interest expense.
  • Tax-exempt interest income as a percentage of pre-tax income of 11.08% compared to 12.20%.

Total Assets, Total Loans and Total Deposits

Total assets were $19.13 billion at March 31, 2024, a decrease of $278.9 million or 1% from $19.41 billion at year-end 2023. Securities represented 28% and 29% of total assets at March 31, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.64 billion at March 31, 2024, compared to $12.07 billion at December 31, 2023, which was a decrease of $424.0 million or 4%. Excluding the impact of the transfer of $352.7 million of loans to held for sale related to the planned sale of Rocky Mountain Bank, loans held to maturity decreased $71.3 million or 1%.

Significant changes by loan category at March 31, 2024 compared to December 31, 2023 included:

  • Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $200.7 million or 3% to $6.09 billion compared to $6.29 billion. Excluding the decrease related to Rocky Mountain Bank, commercial and business lending decreased $41.0 million or 1%.
  • Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $28.8 million or 1% to $3.54 billion compared to $3.57 billion. Excluding the decrease related to Rocky Mountain Bank, commercial real estate lending increased $35.7 million or 1%.
  • Agricultural and agricultural real estate loans decreased $109.3 million or 12% to $809.9 million compared to $919.2 million. Excluding the decrease related to Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $46.5 million or 5%.
  • Residential mortgage loans decreased $41.8 million or 5% to $756.0 million compared to $797.8 million. Excluding the decrease related to Rocky Mountain Bank, residential mortgage loans decreased $9.9 million or 1%.

Total deposits were $15.30 billion as of March 31, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $899.5 million or 6%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, deposits decreased $303.2 million or 2%.

Total customer deposits were $14.27 billion as of March 31, 2024 compared to $14.86 billion at December 31, 2023, which was a decrease of $587.1 million or 4%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, customer deposits increased $9.2 million. Significant customer deposit changes by category at March 31, 2024, compared to December 31, 2023, included:

  • Customer demand deposits decreased $235.9 million or 5% to $4.26 billion compared to $4.50 billion. Excluding the decrease related to Rocky Mountain Bank, customer demand deposits decreased $91.9 million or 2%.
  • Customer savings deposits decreased $141.3 million or 2% to $8.27 billion compared to $8.41 billion. Excluding the decrease related to Rocky Mountain Bank, customer savings deposits increased $189.0 million or 2%.
  • Customer time deposits decreased $209.9 million or 11% to $1.73 billion compared to $1.94 billion. Excluding the decrease related to Rocky Mountain Bank, customer time deposits decreased $87.9 million or 5%.

Total wholesale and institutional deposits were $1.03 billion as of March 31, 2024, which was a decrease of $312.4 million or 23% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at March 31, 2024 compared to December 31, 2023 included:

  • Wholesale and institutional savings deposits increased $4.9 million or 1% to $399.3 million compared to $394.4 million.
  • Wholesale time deposits decreased $317.3 million or 33% to $633.6 million compared to $950.9 million.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the first quarter of 2024 was $3.7 million, an increase of $1.5 million from $2.2 million recorded in the first quarter of 2023.

The allowance for credit losses for loans totaled $123.9 million at March 31, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at March 31, 2024:

  • Provision expense for the three months ended March 31, 2024, totaled $3.7 million. The provision expense reflected a benefit of $2.0 million for the impact of the Rocky Mountain Bank loans transferred to the available for sale category.
  • Net charge-offs of $2.3 million were recorded for the first three months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $2.7 million or 16% to $13.8 million at March 31, 2024, from $16.5 million at December 31, 2023, largely due to a reduction of $105.7 million in unfunded commitments for construction loans, which carry the highest loss rate. Total unfunded commitments decreased $88.1 million or 2% to $4.54 billion at March 31, 2024 compared to $4.63 billion at December 31, 2023.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $986,000 for the first quarter of 2024 compared to $3.1 million for the first quarter of 2023. The total allowance for lending related credit losses was $137.7 million or 1.18% of total loans at March 31, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets decreased $12.5 million or 11% to $98.0 million or 0.51% of total assets at March 31, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming loans were $95.4 million or 0.82% of total loans at March 31, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At March 31, 2024, loans delinquent 30-89 days were 0.31% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was primarily associated with a single $19.9 million construction loan that is currently in process of being sold by owners. Other real estate owned, net, decreased $10.0 million or 79% to $2.6 million at March 31, 2024 from $12.5 million at December 31, 2023. HTLF added one property with a book value of $11.3 million to other real estate during the third quarter of 2023 which was sold in the first quarter of 2024.

Non-GAAP Financial Measures

This earnings release contains references to financial measures which are not defined by generally accepted accounting principles ("GAAP"). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company's financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. Additionally, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP measures in this earnings release with other companies' non-GAAP measures. Reconciliations of each non-GAAP measure to the most directly comparable GAAP measure may be found in the financial tables in this earnings release.

