 |  | |||||||
| CONTACT: | FOR IMMEDIATE RELEASE | ||||
| Bryan R. McKeag | April 25, 2022 | ||||
| Executive Vice President | |||||
| Chief Financial Officer | |||||
| (563) 589-1994 | |||||
| BMcKeag@htlf.com | |||||
UPDATING AND REPLACING HEARTLAND FINANCIAL USA, INC. ("HTLF") REPORTS QUARTERLY RESULTS AS OF MARCH 31, 2022
Please replace with this revised version to update certain Q1 2022 financial information issued April 25, 2022, at 4:00 PM ET. Please refer to Form 8-K/A furnished May 9, 2022 for additional information.
The updated release reads:
Highlights and Developments
| § | Quarterly loan growth of $348.6 million or 4%, exclusive of Paycheck Protection Program ("PPP") loans | |||||||
| § | Quarterly non-time deposit growth of $219.4 million or 1% | |||||||
| § | Quarterly net income available to common stockholders of $41.1 million | |||||||
| § | Diluted earnings per common share of $0.97 | |||||||
| § | Nonperforming assets to total assets of 0.34% and 30-89 day loan delinquencies were 0.10% of total loans | |||||||
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net income available to common stockholders (in millions) | $ | 41.1 | $ | 50.8 | |||||||
| Diluted earnings per common share | 0.97 | 1.20 | |||||||||
| Return on average assets | 0.91 | % | 1.19 | % | |||||||
| Return on average common equity | 8.32 | 10.49 | |||||||||
Return on average tangible common equity (non-GAAP)(1) | 12.41 | 15.90 | |||||||||
| Net interest margin | 3.08 | 3.44 | |||||||||
Net interest margin, fully tax-equivalent (non-GAAP)(1) | 3.12 | 3.48 | |||||||||
Efficiency ratio, fully-tax equivalent (non-GAAP)(1) | 64.65 | 56.61 | |||||||||
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.
| "HTLF is off to a great start in 2022. The execution of our growth strategies and recent investments in talent and technology resulted in strong loan growth, increased fee revenue and excellent credit metrics for the first quarter." | ||
| Bruce K. Lee, president and chief executive officer, HTLF | ||
Dubuque, Iowa, Monday, April 25, 2022-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021:
•Net income available to common stockholders of $41.1 million compared to $50.8 million, a decrease of $9.7 million or 19%.
•Earnings per diluted common share of $0.97 compared to $1.20, a decrease of $0.23 or 19%.
•Net interest income of $134.7 million compared to $139.6 million, a decrease of $4.9 million or 4%.
•Return on average common equity was 8.32% and return on average assets was 0.91% compared to 10.49% and 1.19%.
•Return on average tangible common equity (non-GAAP) was 12.41% compared to 15.90%.
"HTLF is off to a great start in 2022. The execution of our growth strategies and recent investments in talent and technology resulted in strong loan growth, increased fee revenue and excellent credit metrics for the first quarter," said Bruce K. Lee, president and chief executive officer of HTLF.
Charter Consolidation Update
The HTLF Board of Directors unanimously approved a plan to consolidate its 11 separate bank charters. The consolidation project is underway and is expected to be completed by the end of 2023. The remaining estimated restructuring costs of the project are approximately $17.0 million. The ongoing financial benefits from consolidation are expected to be approximately $20.0 million when the project is completed and are expected to arise from the elimination of redundancies and improved operating processes. The consolidation will also increase operating capacity to be leveraged with future growth and provide better alignment of products and services.
Net Interest Income and Net Interest Margin
Net interest margin, expressed as a percentage of average earning assets, was 3.08% (3.12% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2022 compared to 3.44% (3.48% on a fully tax-equivalent basis, non-GAAP) during the first quarter of 2021.
Total interest income and average earning asset changes for the first quarter of 2022 compared to the first quarter of 2021 were:
•Total interest income was $141.3 million, which was a decrease of $6.2 million or 4% from $147.5 million and primarily attributable to lower yields and a reduction of PPP loan interest income. PPP loan interest income totaled $4.3 million compared to $10.1 million, which was a decrease of $5.8 million or 57%.
