CONTACT: | FOR IMMEDIATE RELEASE |
John K. Schmidt | January 30, 2012 |
Chief Operating Officer | |
Chief Financial Officer | |
(563) 589-1994 | |
jschmidt@htlf.com | |
HEARTLAND FINANCIAL USA, INC. REPORTS FOURTH QUARTER 2011 RESULTS
Quarterly Highlights
§ | Net interest margin of 4.08% |
§ | Growth in loans held to maturity of $107.1 million since September 30, 2011 |
§ | Deposit growth of $36.5 million since September 30, 2011 |
§ | Nonperforming assets decreased $10.3 million since September 30, 2011 |
§ | Expansion of mortgage operations in existing and new markets |
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (in millions) | $ | 6.2 | $ | 6.5 | $ | 28.0 | $ | 23.8 | |||||||
Net income available to common stockholders (in millions) | 5.2 | 5.2 | 20.4 | 18.6 | |||||||||||
Diluted earnings per common share | 0.31 | 0.31 | 1.23 | 1.13 | |||||||||||
Return on average assets | 0.49 | % | 0.50 | % | 0.50 | % | 0.46 | % | |||||||
Return on average common equity | 7.77 | 8.06 | 7.77 | 7.51 | |||||||||||
Net interest margin | 4.08 | 4.05 | 4.16 | 4.12 | |||||||||||
“We are very pleased to see net income increase by 18 percent to $28.0 million for the year. Heartland's favorable results continue to be driven by a solid net interest margin of 4.08 percent. This marks ten consecutive quarters with margin exceeding four percent.” Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc. | ||||
Dubuque, Iowa, Monday, January 30, 2012-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $6.2 million for the quarter ended December 31, 2011, which was a decrease from the $6.5 million recorded for the fourth quarter of 2010. Net income available to common stockholders was $5.2 million, or $0.31 per diluted common share, for the quarter ended December 31, 2011, compared to $5.2 million, or $0.31 per diluted common share, for the fourth quarter of 2010. Return on average common equity was 7.77 percent and return on average assets was 0.49 percent for the fourth quarter of 2011, compared to 8.06 percent and 0.50 percent, respectively, for the same quarter in 2010.
Earnings for the fourth quarter of 2011 in comparison to the fourth quarter of 2010 were positively affected by increases in net interest income, securities gains and gains on sale of loans, along with a lower provision for loan and lease losses and reduced losses on repossessed assets. The effect of these improvements was mitigated by a significant increase in salaries and employee benefits due to the expansion of mortgage operations in both new and existing markets.
Net income recorded for the year was $28.0 million in 2011, compared to $23.8 million in 2010, an increase of $4.2 million or 18 percent. Net income available to common stockholders was $20.4 million, or $1.23 per diluted common share, in 2011, compared to $18.6 million, or $1.13 per diluted common share, in 2010. Return on average common equity was 7.77 percent and return on average assets was 0.50 percent for 2011, compared to 7.51 percent and 0.46 percent, respectively, for 2010.
On September 15, 2011, Heartland joined the Small Business Lending Fund ("SBLF"). Simultaneous with receipt of the SBLF funds, Heartland redeemed the $81.7 million of preferred stock issued to the U.S. Treasury in December 2008 under the Capital Purchase Program, a part of the Troubled Asset Relief Program ("TARP"). As a result of this redemption, $2.6 million in remaining unamortized discount on preferred stock was recognized during the third quarter of 2011. Exclusive of this one-time event, net income available to common stockholders for the year 2011 would have been $23.0 million or $1.39 per diluted common share.
Annual earnings for 2011 compared to 2010 were positively affected by increased securities gains, gains on sale of loans and net interest income, combined with reductions in net losses on repossessed assets, FDIC insurance assessments and provision for loan and lease losses. The effect of these improvements was partially offset by increases in salaries and employee benefits, professional fees and other noninterest expenses.
Commenting on Heartland's results for 2011, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, “We are very pleased to see net income increase by 18 percent to $28.0 million for the year. Heartland's favorable results continue to be driven by a solid net interest margin of 4.08 percent. This marks ten consecutive quarters with margin exceeding four percent.”
Net Interest Margin Remains Above 4.00 Percent
Net interest margin, expressed as a percentage of average earning assets, was 4.08 percent during the fourth quarter of 2011 compared to 4.05 percent for the fourth quarter of 2010. For the twelve months ended December 31, net interest margin was 4.16 percent during 2011 and 4.12 percent during 2010. The continuation of a net interest margin above 4.00 percent has been a direct result of Heartland's price discipline. Also positively affecting net interest margin was improvement in the level of nonaccrual loans not covered under loss share agreements, which had balances of $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, and $90.6 million or 3.87 percent of total loans and leases at December 31, 2010.
Fuller said, “Our net interest margin was excellent throughout 2011, exceeding four percent each quarter. While we are certainly focused on loan growth, we recognize it will be difficult to maintain net interest margin at this level going forward. There is little room to move deposit rates lower, while competition for new loans and reinvestment rates on maturing securities continue to push asset yields lower.”
On a tax-equivalent basis, interest income in the fourth quarter of 2011 was $49.3 million compared to $50.0 million in the fourth quarter of 2010, a decrease of $723,000 or 1 percent. The $111.9 million or 3 percent growth in average earning assets during the fourth quarter of 2011 compared to the same period in 2010 was not enough to compensate for the decrease in the average interest rate earned on these assets which was 5.22 percent during the fourth quarter of 2011 compared to 5.46 percent during the fourth quarter of 2010. A majority of the reduction in the average interest rate earned was in the securities portfolio which earned 3.38 percent during the fourth quarter
of 2011 compared to 3.85 percent during the fourth quarter of 2010. For the year, interest income on a tax-equivalent basis was $197.7 million in 2011 compared to $203.9 million in 2010, a decrease of $6.2 million or 3 percent. The $44.2 million or 1 percent growth in average earning assets during the year 2011 compared to the year 2010 was offset by the impact of a decrease in the average interest rate earned on these assets which was 5.43 percent during 2011 compared to 5.67 percent during 2010. As in the quarterly comparisons, the decrease in earning asset interest rates was primarily due to the decrease in the average interest rate earned on total securities which was 3.69 percent in 2011 compared to 4.17 percent in 2010.
Interest expense for the fourth quarter of 2011 was $10.8 million, a decrease of $2.1 million or 17 percent from $12.9 million in the fourth quarter of 2010. On a year-over-year comparative basis, interest expense decreased $9.6 million or 17 percent to $46.3 million during 2011 from $55.9 million during 2010. Average interest bearing liabilities decreased $29.1 million or 1 percent for the quarter ended December 31, 2011, as compared to the same quarter in 2010. For the year, average interest bearing liabilities decreased $106.0 million or 3 percent in 2011 compared to 2010. These decreases resulted primarily from an outflow of higher cost certificates of deposit and a reduction in other borrowings. The average interest rates paid on Heartland's interest bearing deposits and borrowings declined 26 basis points to 1.40 percent in the fourth quarter of 2011 from 1.66 percent in the fourth quarter of 2010. On a year-over-year comparative basis, the average interest rate paid on Heartland's deposits and borrowings declined 26 basis points to 1.53 percent in 2011 from 1.79 percent in 2010.
Net interest income on a tax-equivalent basis totaled $38.5 million during the fourth quarter of 2011, an increase of $1.4 million or 4 percent from the $37.1 million recorded during the fourth quarter of 2010. For the year 2011, net interest income on a tax-equivalent basis was $151.3 million, an increase of $3.3 million or 2 percent from the $148.0 million recorded during 2010.