Below are the non-GAAP measures included in this earnings release, management's reason for including each measure and the method of calculating each measure:

  • Adjusted earnings available to common stockholders, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability net income available to common stockholders as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
  • Adjusted annualized return on average assets, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
  • Annualized net interest margin, fully tax-equivalent, 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.
  • Adjusted 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 reconciliation contained in this earnings release.
  • Net interest income, fully tax equivalent, is net income adjusted 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. Net interest margin, fully tax equivalent, is net interest income adjusted for the tax-favored status of certain loans and securities divided by average earning assets.
  • Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
  • Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
  • Adjusted annualized return on average common equity, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
  • Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
  • Adjusted annualized return on average tangible common equity, adjusts net income available to common stockholders for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
  • Annualized ratio of core expenses to average assets adjusts noninterest expenses to exclude specific items noted in the reconciliation. Management includes this measure as it is considered to be a critical metric to analyze and evaluate controllable expenses related to primary business operations.

Change in Conference Call

As a result of today's announcement that HTLF has entered into a merger agreement with UMB Financial Corporation ("UMB") and a wholly-owned subsidiary of UMB, HTLF has cancelled the previously announced HTLF conference call scheduled for 5:00 p.m. EDT on Wednesday, May 1, 2024, to discuss the Company's performance for the first quarter of 2024.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $19.13 billion as of March 31, 2024. HTLF's banks serve communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, wealth management, investments and residential mortgage. Additional information is available at www.htlf.com.

Safe Harbor Statement

This release (including any information incorporated herein by reference), and future oral and written statements of the company and its management, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, financial condition, results of operations, plans, objectives and future performance of HTLF.

Any statements about the company's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of the company's operations or performance. These forward-looking statements are generally identified by the use of the words such as "believe", "expect", "intent", "anticipate", "plan", "intend", "estimate", "project", "may", "will", "would", "could", "should", "may", "view", "opportunity", "potential", or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of the company and its management. Although the company may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of the company to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, 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 the company currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF's reports filed with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section under Item 1A of Part I of the company’s Annual Report on Form 10-K for the year ended December 31, 2023, include, among others:

  • Economic and Market Conditions Risks, including risks related to the deterioration of the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, pandemics and governmental measures addressing them, climate change and climate-related regulations, persistent inflation, higher interest rates, supply chain issues, labor shortages, terrorist threats or acts of war;
  • Credit Risks, including risks of increasing credit losses due to deterioration in the financial condition of HTLF's borrowers, changes in asset and collateral values due to climate and other borrower industry risks, which may impact the provision for credit losses and net charge-offs;
  • Liquidity and Interest Rate Risks, including the impact of capital market conditions, rising interest rates and changes in monetary policy on our borrowings and net interest income;
  • Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
  • Strategic and External Risks, including economic, political, and competitive forces impacting our business;
  • Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and
  • Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.

There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF's business, financial condition and results of operations. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to or correct or update any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events or to otherwise update any statement in light of new information or future events. Further information concerning HTLF and its business, including additional factors that could materially affect HTLF's financial results, is included in HTLF’s filings with the SEC.

-FINANCIAL TABLES FOLLOW-

CONTACT: 
Kevin L. Thompson 
Executive Vice President 
Chief Financial Officer 
(563) 589-1994 
kthompson@htlf.com  