•Total interest income on a tax-equivalent basis (non-GAAP) was $143.4 million, which was a decrease of $5.8 million or 4% from $149.2 million.
•Average earning assets increased $1.30 billion or 8% to $17.76 billion compared to $16.46 billion, which was primarily attributable to increases in the securities portfolio.
•The average rate on earning assets decreased 41 basis points to 3.27% compared to 3.68%, which was primarily due to a shift in earning asset mix. Total average securities were 43% of total average earning assets compared to 39%.
Total interest expense and average interest bearing liability changes for the first quarter of 2022 compared to the first quarter of 2021 were:
•Total interest expense was $6.6 million, a decrease of $1.3 million or 16% from $7.8 million, based on a decrease in the average interest rate paid, which was partially offset by an increase in average interest bearing liabilities.
•The average interest rate paid on interest bearing liabilities decreased to 0.26% compared to 0.32%.
•Average interest bearing deposits increased $695.6 million or 8% to $9.96 billion from $9.27 billion which was primarily attributable to deposit growth.
•The average interest rate paid on interest bearing deposits decreased 7 basis points to 0.12% compared to 0.19%.
•Average borrowings decreased $159.4 million or 24% to $491.8 million from $651.2 million, which was primarily attributable to reduced advances from the PPP lending fund used to fund PPP loans to borrowers. Average advances from the PPP lending fund were $0 compared to $143.7 million. The average interest rate paid on borrowings was 2.97% compared to 2.15%.
Net interest income changes for the first quarter of 2022 compared to the first quarter of 2021 were:
•Net interest income totaled $134.7 million compared to $139.6 million, which was a decrease of $4.9 million or 4%. PPP loan interest income totaled $4.3 million compared to $10.1 million, which was a decrease of $5.8 million or 57%.
•Net interest income on a tax-equivalent basis (non-GAAP) totaled $136.8 million compared to $141.4 million, which was a decrease of $4.6 million or 3%.
Noninterest Income and Noninterest Expense
Total noninterest income was $34.6 million during the first quarter of 2022 compared to $30.3 million during the first quarter of 2021, an increase of $4.3 million or 14%. Significant changes within the noninterest income category for the first quarter of 2022 compared to the first quarter of 2021 were:
•Service charges and fees increased $1.6 million or 12% to $15.3 million from $13.7 million. Credit card revenue was $5.6 million compared to $4.3 million, which was an increase of $1.3 million or 31%.
•Net security gains totaled $2.9 million compared to net losses of $30,000.
•Net gains on sales of loans held for sale totaled $3.4 million compared to $6.4 million, which was a decrease of $3.0 million or 47% and was primarily attributable to a decrease of loans sold to the secondary market.
•Other noninterest income totaled $3.9 million compared to $1.2 million, which was an increase of $2.8 million. Commercial swap fee income and syndication income totaled $3.0 million compared to $77,000.
Total noninterest expense was $110.8 million during the first quarter of 2022 compared to $102.4 million during the first quarter of 2021, which was an increase of $8.4 million or 8%. Significant changes within the noninterest expense category for the first quarter of 2022 compared to the first quarter of 2021 were:
•Salaries and employee benefits totaled $66.2 million compared to $59.1 million, which was an increase of $7.1 million or 12%. The increase was primarily attributable to higher salary and health care expenses as a result of more full time equivalent employees and normalized health care usage. Full-time equivalent employees increased 77 to 2,208 compared to 2,131.
•Professional fees increased $1.7 million or 12% to $15.2 million compared to $13.5 million. The increase was primarily attributable to higher cloud based computing expenses.
•Other noninterest expenses increased $2.5 million or 22% to $14.1 million compared to $11.6 million. The following items impacted the first quarter of 2022 compared to the first quarter of 2021:
•Travel and staff and customer entertainment expenses increased $651,000 to $1.1 million from $482,000. In-person meetings and events were limited in the first quarter of 2021 due to the pandemic.