Noninterest Income and Noninterest Expense Increase
Noninterest income was $19.0 million during the fourth quarter of 2011 compared to $18.3 million during the fourth quarter of 2010, an increase of $745,000 or 4 percent. . The categories contributing most significantly to the improvement in noninterest income were securities gains and gains on sale of loans. The increase in securities gains resulted from strategies described below to shift concentrations in the securities portfolio. The improvement in gains on sale of loans resulted primarily from better pricing received on the sale of these loans into the secondary market. Heartland began selling a majority of its originated 15- and 30- year, fixed rate residential mortgage loans under a bulk delivery method during the second quarter of 2011, instead of under an individual delivery method. At the same time, Heartland implemented a software tool to assist management with the identification of prudent strategies to hedge its locked rate pipeline position. As a consequence of these two initiatives, gains on sale of loans increased despite a decrease in the volume of loans sold, which totaled $208.5 million during the fourth quarter of 2011 in comparison to $259.0 million during the fourth quarter of 2010. The improvement in securities gains and gains on sale of loans was offset by a $19,000 valuation allowance in the fourth quarter of 2011 as opposed to a $1.2 million positive valuation adjustment in the fourth quarter of 2010 on mortgage servicing rights, reduced loan servicing income and a decrease in other noninterest income, primarily attributable to payment to the FDIC for recoveries on loans covered under loss share agreements and the receipt of $502,000 in life insurance proceeds during the fourth quarter of 2010.
For the year, noninterest income was $59.6 million in 2011 compared to $52.3 million in 2010, an increase of $7.3 million or 14 percent. Securities gains totaled $13.1 million for the year 2011 compared to $6.8 million for the year 2010. Volatility in the bond market provided opportunities in 2011 to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. One such strategy was the sale of taxable municipal bonds and the reinvestment into tax-exempt municipal bonds. Another strategy initiated in the second quarter of 2011 shifted a portion of the securities portfolio from agencies to treasuries and shorter-term mortgage-backed securities. Other categories contributing to the increase for the year-over-year comparative period were gains on sale of loans, service charges and fees, trust fees and brokerage and insurance commissions.
Loan servicing income decreased $319,000 or 14 percent for the fourth quarter of 2011 as compared to the fourth quarter of 2010 and $1.3 million or 18 percent for the year 2011 compared to the year 2010. Two components of loan servicing income, mortgage servicing rights and amortization of mortgage servicing rights, are dependent upon the level of loans Heartland originates and sells into the secondary market, which in turn is highly influenced by market interest rates for home mortgage loans. Mortgage servicing rights income was $1.4 million during the fourth quarter of 2011 compared to $2.3 million during the fourth quarter of 2010 and amortization of mortgage servicing rights was $861,000 during the fourth quarter of 2011 compared to $1.5 million during the fourth quarter of 2010.
Loan servicing income also includes the fees collected for the servicing of mortgage loans for others, which is dependent upon the aggregate outstanding balance of these loans, rather than quarterly production and sale of mortgage loans. Fees collected for the servicing of mortgage loans for others were $932,000 during the fourth quarter of 2011 compared to $831,000 during the fourth quarter of 2010. The portfolio of mortgage loans serviced for others by Heartland totaled $1.54 billion at December 31, 2011, compared to $1.40 billion at December 31, 2010.
For the fourth quarter of 2011, noninterest expense totaled $40.2 million, an increase of $2.9 million or 8 percent from the same quarter of 2010. The primary contributor to this increase was the $5.2 million or 31 percent increase in salaries and employee benefits, a large portion of which resulted from the expansion of residential loan origination and the addition of personnel in the Heartland Mortgage and National Residential Mortgage unit. Full-time equivalent employees totaled 1,195 on December 31, 2011, compared to 1,065 on December 31, 2010. Also contributing to the increased salaries and employee benefits costs during the fourth quarter of 2011 was a decision to change the discretionary retirement plan contribution percentage to 5.00 percent of employee compensation instead of the 4.25 percent it was for 2010. Other noninterest expenses increased $835,000 or 23 percent primarily as a result of the establishment of a $613,000 repurchase reserve during the fourth quarter of 2011 for the potential buyback of mortgage loans sold into the secondary market. Offsetting, in part, these increases were a $458,000 or 35 percent reduction in FDIC insurance assessments and a $3.1 million or 42 percent reduction in net losses on repossessed assets.
For the year-over-year comparative period, noninterest expense totaled $137.3 million in 2011 compared to $129.2 million in 2010, an $8.1 million or 6 percent increase. Contributing to this increase in noninterest expense was a $12.1 million or 19 percent increase in salaries and employee benefits for the yearly comparative period, primarily attributable to the expansion of residential loan origination. Also contributing to the increase in noninterest expense was additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants, and increases in other noninterest expenses, a portion of which was associated with a writedown on land in Phoenix, Arizona, which had originally been purchased for branch expansion but has now been listed for sale, and establishment of the repurchase reserve for the potential buyback of mortgage loans. The effect of these increases was mitigated by a $1.7 million or 30 percent decrease in FDIC insurance assessments and a $5.5 million or 36 percent decrease in net losses on repossessed assets. Included in noninterest expense during 2010 was a $1.6 million goodwill impairment charge.
Fuller commented, “Our new Heartland Mortgage and National Residential unit has significantly expanded our mortgage origination capability, both within and outside of the Heartland footprint. We are optimistic that growth in the mortgage unit will result in increased net profit for the company.”
Heartland's effective tax rate was 26.89 percent for 2011 compared to 29.27 percent for 2010. Excluding a non-deductible goodwill impairment charge recorded in 2010, Heartland's effective tax rate was 27.91 percent for 2010. During the third quarter of 2011, Heartland's income taxes included a $404,000 refund for state taxes attributable to the 2007 and 2008 tax years. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $798,000 during 2011 compared to $554,000 during 2010. Heartland's effective tax rate is also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 28.78 percent during 2011 compared to 27.29 percent during 2010. The tax-equivalent adjustment for this tax-exempt interest income was $5.9 million during 2011 compared to $4.9 million during 2010.
Loan Demand Strengthens; Deposit Growth Continues With Improving Mix
At December 31, 2011, total assets were $4.26 billion, an increase of $259.6 million or 6 percent, over total assets of $4.00 billion at December 31, 2010. Securities represented 30 percent of total assets at year-end 2011 compared to 32 percent at year-end 2010.
Total loans and leases, exclusive of those covered by loss share agreements, were $2.48 billion at December 31, 2011, compared to $2.34 billion at year-end 2010, an increase of $137.3 million or 6 percent. Commercial and commercial real estate loans, which totaled $1.81 billion at December 31, 2011, increased $90.5 million or 5 percent since year-end 2010. Residential mortgage loans, which totaled $194.4 million at December 31, 2011, increased $30.7 million or 19 percent since year-end 2010. Agricultural and agricultural real estate loans, which totaled $263.0 million at December 31, 2011, increased $12.0 million or 5 percent since year-end 2010. Consumer loans, which totaled $220.1 million at December 30, 2011, increased $5.6 million or 3 percent since year-end 2010.
“Loan demand picked up during the second half of the year with very good growth in the fourth quarter. Overall, loans increased 6 percent year-over-year. We believe this is the beginning of a positive trend toward sustained growth in quality loans.” added Fuller.
Fuller also noted, “Our participation in the Small Business Lending Fund provides added incentive for the Heartland banks to originate small business loans. Fueled by the potential of lower funding cost, we will provide affordable credit to small commercial and agricultural clients, which will in turn help to increase employment and assist the economic recovery in the communities we serve.”
Total deposits were $3.21 billion at December 31, 2011, compared to $3.03 billion at year-end 2010, an increase of $176.1 million or 6 percent. The composition of Heartland's deposits shifted from higher cost certificates of deposit to no cost demand deposits during 2011, as demand deposits increased $156.7 million or 27 percent since year-end 2010. Certificates of deposit, exclusive of brokered deposits, experienced a decrease of $103.8 million or 12 percent since year-end 2010. At December 31, 2011, brokered time deposits totaled $41.2 million or 1 percent of total deposits compared to $37.3 million or 1 percent of total deposits at December 31, 2010.