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 For the Three Months Ended
March 31,
  2024   2023 
Interest Income   
Interest and fees on loans$195,661  $153,843 
Interest on securities:   
Taxable 47,014   55,976 
Nontaxable 6,041   6,028 
Interest on federal funds sold     
Interest on deposits with other banks and short-term investments 3,006   1,131 
Total Interest Income 251,722   216,978 
Interest Expense   
Interest on deposits 84,134   56,898 
Interest on borrowings 7,524   2,422 
Interest on term debt 5,849   5,446 
Total Interest Expense 97,507   64,766 
Net Interest Income 154,215   152,212 
Provision for credit losses 986   3,074 
Net Interest Income After Provision for Credit Losses 153,229   149,138 
Noninterest Income   
Service charges and fees 17,063   17,136 
Loan servicing income 131   714 
Trust fees 5,043   5,657 
Brokerage and insurance commissions 754   696 
Capital markets fees 891   2,449 
Securities gains (losses), net 58   (1,104)
Unrealized gain/(loss) on equity securities, net 95   193 
Net gains on sale of loans held for sale 104   1,831 
Income on bank owned life insurance 1,177   964 
Other noninterest income 2,347   1,463 
Total Noninterest Income 27,663   29,999 
Noninterest Expense   
Salaries and employee benefits 63,955   62,149 
Occupancy 7,263   7,209 
Furniture and equipment 2,337   2,915 
Professional fees 15,531   12,797 
FDIC insurance assessments 4,969   3,279 
Advertising 1,358   1,985 
Core deposit intangibles amortization 1,492   1,788 
Other real estate and loan collection expenses, net 512   155 
(Gain) loss on sales/valuations of assets, net 214   1,115 
Acquisition, integration and restructuring costs 1,375   1,673 
Partnership investment in tax credit projects 494   538 
Other noninterest expenses 14,095   15,440 
Total Noninterest Expense 113,595   111,043 
Income Before Income Taxes 67,297   68,094 
Income taxes 15,590   15,318 
Net Income/(Loss) 51,707   52,776 
Preferred dividends (2,013)  (2,013)
Net Income/(Loss) Available to Common Stockholders$49,694  $50,763 
Earnings/(loss) per common share-diluted$1.16  $1.19 
Weighted average shares outstanding-diluted 42,915,768   42,742,878 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 For the Quarter Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Interest Income         
Interest and fees on loans$195,661  $192,861  $182,394  $168,899  $153,843 
Interest on securities:         
Taxable 47,014   54,573   54,800   58,172   55,976 
Nontaxable 6,041   6,278   6,584   6,378   6,028 
Interest on federal funds sold       3       
Interest on deposits with other banks and short-term investments 3,006   2,174   1,651   2,051   1,131 
Total Interest Income 251,722   255,886   245,432   235,500   216,978 
Interest Expense         
Interest on deposits 84,134   88,071   92,744   81,975   56,898 
Interest on borrowings 7,524   5,874   1,167   848   2,422 
Interest on term debt 5,849   5,804   5,765   5,545   5,446 
Total Interest Expense 97,507   99,749   99,676   88,368   64,766 
Net Interest Income 154,215   156,137   145,756   147,132   152,212 
Provision for credit losses 986   11,738   1,516   5,379   3,074 
Net Interest Income After Provision for Credit Losses 153,229   144,399   144,240   141,753   149,138 
Noninterest Income         
Service charges and fees 17,063   18,708   18,553   19,627   17,136 
Loan servicing income 131   158   278   411   714 
Trust fees 5,043   4,905   4,734   5,419   5,657 
Brokerage and insurance commissions 754   729   692   677   696 
Capital markets fees 891   1,676   1,845   4,037   2,449 
Securities gains (losses), net 58   (140,007)  (114)  (314)  (1,104)
Unrealized gain/(loss) on equity securities, net 95   75   13   (41)  193 
Net gains on sale of loans held for sale 104   94   905   1,050   1,831 
Income on bank owned life insurance 1,177   729   858   1,220   964 
Other noninterest income 2,347   1,132   619   407   1,463 
Total Noninterest Income 27,663   (111,801)  28,383   32,493   29,999 
Noninterest Expense         
Salaries and employee benefits 63,955   64,766   62,262   62,099   62,149 
Occupancy 7,263   6,509   6,438   6,691   7,209 
Furniture and equipment 2,337   2,901   2,720   3,063   2,915 
Professional fees 15,531   17,060   13,616   15,194   12,797 
FDIC insurance assessments 4,969   10,313   3,313   3,035   3,279 
Advertising 1,358   1,677   1,633   3,052   1,985 
Core deposit intangibles amortization 1,492   1,611   1,625   1,715   1,788 
Other real estate and loan collection expenses, net 512   505   481   348   155 
(Gain) loss on sales/valuations of assets, net 214   2,072   108   (3,372)  1,115 
Acquisition, integration and restructuring costs 1,375   4,365   2,429   1,892   1,673 
Partnership investment in tax credit projects 494   3,573   1,136   154   538 
Other noninterest expenses 14,095   14,933   15,292   15,575   15,440 
Total Noninterest Expense 113,595   130,285   111,053   109,446   111,043 
Income Before Income Taxes 67,297   (97,687)  61,570   64,800   68,094 
Income taxes 15,590   (27,324)  13,479   15,384   15,318 
Net Income/(Loss) 51,707   (70,363)  48,091   49,416   52,776 
Preferred dividends (2,013)  (2,012)  (2,013)  (2,012)  (2,013)
Net Income/(Loss) Available to Common Stockholders$49,694  $(72,375) $46,078  $47,404  $50,763 
Earnings/(loss) per common share-diluted$1.16  $(1.69) $1.08  $1.11  $1.19 
Weighted average shares outstanding-diluted 42,915,768   42,838,405   42,812,563   42,757,603   42,742,878 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 As of
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Assets         
Cash and due from banks$208,176  $275,554  $248,756  $317,303  $274,354 
Interest bearing deposits with other banks and short-term investments 236,190   47,459   99,239   82,884   87,757 
Cash and cash equivalents 444,366   323,013   347,995   400,187   362,111 
Time deposits in other financial institutions 1,240   1,240   1,490   1,490   1,740 
Securities:         
Carried at fair value 4,418,222   4,646,891   5,482,687   5,798,041   6,096,657 
Held to maturity, at cost 841,055   838,241   835,468   834,673   832,098 
Other investments, at cost 68,524   91,277   90,001   72,291   72,364 
Loans held for sale 352,744   5,071   6,262   14,353   10,425 
Loans:         
Held to maturity 11,644,641   12,068,645   11,872,436   11,717,974   11,495,353 
Allowance for credit losses (123,934)  (122,566)  (110,208)  (111,198)  (112,707)
Loans, net 11,520,707   11,946,079   11,762,228   11,606,776   11,382,646 
Premises, furniture and equipment, net 176,582   181,070   187,436   190,420   191,267 
Goodwill 576,005   576,005   576,005   576,005   576,005 
Core deposit intangibles, net 16,923   18,415   20,026   21,651   23,366 
Cash surrender value on life insurance 197,671   197,085   196,694   195,793   194,419 
Other real estate, net 2,590   12,548   14,362   2,677   7,438 
Other assets 516,198   574,772   609,139   510,359   432,008 
Total Assets$19,132,827  $19,411,707  $20,129,793  $20,224,716  $20,182,544 
Liabilities and Equity         
Liabilities         
Deposits:         
Demand$4,264,390  $4,500,304  $4,792,813  $4,897,858  $5,119,554 
Savings 8,669,221   8,805,597   8,754,911   8,772,596   9,256,609 
Time 2,368,555   2,895,813   3,553,269   3,993,089   3,305,183 
Total deposits 15,302,166   16,201,714   17,100,993   17,663,543   17,681,346 
Deposits held for sale 596,328             
Borrowings 650,033   622,255   392,634   44,364   92,337 
Term debt 372,652   372,396   372,059   372,403   372,097 
Accrued expenses and other liabilities 232,815   282,225   438,577   285,416   207,359 
Total Liabilities 17,153,994   17,478,590   18,304,263   18,365,726   18,353,139 
Stockholders' Equity         
Preferred equity 110,705   110,705   110,705   110,705   110,705 
Common stock 42,784   42,688   42,656   42,645   42,559 
Capital surplus 1,093,207   1,090,740   1,088,267   1,087,358   1,084,112 
Retained earnings 1,178,330   1,141,501   1,226,740   1,193,522   1,158,948 
Accumulated other comprehensive income/(loss) (446,193)  (452,517)  (642,838)  (575,240)  (566,919)
Total Equity 1,978,833   1,933,117   1,825,530   1,858,990   1,829,405 
Total Liabilities and Equity$19,132,827  $19,411,707  $20,129,793  $20,224,716  $20,182,544 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 For the Quarter Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Average Balances         
Assets$19,296,638  $19,667,825  $20,207,920  $20,221,511  $20,118,005 
Loans, net of unearned 12,021,930   11,938,272   11,800,064   11,625,442   11,378,078 
Deposits 16,042,402   16,709,394   17,507,813   17,689,138   17,505,867 
Customer deposits 14,816,652   14,969,948   14,699,235   14,655,535   15,123,181 
Earning assets 17,597,068   17,853,957   18,439,010   18,523,552   18,392,649 
Interest-bearing liabilities 12,607,745   12,721,680   13,158,631   13,209,794   12,582,234 
Common equity 1,832,959   1,729,086   1,746,818   1,727,013   1,655,860 
Total stockholders' equity 1,943,664   1,839,791   1,857,523   1,837,718   1,766,565 
Tangible common equity (non-GAAP)(1) 1,239,313   1,133,888   1,149,992   1,128,527   1,055,617 
          