•Credit card processing and rebate expenses increased $1.2 million or 53% to $3.5 million from $2.3 million, which was primarily attributable to increased volume.
The effective tax rate was 21.95% for the first quarter of 2022 compared to 22.50% for the first quarter of 2021. The following items impacted the first quarter 2022 and 2021 tax calculations:
•Solar energy tax credits of $0 compared to $97,000.
•Federal low-income housing tax credits of $135,000 in each quarterly calculation.
•New markets tax credits of $75,000 in each quarterly calculation.
•Historic rehabilitation tax credits of $63,000 compared to $0.
•Tax-exempt interest income as a percentage of pre-tax income of 12.42% compared to 9.72%.
•Tax benefit of $172,000 compared to $153,000 resulting from the vesting of restricted stock units.
Total Assets, Total Loans and Total Deposits
Total assets were $19.23 billion at March 31, 2022, a decrease of $43.7 million or less than 1% from $19.27 billion at year-end 2021. Securities represented 37% and 40% of total assets at March 31, 2022, and December 31, 2021, respectively.
Total loans held to maturity were $10.18 billion at March 31, 2022, compared to $9.95 billion at December 31, 2021, which was an increase of $222.8 million or 2%. Excluding total PPP loans, loans increased $348.6 million or 4% during the first quarter of 2022.
Significant changes by loan category at March 31, 2022 compared to December 31, 2021 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $69.4 million or 1% to $5.15 billion compared to $5.09 billion.
•PPP loans originated in 2020 ("PPP I") decreased $21.4 million or 79%. PPP loans originated in 2021 ("PPP II") decreased $104.4 million or 60%.
•Excluding total PPP loans, commercial and business lending increased $195.2 million or 4% to $5.08 billion from $4.89 billion.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $137.5 million or 5% to $3.00 billion compared to $2.87 billion.
Total deposits were $16.67 billion as of March 31, 2022, compared to $16.42 billion at December 31, 2021. Significant deposit changes by category at March 31, 2022 compared to December 31, 2021 included:
•Demand deposits decreased $119.1 million or 2% to $6.38 billion compared to $6.50 billion.
•Savings deposits increased $338.5 million or 4% to $9.24 billion from $8.90 billion.
Provision and Allowance
Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the first quarter of 2022 was $2.6 million, which was an increase of $2.6 million from provision expense of $16,000 recorded in the first quarter of 2021. The provision benefit for the first quarter of 2022 was impacted by several factors, including:
•charge-offs totaling $13.2 million, including $9.2 million related to two lending relationships for which information received subsequent to March 31, 2022 indicated collateral deficiencies due to customer fraud,
•decrease in nonperforming loans of $27.5 million to $64.4 million or 0.63% of total loans compared to $91.9 million or 0.91% of total loans at March 31, 2021,
•nonpass loans declined to 6.3% of total loans compared to 11.5% of total loans at March 31, 2021,
•loans delinquent 30-89 days as a percent of total loans fell to 0.10% compared to 0.16% at March 31, 2021, and
•improved macroeconomic factors compared to the first quarter of 2021.
The allowance for credit losses for loans totaled $100.5 million and $110.1 million at March 31, 2022, and December 31, 2021, respectively. The following items have impacted the allowance for credit losses for loans for the three months ended March 31, 2022:
•Provision for the three months ended March 31, 2022, totaled $2.6 million.
•Net charge offs of $12.2 million were recorded for the first three months of 2022.
Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments totaled $16.1 million at March 31, 2022, which was an increase of $617,000 from $15.5 million at December 31, 2021. Unfunded commitments increased $300.1 million to $4.13 billion at March 31, 2022 compared to $3.83 billion at December 31, 2021.
Total Provision and Allowance for Lending Related Credit Losses
The total provision for lending related credit losses was $3.2 million for the first quarter of 2022 compared to $645,000 for the first quarter of 2021. The total allowance for lending related credit losses was $116.6 million or 1.15% of total loans at March 31, 2022, compared to $125.6 million or 1.26% of total loans as of December 31, 2021.
