 |  | |||||||
| CONTACT: | FOR IMMEDIATE RELEASE | ||||
| Bryan R. McKeag | October 28, 2019 | ||||
| Executive Vice President | |||||
| Chief Financial Officer | |||||
| (563) 589-1994 | |||||
| bmckeag@htlf.com | |||||
HEARTLAND FINANCIAL USA, INC. REPORTS QUARTERLY AND YEAR TO DATE RESULTS AS OF SEPTEMBER 30, 2019
Highlights
| § | Quarterly net income available to common stockholders of $34.6 million or $0.94 per diluted common share in comparison with $33.7 million or $0.97 per diluted common share for the third quarter of the prior year | |||||||
| § | Net interest margin of 3.98%, fully tax-equivalent (non-GAAP)(1) of 4.02% | |||||||
| § | Return on average common equity of 8.91% and return on average tangible common equity (non-GAAP)(1) of 13.78% | |||||||
| § | Efficiency ratio (non-GAAP)(1) for the third quarter of 2019 of 61.92% compared to 62.51% for the third quarter of 2018 | |||||||
| § | Tangible common equity ratio (non-GAAP)(1) of 8.99% in comparison to 7.70% at September 30, 2018 | |||||||
| § | Organic loan growth of $118.6 million and organic deposit growth of $361.3 million for the third quarter of 2019 | |||||||
| § | Entered into an agreement to acquire substantially all of the assets and deposits and certain other liabilities of Rockford Bank and Trust Company | |||||||
| § | Completed Bank of Blue Valley systems conversion on August 23, 2019 | |||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Net income available to common stockholders (in millions) | $ | 34.6 | $ | 33.7 | $ | 111.3 | $ | 84.8 | |||||||||||||||
| Diluted earnings per common share | 0.94 | 0.97 | 3.11 | 2.59 | |||||||||||||||||||
| Return on average assets | 1.12 | % | 1.18 | % | 1.27 | % | 1.07 | % | |||||||||||||||
| Return on average common equity | 8.91 | 10.58 | 10.33 | 9.95 | |||||||||||||||||||
Return on average tangible common equity (non-GAAP)(1) | 13.78 | 17.31 | 16.13 | 15.64 | |||||||||||||||||||
| Net interest margin | 3.98 | 4.32 | 4.05 | 4.25 | |||||||||||||||||||
Net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.02 | 4.38 | 4.10 | 4.32 | |||||||||||||||||||
Efficiency ratio, fully-tax equivalent (non-GAAP)(1) | 61.92 | 62.51 | 63.95 | 65.03 | |||||||||||||||||||
(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.
| "Heartland completed another successful quarter with net income of $34.6 million for the quarter ended September 30, 2019. Our quarterly results were highlighted by a strong net interest margin and impressive organic loan and deposit growth of $118.6 million and $361.3 million, respectively." | ||
| Bruce K. Lee, president and chief executive officer, Heartland Financial USA, Inc. | ||
Dubuque, Iowa, Monday, October 28, 2019-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income available to common stockholders of $34.6 million, or $0.94 per diluted common share, for the quarter ended September 30, 2019, compared to $33.7 million, or $0.97 per diluted common share, for the third quarter of 2018. Return on average common equity was 8.91% and return on average assets was 1.12% for the third quarter of 2019, compared to 10.58% and 1.18%, respectively, for the same quarter in 2018.
Net income available to common stockholders for the nine months ended September 30, 2019, was $111.3 million or $3.11 per diluted common share, compared to $84.8 million or $2.59 per diluted common share for the nine months ended September 30, 2018. Return on average common equity was 10.33% and return on average assets was 1.27% for the first nine months of 2019, compared to 9.95% and 1.07% for the same period in 2018.
Commenting on Heartland’s third quarter results, Bruce K. Lee, Heartland’s president and chief executive officer, said, "Heartland completed another successful quarter with net income of $34.6 million for the quarter ended September 30, 2019. Our quarterly results were highlighted by a strong net interest margin and impressive organic loan and deposit growth of $118.6 million and $361.3 million, respectively."
Recent Developments
•On May 10, 2019, Heartland completed the acquisition of Blue Valley Ban Corp. ("BVBC") and its wholly-owned subsidiary, Bank of Blue Valley, headquartered in Overland Park, Kansas. Based on Heartland's closing common stock price of $44.78 per share on May 10, 2019, the aggregate consideration paid to BVBC common shareholders was $92.3 million, which was paid by delivery of Heartland common stock. Immediately following the closing of the transaction, Bank of Blue Valley was merged with and into Heartland's wholly-owned Kansas subsidiary, Morrill & Janes Bank and Trust Company, and the combined entity operates under the Bank of Blue Valley brand. As of the closing date, BVBC had, at fair value, total assets of $766.2 million, total loans held to maturity of $542.0 million, and total deposits of $617.1 million. Heartland also assumed, at fair value, $16.1 million of trust preferred debt. The systems conversion for this transaction was completed on August 23, 2019.
•In keeping with its focus on core businesses and execution of strategic priorities, during the second quarter of 2019, Heartland completed the sale of two branches of Dubuque Bank and Trust Company, two branches of Illinois Bank & Trust and one branch of Citywide Banks, which resulted in a reduction of loans of $27.1 million and deposits of $107.8 million. On April 30, 2019, Dubuque Bank and Trust Company closed on the sale of substantially all its mortgage servicing rights to PNC Bank, N.A. Heartland is utilizing a portion of the net gains from these sales transactions, which totaled approximately $19.8 million and were recorded in the second quarter of 2019, to invest in several new technology and process improvement projects. These projects include system upgrades, process automation, and expansion of online and mobile banking capabilities.
•On August 13, 2019, Heartland's Illinois Bank & Trust subsidiary entered into a purchase and assumption agreement to acquire substantially all of the assets and substantially all of the deposits and certain other liabilities of Rockford Bank and Trust Company ("RB&T"), headquartered in Rockford, Illinois. RB&T is a wholly-owned subsidiary of Moline, Illinois-based QCR Holdings, Inc. As of September 30, 2019, RB&T had total assets of $519.5 million, which included $417.3 million of gross loans held to maturity, and $451.5 million of deposits. RB&T serves the Rockford market from two full-service banking locations. The all-cash transaction is subject to approval by federal and state bank regulators and to customary closing conditions and is expected to close in the fourth quarter of 2019. The systems conversion is expected to occur in the first quarter of 2020.
Net Interest Income Increases, Net Interest Margin Decreases, from Third Quarter of 2018
Net interest margin, expressed as a percentage of average earning assets, was 3.98% (4.02% on a fully tax-equivalent basis, non-GAAP) during the third quarter of 2019, compared to 4.06% (4.10% on a fully tax-equivalent basis, non-GAAP) during the second quarter of 2019 and 4.32% (4.38% on a fully tax-equivalent basis, non-GAAP) during the third quarter of 2018.
Total interest income for the third quarter of 2019 was $133.4 million compared to $124.9 million recorded in the third quarter of 2018, an increase of $8.5 million or 7%. The tax-equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $1.1 million for the third quarter of 2019 and $1.5 million for the third quarter of 2018. With these adjustments, total interest income on a tax-equivalent basis was $134.5
million for the third quarter of 2019, an increase of $8.1 million or 6%, compared to total interest income on a tax-equivalent basis of $126.4 million for the third quarter of 2018. Average earning assets of $11.10 billion increased $948.0 million or 9% from the third quarter of 2018, which was primarily attributable to recent acquisitions. The average rate on earning assets decreased 13 basis points to 4.81% for the third quarter of 2019 compared to 4.94% for the same quarter in 2018. In the first quarter of 2019, Heartland sold its higher yielding consumer loan portfolios, which decreased the average rate on earning assets by approximately 13 basis points for the third quarter of 2019 compared to the same quarter in 2018.
Total interest expense for the third quarter of 2019 was $22.1 million, an increase of $7.9 million or 55% from $14.2 million in the third quarter of 2018. The average interest rate paid on Heartland's interest bearing liabilities increased to 1.22% for the third quarter of 2019 compared to 0.86% for the third quarter of 2018, which was primarily due to recent increases in market interest rates. Average interest bearing deposits increased $666.8 million or 11% to $6.79 billion for the quarter ended September 30, 2019, from $6.13 billion in the same quarter in 2018, which was primarily attributable to recent acquisitions. The average interest rate paid on Heartland's interest bearing deposits increased 40 basis points to 1.05% for the third quarter of 2019 compared to 0.65% for the same quarter in 2018. Average borrowings decreased $36.8 million or 9% to $382.2 million during the third quarter of 2019 from $419.0 million during the same quarter in 2018. The average interest rate paid on Heartland's borrowings was 4.26% for the third quarter of 2019 compared to 3.91% in the third quarter of 2018.