Key Performance Ratios         
Annualized return on average assets 1.08% (1.42)%  0.94%  0.98%  1.06%
Adjusted annualized return on average assets (non-GAAP)(1) 1.13   0.96   0.98   0.96   1.12 
Annualized return on average common equity (GAAP) 10.90   (16.61)  10.47   11.01   12.43 
Adjusted annualized return on average common equity (non-GAAP)(1) 11.50   10.46   10.92   10.80   13.16 
Annualized return on average tangible common equity (non-GAAP)(1) 16.49   (24.89)  16.32   17.31   20.03 
Adjusted annualized return on average tangible common equity (non-GAAP)(1) 17.38   16.38   17.02   17.00   21.17 
Annualized ratio of net charge-offs/(recoveries) to average loans 0.08   0.01   0.12   0.32   (0.04)
Annualized net interest margin (GAAP) 3.52   3.47   3.14   3.19   3.36 
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) 3.57   3.52   3.18   3.23   3.40 
Annualized cost of deposits 2.11   2.09   2.10   1.86   1.32 
Efficiency ratio (GAAP) 62.46   293.86   63.77   60.93   60.94 
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1) 58.77   59.31   59.95   59.88   57.16 
Annualized ratio of total noninterest expenses to average assets (GAAP) 2.37   2.63   2.18   2.17   2.24 
Annualized ratio of core expenses to average assets (non-GAAP)(1) 2.25   2.23   2.08   2.16   2.14 
          
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.