Nonperforming Assets
Nonperforming assets decreased $6.0 million or 8% to $65.9 million or 0.34% of total assets at March 31, 2022, compared to $71.9 million or 0.37% of total assets at December 31, 2021. Nonperforming loans were $64.4 million
or 0.63% of total loans at March 31, 2022, compared to $69.9 million or 0.70% of total loans at December 31, 2021. At March 31, 2022, loans delinquent 30-89 days were 0.10% of total loans compared to 0.07% of total loans at December 31, 2021.
Non-GAAP Financial Measures
This earnings release contains references to financial measures which are not defined by generally accepted accounting principles ("GAAP"). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company's financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. Additionally, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP measures in this earnings release with other companies' non-GAAP measures. Reconciliations of each non-GAAP measure to the most directly comparable GAAP measure may be found in the financial tables in this earnings release.
Below are the non-GAAP measures included in this earnings release, management's reason for including each measure and the method of calculating each measure:
•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 earnings release.
•Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
•Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
•Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
•Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
Conference Call Details
HTLF will host a conference call for shareholders, analysts and other interested parties at 5:00 p.m. EDT today. To join, please register in advance of the conference using the link provided below. Upon registering, participant dial-in numbers, Direct Event passcode and unique registrant ID will be provided. Direct Event online registration can be found at: http://www.directeventreg.com/registration/event/5974087. In the 10 minutes prior to the call start time, participants need to use the conference access information provided in the email received at the point of registering. A replay will be available until April 24, 2023, by logging on to www.htlf.com.
About HTLF
Heartland Financial USA, Inc., operating under the brand name HTLF, is a financial services company with assets of $19.23 billion. HTLF has banks serving communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including
treasury management, residential mortgage, wealth management, investment and insurance. Additional information is available at www.htlf.com.
Safe Harbor Statement
This release (including any information incorporated herein by reference) contains, and future oral and written statements of HTLF and its management may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, financial condition, results of operations, plans, objectives and future performance of HTLF.
Any statements about HTLF's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of HTLF's operations or performance, and may be based upon beliefs, expectations and assumptions of HTLF's management. These forward-looking statements are generally identified by the use of the words such as "believe", "expect", "anticipate", "plan", "intend", "estimate", "project", "may", "will", "would", "could", "should", "may", "view", "opportunity", "potential", or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of HTLF and its management. Although HTLF may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of HTLF to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which HTLF currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF's reports filed with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section under Item 1A of Part I of HTLF’s Annual Report on Form 10-K for the year ended December 31, 2021, include, among others:
•Coronavirus Disease 2019 ("COVID-19") Pandemic Risks, including risks related to the ongoing COVID-19 pandemic and measures enacted by the U.S. federal and state governments and adopted by private businesses in response to the COVID-19 pandemic;
•Economic and Market Conditions Risks, including risks related to changes in the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, terrorist threats or acts of war;
•Credit Risks, including risks of increasing credit losses due to deterioration in the financial condition of HTLF's borrowers, changes in asset and collateral values and climate and other borrower industry risks which may impact the provision for credit losses and net charge-offs;
•Liquidity and Interest Rate Risks, including the impact of capital market conditions and changes in monetary policy on our borrowings and net interest income;
•Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
•Strategic and External Risks, including economic, political and competitive forces impacting our business;
•Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and
•Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.
There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF's business, financial condition and results of operations. In addition, many of these risks and uncertainties are currently amplified by and may continue to be amplified by the COVID-19 pandemic and the impact of varying governmental responses that affect HTLF’s customers and the economies where they operate. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events or to otherwise update any statement in light of new information or future events. Further information concerning HTLF and its business, including additional factors that could materially affect HTLF’s financial results, is included in HTLF's filings with the SEC.