Net interest income was $111.3 million during the third quarter of 2019 compared to $110.7 million during the third quarter of 2018, an increase of $643,000 or 1%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $112.5 million during the third quarter of 2019 compared to net interest income on a tax-equivalent basis of $112.2 million during the third quarter of 2018, an increase of $239,000 or less than 1%.
"Our fully tax-equivalent net interest margin remains strong at 4.02% for the third quarter of 2019, which was a decline of eight basis points from the second quarter of 2019. In response to the recent decline in interest rates, we have taken steps to help maintain our yield on loans and lower our funding costs," Lee said.
Noninterest Income and Noninterest Expense Remain Flat from Third Quarter of 2018
Total noninterest income was $29.4 million during the third quarter of 2019 compared to $29.8 million during the third quarter of 2018, a decrease of $365,000 or 1%. Significant changes by noninterest income category were:
•Loan servicing income totaled $821,000 for the third quarter of 2019 compared to $1.7 million for the third quarter of 2018, which was a decrease of $849,000 or 51%. The decrease was primarily due to the sale of the mortgage servicing rights of Dubuque Bank and Trust Company in the second quarter of 2019.
•Securities gains, net, totaled $2.0 million for the third quarter of 2019 compared to net securities losses of $145,000 in the third quarter of 2018.
•Net gains on sale of loans held for sale totaled $4.7 million during the third quarter of 2019 compared to $7.4 million during the same quarter in 2018, which was a decrease of $2.7 million or 37%, primarily due to the outsourcing of Heartland's legacy mortgage lending operations in the fourth quarter of 2018.
•Other noninterest income totaled $3.2 million for the third quarter of 2019 compared to $1.1 million for the third quarter of 2018, which was an increase of $2.1 million or 179%. Commercial swap fee income increased $1.3 million to $1.6 million for the third quarter of 2019 compared to $374,000 for the same quarter of 2018. Also included in other noninterest income for the third quarter of 2019 was a gain on the extinguishment of debt of $375,000.
For the third quarter of 2019, total noninterest expense was $93.0 million compared to $92.5 million during the third quarter of 2018, an increase of $428,000 or less than 1%. The most significant change by noninterest expense category was in other noninterest expenses, which was $15.5 million for the third quarter of 2019 compared to $12.9 million for the third quarter of 2018, which was an increase of $2.5 million or 20%. Included in this increase was a write-down of $3.1 million on a partnership investment that qualifies for solar energy tax credits.
"Our strategic initiatives and process improvement projects are positively impacting our total noninterest expense as we expected. Since the end of the third quarter of 2018, our assets increased $1.23 billion while our expenses have remained flat," said Lee.
Heartland's effective tax rate was 18.66% for the third quarter of 2019 compared to 20.99% for the third quarter of 2018. Included in Heartland's third quarter 2019 and 2018 tax calculations were solar energy tax credits of $2.0 million and $223,000, respectively. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $281,000 for the third quarter of 2019 compared to $307,000 for the third quarter of 2018. Tax-exempt interest income as a percentage of pre-tax income declined to 10.08% during the third quarter of 2019 from 13.62% during the third quarter of 2018.
Loans and Deposits Increase Since December 31, 2018
Total assets were $12.57 billion at September 30, 2019, an increase of $1.16 billion or 10% from $11.41 billion at year-end 2018. Excluding $766.2 million of assets acquired at fair value in the BVBC transaction, total assets increased $395.0 million or 3% since year-end 2018. Securities represented 25% and 24% of total assets at September 30, 2019, and December 31, 2018, respectively.
Total loans held to maturity were $7.97 billion at September 30, 2019, compared to $7.41 billion at year-end 2018, an increase of $563.9 million or 8%. This change includes $542.0 million of total loans held to maturity acquired at fair value in the BVBC transaction. During the first quarter of 2019, Heartland classified $32.1 million of loans as held for sale in conjunction with the branch sales. Excluding the reclassification of loans to held for sale and the BVBC transaction, total loans held to maturity increased $54.0 million or 1% since December 31, 2018. Loan changes by category were:
•Commercial and commercial real estate loans totaled $6.39 billion at September 30, 2019, compared to $5.73 billion at December 31, 2018, which was an increase of $661.9 million or 12%. Excluding $14.9 million of commercial and commercial real estate loans classified as held for sale during the first quarter of 2019 and $480.1 million of loans acquired in the BVBC transaction, commercial and commercial real estate loans increased $196.6 million or 3% since year-end.
•Agricultural and agricultural real estate loans totaled $545.0 million at September 30, 2019, compared to $565.4 million at December 31, 2018, which was a decrease of $20.4 million or 4%. Excluding $6.6 million of agricultural and agricultural real estate loans classified as held for sale during the first quarter of 2019 and $1.8 million of loans acquired in the BVBC transaction, agricultural and agricultural real estate loans decreased $15.6 million or 3% since year-end.
•Residential mortgage loans decreased $83.8 million or 12% to $589.8 million at September 30, 2019, from $673.6 million at December 31, 2018. Excluding $2.0 million of residential mortgage loans classified as held for sale during the first quarter of 2019 and $17.2 million of loans acquired in the BVBC transaction, residential mortgage loans decreased $99.0 million or 15% since year-end.
•Consumer loans increased $7.6 million or 2% to $447.7 million at September 30, 2019, compared to $440.2 million at December 31, 2018. Excluding $8.6 million of loans classified as held for sale during the first quarter of 2019 and $42.9 million of loans acquired in the BVBC transaction, consumer loans decreased $26.7 million or 6% since year-end.
"An important contributor to our third quarter success was organic growth in our commercial loan portfolio of $163.2 million and $196.6 million year to date. We continued to see contraction in the residential mortgage and consumer loan portfolios due to declines in mortgage interest rates. Quality loan growth remains a top priority, and our pipelines indicate continued growth," said Lee.
Total deposits were $10.47 billion as of September 30, 2019, compared to $9.40 billion at year-end 2018, an increase of $1.07 billion or 11%. This increase includes $617.1 million of deposits acquired at fair value in the BVBC transaction. During the first quarter of 2019, Heartland classified $77.0 million of deposits as held for sale in conjunction with the branch sales. Exclusive of the reclassification of deposits to held for sale and the deposits acquired at fair value in the BVBC transaction, total deposits increased $533.3 million or 6% since December 31, 2018. Deposit changes by category were:
•Demand deposits increased $316.4 million or 10% to $3.58 billion at September 30, 2019, compared to $3.26 billion at December 31, 2018. Excluding $164.9 million of demand deposits acquired in the BVBC transaction and $17.3 million of demand deposits classified as held for sale in the first quarter of 2019, demand deposits increased $168.8 million or 5% since year-end 2018.
•Savings deposits increased $662.8 million or 13% to $5.77 billion at September 30, 2019, from $5.11 billion at December 31, 2018. Excluding savings deposits of $346.2 million acquired in the BVBC transaction and $47.8 million of savings deposits classified as held for sale in the first quarter of 2019, savings deposits increased $364.4 million or 7% since year-end 2018.
•Time deposits increased $94.2 million or 9% to $1.12 billion at September 30, 2019 from $1.02 billion at December 31, 2018. Excluding time deposits of $106.0 million acquired in the BVBC transaction and $11.9 million of time deposits classified as held for sale in the first quarter of 2019, time deposits increased $100,000 or less than 1% since year-end 2018.
"We had outstanding organic non-time deposit growth of $391.6 million for the third quarter of 2019 and $533.3 million for the first nine months of 2019. Non-time deposits represented 89 percent of total deposits at September 30, 2019," Lee stated.
Nonperforming Assets Decrease Since December 31, 2018
Nonperforming assets decreased $595,000 or 1% to $78.7 million or 0.63% of total assets at September 30, 2019, compared to $79.3 million or 0.69% of total assets at December 31, 2018. Nonperforming loans were $72.2 million or 0.91% of total loans at September 30, 2019, compared to $72.7 million or 0.98% of total loans at December 31, 2018. At September 30, 2019, loans delinquent 30-89 days were 0.28% of total loans compared to 0.21% of total loans at December 31, 2018.
The allowance for loan losses at September 30, 2019, was 0.83% of loans and 91.66% of nonperforming loans, compared to 0.84% of loans and 85.27% of nonperforming loans at December 31, 2018.
Non-GAAP Financial Measures
This press 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 Heartland'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 press 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 press release.