Fuller said, “Deposit growth also demonstrated steady improvement over the year. We continue to see a very favorable shift in our deposit mix through the growth of non-time deposits. An increase in demand deposits was effectively matched with a corresponding decrease in time deposits.”
Decrease in Allowance for Loan Losses; Decrease in Nonperforming Assets
The allowance for loan and lease losses at December 31, 2011, was 1.48 percent of loans and leases and 64.09 percent of nonperforming loans compared to 1.82 percent of loans and leases and 47.12 percent of nonperforming loans at December 31, 2010. The allowance for loan and lease losses as a percentage of loans and leases declined by year-end 2011 as several credit relationships considered impaired, for which specific reserves had been provided, were charged-off or transitioned to other real estate owned. The provision for loan losses was $7.8 million for the fourth quarter of 2011 compared to $8.9 million for the fourth quarter of 2010, a $1.1 million or 12 percent decrease. For the year, provision for loan losses was $29.4 million in 2011 compared to $32.5 million in 2010. Although the aggregate annual provision for loan losses has moderated, additions to the allowance for loan and lease losses continued during 2011 as the lack of significant economic recovery and the long-term affect of adverse economic conditions impacted individual credits and continued to impact the value of collateral when appraisals were obtained.
Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, compared to $90.6 million or 3.87 percent of total loans and leases at December 31, 2010. Approximately 57 percent, or $32.7 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 15 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $8.8 million originated by Arizona Bank & Trust, $8.2 million originated by New Mexico Bank & Trust, $4.5 million originated by Wisconsin Community Bank, $4.5 million originated by Rocky Mountain Bank, $3.9 million originated by Riverside Community Bank and $2.8 million originated by Galena State Bank and Trust Company. The portion of Heartland's nonperforming loans covered by government guarantees was $2.7 million at December 31, 2011. The industry breakdown for nonperforming loans with individual balances exceeding $1.0 million, as identified using the North American Industry Classification System (NAICS), was $14.4 million for lot and land development and $6.7 million for construction and development. The remaining $11.6 million was distributed among seven other industry categories.
Delinquencies in each of the loan portfolios continue to be well-managed and no significant adverse trends were identified during 2011. Loans delinquent 30 to 89 days as a percent of total loans were 0.23 percent at December 31, 2011, compared to 0.54 percent at September 30, 2011, 0.60 percent at June 30, 2011, 0.61 percent at March 31, 2011, and 0.67 percent at December 31, 2010.
Other real estate owned was $44.4 million at December 31, 2011, compared to $32.0 million at December 31, 2010. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues to market these properties through an orderly liquidation process instead of a quick liquidation process in order to avoid discounts greater than the projected carrying costs. During 2011, $21.8 million of other real estate owned was sold, $5.4 million during the fourth quarter, $6.2 million during the third quarter, $4.9 million during the second quarter and $5.3 million during the first quarter.
The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the fourth quarter and year ended December 31, 2011:
(Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
September 30, 2011 | $ | 76,515 | $ | 39,188 | $ | 398 | $ | 116,101 | |||||||
Loan foreclosures | (14,488 | ) | 14,072 | 416 | — | ||||||||||
Net loan charge offs | (15,171 | ) | — | — | (15,171 | ) | |||||||||
New nonperforming loans | 21,634 | — | — | 21,634 | |||||||||||
Reduction of nonperforming loans(1) | (7,710 | ) | — | — | (7,710 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (5,546 | ) | (64 | ) | (5,610 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (3,327 | ) | (20 | ) | (3,347 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | (82 | ) | (82 | ) | |||||||||
December 31, 2011 | $ | 60,780 | $ | 44,387 | $ | 648 | $ | 105,815 | |||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||
(Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
December 31, 2010 | $ | 95,498 | $ | 32,002 | $ | 302 | $ | 127,802 | |||||||
Loan foreclosures | (41,933 | ) | 41,272 | 661 | — | ||||||||||
Net loan charge offs | (35,250 | ) | — | — | (35,250 | ) | |||||||||
New nonperforming loans | 75,676 | — | — | 75,676 | |||||||||||
Reduction of nonperforming loans(1) | (33,211 | ) | — | — | (33,211 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (21,635 | ) | (234 | ) | (21,869 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (7,252 | ) | (52 | ) | (7,304 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | (29 | ) | (29 | ) | |||||||||
December 31, 2011 | $ | 60,780 | $ | 44,387 | $ | 648 | $ | 105,815 | |||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||
Net charge-offs on loans during the fourth quarter of 2011 were $15.2 million compared to $10.9 million during the fourth quarter of 2010. Included in the fourth quarter 2011 net charge-offs was a $6.1 million charge-off on one credit relationship in the Midwest, which had been identified as impaired and fully reserved for in the third quarter of 2011. A large portion of the net charge-offs in both years was related to nonfarm nonresidential real estate and construction, land development and other land loans.
“During the quarter we made substantial headway in reducing nonperforming loans, which has been and continues to be Heartland's number one priority. Nonperforming loans ended the year at 2.3 percent of total loans, a decrease of 37 percent from their peak at year-end 2010. Additionally, delinquencies are at their lowest level in over three years. Compared to the high-water marks set earlier last year, our asset quality measures are moving in a very favorable direction,” Fuller concluded.