-FINANCIAL TABLES FOLLOW-
###
| HEARTLAND FINANCIAL USA, INC. | |||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||
| For the Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Interest Income | |||||||||||
| Interest and fees on loans | $ | 102,369 | $ | 112,439 | |||||||
| Interest on securities: | |||||||||||
| Taxable | 32,620 | 30,443 | |||||||||
| Nontaxable | 6,202 | 4,503 | |||||||||
| Interest on federal funds sold | — | 1 | |||||||||
| Interest on deposits with other banks and short-term investments | 71 | 66 | |||||||||
| Total Interest Income | 141,262 | 147,452 | |||||||||
| Interest Expense | |||||||||||
| Interest on deposits | 2,977 | 4,395 | |||||||||
| Interest on short-term borrowings | 46 | 152 | |||||||||
| Interest on other borrowings | 3,560 | 3,300 | |||||||||
| Total Interest Expense | 6,583 | 7,847 | |||||||||
| Net Interest Income | 134,679 | 139,605 | |||||||||
| Provision (benefit) for credit losses | 3,245 | (648) | |||||||||
| Net Interest Income After Provision for Credit Losses | 131,434 | 140,253 | |||||||||
| Noninterest Income | |||||||||||
| Service charges and fees | 15,251 | 13,671 | |||||||||
| Loan servicing income | 286 | 838 | |||||||||
| Trust fees | 6,079 | 5,777 | |||||||||
| Brokerage and insurance commissions | 869 | 853 | |||||||||
| Securities gains/(losses), net | 2,872 | (30) | |||||||||
| Unrealized gain/ (loss) on equity securities, net | (283) | (110) | |||||||||
| Net gains on sale of loans held for sale | 3,411 | 6,420 | |||||||||
| Valuation adjustment on servicing rights | 1,658 | 917 | |||||||||
| Income on bank owned life insurance | 524 | 829 | |||||||||
| Other noninterest income | 3,902 | 1,152 | |||||||||
| Total Noninterest Income | 34,569 | 30,317 | |||||||||
| Noninterest Expense | |||||||||||
| Salaries and employee benefits | 66,174 | 59,062 | |||||||||
| Occupancy | 7,362 | 7,918 | |||||||||
| Furniture and equipment | 3,519 | 3,093 | |||||||||
| Professional fees | 15,156 | 13,490 | |||||||||
| Advertising | 1,555 | 1,469 | |||||||||
| Core deposit and customer relationship intangibles amortization | 2,054 | 2,516 | |||||||||
| Other real estate and loan collection expenses, net | 195 | 135 | |||||||||
| (Gain)/loss on sales/valuations of assets, net | 46 | 194 | |||||||||
| Acquisition, integration and restructuring costs | 576 | 2,928 | |||||||||
| Partnership investment in tax credit projects | 77 | 35 | |||||||||
| Other noninterest expenses | 14,083 | 11,583 | |||||||||
| Total Noninterest Expense | 110,797 | 102,423 | |||||||||
| Income Before Income Taxes | 55,206 | 68,147 | |||||||||
| Income taxes | 12,117 | 15,333 | |||||||||
| Net Income | 43,089 | 52,814 | |||||||||
| Preferred dividends | (2,013) | (2,013) | |||||||||
| Net Income Available to Common Stockholders | $ | 41,076 | $ | 50,801 | |||||||
| Earnings per common share-diluted | $ | 0.97 | $ | 1.20 | |||||||
| Weighted average shares outstanding-diluted | 42,540,953 | 42,335,747 | |||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Interest Income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 102,369 | $ | 107,721 | $ | 112,062 | $ | 111,915 | $ | 112,439 | |||||||||||||||||||
| Interest on securities: | |||||||||||||||||||||||||||||