Below are the non-GAAP measures included in this press release, management's reason for including each measure and the method of calculating each measure:
•Annualized return on average tangible common equity is net income available to common stockholders plus core deposit and customer relationship intangibles amortization, net of tax, divided by average common stockholders' 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 financial condition and capital strength.
•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.
•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 press release.
•Tangible book value per common share is total common stockholders' 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 stockholders' 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 use of equity, financial condition and capital strength.
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, log on to www.htlf.com at least 15 minutes before start time. A replay will be available until October 27, 2020, by logging on to www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a diversified financial services company with assets of $12.57 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 114 banking locations serving 83 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.
Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, contained, 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 as they impact the company's general business; (iv) changes in interest rates and prepayment rates of the company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions and Heartland's ability to successfully integrate acquired banks; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the company; and (xi) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.
-FINANCIAL TABLES FOLLOW
-###
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||
| For the Quarter Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||
| Interest and fees on loans | $ | 110,566 | $ | 105,733 | $ | 317,049 | $ | 288,171 | |||||||||||||||
| Interest on securities: | |||||||||||||||||||||||
| Taxable | 18,567 | 14,433 | 50,566 | 38,280 | |||||||||||||||||||
| Nontaxable | 2,119 | 3,490 | 7,766 | 10,653 | |||||||||||||||||||
| Interest on federal funds sold | — | — | 4 | — | |||||||||||||||||||
| Interest on deposits with other banks and other short-term investments | 2,151 | 1,238 | 5,742 | 2,413 | |||||||||||||||||||
| Total Interest Income | 133,403 | 124,894 | 381,127 | 339,517 | |||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Interest on deposits | 17,982 | 10,092 | 47,333 | 23,841 | |||||||||||||||||||
| Interest on short-term borrowings | 250 | 464 | 1,477 | 1,279 | |||||||||||||||||||
| Interest on other borrowings | 3,850 | 3,660 | 11,333 | 10,726 | |||||||||||||||||||
| Total Interest Expense | 22,082 | 14,216 | 60,143 | 35,846 | |||||||||||||||||||
| Net Interest Income | 111,321 | 110,678 | 320,984 | 303,671 | |||||||||||||||||||
| Provision for loan losses | 5,201 | 5,238 | 11,754 | 14,332 | |||||||||||||||||||
| Net Interest Income After Provision for Loan Losses | 106,120 | 105,440 | 309,230 | 289,339 | |||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||
| Service charges and fees | 12,366 | 12,895 | 39,789 | 35,046 | |||||||||||||||||||
| Loan servicing income | 821 | 1,670 | 3,888 | 5,231 | |||||||||||||||||||
| Trust fees | 4,959 | 4,499 | 14,258 | 13,794 | |||||||||||||||||||
| Brokerage and insurance commissions | 962 | 1,111 | 2,724 | 2,895 | |||||||||||||||||||
| Securities gains/(losses), net | 2,013 | (145) | 7,168 | 1,037 | |||||||||||||||||||
| Unrealized gain on equity securities, net | 144 | 54 | 514 | 97 | |||||||||||||||||||
| Net gains on sale of loans held for sale | 4,673 | 7,410 | 12,192 | 18,261 | |||||||||||||||||||
| Valuation adjustment on servicing rights | (626) | 230 | (1,579) | 12 | |||||||||||||||||||
| Income on bank owned life insurance | 881 | 892 | 2,668 | 2,206 | |||||||||||||||||||
| Other noninterest income | 3,207 | 1,149 | 6,556 | 3,536 | |||||||||||||||||||
| Total Noninterest Income | 29,400 | 29,765 | 88,178 | 82,115 | |||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||
| Salaries and employee benefits | 50,027 | 49,921 | 150,307 | 149,389 | |||||||||||||||||||
| Occupancy | 6,594 | 6,348 | 19,637 | 18,706 | |||||||||||||||||||
| Furniture and equipment | 2,858 | 3,470 | 8,770 | 9,403 | |||||||||||||||||||
| Professional fees | 12,131 | 12,800 | 38,478 | 32,880 | |||||||||||||||||||
| Advertising | 2,737 | 2,754 | 7,723 | 6,839 | |||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,899 | 2,626 | 9,054 | 6,763 | |||||||||||||||||||
| Other real estate and loan collection expenses, net | (89) | 784 | 774 | 2,464 | |||||||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 356 | 912 | (20,934) | 2,243 | |||||||||||||||||||
| Restructuring expenses | — | — | 3,227 | 2,564 | |||||||||||||||||||
| Other noninterest expenses | 15,454 | 12,924 | 39,259 | 33,816 | |||||||||||||||||||
| Total Noninterest Expense | 92,967 | 92,539 | 256,295 | 265,067 | |||||||||||||||||||
| Income Before Income Taxes | 42,553 | 42,666 | 141,113 | 106,387 | |||||||||||||||||||
| Income taxes | 7,941 | 8,956 | 29,835 | 21,530 | |||||||||||||||||||
| Net Income | 34,612 | 33,710 | 111,278 | 84,857 | |||||||||||||||||||
| Preferred dividends | — | (13) | — | (39) | |||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 34,612 | $ | 33,697 | $ | 111,278 | $ | 84,818 | |||||||||||||||
| Earnings per common share-diluted | $ | 0.94 | $ | 0.97 | $ | 3.11 | $ | 2.59 | |||||||||||||||
| Weighted average shares outstanding-diluted | 36,835,191 | 34,644,187 | 35,817,899 | 32,707,481 | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 110,566 | $ | 106,027 | $ | 100,456 | $ | 105,700 | $ | 105,733 | |||||||||||||||||||
| Interest on securities: | |||||||||||||||||||||||||||||
| Taxable | 18,567 | 16,123 | 15,876 | 15,851 | 14,433 | ||||||||||||||||||||||||
| Nontaxable | 2,119 | 2,554 | 3,093 | 3,467 | 3,490 | ||||||||||||||||||||||||
| Interest on federal funds sold | — | — | 4 | — | — | ||||||||||||||||||||||||
| Interest on deposits with other banks and other short-term investments | 2,151 | 2,299 | 1,292 | 1,285 | 1,238 | ||||||||||||||||||||||||
| Total Interest Income | 133,403 | 127,003 | 120,721 | 126,303 | 124,894 | ||||||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||||||
| Interest on deposits | 17,982 | 16,138 | 13,213 | 11,826 | 10,092 | ||||||||||||||||||||||||
| Interest on short-term borrowings | 250 | 338 | 889 | 417 | 464 | ||||||||||||||||||||||||
| Interest on other borrowings | 3,850 | 3,819 | 3,664 | 3,777 | 3,660 | ||||||||||||||||||||||||
| Total Interest Expense | 22,082 | 20,295 | 17,766 | 16,020 | 14,216 | ||||||||||||||||||||||||
| Net Interest Income | 111,321 | 106,708 | 102,955 | 110,283 | 110,678 | ||||||||||||||||||||||||
| Provision for loan losses | 5,201 | 4,918 | 1,635 | 9,681 | 5,238 | ||||||||||||||||||||||||
| Net Interest Income After Provision for Loan Losses | 106,120 | 101,790 | 101,320 | 100,602 | 105,440 | ||||||||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||||||||