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-941-9205 at least five minutes before start time, or log onto www.htlf.com. If you are unable to participate on the call, a replay will be available until January 28, 2013, by logging onto www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a $4.26 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 61 banking locations in 42 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota. 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 loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (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 December 31, | For the Year Ended December 31, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest Income | |||||||||||||||
Interest and fees on loans and leases | $ | 37,764 | $ | 37,440 | $ | 149,603 | $ | 151,794 | |||||||
Interest on securities and other: | |||||||||||||||
Taxable | 6,375 | 7,889 | 28,195 | 34,507 | |||||||||||
Nontaxable | 3,483 | 3,438 | 13,935 | 12,616 | |||||||||||
Interest on federal funds sold | — | — | 3 | 1 | |||||||||||
Interest on deposits in other financial institutions | — | 1 | 1 | 14 | |||||||||||
Total Interest Income | 47,622 | 48,768 | 191,737 | 198,932 | |||||||||||
Interest Expense | |||||||||||||||
Interest on deposits | 6,495 | 8,524 | 29,224 | 38,272 | |||||||||||
Interest on short-term borrowings | 204 | 330 | 893 | 1,160 | |||||||||||
Interest on other borrowings | 4,086 | 4,068 | 16,226 | 16,448 | |||||||||||
Total Interest Expense | 10,785 | 12,922 | 46,343 | 55,880 | |||||||||||
Net Interest Income | 36,837 | 35,846 | 145,394 | 143,052 | |||||||||||
Provision for loan and lease losses | 7,784 | 8,860 | 29,365 | 32,508 | |||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 29,053 | 26,986 | 116,029 | 110,544 | |||||||||||
Noninterest Income | |||||||||||||||
Service charges and fees | 3,686 | 3,537 | 14,303 | 13,900 | |||||||||||
Loan servicing income | 2,004 | 2,323 | 5,932 | 7,232 | |||||||||||
Trust fees | 2,337 | 2,428 | 9,856 | 9,206 | |||||||||||
Brokerage and insurance commissions | 889 | 948 | 3,511 | 3,184 | |||||||||||
Securities gains, net | 4,174 | 2,170 | 13,104 | 6,834 | |||||||||||
Gain (loss) on trading account securities | (125 | ) | 107 | 89 | (91 | ) | |||||||||
Gains on sale of loans | 5,473 | 3,813 | 11,366 | 8,088 | |||||||||||
Valuation adjustment on mortgage servicing rights | (19 | ) | 1,239 | (19 | ) | — | |||||||||
Income on bank owned life insurance | 407 | 463 | 1,349 | 1,466 | |||||||||||
Other noninterest income | 212 | 1,265 | 86 | 2,510 | |||||||||||
Total Noninterest Income | 19,038 | 18,293 | 59,577 | 52,329 | |||||||||||
Noninterest Expense | |||||||||||||||
Salaries and employee benefits | 22,135 | 16,892 | 75,537 | 63,391 | |||||||||||
Occupancy | 2,368 | 2,339 | 9,363 | 9,121 | |||||||||||
Furniture and equipment | 1,475 | 1,543 | 5,636 | 6,104 | |||||||||||
Professional fees | 3,385 | 3,065 | 12,567 | 10,446 | |||||||||||
FDIC insurance assessments | 848 | 1,306 | 3,777 | 5,441 | |||||||||||
Advertising | 1,138 | 1,058 | 4,292 | 3,830 | |||||||||||
Intangible assets amortization | 141 | 146 | 572 | 591 | |||||||||||
Goodwill impairment charge | — | — | — | 1,639 | |||||||||||
Net loss on repossessed assets | 4,255 | 7,345 | 9,807 | 15,264 | |||||||||||
Other noninterest expenses | 4,458 | 3,623 | 15,745 | 13,412 | |||||||||||
Total Noninterest Expense | 40,203 | 37,317 | 137,296 | 129,239 | |||||||||||
Income Before Income Taxes | 7,888 | 7,962 | 38,310 | 33,634 | |||||||||||
Income taxes | 1,671 | 1,464 | 10,302 | 9,846 | |||||||||||
Net Income | 6,217 | 6,498 | 28,008 | 23,788 | |||||||||||
Net income attributable to noncontrolling interest, net of tax | 31 | 35 | 36 | 115 | |||||||||||
Net Income Attributable to Heartland | 6,248 | 6,533 | 28,044 | 23,903 | |||||||||||
Preferred dividends and discount | (1,021 | ) | (1,336 | ) | (7,640 | ) | (5,344 | ) | |||||||
Net Income Available to Common Stockholders | $ | 5,227 | $ | 5,197 | $ | 20,404 | $ | 18,559 | |||||||
Earnings per common share-diluted | $ | 0.31 | $ | 0.31 | $ | 1.23 | $ | 1.13 | |||||||
Weighted average shares outstanding-diluted | 16,599,741 | 16,515,657 | 16,575,506 | 16,461,679 | |||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||||||
Interest Income | |||||||||||||||||||
Interest and fees on loans and leases | $ | 37,764 | $ | 37,393 | $ | 37,480 | $ | 36,966 | $ | 37,440 | |||||||||
Interest on securities and other: | |||||||||||||||||||
Taxable | 6,375 | 6,826 | 7,583 | 7,411 | 7,889 | ||||||||||||||
Nontaxable | 3,483 | 3,370 | 3,518 | 3,564 | 3,438 | ||||||||||||||
Interest on federal funds sold | — | 2 | 1 | — | — | ||||||||||||||
Interest on deposits in other financial institutions | — | — | — | 1 | 1 | ||||||||||||||
Total Interest Income | 47,622 | 47,591 | 48,582 | 47,942 | 48,768 | ||||||||||||||
Interest Expense | |||||||||||||||||||
Interest on deposits | 6,495 | 7,028 | 7,675 | 8,026 | 8,524 | ||||||||||||||
Interest on short-term borrowings | 204 | 205 | 225 | 259 | 330 | ||||||||||||||
Interest on other borrowings | 4,086 | 4,123 | 4,081 | 3,936 | 4,068 | ||||||||||||||
Total Interest Expense | 10,785 | 11,356 | 11,981 | 12,221 | 12,922 | ||||||||||||||
Net Interest Income | 36,837 | 36,235 | 36,601 | 35,721 | 35,846 | ||||||||||||||
Provision for loan and lease losses | 7,784 | 7,727 | 3,845 | 10,009 | 8,860 | ||||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 29,053 | 28,508 | 32,756 | 25,712 | 26,986 | ||||||||||||||
Noninterest Income | |||||||||||||||||||
Service charges and fees | 3,686 | 3,657 | 3,599 | 3,361 | 3,537 | ||||||||||||||
Loan servicing income | 2,004 | 1,081 | 1,298 | 1,549 | 2,323 | ||||||||||||||
Trust fees | 2,337 | 2,384 | 2,656 | 2,479 | 2,428 | ||||||||||||||
Brokerage and insurance commissions | 889 | 918 | 856 | 848 | 948 | ||||||||||||||
Securities gains, net | 4,174 | 2,085 | 4,756 | 2,089 | 2,170 | ||||||||||||||
Gain (loss) on trading account securities | (125 | ) | (83 | ) | 81 | 216 | 107 | ||||||||||||
Gains on sale of loans | 5,473 | 3,183 | 1,308 | 1,402 | 3,813 | ||||||||||||||
Valuation adjustment on mortgage servicing rights | (19 | ) | — | — | — | 1,239 | |||||||||||||
Income on bank owned life insurance | 407 | 208 | 331 | 403 | 463 | ||||||||||||||
Other noninterest income | 212 | (171 | ) | (216 | ) | 261 | 1,265 | ||||||||||||
Total Noninterest Income | 19,038 | 13,262 | 14,669 | 12,608 | 18,293 | ||||||||||||||
Noninterest Expense | |||||||||||||||||||
Salaries and employee benefits | 22,135 | 17,736 | 17,480 | 18,186 | 16,892 | ||||||||||||||