| Taxable | 32,620 | 30,637 | 32,384 | 31,546 | 30,443 | ||||||||||||||||||||||||
| Nontaxable | 6,202 | 5,595 | 4,609 | 4,561 | 4,503 | ||||||||||||||||||||||||
| Interest on federal funds sold | — | — | — | — | 1 | ||||||||||||||||||||||||
| Interest on deposits with other banks and short-term investments | 71 | 86 | 132 | 60 | 66 | ||||||||||||||||||||||||
| Total Interest Income | 141,262 | 144,039 | 149,187 | 148,082 | 147,452 | ||||||||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||||||||
| Interest on deposits | 2,977 | 3,168 | 3,444 | 3,790 | 4,395 | ||||||||||||||||||||||||
| Interest on short-term borrowings | 46 | 123 | 98 | 98 | 152 | ||||||||||||||||||||||||
| Interest on other borrowings | 3,560 | 3,554 | 3,102 | 2,976 | 3,300 | ||||||||||||||||||||||||
| Total Interest Expense | 6,583 | 6,845 | 6,644 | 6,864 | 7,847 | ||||||||||||||||||||||||
| Net Interest Income | 134,679 | 137,194 | 142,543 | 141,218 | 139,605 | ||||||||||||||||||||||||
| Provision (benefit) for credit losses | 3,245 | (5,313) | (4,534) | (7,080) | (648) | ||||||||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | 131,434 | 142,507 | 147,077 | 148,298 | 140,253 | ||||||||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||||||||
| Service charges and fees | 15,251 | 15,349 | 15,551 | 15,132 | 13,671 | ||||||||||||||||||||||||
| Loan servicing income | 286 | 781 | 784 | 873 | 838 | ||||||||||||||||||||||||
| Trust fees | 6,079 | 6,380 | 6,221 | 6,039 | 5,777 | ||||||||||||||||||||||||
| Brokerage and insurance commissions | 869 | 962 | 866 | 865 | 853 | ||||||||||||||||||||||||
| Securities gains/(losses), net | 2,872 | 1,563 | 1,535 | 2,842 | (30) | ||||||||||||||||||||||||
| Unrealized gain/ (loss) on equity securities, net | (283) | (27) | 112 | 83 | (110) | ||||||||||||||||||||||||
| Net gains on sale of loans held for sale | 3,411 | 4,151 | 5,281 | 4,753 | 6,420 | ||||||||||||||||||||||||
| Valuation adjustment on servicing rights | 1,658 | 502 | 195 | (526) | 917 | ||||||||||||||||||||||||
| Income on bank owned life insurance | 524 | 1,056 | 940 | 937 | 829 | ||||||||||||||||||||||||
| Other noninterest income | 3,902 | 2,013 | 1,239 | 2,166 | 1,152 | ||||||||||||||||||||||||
| Total Noninterest Income | 34,569 | 32,730 | 32,724 | 33,164 | 30,317 | ||||||||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 66,174 | 63,031 | 60,689 | 57,332 | 59,062 | ||||||||||||||||||||||||
| Occupancy | 7,362 | 7,282 | 7,366 | 7,399 | 7,918 | ||||||||||||||||||||||||
| Furniture and equipment | 3,519 | 3,364 | 3,365 | 3,501 | 3,093 | ||||||||||||||||||||||||
| Professional fees | 15,156 | 17,631 | 17,242 | 16,237 | 13,490 | ||||||||||||||||||||||||
| Advertising | 1,555 | 2,218 | 1,921 | 1,649 | 1,469 | ||||||||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,054 | 2,169 | 2,295 | 2,415 | 2,516 | ||||||||||||||||||||||||
| Other real estate and loan collection expenses, net | 195 | 363 | 78 | 414 | 135 | ||||||||||||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 46 | 214 | (3) | 183 | 194 | ||||||||||||||||||||||||
| Acquisition, integration and restructuring costs | 576 | 1,989 | 204 | 210 | 2,928 | ||||||||||||||||||||||||
| Partnership investment in tax credit projects | 77 | 2,549 | 2,374 | 1,345 | 35 | ||||||||||||||||||||||||