| Service charges and fees | 12,366 | 14,629 | 12,794 | 13,660 | 12,895 | ||||||||||||||||||||||||
| Loan servicing income | 821 | 1,338 | 1,729 | 2,061 | 1,670 | ||||||||||||||||||||||||
| Trust fees | 4,959 | 4,825 | 4,474 | 4,599 | 4,499 | ||||||||||||||||||||||||
| Brokerage and insurance commissions | 962 | 1,028 | 734 | 1,618 | 1,111 | ||||||||||||||||||||||||
| Securities gains/(losses), net | 2,013 | 3,580 | 1,575 | 48 | (145) | ||||||||||||||||||||||||
| Unrealized gain on equity securities, net | 144 | 112 | 258 | 115 | 54 | ||||||||||||||||||||||||
| Net gains on sale of loans held for sale | 4,673 | 4,343 | 3,176 | 3,189 | 7,410 | ||||||||||||||||||||||||
| Valuation adjustment on servicing rights | (626) | (364) | (589) | (58) | 230 | ||||||||||||||||||||||||
| Income on bank owned life insurance | 881 | 888 | 899 | 587 | 892 | ||||||||||||||||||||||||
| Other noninterest income | 3,207 | 1,682 | 1,667 | 1,226 | 1,149 | ||||||||||||||||||||||||
| Total Noninterest Income | 29,400 | 32,061 | 26,717 | 27,045 | 29,765 | ||||||||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 50,027 | 49,995 | 50,285 | 46,729 | 49,921 | ||||||||||||||||||||||||
| Occupancy | 6,594 | 6,436 | 6,607 | 6,622 | 6,348 | ||||||||||||||||||||||||
| Furniture and equipment | 2,858 | 3,220 | 2,692 | 3,126 | 3,470 | ||||||||||||||||||||||||
| Professional fees | 12,131 | 14,968 | 11,379 | 10,630 | 12,800 | ||||||||||||||||||||||||
| Advertising | 2,737 | 2,661 | 2,325 | 2,726 | 2,754 | ||||||||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,899 | 3,313 | 2,842 | 2,592 | 2,626 | ||||||||||||||||||||||||
| Other real estate and loan collection expenses, net | (89) | 162 | 701 | 574 | 784 | ||||||||||||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 356 | (18,286) | (3,004) | (35) | 912 | ||||||||||||||||||||||||
| Restructuring expenses | — | — | 3,227 | — | — | ||||||||||||||||||||||||
| Other noninterest expenses | 15,454 | 12,629 | 11,176 | 15,857 | 12,924 | ||||||||||||||||||||||||
| Total Noninterest Expense | 92,967 | 75,098 | 88,230 | 88,821 | 92,539 | ||||||||||||||||||||||||
| Income Before Income Taxes | 42,553 | 58,753 | 39,807 | 38,826 | 42,666 | ||||||||||||||||||||||||
| Income taxes | 7,941 | 13,584 | 8,310 | 6,685 | 8,956 | ||||||||||||||||||||||||
| Net Income | 34,612 | 45,169 | 31,497 | 32,141 | 33,710 | ||||||||||||||||||||||||
| Preferred dividends | — | — | — | — | (13) | ||||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 34,612 | $ | 45,169 | $ | 31,497 | $ | 32,141 | $ | 33,697 | |||||||||||||||||||
| Earnings per common share-diluted | $ | 0.94 | $ | 1.26 | $ | 0.91 | $ | 0.93 | $ | 0.97 | |||||||||||||||||||
| Weighted average shares outstanding-diluted | 36,835,191 | 35,879,259 | 34,699,839 | 34,670,180 | 34,644,187 | ||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 243,395 | $ | 198,664 | $ | 174,198 | $ | 223,135 | $ | 196,847 | |||||||||||||||||||
| Interest bearing deposits with other banks and other short-term investments | 204,372 | 443,475 | 318,303 | 50,495 | 240,528 | ||||||||||||||||||||||||
| Cash and cash equivalents | 447,767 | 642,139 | 492,501 | 273,630 | 437,375 | ||||||||||||||||||||||||
| Time deposits in other financial institutions | 3,711 | 4,430 | 4,675 | 4,672 | 5,836 | ||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||
| Carried at fair value | 3,020,568 | 2,561,887 | 2,400,460 | 2,450,709 | 2,274,215 | ||||||||||||||||||||||||
| Held to maturity, at cost | 87,965 | 88,166 | 88,089 | 236,283 | 239,908 | ||||||||||||||||||||||||
| Other investments, at cost | 29,042 | 31,366 | 27,506 | 28,396 | 26,656 | ||||||||||||||||||||||||
| Loans held for sale | 35,427 | 34,575 | 69,716 | 119,801 | 77,727 | ||||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||||
| Held to maturity | 7,971,608 | 7,853,051 | 7,331,544 | 7,407,697 | 7,365,493 | ||||||||||||||||||||||||
| Allowance for loan losses | (66,222) | (63,850) | (62,639) | (61,963) | (61,221) | ||||||||||||||||||||||||
| Loans, net | 7,905,386 | 7,789,201 | 7,268,905 | 7,345,734 | 7,304,272 | ||||||||||||||||||||||||
| Premises, furniture and equipment, net | 199,235 | 198,329 | 190,215 | 194,676 | 198,224 | ||||||||||||||||||||||||
| Goodwill | 427,097 | 427,097 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
| Core deposit and customer relationship intangibles, net | 49,819 | 52,718 | 44,637 | 47,479 | 50,071 | ||||||||||||||||||||||||
| Servicing rights, net | 6,271 | 7,180 | 28,968 | 31,072 | 32,039 | ||||||||||||||||||||||||
| Cash surrender value on life insurance | 171,471 | 170,421 | 163,764 | 162,892 | 162,216 | ||||||||||||||||||||||||
| Other real estate, net | 6,425 | 6,646 | 5,391 | 6,153 | 11,908 | ||||||||||||||||||||||||
| Other assets | 179,078 | 146,135 | 136,000 | 114,841 | 123,017 | ||||||||||||||||||||||||
| Total Assets | $ | 12,569,262 | $ | 12,160,290 | $ | 11,312,495 | $ | 11,408,006 | $ | 11,335,132 | |||||||||||||||||||
| Liabilities and Equity | |||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||
| Demand | $ | 3,581,127 | $ | 3,426,758 | $ | 3,118,909 | $ | 3,264,737 | $ | 3,427,819 | |||||||||||||||||||
| Savings | 5,770,754 | 5,533,503 | 5,145,929 | 5,107,962 | 4,958,430 | ||||||||||||||||||||||||
| Time | 1,117,975 | 1,148,296 | 1,088,104 | 1,023,730 | 1,125,914 | ||||||||||||||||||||||||
| Total deposits | 10,469,856 | 10,108,557 | 9,352,942 | 9,396,429 | 9,512,163 | ||||||||||||||||||||||||
| Deposits held for sale | — | — | 118,564 | 106,409 | 50,312 | ||||||||||||||||||||||||
| Short-term borrowings | 107,853 | 107,260 | 104,314 | 227,010 | 131,139 | ||||||||||||||||||||||||
| Other borrowings | 278,417 | 282,863 | 268,312 | 274,905 | 277,563 | ||||||||||||||||||||||||
| Accrued expenses and other liabilities | 149,293 | 139,823 | 96,261 | 78,078 | 83,562 | ||||||||||||||||||||||||
| Total Liabilities | 11,005,419 | 10,638,503 | 9,940,393 | 10,082,831 | 10,054,739 | ||||||||||||||||||||||||
| Stockholders' Equity | |||||||||||||||||||||||||||||
| Common stock | 36,696 | 36,690 | 34,604 | 34,477 | 34,473 | ||||||||||||||||||||||||
| Capital surplus | 838,543 | 837,150 | 745,596 | 743,095 | 742,080 | ||||||||||||||||||||||||
| Retained earnings | 670,816 | 642,808 | 603,506 | 579,252 | 553,662 | ||||||||||||||||||||||||
| Accumulated other comprehensive income/(loss) | 17,788 | 5,139 | (11,604) | (31,649) | (49,822) | ||||||||||||||||||||||||
| Total Equity | 1,563,843 | 1,521,787 | 1,372,102 | 1,325,175 | 1,280,393 | ||||||||||||||||||||||||
| Total Liabilities and Equity | $ | 12,569,262 | $ | 12,160,290 | $ | 11,312,495 | $ | 11,408,006 | $ | 11,335,132 | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||
| For the Quarter Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Average Balances | |||||||||||||||||||||||
| Assets | $ | 12,293,332 | $ | 11,291,289 | $ | 11,760,120 | $ | 10,570,453 | |||||||||||||||
| Loans, net of unearned | 7,883,678 | 7,462,176 | 7,650,090 | 7,040,401 | |||||||||||||||||||
| Deposits | 10,253,643 | 9,530,743 | 9,803,488 | 8,938,297 | |||||||||||||||||||
| Earning assets | 11,102,581 | 10,154,591 | 10,598,465 | 9,547,147 | |||||||||||||||||||