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
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Common Share Data         
Book value per common share$43.66  $42.69  $40.20  $41.00  $40.38 
Tangible book value per common share (non-GAAP)(1) 29.81   28.77   26.23   26.98   26.30 
ASC 320 effect on book value per common share (11.18)  (11.00)  (16.27)  (14.04)  (13.35)
          
Common shares outstanding, net of treasury stock 42,783,670   42,688,008   42,656,303   42,644,544   42,558,726 
          
Capital Ratios         
Common equity ratio 9.76%  9.39%  8.52%  8.64%  8.52%
Tangible common equity ratio (non-GAAP)(1) 6.88   6.53   5.73   5.86   5.72 
Tier 1 leverage ratio 9.84   9.44   9.59   9.40   9.25 
Common equity tier 1 ratio(2) 11.40   10.97   11.37   11.33   11.28 
Total risk based capital ratio(2) 14.99   14.53   14.90   14.93   14.98 
          
Other Selected Trend Information         
Effective tax rate 23.17%  27.97%  21.89%  23.74%  22.50%
Full time equivalent employees 1,888   1,970   1,965   1,966   1,991 
          
Loans Held to Maturity         
Commercial and industrial$3,545,051  $3,652,047  $3,591,809  $3,590,680  $3,498,345 
Paycheck Protection Program ("PPP") 2,172   2,777   3,750   4,139   8,258 
Owner occupied commercial real estate 2,545,033   2,638,175   2,429,659   2,398,698   2,312,538 
Commercial and business lending 6,092,256   6,292,999   6,025,218   5,993,517   5,819,141 
Non-owner occupied commercial real estate 2,495,068   2,553,711   2,656,358   2,530,736   2,421,341 
Real estate construction 1,041,583   1,011,716   1,029,554   1,013,134   1,102,186 
Commercial real estate lending 3,536,651   3,565,427   3,685,912   3,543,870   3,523,527 
Total commercial lending 9,628,907   9,858,426   9,711,130   9,537,387   9,342,668 
Agricultural and agricultural real estate 809,876   919,184   842,116   839,817   810,183 
Residential mortgage 756,021   797,829   813,803   828,437   841,084 
Consumer 449,837   493,206   505,387   512,333   501,418 
Total loans held to maturity$11,644,641  $12,068,645  $11,872,436  $11,717,974  $11,495,353 
          
Total unfunded loan commitments$4,537,718  $4,625,768  $4,813,798  $4,905,147  $4,867,925 
          
Deposits         
Demand-customer$4,264,390  $4,500,304  $4,792,813  $4,897,858  $5,119,554 
Savings-customer 8,269,956   8,411,240   8,190,430   8,149,596   8,501,337 
Savings-wholesale and institutional 399,265   394,357   564,481   623,000   755,272 
Total savings 8,669,221   8,805,597   8,754,911   8,772,596   9,256,609 
Time-customer 1,734,971   1,944,884   1,814,335   1,597,849   1,071,476 
Time-wholesale 633,584   950,929   1,738,934   2,395,240   2,233,707 
Total time 2,368,555   2,895,813   3,553,269   3,993,089   3,305,183 
Total deposits$15,302,166  $16,201,714  $17,100,993  $17,663,543  $17,681,346 
          
Total customer deposits$14,269,317  $14,856,428  $14,797,578  $14,645,303  $14,692,367 
Total wholesale and institutional deposits 1,032,849   1,345,286   2,303,415   3,018,240   2,988,979 
Total deposits$15,302,166  $16,201,714  $17,100,993  $17,663,543  $17,681,346 
          
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.
(2) March 31, 2024 calculation is preliminary.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 As of and for the Quarter Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Allowance for Credit Losses-Loans         
Balance, beginning of period$122,566  $110,208  $111,198  $112,707  $109,483 
Provision for credit losses 3,668   12,750   2,672   7,829   2,184 
Charge-offs (4,093)  (3,886)  (3,964)  (9,613)  (2,151)
Recoveries 1,793   3,494   302   275   3,191 
Balance, end of period$123,934  $122,566  $110,208  $111,198  $112,707 
          