Occupancy | 2,368 | 2,396 | 2,213 | 2,386 | 2,339 | ||||||||||||||
Furniture and equipment | 1,475 | 1,392 | 1,360 | 1,409 | 1,543 | ||||||||||||||
Professional fees | 3,385 | 3,110 | 3,053 | 3,019 | 3,065 | ||||||||||||||
FDIC insurance assessments | 848 | 798 | 786 | 1,345 | 1,306 | ||||||||||||||
Advertising | 1,138 | 1,191 | 1,113 | 850 | 1,058 | ||||||||||||||
Intangible assets amortization | 141 | 141 | 144 | 146 | 146 | ||||||||||||||
Goodwill impairment charge | — | — | — | — | — | ||||||||||||||
Net loss on repossessed assets | 4,255 | 1,409 | 2,511 | 1,632 | 7,345 | ||||||||||||||
Other noninterest expenses | 4,458 | 3,690 | 3,683 | 3,914 | 3,623 | ||||||||||||||
Total Noninterest Expense | 40,203 | 31,863 | 32,343 | 32,887 | 37,317 | ||||||||||||||
Income Before Income Taxes | 7,888 | 9,907 | 15,082 | 5,433 | 7,962 | ||||||||||||||
Income taxes | 1,671 | 2,549 | 4,870 | 1,212 | 1,464 | ||||||||||||||
Net Income | 6,217 | 7,358 | 10,212 | 4,221 | 6,498 | ||||||||||||||
Net income (loss) attributable to noncontrolling interest, net of tax | 31 | (20 | ) | 9 | 16 | 35 | |||||||||||||
Net Income Attributable to Heartland | 6,248 | 7,338 | 10,221 | 4,237 | 6,533 | ||||||||||||||
Preferred dividends and discount | (1,021 | ) | (3,947 | ) | (1,336 | ) | (1,336 | ) | (1,336 | ) | |||||||||
Net Income Available to Common Stockholders | $ | 5,227 | $ | 3,391 | $ | 8,885 | $ | 2,901 | $ | 5,197 | |||||||||
Earnings per common share-diluted | $ | 0.31 | $ | 0.20 | $ | 0.54 | $ | 0.18 | $ | 0.31 | |||||||||
Weighted average shares outstanding-diluted | 16,599,741 | 16,585,021 | 16,568,701 | 16,557,353 | 16,515,657 | ||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
As Of | |||||||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 129,834 | $ | 81,605 | $ | 148,388 | $ | 86,278 | $ | 62,572 | |||||||||
Securities | 1,280,577 | 1,323,464 | 1,193,480 | 1,244,447 | 1,264,564 | ||||||||||||||
Loans held for sale | 53,528 | 36,529 | 15,770 | 8,317 | 23,904 | ||||||||||||||
Loans and leases: | |||||||||||||||||||
Held to maturity | 2,481,284 | 2,374,186 | 2,351,785 | 2,360,604 | 2,343,987 | ||||||||||||||
Loans covered by loss share agreements | 13,347 | 14,766 | 16,190 | 19,201 | 20,800 | ||||||||||||||
Allowance for loan and lease losses | (36,808 | ) | (44,195 | ) | (40,602 | ) | (43,271 | ) | (42,693 | ) | |||||||||
Loans and leases, net | 2,457,823 | 2,344,757 | 2,327,373 | 2,336,534 | 2,322,094 | ||||||||||||||
Premises, furniture and equipment, net | 110,206 | 110,127 | 118,828 | 119,954 | 121,012 | ||||||||||||||
Goodwill | 25,909 | 25,909 | 25,909 | 25,909 | 25,909 | ||||||||||||||
Other intangible assets, net | 12,960 | 12,601 | 13,103 | 13,440 | 13,466 | ||||||||||||||
Cash surrender value on life insurance | 67,084 | 66,654 | 66,425 | 66,073 | 61,981 | ||||||||||||||
Other real estate, net | 44,387 | 39,188 | 39,075 | 35,007 | 32,002 | ||||||||||||||
FDIC indemnification asset | 1,343 | 992 | 1,035 | 1,396 | 2,294 | ||||||||||||||
Other assets | 75,392 | 70,853 | 61,231 | 66,019 | 69,657 | ||||||||||||||
Total Assets | $ | 4,259,043 | $ | 4,112,679 | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | |||||||||
Liabilities and Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Demand | $ | 737,323 | $ | 692,893 | $ | 649,523 | $ | 637,452 | $ | 580,589 | |||||||||
Savings | 1,678,154 | 1,654,417 | 1,557,053 | 1,569,993 | 1,558,998 | ||||||||||||||
Brokered time deposits | 41,225 | 44,225 | 39,225 | 39,225 | 37,285 | ||||||||||||||
Other time deposits | 753,411 | 782,079 | 834,884 | 835,704 | 857,176 | ||||||||||||||
Total deposits | 3,210,113 | 3,173,614 | 3,080,685 | 3,082,374 | 3,034,048 | ||||||||||||||
Short-term borrowings | 270,081 | 173,199 | 168,021 | 194,934 | 235,864 | ||||||||||||||
Other borrowings | 372,820 | 375,976 | 379,718 | 365,281 | 362,527 | ||||||||||||||
Accrued expenses and other liabilities | 53,136 | 36,667 | 36,643 | 28,393 | 35,232 | ||||||||||||||
Total Liabilities | 3,906,150 | 3,759,456 | 3,665,067 | 3,670,982 | 3,667,671 | ||||||||||||||
Equity | |||||||||||||||||||
Preferred equity | 81,698 | 81,698 | 79,113 | 78,798 | 78,483 | ||||||||||||||
Common equity | 268,520 | 268,819 | 263,769 | 250,918 | 250,608 | ||||||||||||||
Total Heartland Stockholders' Equity | 350,218 | 350,517 | 342,882 | 329,716 | 329,091 | ||||||||||||||
Noncontrolling interest | 2,675 | 2,706 | 2,668 | 2,676 | 2,693 | ||||||||||||||
Total Equity | 352,893 | 353,223 | 345,550 | 332,392 | 331,784 | ||||||||||||||
Total Liabilities and Equity | $ | 4,259,043 | $ | 4,112,679 | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | |||||||||
Common Share Data | |||||||||||||||||||
Book value per common share | $ | 16.30 | $ | 16.33 | $ | 16.04 | $ | 15.28 | $ | 15.26 | |||||||||
ASC 320 effect on book value per common share | $ | 0.97 | $ | 1.22 | $ | 0.86 | $ | 0.49 | $ | 0.60 | |||||||||
Common shares outstanding, net of treasury stock | 16,484,790 | 16,459,338 | 16,442,437 | 16,418,228 | 16,425,055 | ||||||||||||||
Tangible Capital Ratio (1) | 5.69 | % | 5.90 | % | 5.92 | % | 5.61 | % | 5.60 | % | |||||||||
(1) Total common stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less intangible assets (excluding mortgage servicing rights). This is a non-GAAP financial measure. | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||||||||
12/31/2011 | 12/31/2010 | 12/31/2011 | 12/31/2010 | ||||||||||||||||
Average Balances | |||||||||||||||||||
Assets | 4,197,916 | 4,091,276 | 4,071,811 | 4,030,382 | |||||||||||||||
Loans and leases, net of unearned | 2,487,778 | 2,414,799 | 2,418,864 | 2,415,947 | |||||||||||||||
Deposits | 3,215,793 | 3,075,193 | 3,114,080 | 3,039,928 | |||||||||||||||
Earning assets | 3,749,612 | 3,637,735 | 3,639,926 | 3,595,690 | |||||||||||||||
Interest bearing liabilities | 3,066,704 | 3,095,791 | 3,021,430 | 3,127,389 | |||||||||||||||
Common stockholders' equity | 267,025 | 255,940 | 262,504 | 247,141 | |||||||||||||||
Total stockholders' equity | 351,538 | 336,827 | 344,878 | 327,577 | |||||||||||||||
Tangible common stockholders' equity | 239,394 | 227,696 | 234,630 | 217,451 | |||||||||||||||
Earnings Performance Ratios | |||||||||||||||||||
Annualized return on average assets | 0.49 | % | 0.50 | % | 0.50 | % | 0.46 | % | |||||||||||
Annualized return on average common equity | 7.77 | % | 8.06 | % | 7.77 | % | 7.51 | % | |||||||||||