| Interest bearing liabilities | 7,174,944 | 6,544,949 | 6,891,871 | 6,151,275 | |||||||||||||||||||
| Common stockholders' equity | 1,541,369 | 1,263,226 | 1,440,754 | 1,139,149 | |||||||||||||||||||
| Total stockholders' equity | 1,541,369 | 1,263,795 | 1,440,754 | 1,139,963 | |||||||||||||||||||
| Tangible common stockholders' equity | 1,062,568 | 819,966 | 981,449 | 770,884 | |||||||||||||||||||
| Key Performance Ratios | |||||||||||||||||||||||
| Annualized return on average assets | 1.12 | % | 1.18 | % | 1.27 | % | 1.07 | % | |||||||||||||||
| Annualized return on average common equity (GAAP) | 8.91 | % | 10.58 | % | 10.33 | % | 9.95 | % | |||||||||||||||
Annualized return on average tangible common equity (non-GAAP)(1) | 13.78 | % | 17.31 | % | 16.13 | % | 15.64 | % | |||||||||||||||
| Annualized ratio of net charge-offs to average loans | 0.14 | % | 0.28 | % | 0.13 | % | 0.17 | % | |||||||||||||||
| Annualized net interest margin (GAAP) | 3.98 | % | 4.32 | % | 4.05 | % | 4.25 | % | |||||||||||||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.02 | % | 4.38 | % | 4.10 | % | 4.32 | % | |||||||||||||||
Efficiency ratio, fully tax-equivalent(1) | 61.92 | % | 62.51 | % | 63.95 | % | 65.03 | % | |||||||||||||||
| Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP) | |||||||||||||||||||||||
| Net income available to common stockholders (GAAP) | $ | 34,612 | $ | 33,697 | $ | 111,278 | $ | 84,818 | |||||||||||||||
Plus core deposit and customer relationship intangibles amortization, net of tax(2) | 2,291 | 2,075 | 7,153 | 5,343 | |||||||||||||||||||
| Adjusted net income available to common stockholders (non-GAAP) | $ | 36,903 | $ | 35,772 | $ | 118,431 | $ | 90,161 | |||||||||||||||
| Average common stockholders' equity (GAAP) | $ | 1,541,369 | $ | 1,263,226 | $ | 1,440,754 | $ | 1,139,149 | |||||||||||||||
| Less average goodwill | 427,097 | 391,668 | 409,932 | 323,058 | |||||||||||||||||||
| Less average core deposit and customer relationship intangibles, net | 51,704 | 51,592 | 49,373 | 45,207 | |||||||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,062,568 | 819,966 | 981,449 | 770,884 | ||||||||||||||||||
| Annualized return on average common equity (GAAP) | 8.91 | % | 10.58 | % | 10.33 | % | 9.95 | % | |||||||||||||||
| Annualized return on average tangible common equity (non-GAAP) | 13.78 | % | 17.31 | % | 16.13 | % | 15.64 | % | |||||||||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) | |||||||||||||||||||||||
| Net Interest Income (GAAP) | $ | 111,321 | $ | 110,678 | $ | 320,984 | $ | 303,671 | |||||||||||||||
Plus tax-equivalent adjustment(2) | 1,140 | 1,544 | 3,820 | 4,663 | |||||||||||||||||||
| Net interest income, tax-equivalent (non-GAAP) | $ | 112,461 | $ | 112,222 | $ | 324,804 | $ | 308,334 | |||||||||||||||
| Average earning assets | $ | 11,102,581 | $ | 10,154,591 | $ | 10,598,465 | $ | 9,547,147 | |||||||||||||||
| Annualized net interest margin (GAAP) | 3.98 | % | 4.32 | % | 4.05 | % | 4.25 | % | |||||||||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.02 | % | 4.38 | % | 4.10 | % | 4.32 | % | |||||||||||||||
| (1) Refer to the "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) 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 | |||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Average Balances | |||||||||||||||||||||||||||||
| Assets | $ | 12,293,332 | $ | 11,708,538 | $ | 11,267,214 | $ | 11,371,247 | $ | 11,291,289 | |||||||||||||||||||
| Loans, net of unearned | 7,883,678 | 7,648,562 | 7,412,855 | 7,436,497 | 7,462,176 | ||||||||||||||||||||||||
| Deposits | 10,253,643 | 9,790,756 | 9,356,204 | 9,596,807 | 9,530,743 | ||||||||||||||||||||||||
| Earning assets | 11,102,581 | 10,552,166 | 10,129,957 | 10,225,409 | 10,154,591 | ||||||||||||||||||||||||
| Interest bearing liabilities | 7,174,944 | 6,872,449 | 6,622,149 | 6,557,185 | 6,544,949 | ||||||||||||||||||||||||
| Common stockholders' equity | 1,541,369 | 1,442,388 | 1,336,250 | 1,290,691 | 1,263,226 | ||||||||||||||||||||||||
| Total stockholders' equity | 1,541,369 | 1,442,388 | 1,336,250 | 1,290,691 | 1,263,795 | ||||||||||||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | 1,062,568 | 981,878 | 898,092 | 849,851 | 819,966 | ||||||||||||||||||||||||
| Key Performance Ratios | |||||||||||||||||||||||||||||
| Annualized return on average assets | 1.12 | % | 1.55 | % | 1.13 | % | 1.12 | % | 1.18 | % | |||||||||||||||||||
| Annualized return on average common equity (GAAP) | 8.91 | % | 12.56 | % | 9.56 | % | 9.88 | % | 10.58 | % | |||||||||||||||||||
Annualized return on average tangible common equity (non-GAAP)(1) | 13.78 | % | 19.52 | % | 15.24 | % | 15.96 | % | 17.31 | % | |||||||||||||||||||
| Annualized ratio of net charge-offs to average loans | 0.14 | % | 0.19 | % | 0.05 | % | 0.48 | % | 0.28 | % | |||||||||||||||||||
| Annualized net interest margin (GAAP) | 3.98 | % | 4.06 | % | 4.12 | % | 4.28 | % | 4.32 | % | |||||||||||||||||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.02 | % | 4.10 | % | 4.18 | % | 4.34 | % | 4.38 | % | |||||||||||||||||||
Efficiency ratio, fully tax-equivalent (non-GAAP)(1) | 61.92 | % | 64.81 | % | 65.23 | % | 59.35 | % | 62.51 | % | |||||||||||||||||||
| Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP) | |||||||||||||||||||||||||||||
| Net income available to common stockholders (GAAP) | $ | 34,612 | $ | 45,169 | $ | 31,497 | $ | 32,141 | $ | 33,697 | |||||||||||||||||||
Plus core deposit and customer relationship intangibles amortization, net of tax(2) | 2,291 | 2,617 | 2,245 | 2,048 | 2,075 | ||||||||||||||||||||||||
| Adjusted net income available to common stockholders (non-GAAP) | $ | 36,903 | $ | 47,786 | $ | 33,742 | $ | 34,189 | $ | 35,772 | |||||||||||||||||||
| Average common stockholders' equity (GAAP) | $ | 1,541,369 | $ | 1,442,388 | $ | 1,336,250 | $ | 1,290,691 | $ | 1,263,226 | |||||||||||||||||||
| Less average goodwill | 427,097 | 410,642 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
| Less average core deposit and customer relationship intangibles, net | 51,704 | 49,868 | 46,490 | 49,172 | 51,592 | ||||||||||||||||||||||||
| Average tangible common stockholders' equity (non-GAAP) | $ | 1,062,568 | $ | 981,878 | $ | 898,092 | $ | 849,851 | $ | 819,966 | |||||||||||||||||||
| Annualized return on average common equity (GAAP) | 8.91 | % | 12.56 | % | 9.56 | % | 9.88 | % | 10.58 | % | |||||||||||||||||||
| Annualized return on average tangible common equity (non-GAAP) | 13.78 | % | 19.52 | % | 15.24 | % | 15.96 | % | 17.31 | % | |||||||||||||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) | |||||||||||||||||||||||||||||
| Net Interest Income (GAAP) | $ | 111,321 | $ | 106,708 | $ | 102,955 | $ | 110,283 | $ | 110,678 | |||||||||||||||||||
Plus tax-equivalent adjustment(2) | 1,140 | 1,268 | 1,412 | 1,565 | 1,544 | ||||||||||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) | $ | 112,461 | $ | 107,976 | $ | 104,367 | $ | 111,848 | $ | 112,222 | |||||||||||||||||||
| Average earning assets | $ | 11,102,581 | $ | 10,552,166 | $ | 10,129,957 | $ | 10,225,409 | $ | 10,154,591 | |||||||||||||||||||