| Other noninterest expenses | 14,083 | 14,576 | 15,096 | 12,691 | 11,583 | ||||||||||||||||||||||||
| Total Noninterest Expense | 110,797 | 115,386 | 110,627 | 103,376 | 102,423 | ||||||||||||||||||||||||
| Income Before Income Taxes | 55,206 | 59,851 | 69,174 | 78,086 | 68,147 | ||||||||||||||||||||||||
| Income taxes | 12,117 | 10,271 | 13,250 | 16,481 | 15,333 | ||||||||||||||||||||||||
| Net Income | 43,089 | 49,580 | 55,924 | 61,605 | 52,814 | ||||||||||||||||||||||||
| Preferred dividends | (2,013) | (2,012) | (2,013) | (2,012) | (2,013) | ||||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 41,076 | $ | 47,568 | $ | 53,911 | $ | 59,593 | $ | 50,801 | |||||||||||||||||||
| Earnings per common share-diluted | $ | 0.97 | $ | 1.12 | $ | 1.27 | $ | 1.41 | $ | 1.20 | |||||||||||||||||||
| Weighted average shares outstanding-diluted | 42,540,953 | 42,479,442 | 42,415,993 | 42,359,873 | 42,335,747 | ||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||||||||
| As of | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 198,559 | $ | 163,895 | $ | 192,247 | $ | 208,702 | $ | 198,177 | |||||||||||||||||||
| Interest bearing deposits with other banks and short-term investments | 406,343 | 271,704 | 135,158 | 240,426 | 269,685 | ||||||||||||||||||||||||
| Cash and cash equivalents | 604,902 | 435,599 | 327,405 | 449,128 | 467,862 | ||||||||||||||||||||||||
| Time deposits in other financial institutions | 2,894 | 2,894 | 3,138 | 3,138 | 3,138 | ||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||
| Carried at fair value | 7,025,243 | 7,530,374 | 7,449,936 | 6,543,978 | 6,370,495 | ||||||||||||||||||||||||
| Held to maturity, at cost, less allowance for credit losses | 81,785 | 84,709 | 85,354 | 85,439 | 85,293 | ||||||||||||||||||||||||
| Other investments, at cost | 82,751 | 82,567 | 83,332 | 76,809 | 74,935 | ||||||||||||||||||||||||
| Loans held for sale | 22,685 | 21,640 | 37,078 | 33,248 | 43,037 | ||||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||||
| Held to maturity | 10,177,385 | 9,954,572 | 9,854,907 | 10,012,014 | 10,050,456 | ||||||||||||||||||||||||
| Allowance for credit losses | (100,522) | (110,088) | (117,533) | (120,726) | (130,172) | ||||||||||||||||||||||||
| Loans, net | 10,076,863 | 9,844,484 | 9,737,374 | 9,891,288 | 9,920,284 | ||||||||||||||||||||||||
| Premises, furniture and equipment, net | 213,752 | 215,827 | 221,996 | 226,358 | 225,047 | ||||||||||||||||||||||||
| Goodwill | 576,005 | 576,005 | 576,005 | 576,005 | 576,005 | ||||||||||||||||||||||||
| Core deposit and customer relationship intangibles, net | 30,934 | 32,988 | 35,157 | 37,452 | 39,867 | ||||||||||||||||||||||||
| Servicing rights, net | 8,102 | 6,890 | 6,351 | 6,201 | 6,953 | ||||||||||||||||||||||||
| Cash surrender value on life insurance | 192,267 | 191,722 | 190,576 | 189,619 | 188,521 | ||||||||||||||||||||||||
| Other real estate, net | 1,422 | 1,927 | 4,744 | 6,314 | 6,236 | ||||||||||||||||||||||||
| Other assets | 311,274 | 246,923 | 237,779 | 246,029 | 236,754 | ||||||||||||||||||||||||
| Total Assets | $ | 19,230,879 | $ | 19,274,549 | $ | 18,996,225 | $ | 18,371,006 | $ | 18,244,427 | |||||||||||||||||||
| Liabilities and Equity | |||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||