Allowance for Unfunded Commitments         
Balance, beginning of period$16,468  $17,480  $18,636  $21,086  $20,196 
Provision for credit losses (2,682)  (1,012)  (1,156)  (2,450)  890 
Balance, end of period$13,786  $16,468  $17,480  $18,636  $21,086 
          
Allowance for lending related credit losses$137,720  $139,034  $127,688  $129,834  $133,793 
          
Provision for Credit Losses         
Provision for credit losses-loans$3,668  $12,750  $2,672  $7,829  $2,184 
Provision (benefit) for credit losses-unfunded commitments (2,682)  (1,012)  (1,156)  (2,450)  890 
Total provision (benefit) for credit losses$986  $11,738  $1,516  $5,379  $3,074 
          
Asset Quality         
Nonaccrual loans$94,800  $95,426  $51,304  $61,956  $58,066 
Loans past due ninety days or more 611   2,507   511   1,459   174 
Other real estate owned 2,590   12,548   14,362   2,677   7,438 
Other repossessed assets       1   5   24 
Total nonperforming assets$98,001  $110,481  $66,178  $66,097  $65,702 
          
Nonperforming Assets Activity         
Balance, beginning of period$110,481  $66,178  $66,097  $65,702  $66,931 
Net loan (charge-offs) recoveries (2,300)  (392)  (3,662)  (9,338)  1,040 
New nonperforming loans 5,470   61,193   19,295   19,805   4,626 
Reduction of nonperforming loans(1) (5,692)  (14,278)  (14,691)  (5,253)  (5,711)
OREO/Repossessed assets sales proceeds (9,958)  (2,220)  (861)  (4,819)  (1,184)
Balance, end of period$98,001  $110,481  $66,178  $66,097  $65,702 
          
Asset Quality Ratios         
Ratio of nonperforming loans to total loans 0.82%  0.81%  0.44%  0.54%  0.51%
Ratio of nonperforming assets to total assets 0.51   0.57   0.33   0.33   0.33 
Annualized ratio of net loan charge-offs (recoveries) to average loans 0.08   0.01   0.12   0.32   (0.04)
Allowance for loan credit losses as a percent of loans 1.06   1.02   0.93   0.95   0.98 
Allowance for lending related credit losses as a percent of loans 1.18   1.15   1.08   1.11   1.16 
Allowance for loan credit losses as a percent of nonperforming loans 129.89   125.15   212.70   175.35   193.52 
Loans delinquent 30-89 days as a percent of total loans 0.31   0.09   0.12   0.12   0.10 
          
(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
 March 31, 2024 December 31, 2023 March 31, 2023
 Average
Balance
 Interest Rate Average
Balance
 Interest Rate Average
Balance
 Interest Rate
Earning Assets                 
Securities:                 
Taxable$4,665,196  $47,014 4.05% $5,119,970  $54,573 4.23% $6,096,888  $55,976 3.72%
Nontaxable(1) 778,632   7,383 3.81   759,464   7,681 4.01   922,676   7,630 3.35 
Total securities 5,443,828   54,397 4.02   5,879,434   62,254 4.20   7,019,564   63,606 3.67 
Interest on deposits with other banks and short-term investments 253,189   3,006 4.78   146,027   2,174 5.91   105,400   1,131 4.35 
Federal funds sold                    
Loans:(2)                 
Commercial and industrial(1) 3,642,588   66,985 7.40   3,624,034   66,980 7.33   3,459,317   49,907 5.85 
PPP loans 2,587   8 1.24   3,064   8 1.04   9,970   26 1.06 
Owner occupied commercial real estate 2,609,773   35,517 5.47   2,436,234   31,714 5.16   2,289,002   26,769 4.74 
Non-owner occupied commercial real estate 2,550,419   39,849 6.28   2,688,805   42,417 6.26   2,331,318   30,749 5.35 
Real estate construction 1,061,843   20,849 7.90   1,035,010   20,200 7.74   1,099,026   18,131 6.69 
Agricultural and agricultural real estate 878,621   13,756 6.30   844,353   13,069 6.14   835,648   11,353 5.51 
Residential real estate 791,248   10,135 5.15   810,069   9,531 4.67   852,561   9,273 4.41 
Consumer 484,851   9,201 7.63   496,703   9,597 7.67   501,236   8,242 6.67 
Less: allowance for credit losses (121,879)      (109,776)      (110,393)    
Net loans 11,900,051   196,300 6.63   11,828,496   193,516 6.49   11,267,685   154,450 5.56 
Total earning assets 17,597,068   253,703 5.80%  17,853,957   257,944 5.73%  18,392,649   219,187 4.83%
Nonearning Assets 1,699,570       1,813,868       1,725,356     
Total Assets$19,296,638      $19,667,825      $20,118,005     
Interest-bearing Liabilities                 
Savings$8,809,530  $54,667 2.50% $8,782,197  $53,807 2.43% $9,730,494  $37,893 1.58%
Time deposits 2,782,195   29,467 4.26   3,165,788   34,264 4.29   2,257,047   19,005 3.41 
Borrowings 643,525   7,524 4.70   401,463   5,874 5.80   222,772   2,422 4.41 
Term debt 372,495   5,849 6.32   372,232   5,804 6.19   371,921   5,446 5.94 
Total interest-bearing liabilities 12,607,745   97,507 3.11%  12,721,680   99,749 3.11%  12,582,234   64,766 2.09%
Noninterest-bearing Liabilities                 
Noninterest-bearing deposits 4,450,677       4,761,409       5,518,326     
Accrued interest and other liabilities 294,552       344,945       250,880     
Total noninterest-bearing liabilities 4,745,229       5,106,354       5,769,206     
Stockholders' Equity 1,943,664       1,839,791       1,766,565     
Total Liabilities and Equity$19,296,638      $19,667,825      $20,118,005     
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)  $156,196     $158,195     $154,421  
Net interest spread(1)    2.69%     2.62%     2.74%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)to total earning assets    3.57%     3.52%     3.40%
Interest-bearing liabilities to earning assets 71.65%      71.25%      68.41%    
                  