| Annualized net interest margin (GAAP) | 3.98 | % | 4.06 | % | 4.12 | % | 4.28 | % | 4.32 | % | |||||||||||||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.02 | % | 4.10 | % | 4.18 | % | 4.34 | % | 4.38 | % | |||||||||||||||||||
| (1) Refer to the "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) 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 September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||
| Reconciliation of Efficiency Ratio (non-GAAP) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
| Net interest income (GAAP) | $ | 111,321 | $ | 110,678 | $ | 320,984 | $ | 303,671 | ||||||||||||||||||
Tax-equivalent adjustment(1) | 1,140 | 1,544 | 3,820 | 4,663 | ||||||||||||||||||||||
| Fully tax-equivalent net interest income | 112,461 | 112,222 | 324,804 | 308,334 | ||||||||||||||||||||||
| Noninterest income | 29,400 | 29,765 | 88,178 | 82,115 | ||||||||||||||||||||||
| Securities (gains)/losses, net | (2,013) | 145 | (7,168) | (1,037) | ||||||||||||||||||||||
| Unrealized gain on equity securities, net | (144) | (54) | (514) | (97) | ||||||||||||||||||||||
| Gain on extinguishment of debt | (375) | — | (375) | — | ||||||||||||||||||||||
| Valuation adjustment on servicing rights | 626 | (230) | 1,579 | (12) | ||||||||||||||||||||||
| Adjusted income (non-GAAP) | $ | 139,955 | $ | 141,848 | $ | 406,504 | $ | 389,303 | ||||||||||||||||||
| Total noninterest expenses (GAAP) | $ | 92,967 | $ | 92,539 | $ | 256,295 | $ | 265,067 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,899 | 2,626 | 9,054 | 6,763 | ||||||||||||||||||||||
| Partnership investment in tax credit projects | 3,052 | 338 | 4,992 | 338 | ||||||||||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 356 | 912 | (20,934) | 2,243 | ||||||||||||||||||||||
| Restructuring expenses | — | — | 3,227 | 2,564 | ||||||||||||||||||||||
| Adjusted noninterest expenses (non-GAAP) | $ | 86,660 | $ | 88,663 | $ | 259,956 | $ | 253,159 | ||||||||||||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 61.92 | % | 62.51 | % | 63.95 | % | 65.03 | % | ||||||||||||||||||
| Reconciliation of Efficiency Ratio (non-GAAP) | For the Quarter Ended | ||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 111,321 | $ | 106,708 | $ | 102,955 | $ | 110,283 | $ | 110,678 | |||||||||||||||||||
Tax-equivalent adjustment(1) | 1,140 | 1,268 | 1,412 | 1,565 | 1,544 | ||||||||||||||||||||||||
| Fully tax-equivalent net interest income | 112,461 | 107,976 | 104,367 | 111,848 | 112,222 | ||||||||||||||||||||||||
| Noninterest income | 29,400 | 32,061 | 26,717 | 27,045 | 29,765 | ||||||||||||||||||||||||
| Securities (gains)/losses, net | (2,013) | (3,580) | (1,575) | (48) | 145 | ||||||||||||||||||||||||
| Unrealized gain on equity securities, net | (144) | (112) | (258) | (115) | (54) | ||||||||||||||||||||||||
| Gain on extinguishment of debt | (375) | — | — | — | — | ||||||||||||||||||||||||
| Valuation adjustment on servicing rights | 626 | 364 | 589 | 58 | (230) | ||||||||||||||||||||||||
| Adjusted income (non-GAAP) | $ | 139,955 | $ | 136,709 | $ | 129,840 | $ | 138,788 | $ | 141,848 | |||||||||||||||||||
| Total noninterest expenses (GAAP) | $ | 92,967 | $ | 75,098 | $ | 88,230 | $ | 88,821 | $ | 92,539 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,899 | 3,313 | 2,842 | 2,592 | 2,626 | ||||||||||||||||||||||||
| Partnership investment in tax credit projects | 3,052 | 1,465 | 475 | 3,895 | 338 | ||||||||||||||||||||||||
| (Gain)/loss on sales/valuation of assets, net | 356 | (18,286) | (3,004) | (35) | 912 | ||||||||||||||||||||||||
| Restructuring expenses | — | — | 3,227 | — | — | ||||||||||||||||||||||||
| Adjusted noninterest expenses (non-GAAP) | $ | 86,660 | $ | 88,606 | $ | 84,690 | $ | 82,369 | $ | 88,663 | |||||||||||||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 61.92 | % | 64.81 | % | 65.23 | % | 59.35 | % | 62.51 | % | |||||||||||||||||||
| (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 AND FULL TIME EQUIVALENT EMPLOYEE DATA | |||||||||||||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Common Share Data | |||||||||||||||||||||||||||||
| Book value per common share | $ | 42.62 | $ | 41.48 | $ | 39.65 | $ | 38.44 | $ | 37.14 | |||||||||||||||||||
Tangible book value per common share (non-GAAP)(1) | $ | 29.62 | $ | 28.40 | $ | 27.04 | $ | 25.70 | $ | 24.33 | |||||||||||||||||||
| Common shares outstanding, net of treasury stock | 36,696,190 | 36,690,061 | 34,603,611 | 34,477,499 | 34,473,029 | ||||||||||||||||||||||||
Tangible common equity ratio (non-GAAP)(1) | 8.99 | % | 8.92 | % | 8.60 | % | 8.08 | % | 7.70 | % | |||||||||||||||||||
| Reconciliation of Tangible Book Value Per Common Share (non-GAAP) | |||||||||||||||||||||||||||||
| Common stockholders' equity (GAAP) | $ | 1,563,843 | $ | 1,521,787 | $ | 1,372,102 | $ | 1,325,175 | $ | 1,280,393 | |||||||||||||||||||
| Less goodwill | 427,097 | 427,097 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
| Less core deposit and customer relationship intangibles, net | 49,819 | 52,718 | 44,637 | 47,479 | 50,071 | ||||||||||||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | $ | 1,086,927 | $ | 1,041,972 | $ | 935,797 | $ | 886,028 | $ | 838,654 | |||||||||||||||||||
| Common shares outstanding, net of treasury stock | 36,696,190 | 36,690,061 | 34,603,611 | 34,477,499 | 34,473,029 | ||||||||||||||||||||||||
| Common stockholders' equity (book value) per share (GAAP) | $ | 42.62 | $ | 41.48 | $ | 39.65 | $ | 38.44 | $ | 37.14 | |||||||||||||||||||
| Tangible book value per common share (non-GAAP) | $ | 29.62 | $ | 28.40 | $ | 27.04 | $ | 25.70 | $ | 24.33 | |||||||||||||||||||
| Reconciliation of Tangible Common Equity Ratio (non-GAAP) | |||||||||||||||||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | $ | 1,086,927 | $ | 1,041,972 | $ | 935,797 | $ | 886,028 | $ | 838,654 | |||||||||||||||||||
| Total assets (GAAP) | $ | 12,569,262 | $ | 12,160,290 | $ | 11,312,495 | $ | 11,408,006 | $ | 11,335,132 | |||||||||||||||||||
| Less goodwill | 427,097 | 427,097 | 391,668 | 391,668 | 391,668 | ||||||||||||||||||||||||
| Less core deposit and customer relationship intangibles, net | 49,819 | 52,718 | 44,637 | 47,479 | 50,071 | ||||||||||||||||||||||||
| Total tangible assets (non-GAAP) | $ | 12,092,346 | $ | 11,680,475 | $ | 10,876,190 | $ | 10,968,859 | $ | 10,893,393 | |||||||||||||||||||
| Tangible common equity ratio (non-GAAP) | 8.99 | % | 8.92 | % | 8.60 | % | 8.08 | % | 7.70 | % | |||||||||||||||||||
| Loan Data | |||||||||||||||||||||||||||||
| Loans held to maturity: | |||||||||||||||||||||||||||||
| Commercial and commercial real estate | $ | 6,393,596 | $ | 6,230,372 | $ | 5,745,051 | $ | 5,731,712 | $ | 5,610,953 | |||||||||||||||||||
| Residential mortgage | 589,793 | 613,707 | 630,433 | 673,603 | 676,941 | ||||||||||||||||||||||||
| Agricultural and agricultural real estate | 545,006 | 549,404 | 544,805 | 565,408 | 574,048 | ||||||||||||||||||||||||
| Consumer | 447,718 | 461,802 | 412,573 | 440,158 | 506,181 | ||||||||||||||||||||||||
| Unearned discount and deferred loan fees | (4,505) | (2,234) | (1,318) | (3,184) | (2,630) | ||||||||||||||||||||||||
| Total loans held to maturity | $ | 7,971,608 | $ | 7,853,051 | $ | 7,331,544 | $ | 7,407,697 | $ | 7,365,493 | |||||||||||||||||||