Annualized return on average common tangible equity | 8.66 | % | 9.06 | % | 8.70 | % | 8.53 | % | |||||||||||
Annualized net interest margin(1) | 4.08 | % | 4.05 | % | 4.16 | % | 4.12 | % | |||||||||||
Efficiency ratio(2) | 75.29 | % | 70.09 | % | 69.41 | % | 66.79 | % | |||||||||||
(1) Computed on a tax equivalent basis using an effective tax rate of 35% | |||||||||||||||||||
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure. | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||||||
Average Balances | |||||||||||||||||||
Assets | $ | 4,197,916 | $ | 4,063,327 | $ | 4,014,290 | $ | 4,009,863 | $ | 4,091,276 | |||||||||
Loans and leases, net of unearned | 2,487,778 | 2,399,047 | 2,388,088 | 2,399,656 | 2,414,799 | ||||||||||||||
Deposits | 3,215,793 | 3,110,978 | 3,059,360 | 3,068,753 | 3,075,193 | ||||||||||||||
Earning assets | 3,749,612 | 3,624,559 | 3,600,095 | 3,583,883 | 3,637,735 | ||||||||||||||
Interest bearing liabilities | 3,066,704 | 3,002,868 | 3,004,928 | 3,010,629 | 3,095,791 | ||||||||||||||
Common stockholders' equity | 267,025 | 270,696 | 260,334 | 251,833 | 255,940 | ||||||||||||||
Total stockholders' equity | 351,538 | 353,003 | 341,797 | 333,016 | 336,827 | ||||||||||||||
Tangible common stockholders' equity | 239,394 | 242,886 | 232,381 | 223,736 | 227,696 | ||||||||||||||
Earnings Performance Ratios | |||||||||||||||||||
Annualized return on average assets | 0.49 | % | 0.33 | % | 0.89 | % | 0.29 | % | 0.50 | % | |||||||||
Annualized return on average common equity | 7.77 | % | 4.97 | % | 13.69 | % | 4.67 | % | 8.06 | % | |||||||||
Annualized return on average common tangible equity | 8.66 | % | 5.54 | % | 15.34 | % | 5.26 | % | 9.06 | % | |||||||||
Annualized net interest margin (1) | 4.08 | % | 4.14 | % | 4.23 | % | 4.19 | % | 4.05 | % | |||||||||
Efficiency ratio (2) | 75.29 | % | 65.07 | % | 67.53 | % | 69.17 | % | 70.09 | % | |||||||||
(1) Computed on a tax equivalent basis using an effective tax rate of 35% | |||||||||||||||||||
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure. | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
As of and for the Quarter Ended | |||||||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||||||
Loan and Lease Data | |||||||||||||||||||
Loans held to maturity: | |||||||||||||||||||
Commercial and commercial real estate | $ | 1,809,450 | $ | 1,725,586 | $ | 1,709,955 | $ | 1,727,530 | $ | 1,718,993 | |||||||||
Residential mortgage | 194,436 | 179,628 | 173,808 | 169,513 | 163,726 | ||||||||||||||
Agricultural and agricultural real estate | 262,975 | 256,857 | 255,257 | 253,189 | 250,943 | ||||||||||||||
Consumer | 220,099 | 217,007 | 217,263 | 214,682 | 214,515 | ||||||||||||||
Direct financing leases, net | 450 | 604 | 667 | 876 | 981 | ||||||||||||||
Unearned discount and deferred loan fees | (6,126 | ) | (5,496 | ) | (5,165 | ) | (5,186 | ) | (5,171 | ) | |||||||||
Total loans and leases held to maturity | $ | 2,481,284 | $ | 2,374,186 | $ | 2,351,785 | $ | 2,360,604 | $ | 2,343,987 | |||||||||
Loans covered under loss share agreements: | |||||||||||||||||||
Commercial and commercial real estate | $ | 6,380 | $ | 6,788 | $ | 7,315 | $ | 9,368 | $ | 10,056 | |||||||||
Residential mortgage | 4,158 | 4,410 | 4,747 | 5,291 | 5,792 | ||||||||||||||
Agricultural and agricultural real estate | 1,659 | 2,139 | 2,298 | 2,628 | 2,723 | ||||||||||||||
Consumer | 1,150 | 1,429 | 1,830 | 1,914 | 2,229 | ||||||||||||||
Total loans and leases covered under loss share agreements | $ | 13,347 | $ | 14,766 | $ | 16,190 | $ | 19,201 | $ | 20,800 | |||||||||
Asset Quality | |||||||||||||||||||
Not covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 57,435 | $ | 72,629 | $ | 68,110 | $ | 87,970 | $ | 90,512 | |||||||||
Loans and leases past due ninety days or more as to interest or principal payments | — | — | — | 3,038 | 85 | ||||||||||||||
Other real estate owned | 43,506 | 38,640 | 38,642 | 34,532 | 31,731 | ||||||||||||||
Other repossessed assets | 648 | 398 | 188 | 223 | 302 | ||||||||||||||
Total nonperforming assets not covered under loss share agreements | $ | 101,589 | $ | 111,667 | $ | 106,940 | $ | 125,763 | $ | 122,630 | |||||||||
Covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 3,345 | $ | 3,886 | $ | 4,480 | $ | 4,564 | $ | 4,901 | |||||||||
Loans and leases past due ninety days or more as to interest or principal payments | — | — | — | — | — | ||||||||||||||
Other real estate owned | 881 | 548 | 433 | 475 | 271 | ||||||||||||||
Other repossessed assets | — | — | — | — | — | ||||||||||||||
Total nonperforming assets covered under loss share agreements | $ | 4,226 | $ | 4,434 | $ | 4,913 | $ | 5,039 | $ | 5,172 | |||||||||
Allowance for Loan and Lease Losses | |||||||||||||||||||
Balance, beginning of period | $ | 44,195 | $ | 40,602 | $ | 43,271 | $ | 42,693 | $ | 44,732 | |||||||||
Provision for loan and lease losses | 7,784 | 7,727 | 3,845 | 10,009 | 8,860 | ||||||||||||||
Charge-offs on loans not covered by loss share agreements | (15,616 | ) | (5,985 | ) | (8,076 | ) | (9,785 | ) | (11,133 | ) | |||||||||
Charge-offs on loans covered by loss share agreements | (5 | ) | (168 | ) | (107 | ) | (238 | ) | (445 | ) | |||||||||
Recoveries | 450 | 2,019 | 1,669 | 592 | 679 | ||||||||||||||
Balance, end of period | $ | 36,808 | $ | 44,195 | $ | 40,602 | $ | 43,271 | $ | 42,693 | |||||||||
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements | |||||||||||||||||||
Ratio of nonperforming loans and leases to total loans and leases | 2.31 | % | 3.06 | % | 2.90 | % | 3.86 | % | 3.87 | % | |||||||||
Ratio of nonperforming assets to total assets | 2.39 | % | 2.72 | % | 2.67 | % | 3.14 | % | 3.07 | % | |||||||||
Annualized ratio of net loan charge-offs to average loans and leases | 2.42 | % | 0.66 | % | 1.08 | % | 1.59 | % | 1.79 | % | |||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.48 | % | 1.86 | % | 1.73 | % | 1.83 | % | 1.82 | % | |||||||||
Allowance for loan and lease losses as a percent of nonperforming loans and leases | 64.09 | % | 60.85 | % | 59.61 | % | 47.55 | % | 47.12 | % | |||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
December 31, 2011 | December 31, 2010 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 993,038 | $ | 6,375 | 2.55 | % | $ | 975,587 | $ | 7,889 | 3.21 | % | |||||||||
Nontaxable(1) | 310,324 | 4,743 | 6.06 | 287,595 | 4,375 | 6.04 | |||||||||||||||