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.  
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
 For the Quarter Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)         
Earnings available to common stockholders (GAAP)$49,694  $(72,375) $46,078  $47,404  $50,763 
Plus core deposit intangibles amortization, net of tax(2) 1,131   1,229   1,240   1,309   1,364 
Earnings available to common stockholders excluding intangible amortization (non-GAAP)$50,825  $(71,146) $47,318  $48,713  $52,127 
          
Average common equity (GAAP)$1,832,959  $1,729,086  $1,746,818  $1,727,013  $1,655,860 
Less average goodwill 576,005   576,005   576,005   576,005   576,005 
Less average core deposit intangibles, net 17,641   19,193   20,821   22,481   24,238 
Average tangible common equity (non-GAAP)$1,239,313  $1,133,888  $1,149,992  $1,128,527  $1,055,617 
Annualized return on average common equity (GAAP) 10.90% (16.61)%  10.47%  11.01%  12.43%
Annualized return on average tangible common equity (non-GAAP) 16.49% (24.89)%  16.32%  17.31%  20.03%
          
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)         
Net Interest Income (GAAP)$154,215  $156,137  $145,756  $147,132  $152,212 
Plus tax-equivalent adjustment(1) 1,981   2,058   2,152   2,136   2,209 
Net interest income, fully tax-equivalent (non-GAAP)$156,196  $158,195  $147,908  $149,268  $154,421 
          
Average earning assets$17,597,068  $17,853,957  $18,439,010  $18,523,552  $18,392,649 
          
Annualized net interest margin (GAAP) 3.52%  3.47%  3.14%  3.19%  3.36%
Annualized net interest margin, fully tax-equivalent (non-GAAP) 3.57   3.52   3.18   3.23   3.40 
Net purchase accounting discount amortization on loans included in annualized net interest margin 0.02   0.02   0.01   0.03   0.02 


Reconciliation of Tangible Book Value Per Common Share (non-GAAP)         
Common equity (GAAP)$1,868,128  $1,822,412  $1,714,825  $1,748,285  $1,718,700 
Less goodwill 576,005   576,005   576,005   576,005   576,005 
Less core deposit intangibles, net 16,923   18,415   20,026   21,651   23,366 
Tangible common equity (non-GAAP)$1,275,200  $1,227,992  $1,118,794  $1,150,629  $1,119,329 
          
Common shares outstanding, net of treasury stock 42,783,670   42,688,008   42,656,303   42,644,544   42,558,726 
Common equity (book value) per share (GAAP)$43.66  $42.69  $40.20  $41.00  $40.38 
Tangible book value per common share (non-GAAP)$29.81  $28.77  $26.23  $26.98  $26.30 
          
Reconciliation of Tangible Common Equity Ratio (non-GAAP)         
Tangible common equity (non-GAAP)$1,275,200  $1,227,992  $1,118,794  $1,150,629  $1,119,329 
          
Total assets (GAAP)$19,132,827  $19,411,707  $20,129,793  $20,224,716  $20,182,544 
Less goodwill 576,005   576,005   576,005   576,005   576,005 
Less core deposit intangibles, net 16,923   18,415   20,026   21,651   23,366 
Total tangible assets (non-GAAP)$18,539,899  $18,817,287  $19,533,762  $19,627,060  $19,583,173 
Tangible common equity ratio (non-GAAP) 6.88%  6.53%  5.73%  5.86%  5.72%
          