| Other Selected Trend Information | |||||||||||||||||||||||||||||
| Effective tax rate | 18.66 | % | 23.12 | % | 20.88 | % | 17.22 | % | 20.99 | % | |||||||||||||||||||
| Full time equivalent employees | 1,962 | 2,040 | 1,976 | 2,045 | 2,124 | ||||||||||||||||||||||||
| (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 DATA | |||||||||||||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 63,850 | $ | 62,639 | $ | 61,963 | $ | 61,221 | $ | 61,324 | |||||||||||||||||||
| Provision for loan losses | 5,201 | 4,918 | 1,635 | 9,681 | 5,238 | ||||||||||||||||||||||||
| Charge-offs | (4,842) | (4,780) | (1,950) | (9,777) | (6,120) | ||||||||||||||||||||||||
| Recoveries | 2,013 | 1,073 | 991 | 838 | 779 | ||||||||||||||||||||||||
| Balance, end of period | $ | 66,222 | $ | 63,850 | $ | 62,639 | $ | 61,963 | $ | 61,221 | |||||||||||||||||||
| Asset Quality | |||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 72,208 | $ | 79,619 | $ | 77,294 | $ | 71,943 | $ | 73,060 | |||||||||||||||||||
| Loans past due ninety days or more | 40 | 285 | 1,706 | 726 | 154 | ||||||||||||||||||||||||
| Other real estate owned | 6,425 | 6,646 | 5,391 | 6,153 | 11,908 | ||||||||||||||||||||||||
| Other repossessed assets | 13 | 39 | 8 | 459 | 495 | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 78,686 | $ | 86,589 | $ | 84,399 | $ | 79,281 | $ | 85,617 | |||||||||||||||||||
| Performing troubled debt restructured loans | $ | 3,199 | $ | 3,539 | $ | 3,460 | $ | 4,026 | $ | 4,180 | |||||||||||||||||||
| Nonperforming Assets Activity | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 86,589 | $ | 84,399 | $ | 79,281 | $ | 85,617 | $ | 81,003 | |||||||||||||||||||
| Net loan charge offs | (2,829) | (3,707) | (959) | (8,939) | (5,341) | ||||||||||||||||||||||||
| New nonperforming loans | 6,818 | 13,688 | 15,314 | 17,332 | 16,965 | ||||||||||||||||||||||||
| Acquired nonperforming assets | — | 230 | — | — | — | ||||||||||||||||||||||||
Reduction of nonperforming loans(1) | (8,861) | (6,246) | (6,238) | (6,065) | (5,085) | ||||||||||||||||||||||||
| OREO/Repossessed assets sales proceeds | (3,067) | (1,288) | (2,092) | (8,390) | (1,064) | ||||||||||||||||||||||||
| OREO/Repossessed assets gain/(loss and writedowns), net | 36 | (487) | (462) | (230) | (886) | ||||||||||||||||||||||||
| Net activity at Citizens Finance Co. | — | — | (445) | (44) | 25 | ||||||||||||||||||||||||
| Balance, end of period | $ | 78,686 | $ | 86,589 | $ | 84,399 | $ | 79,281 | $ | 85,617 | |||||||||||||||||||
| Asset Quality Ratios | |||||||||||||||||||||||||||||
| Ratio of nonperforming loans to total loans | 0.91 | % | 1.02 | % | 1.08 | % | 0.98 | % | 0.99 | % | |||||||||||||||||||
| Ratio of nonperforming loans and performing trouble debt restructured loans to total loans | 0.95 | % | 1.06 | % | 1.12 | % | 1.04 | % | 1.05 | % | |||||||||||||||||||
| Ratio of nonperforming assets to total assets | 0.63 | % | 0.71 | % | 0.75 | % | 0.69 | % | 0.76 | % | |||||||||||||||||||
| Annualized ratio of net loan charge-offs to average loans | 0.14 | % | 0.19 | % | 0.05 | % | 0.48 | % | 0.28 | % | |||||||||||||||||||
| Allowance for loan losses as a percent of loans | 0.83 | % | 0.81 | % | 0.85 | % | 0.84 | % | 0.83 | % | |||||||||||||||||||
| Allowance for loan losses as a percent of nonperforming loans | 91.66 | % | 79.91 | % | 79.29 | % | 85.27 | % | 83.62 | % | |||||||||||||||||||
| Loans delinquent 30-89 days as a percent of total loans | 0.28 | % | 0.31 | % | 0.47 | % | 0.21 | % | 0.62 | % | |||||||||||||||||||
| (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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||||||||||||||||||||||||||||||
| Earning Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable | $ | 2,658,107 | $ | 18,567 | 2.77 | % | $ | 2,217,863 | $ | 16,123 | 2.92 | % | $ | 2,066,071 | $ | 14,433 | 2.77 | % | |||||||||||||||||||||||||||||||||||
Nontaxable(1) | 266,933 | 2,682 | 3.99 | 324,164 | 3,233 | 4.00 | 435,045 | 4,418 | 4.03 | ||||||||||||||||||||||||||||||||||||||||||||
| Total securities | 2,925,040 | 21,249 | 2.88 | 2,542,027 | 19,356 | 3.05 | 2,501,116 | 18,851 | 2.99 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest on deposits with other banks and other short-term investments | 358,327 | 2,151 | 2.38 | 424,262 | 2,299 | 2.17 | 252,535 | 1,238 | 1.94 | ||||||||||||||||||||||||||||||||||||||||||||
| Federal funds sold | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Loans:(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and commercial real estate(1) | 6,216,133 | 86,864 | 5.54 | 5,968,424 | 82,328 | 5.53 | 5,637,360 | 77,443 | 5.45 | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 662,663 | 7,979 | 4.78 | 676,465 | 8,238 | 4.88 | 736,875 | 8,952 | 4.82 | ||||||||||||||||||||||||||||||||||||||||||||
Agricultural and agricultural real estate(1) | 550,441 | 7,551 | 5.44 | 558,128 | 7,581 | 5.45 | 571,599 | 7,725 | 5.36 | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer | 454,441 | 6,697 | 5.85 | 445,545 | 6,517 | 5.87 | 516,342 | 10,043 | 7.72 | ||||||||||||||||||||||||||||||||||||||||||||
| Fees on loans | 2,052 | — | 1,952 | — | 2,186 | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: allowance for loan losses | (64,464) | — | — | (62,685) | — | — | (61,236) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Net loans | 7,819,214 | 111,143 | 5.64 | 7,585,877 | 106,616 | 5.64 | 7,400,940 | 106,349 | 5.70 | ||||||||||||||||||||||||||||||||||||||||||||
| Total earning assets | 11,102,581 | 134,543 | 4.81 | % | 10,552,166 | 128,271 | 4.88 | % | 10,154,591 | 126,438 | 4.94 | % | |||||||||||||||||||||||||||||||||||||||||
| Nonearning Assets | 1,190,751 | 1,156,372 | 1,136,698 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 12,293,332 | $ | 11,708,538 | $ | 11,291,289 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings | $ | 5,643,722 | $ | 13,301 | 0.94 | % | $ | 5,360,355 | $ | 11,895 | 0.89 | % | $ | 4,932,013 | $ | 6,980 | 0.56 | % | |||||||||||||||||||||||||||||||||||
| Time deposits | 1,149,064 | 4,681 | 1.62 | 1,142,842 | 4,243 | 1.49 | 1,193,971 | 3,112 | 1.03 | ||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 102,440 | 250 | 0.97 | 92,977 | 338 | 1.46 | 148,041 | 464 | 1.24 | ||||||||||||||||||||||||||||||||||||||||||||
| Other borrowings | 279,718 | 3,850 | 5.46 | 276,275 | 3,819 | 5.54 | 270,924 | 3,660 | 5.36 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 7,174,944 | 22,082 | 1.22 | % | 6,872,449 | 20,295 | 1.18 | % | 6,544,949 | 14,216 | 0.86 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing deposits | 3,460,857 | 3,287,559 | 3,404,759 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued interest and other liabilities | 116,162 | 106,142 | 77,786 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest bearing liabilities | 3,577,019 | 3,393,701 | 3,482,545 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity | 1,541,369 | 1,442,388 | 1,263,795 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 12,293,332 | $ | 11,708,538 | $ | 11,291,289 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 112,461 | $ | 107,976 | $ | 112,222 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest spread(1) | 3.59 | % | 3.70 | % | 4.08 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) to total earning assets | 4.02 | % | 4.10 | % | 4.38 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| (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) Includes deposits held for sale. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2019 | September 30, 2018 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||||||||||||||||