Total securities | 1,303,362 | 11,118 | 3.38 | 1,263,182 | 12,264 | 3.85 | |||||||||||||||
Interest bearing deposits | 2,065 | — | — | 3,179 | 1 | 0.12 | |||||||||||||||
Federal funds sold | 73 | — | — | 742 | — | — | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,788,884 | 24,827 | 5.51 | 1,730,992 | 24,867 | 5.70 | |||||||||||||||
Residential mortgage | 225,701 | 2,630 | 4.62 | 210,155 | 2,669 | 5.04 | |||||||||||||||
Agricultural and agricultural real estate (1) | 254,555 | 3,833 | 5.97 | 255,061 | 3,862 | 6.01 | |||||||||||||||
Consumer | 218,117 | 5,347 | 9.73 | 217,488 | 4,998 | 9.12 | |||||||||||||||
Direct financing leases, net | 521 | 7 | 5.33 | 1,103 | 16 | 5.76 | |||||||||||||||
Fees on loans | — | 1,560 | — | — | 1,368 | — | |||||||||||||||
Less: allowance for loan and lease losses | (43,666 | ) | — | — | (44,167 | ) | — | — | |||||||||||||
Net loans and leases | 2,444,112 | 38,204 | 6.20 | 2,370,632 | 37,780 | 6.32 | |||||||||||||||
Total earning assets | 3,749,612 | 49,322 | 5.22 | % | 3,637,735 | 50,045 | 5.46 | % | |||||||||||||
Nonearning Assets | 448,304 | 453,541 | |||||||||||||||||||
Total Assets | $ | 4,197,916 | $ | 49,322 | $ | 4,091,276 | $ | 50,045 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,662,065 | $ | 1,972 | 0.47 | $ | 1,558,542 | $ | 2,747 | 0.70 | |||||||||||
Time, $100,000 and over | 257,186 | 1,336 | 2.06 | 277,373 | 1,744 | 2.49 | |||||||||||||||
Other time deposits | 557,930 | 3,187 | 2.27 | 628,511 | 4,033 | 2.55 | |||||||||||||||
Short-term borrowings | 215,473 | 204 | 0.38 | 224,483 | 330 | 0.58 | |||||||||||||||
Other borrowings | 374,050 | 4,086 | 4.33 | 406,882 | 4,068 | 3.97 | |||||||||||||||
Total interest bearing liabilities | 3,066,704 | 10,785 | 1.40 | % | 3,095,791 | 12,922 | 1.66 | % | |||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 738,612 | 610,767 | |||||||||||||||||||
Accrued interest and other liabilities | 41,062 | 47,891 | |||||||||||||||||||
Total noninterest bearing liabilities | 779,674 | 658,658 | |||||||||||||||||||
Stockholders' Equity | 351,538 | 336,827 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,197,916 | $ | 4,091,276 | |||||||||||||||||
Net interest income (1) | $ | 38,537 | $ | 37,123 | |||||||||||||||||
Net interest spread (1) | 3.82 | % | 3.80 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.08 | % | 4.05 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 81.79 | % | 85.10 | % | |||||||||||||||||
(1) Computed on a tax equivalent basis using an effective tax rate of 35% | |||||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||
December 31, 2011 | December 31, 2010 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 1,038,172 | $ | 28,195 | 2.72 | % | $ | 956,976 | $ | 34,507 | 3.61 | % | |||||||||
Nontaxable (1) | 221,974 | 18,262 | 8.23 | 264,307 | 16,408 | 6.21 | |||||||||||||||
Total securities | 1,260,146 | 46,457 | 3.69 | 1,221,283 | 50,915 | 4.17 | |||||||||||||||
Interest bearing deposits | 3,179 | 3 | 0.09 | 3,541 | 14 | 0.40 | |||||||||||||||
Federal funds sold | 430 | 1 | 0.23 | 667 | 1 | 0.15 | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,747,968 | 99,986 | 5.72 | 1,727,548 | 101,720 | 5.89 | |||||||||||||||
Residential mortgage | 198,312 | 10,172 | 5.13 | 203,596 | 10,663 | 5.24 | |||||||||||||||
Agricultural and agricultural real estate (1) | 255,615 | 15,553 | 6.08 | 258,943 | 15,966 | 6.17 | |||||||||||||||
Consumer | 216,268 | 20,526 | 9.49 | 224,288 | 20,052 | 8.94 | |||||||||||||||
Direct financing leases, net | 701 | 38 | 5.42 | 1,572 | 92 | 5.85 | |||||||||||||||
Fees on loans | — | 4,939 | — | — | 4,452 | — | |||||||||||||||
Less: allowance for loan and lease losses | (42,693 | ) | — | — | (45,748 | ) | — | — | |||||||||||||
Net loans and leases | 2,376,171 | 151,214 | 6.36 | 2,370,199 | 152,945 | 6.45 | |||||||||||||||
Total earning assets | 3,639,926 | 197,675 | 5.43 | % | 3,595,690 | 203,875 | 5.67 | % | |||||||||||||
Nonearning Assets | 431,885 | 434,692 | |||||||||||||||||||
Total Assets | $ | 4,071,811 | $ | 197,675 | $ | 4,030,382 | $ | 203,875 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,589,697 | $ | 9,090 | 0.57 | $ | 1,557,658 | $ | 13,677 | 0.88 | |||||||||||
Time, $100,000 and over | 265,664 | 5,928 | 2.23 | 296,325 | 7,534 | 2.54 | |||||||||||||||
Other time deposits | 590,767 | 14,206 | 2.40 | 649,892 | 17,061 | 2.63 | |||||||||||||||
Short-term borrowings | 202,183 | 893 | 0.44 | 200,389 | 1,160 | 0.58 | |||||||||||||||
Other borrowings | 373,119 | 16,226 | 4.35 | 423,125 | 16,448 | 3.89 | |||||||||||||||
Total interest bearing liabilities | 3,021,430 | 46,343 | 1.53 | % | 3,127,389 | 55,880 | 1.79 | % | |||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 667,952 | 536,053 | |||||||||||||||||||
Accrued interest and other liabilities | 37,551 | 39,363 | |||||||||||||||||||
Total noninterest bearing liabilities | 705,503 | 575,416 | |||||||||||||||||||
Stockholders' Equity | 344,878 | 327,577 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,071,811 | $ | 4,030,382 | |||||||||||||||||
Net interest income (1) | $ | 151,332 | $ | 147,995 | |||||||||||||||||
Net interest spread (1) | 3.90 | % | 3.88 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.16 | % | 4.12 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 83.01 | % | 86.98 | % | |||||||||||||||||
(1) Computed on a tax equivalent basis using an effective tax rate of 35% | |||||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||
As of and For the Quarter Ended | |||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||
Total Assets | |||||||||||||||
Dubuque Bank and Trust Company | $ | 1,381,674 | $ | 1,275,116 | $ | 1,294,654 | $ | 1,270,387 | $ | 1,247,297 | |||||
New Mexico Bank & Trust | 974,943 | 921,973 | 891,609 | 880,980 | 913,776 | ||||||||||
Wisconsin Community Bank | 519,491 | 486,319 | 453,427 | 469,305 | 474,366 | ||||||||||
Rocky Mountain Bank | 434,565 | 425,132 | 419,697 | 417,846 | 417,781 | ||||||||||
Riverside Community Bank | 318,892 | 316,945 | 322,601 | 302,057 | 290,018 | ||||||||||
Galena State Bank & Trust Co. | 283,821 | 294,299 | 296,318 | 275,807 | 278,353 | ||||||||||
Arizona Bank & Trust | 225,807 | 221,481 | 222,148 | 231,020 | 223,574 | ||||||||||
Summit Bank & Trust | 100,994 | 99,528 | 95,130 | 93,600 | 95,414 | ||||||||||
Minnesota Bank & Trust | 81,457 | 75,021 | 67,594 | 62,251 | 58,386 | ||||||||||
Total Deposits | |||||||||||||||