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 For the Quarter Ended
3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP) 
Net interest income (GAAP)$154,215  $156,137  $145,756  $147,132  $152,212 
Tax-equivalent adjustment(1) 1,981   2,058   2,152   2,136   2,209 
Fully tax-equivalent net interest income 156,196   158,195   147,908   149,268   154,421 
Noninterest income 27,663   (111,801)  28,383   32,493   29,999 
Securities (gains)/losses, net (58)  140,007   114   314   1,104 
Unrealized (gain) loss on equity securities, net (95)  (75)  (13)  41   (193)
Valuation adjustment on servicing rights              
Adjusted revenue (non-GAAP)$183,706  $186,326  $176,392  $182,116  $185,331 
          
Total noninterest expenses (GAAP)$113,595  $130,285  $111,053  $109,446  $111,043 
Less:         
Core deposit intangibles amortization 1,492   1,611   1,625   1,715   1,788 
Partnership investment in tax credit projects 494   3,573   1,136   154   538 
(Gain) loss on sales/valuation of assets, net 214   2,072   108   (3,372)  1,115 
Acquisition, integration and restructuring costs 1,375   4,365   2,429   1,892   1,673 
FDIC special assessment 2,049   8,145          
Core expenses (non-GAAP)$107,971  $110,519  $105,755  $109,057  $105,929 
          
Efficiency ratio (GAAP) 62.46%  293.86%  63.77%  60.93%  60.94%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP) 58.77%  59.31%  59.95%  59.88%  57.16%
          
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)         
Total noninterest expenses (GAAP)$113,595  $130,285  $111,053  $109,446  $111,043 
Core expenses (non-GAAP) 107,971   110,519   105,755   109,057   105,929 
          
Average assets$19,296,638  $19,667,825  $20,207,920  $20,221,511  $20,118,005 
Total noninterest expenses to average assets (GAAP) 2.37%  2.63%  2.18%  2.17%  2.24%
Core expenses to average assets (non-GAAP) 2.25%  2.23%  2.08%  2.16%  2.14%
          
Acquisition, integration and restructuring costs         
Salaries and employee benefits$168  $1,425  $94  $93  $74 
Occupancy    1,092          
Furniture and equipment    19          
Professional fees 931   793   1,617   1,068   934 
Advertising    28   178   222   122 
Other noninterest expenses 276   1,008   540   509   543 
Total acquisition, integration and restructuring costs$1,375  $4,365  $2,429  $1,892  $1,673 
          
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
 For the Quarter Ended
 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023
Reconciliation of Adjusted Earnings         
Net income/(loss)$51,707  $(70,363) $48,091  $49,416  $52,776 
(Gain) loss from sale of securities (58)  140,007   114   314   1,104 
(Gain) loss on sales/valuation of assets, net 214   2,072   108   (3,372)  1,115 
Acquisition, integration and restructuring costs 1,375   4,365   2,429   1,892   1,673 
FDIC special assessment 2,049   8,145          
Total adjustments 3,580   154,589   2,651   (1,166)  3,892 
Tax effect of adjustments(2) (866)  (36,638)  (628)  276   (922)
Adjusted earnings$54,421  $47,588  $50,114  $48,526  $55,746 
          
Preferred dividends (2,013)  (2,012)  (2,013)  (2,012)  (2,013)
Adjusted earnings available to common stockholders$52,408  $45,576  $48,101  $46,514  $53,733 
          
Plus core deposit intangibles amortization, net of tax(2) 1,131   1,229   1,240   1,309   1,364 
Earnings available to common stockholders excluding intangible amortization (non-GAAP)$53,539  $46,805  $49,341  $47,823  $55,097 
          
          
Reconciliation of Adjusted Annualized Return on Average Assets 
Average assets$19,296,638  $19,667,825  $20,207,920  $20,221,511  $20,118,005 
Adjusted annualized return on average assets (non-GAAP) 1.13%  0.96%  0.98%  0.96%  1.12%
          
Reconciliation of Adjusted Annualized Return on Average Common Equity         
Average common stockholders' equity (GAAP)$1,832,959  $1,729,086  $1,746,818  $1,727,013  $1,655,860 
Adjusted annualized average common equity (non-GAAP) 11.50%  10.46%  10.92%  10.80%  13.16%
          
Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity         
Average tangible common equity (non-GAAP)$1,239,313  $1,133,888  $1,149,992  $1,128,527  $1,055,617 
Adjusted annualized average tangible common equity (non-GAAP) 17.38%  16.38%  17.02%  17.00%  21.17%
          
Reconciliation of Adjusted Diluted Earnings Per Common Share         
Weighted average shares outstanding-diluted 42,915,768   42,838,405   42,812,563   42,757,603   42,742,878 
Adjusted diluted earnings per common share$1.22  $1.06  $1.12  $1.09  $1.26 
          
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.

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