| Earning Assets | |||||||||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||||||||
| Taxable | $ | 2,350,120 | $ | 50,566 | 2.88 | % | $ | 1,937,053 | $ | 38,280 | 2.64 | % | |||||||||||||||||||||||
Nontaxable(1) | 327,150 | 9,830 | 4.02 | 444,127 | 13,485 | 4.06 | |||||||||||||||||||||||||||||
| Total securities | 2,677,270 | 60,396 | 3.02 | 2,381,180 | 51,765 | 2.91 | |||||||||||||||||||||||||||||
| Interest bearing deposits with other banks and other short-term investments | 334,191 | 5,742 | 2.30 | 183,905 | 2,413 | 1.75 | |||||||||||||||||||||||||||||
| Federal funds sold | 185 | 4 | 2.89 | 471 | — | — | |||||||||||||||||||||||||||||
Loans:(2) | |||||||||||||||||||||||||||||||||||
Commercial and commercial real estate(1) | 5,978,304 | 247,275 | 5.53 | 5,319,862 | 211,557 | 5.32 | |||||||||||||||||||||||||||||
| Residential mortgage | 670,896 | 23,396 | 4.66 | 688,367 | 23,365 | 4.54 | |||||||||||||||||||||||||||||
Agricultural and agricultural real estate(1) | 554,344 | 22,433 | 5.41 | 542,755 | 20,579 | 5.07 | |||||||||||||||||||||||||||||
| Consumer | 446,546 | 19,693 | 5.90 | 489,417 | 27,895 | 7.62 | |||||||||||||||||||||||||||||
| Fees on loans | 6,008 | — | 6,606 | — | |||||||||||||||||||||||||||||||
| Less: allowance for loan losses | (63,271) | — | — | (58,810) | — | — | |||||||||||||||||||||||||||||
| Net loans | 7,586,819 | 318,805 | 5.62 | 6,981,591 | 290,002 | 5.55 | |||||||||||||||||||||||||||||
| Total earning assets | 10,598,465 | 384,947 | 4.86 | % | 9,547,147 | 344,180 | 4.82 | % | |||||||||||||||||||||||||||
| Nonearning Assets | 1,161,655 | 1,023,306 | |||||||||||||||||||||||||||||||||
| Total Assets | $ | 11,760,120 | $ | 10,570,453 | |||||||||||||||||||||||||||||||
Interest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||
| Savings | $ | 5,376,999 | $ | 35,279 | 0.88 | % | $ | 4,681,710 | $ | 16,306 | 0.47 | % | |||||||||||||||||||||||
| Time deposits | 1,109,302 | 12,054 | 1.45 | 1,048,878 | 7,535 | 0.96 | |||||||||||||||||||||||||||||
| Short-term borrowings | 129,928 | 1,477 | 1.52 | 149,453 | 1,279 | 1.14 | |||||||||||||||||||||||||||||
| Other borrowings | 275,642 | 11,333 | 5.50 | 271,234 | 10,726 | 5.29 | |||||||||||||||||||||||||||||
| Total interest bearing liabilities | 6,891,871 | 60,143 | 1.17 | % | 6,151,275 | 35,846 | 0.78 | % | |||||||||||||||||||||||||||
Noninterest Bearing Liabilities(3) | |||||||||||||||||||||||||||||||||||
| Noninterest bearing deposits | 3,317,187 | 3,207,709 | |||||||||||||||||||||||||||||||||
| Accrued interest and other liabilities | 110,308 | 71,506 | |||||||||||||||||||||||||||||||||
| Total noninterest bearing liabilities | 3,427,495 | 3,279,215 | |||||||||||||||||||||||||||||||||
| Stockholders' Equity | 1,440,754 | 1,139,963 | |||||||||||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 11,760,120 | $ | 10,570,453 | |||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 324,804 | $ | 308,334 | |||||||||||||||||||||||||||||||
Net interest spread(1) | 3.69 | % | 4.04 | % | |||||||||||||||||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) to total earning assets | 4.10 | % | 4.32 | % | |||||||||||||||||||||||||||||||
| (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) Includes deposits held for sale. | |||||||||||||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) | |||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||
| As of and For the Quarter Ended | |||||||||||||||||
| 9/30/2019 | 6/30/2019 | 3/31/2019 | 12/31/2018 | 9/30/2018 | |||||||||||||
| Total Assets | |||||||||||||||||
| Citywide Banks | $ | 2,335,811 | $ | 2,261,591 | $ | 2,214,105 | $ | 2,307,284 | $ | 2,300,018 | |||||||
| New Mexico Bank & Trust | 1,607,498 | 1,534,236 | 1,500,024 | 1,492,555 | 1,465,020 | ||||||||||||
| Dubuque Bank and Trust Company | 1,547,014 | 1,680,539 | 1,550,487 | 1,480,914 | 1,523,447 | ||||||||||||
Bank of Blue Valley(1) | 1,346,342 | 1,319,226 | 564,833 | 571,012 | 592,786 | ||||||||||||
| First Bank & Trust | 1,158,320 | 1,088,796 | 1,099,759 | 1,109,929 | 1,112,464 | ||||||||||||
| Wisconsin Bank & Trust | 1,032,016 | 1,042,463 | 1,031,305 | 1,114,352 | 1,051,160 | ||||||||||||
| Premier Valley Bank | 888,401 | 847,076 | 855,473 | 849,696 | 851,358 | ||||||||||||
| Illinois Bank & Trust | 839,721 | 852,830 | 810,357 | 804,907 | 795,132 | ||||||||||||
| Minnesota Bank & Trust | 718,035 | 631,339 | 657,187 | 666,564 | 649,179 | ||||||||||||
| Arizona Bank & Trust | 695,236 | 732,783 | 669,806 | 658,714 | 650,032 | ||||||||||||
| Rocky Mountain Bank | 528,094 | 503,126 | 489,135 | 490,453 | 492,063 | ||||||||||||
Total Deposits(2) | |||||||||||||||||
| Citywide Banks | $ | 1,895,894 | $ | 1,833,259 | $ | 1,802,701 | $ | 1,848,373 | $ | 1,905,830 | |||||||
| New Mexico Bank & Trust | 1,413,170 | 1,346,304 | 1,313,708 | 1,307,464 | 1,267,844 | ||||||||||||
| Dubuque Bank and Trust Company | 1,275,131 | 1,157,881 | 1,245,553 | 1,214,541 | 1,217,976 | ||||||||||||
Bank of Blue Valley(1) | 1,091,243 | 1,077,183 | 473,712 | 489,471 | 511,154 | ||||||||||||
| First Bank & Trust | 903,410 | 844,793 | 857,313 | 861,629 | 875,170 | ||||||||||||
| Wisconsin Bank & Trust | 880,217 | 892,020 | 872,090 | 927,821 | 891,167 | ||||||||||||
| Premier Valley Bank | 719,141 | 689,384 | 676,849 | 639,194 | 706,125 | ||||||||||||
| Illinois Bank & Trust | 768,267 | 769,577 | 735,101 | 715,482 | 726,790 | ||||||||||||
| Minnesota Bank & Trust | 600,175 | 515,310 | 546,706 | 560,399 | 544,513 | ||||||||||||
| Arizona Bank & Trust | 578,694 | 646,728 | 593,089 | 574,762 | 550,530 | ||||||||||||
| Rocky Mountain Bank | 462,825 | 438,349 | 426,503 | 424,700 | 429,167 | ||||||||||||
| Net Income | |||||||||||||||||
| Citywide Banks | $ | 6,030 | $ | 8,120 | $ | 7,283 | $ | 7,005 | $ | 7,762 | |||||||
| New Mexico Bank & Trust | 6,404 | 7,634 | 7,847 | 6,007 | 7,104 | ||||||||||||
| Dubuque Bank and Trust Company | 5,445 | 17,353 | 5,011 | 6,002 | 4,458 | ||||||||||||
Bank of Blue Valley(1) | 3,550 | 3,505 | 1,172 | 324 | 165 | ||||||||||||
| First Bank & Trust | 2,927 | 3,099 | 2,792 | 3,334 | 3,932 | ||||||||||||
| Wisconsin Bank & Trust | 3,195 | 2,516 | 4,707 | 3,229 | 3,735 | ||||||||||||
| Premier Valley Bank | 3,301 | 2,763 | 2,411 | 2,930 | 3,006 | ||||||||||||
| Illinois Bank & Trust | 2,223 | 1,751 | 2,632 | 2,180 | 2,419 | ||||||||||||
| Minnesota Bank & Trust | 3,250 | 1,980 | 1,454 | 1,038 | 2,167 | ||||||||||||
| Arizona Bank & Trust | 3,222 | 3,110 | 2,780 | 1,951 | 2,660 | ||||||||||||
| Rocky Mountain Bank | 720 | 779 | 1,358 | 1,230 | 1,210 | ||||||||||||
| (1) Formerly known as Morrill & Janes Bank and Trust Company. | |||||||||||||||||
| (2) Includes deposits held for sale. | |||||||||||||||||