Dubuque Bank and Trust Company | $ | 938,000 | $ | 929,854 | $ | 892,526 | $ | 935,424 | $ | 902,849 | |||||
New Mexico Bank & Trust | 690,293 | 681,413 | 674,096 | 659,373 | 646,302 | ||||||||||
Wisconsin Community Bank | 429,062 | 402,957 | 371,037 | 374,758 | 392,432 | ||||||||||
Rocky Mountain Bank | 365,373 | 356,353 | 349,299 | 348,723 | 347,924 | ||||||||||
Riverside Community Bank | 264,699 | 268,432 | 271,553 | 245,639 | 241,184 | ||||||||||
Galena State Bank & Trust Co. | 243,639 | 255,006 | 257,413 | 239,445 | 236,647 | ||||||||||
Arizona Bank & Trust | 177,457 | 179,369 | 179,885 | 188,415 | 183,279 | ||||||||||
Summit Bank & Trust | 81,224 | 85,431 | 80,793 | 80,327 | 81,024 | ||||||||||
Minnesota Bank & Trust | 66,875 | 57,058 | 50,091 | 46,205 | 44,278 | ||||||||||
Net Income (Loss) | |||||||||||||||
Dubuque Bank and Trust Company | $ | 4,846 | $ | 5,602 | $ | 6,132 | $ | 4,958 | $ | 3,972 | |||||
New Mexico Bank & Trust | 2,197 | 1,509 | 2,505 | 958 | 3,098 | ||||||||||
Wisconsin Community Bank | 2,313 | 2,443 | 1,882 | 1,466 | 1,581 | ||||||||||
Rocky Mountain Bank | 493 | 780 | 646 | (630 | ) | 1,393 | |||||||||
Riverside Community Bank | 800 | (339 | ) | 953 | (212 | ) | 190 | ||||||||
Galena State Bank & Trust Co. | 1,139 | 941 | 1,113 | 579 | 1,000 | ||||||||||
Arizona Bank & Trust | (1,202 | ) | (960 | ) | 546 | (1,452 | ) | (231 | ) | ||||||
Summit Bank & Trust | (154 | ) | (160 | ) | 116 | (604 | ) | (208 | ) | ||||||
Minnesota Bank & Trust | (157 | ) | 102 | (45 | ) | (81 | ) | (178 | ) | ||||||
Return on Average Assets | |||||||||||||||
Dubuque Bank and Trust Company | 1.44 | % | 1.74 | % | 1.92 | % | 1.60 | % | 1.18 | % | |||||
New Mexico Bank & Trust | 0.93 | 0.65 | 1.11 | 0.43 | 1.33 | ||||||||||
Wisconsin Community Bank | 1.83 | 2.05 | 1.63 | 1.26 | 1.31 | ||||||||||
Rocky Mountain Bank | 0.45 | 0.73 | 0.61 | (0.61 | ) | 1.27 | |||||||||
Riverside Community Bank | 0.98 | (0.42 | ) | 1.24 | (0.28 | ) | 0.25 | ||||||||
Galena State Bank & Trust Co. | 1.54 | 1.28 | 1.61 | 0.85 | 1.39 | ||||||||||
Arizona Bank & Trust | (2.13 | ) | (1.72 | ) | 0.94 | (2.58 | ) | (0.38 | ) | ||||||
Summit Bank & Trust | (0.63 | ) | (0.66 | ) | 0.49 | (2.59 | ) | (0.84 | ) | ||||||
Minnesota Bank & Trust | (0.77 | ) | 0.56 | (0.25 | ) | (0.53 | ) | (1.23 | ) | ||||||
Net Interest Margin as a Percentage of Average Earning Assets | |||||||||||||||
Dubuque Bank and Trust Company | 4.00 | % | 4.01 | % | 3.62 | % | 3.59 | % | 3.83 | % | |||||
New Mexico Bank & Trust | 3.85 | 4.10 | 4.33 | 4.34 | 4.00 | ||||||||||
Wisconsin Community Bank | 4.30 | 4.33 | 4.60 | 4.57 | 4.26 | ||||||||||
Rocky Mountain Bank | 4.06 | 4.03 | 3.85 | 3.91 | 3.76 | ||||||||||
Riverside Community Bank | 3.64 | 3.58 | 3.90 | 4.01 | 4.38 | ||||||||||
Galena State Bank and Trust Co. | 3.69 | 3.55 | 3.86 | 3.73 | 3.60 | ||||||||||
Arizona Bank & Trust | 4.06 | 4.10 | 4.52 | 4.25 | 3.72 | ||||||||||
Summit Bank & Trust | 3.41 | 3.84 | 3.33 | 2.99 | 2.78 | ||||||||||
Minnesota Bank & Trust | 4.56 | 4.82 | 4.55 | 4.75 | 4.07 | ||||||||||
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||
As of | |||||||||||||||||||
12/31/2011 | 9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | |||||||||||||||
Total Portfolio Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 778,467 | $ | 731,356 | $ | 730,802 | $ | 748,354 | $ | 734,226 | |||||||||
New Mexico Bank & Trust | 508,874 | 507,416 | 506,810 | 513,568 | 513,658 | ||||||||||||||
Wisconsin Community Bank | 333,112 | 318,906 | 314,432 | 320,841 | 320,711 | ||||||||||||||
Rocky Mountain Bank | 256,704 | 250,728 | 247,718 | 238,201 | 246,213 | ||||||||||||||
Riverside Community Bank | 155,320 | 155,995 | 157,901 | 161,238 | 162,706 | ||||||||||||||
Galena State Bank and Trust Co. | 157,398 | 143,680 | 138,726 | 136,210 | 137,153 | ||||||||||||||
Arizona Bank & Trust | 146,346 | 137,356 | 137,853 | 134,254 | 124,388 | ||||||||||||||
Summit Bank & Trust | 62,422 | 53,402 | 52,570 | 47,024 | 48,020 | ||||||||||||||
Minnesota Bank & Trust | 58,058 | 50,545 | 43,109 | 40,197 | 36,013 | ||||||||||||||
Allowance For Loan and Lease Losses | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 9,365 | $ | 10,087 | $ | 10,148 | $ | 11,984 | $ | 12,432 | |||||||||
New Mexico Bank & Trust | 6,633 | 10,271 | 8,405 | 7,277 | 7,704 | ||||||||||||||
Wisconsin Community Bank | 3,458 | 3,288 | 3,637 | 3,369 | 3,847 | ||||||||||||||
Rocky Mountain Bank | 3,865 | 3,953 | 4,074 | 4,425 | 3,779 | ||||||||||||||
Riverside Community Bank | 2,834 | 4,770 | 2,702 | 3,693 | 3,524 | ||||||||||||||
Galena State Bank & Trust Co. | 1,835 | 1,956 | 2,077 | 2,278 | 1,811 | ||||||||||||||
Arizona Bank & Trust | 4,627 | 5,590 | 5,502 | 6,018 | 5,407 | ||||||||||||||
Summit Bank & Trust | 1,012 | 1,108 | 1,091 | 1,103 | 1,271 | ||||||||||||||
Minnesota Bank & Trust | 588 | 507 | 449 | 636 | 565 | ||||||||||||||
Nonperforming Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 3,634 | $ | 4,298 | $ | 4,910 | $ | 12,897 | $ | 7,511 | |||||||||
New Mexico Bank & Trust | 15,161 | 15,404 | 16,053 | 15,979 | 20,753 | ||||||||||||||
Wisconsin Community Bank | 8,074 | 11,871 | 10,359 | 11,776 | 12,702 | ||||||||||||||
Rocky Mountain Bank | 8,662 | 14,180 | 16,971 | 18,303 | 21,406 | ||||||||||||||
Riverside Community Bank | 6,729 | 5,870 | 5,962 | 11,443 | 7,611 | ||||||||||||||
Galena State Bank & Trust Co. | 3,853 | 5,309 | 5,182 | 6,259 | 5,308 | ||||||||||||||
Arizona Bank & Trust | 7,927 | 10,811 | 4,054 | 6,959 | 8,797 | ||||||||||||||
Summit Bank & Trust | 2,848 | 4,159 | 3,905 | 4,527 | 5,965 | ||||||||||||||
Minnesota Bank & Trust | 6 | 6 | 110 | 2,229 | 8 | ||||||||||||||
Allowance As a Percent of Total Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | 1.20 | % | 1.38 | % | 1.39 | % | 1.60 | % | 1.69 | % | |||||||||
New Mexico Bank & Trust | 1.30 | 2.02 | 1.66 | 1.42 | 1.50 | ||||||||||||||
Wisconsin Community Bank | 1.04 | 1.03 | 1.16 | 1.05 | 1.20 | ||||||||||||||
Rocky Mountain Bank | 1.51 | 1.58 | 1.64 | 1.86 | 1.53 | ||||||||||||||
Riverside Community Bank | 1.82 | 3.06 | 1.71 | 2.29 | 2.17 | ||||||||||||||
Galena State Bank & Trust Co. | 1.17 | 1.36 | 1.50 | 1.67 | 1.32 | ||||||||||||||
Arizona Bank & Trust | 3.16 | 4.07 | 3.99 | 4.48 | 4.35 | ||||||||||||||
Summit Bank & Trust | 1.62 | 2.07 | 2.08 | 2.35 | 2.65 | ||||||||||||||
Minnesota Bank & Trust | 1.01 | 1.00 | 1.04 | 1.58 | 1.57 | ||||||||||||||