| Demand | $ | 6,376,249 | $ | 6,495,326 | $ | 6,537,722 | $ | 6,299,289 | $ | 6,175,946 | |||||||||||||||||||
| Savings | 9,236,427 | 8,897,909 | 8,416,204 | 8,189,223 | 8,179,251 | ||||||||||||||||||||||||
| Time | 1,054,008 | 1,024,020 | 1,068,317 | 1,126,606 | 1,203,854 | ||||||||||||||||||||||||
| Total deposits | 16,666,684 | 16,417,255 | 16,022,243 | 15,615,118 | 15,559,051 | ||||||||||||||||||||||||
| Short-term borrowings | 107,372 | 131,597 | 265,620 | 152,563 | 140,597 | ||||||||||||||||||||||||
| Other borrowings | 372,290 | 372,072 | 371,765 | 271,244 | 349,514 | ||||||||||||||||||||||||
| Accrued expenses and other liabilities | 152,676 | 171,447 | 164,345 | 172,295 | 139,058 | ||||||||||||||||||||||||
| Total Liabilities | 17,299,022 | 17,092,371 | 16,823,973 | 16,211,220 | 16,188,220 | ||||||||||||||||||||||||
| Stockholders' Equity | |||||||||||||||||||||||||||||
| Preferred equity | 110,705 | 110,705 | 110,705 | 110,705 | 110,705 | ||||||||||||||||||||||||
| Common stock | 42,370 | 42,275 | 42,250 | 42,245 | 42,174 | ||||||||||||||||||||||||
| Capital surplus | 1,073,048 | 1,071,956 | 1,068,913 | 1,066,765 | 1,063,497 | ||||||||||||||||||||||||
| Retained earnings | 992,655 | 962,994 | 926,834 | 883,484 | 833,171 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | (286,921) | (5,752) | 23,550 | 56,587 | 6,660 | ||||||||||||||||||||||||
| Total Equity | 1,931,857 | 2,182,178 | 2,172,252 | 2,159,786 | 2,056,207 | ||||||||||||||||||||||||
| Total Liabilities and Equity | $ | 19,230,879 | $ | 19,274,549 | $ | 18,996,225 | $ | 18,371,006 | $ | 18,244,427 | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Average Balances | |||||||||||||||||||||||||||||
| Assets | $ | 19,229,872 | $ | 19,151,691 | $ | 18,608,775 | $ | 18,293,756 | $ | 17,964,723 | |||||||||||||||||||
| Loans, net of unearned | 10,043,594 | 9,886,027 | 9,920,047 | 10,072,071 | 9,952,152 | ||||||||||||||||||||||||
| Deposits | 16,459,378 | 16,265,476 | 15,817,778 | 15,576,345 | 15,044,561 | ||||||||||||||||||||||||
| Earning assets | 17,757,067 | 17,681,917 | 17,123,824 | 16,819,978 | 16,460,124 | ||||||||||||||||||||||||
| Interest bearing liabilities | 10,453,400 | 10,207,255 | 9,881,350 | 9,871,302 | 9,917,159 | ||||||||||||||||||||||||
| Common equity | 2,003,424 | 2,061,973 | 2,072,593 | 1,980,904 | 1,963,674 | ||||||||||||||||||||||||
| Total stockholders' equity | 2,114,129 | 2,172,678 | 2,183,298 | 2,091,609 | 2,074,379 | ||||||||||||||||||||||||
Tangible common equity (non-GAAP)(1) | 1,395,488 | 1,451,950 | 1,460,309 | 1,366,285 | 1,346,270 | ||||||||||||||||||||||||
| Key Performance Ratios | |||||||||||||||||||||||||||||
| Annualized return on average assets | 0.91 | % | 1.03 | % | 1.19 | % | 1.35 | % | 1.19 | % | |||||||||||||||||||
| Annualized return on average common equity (GAAP) | 8.32 | 9.15 | 10.32 | 12.07 | 10.49 | ||||||||||||||||||||||||
Annualized return on average tangible common equity (non-GAAP)(1) | 12.41 | 13.47 | 15.14 | 18.05 | 15.90 | ||||||||||||||||||||||||
| Annualized ratio of net charge-offs/(recoveries) to average loans | 0.49 | 0.03 | (0.05) | 0.12 | 0.06 | ||||||||||||||||||||||||
| Annualized net interest margin (GAAP) | 3.08 | 3.08 | 3.30 | 3.37 | 3.44 | ||||||||||||||||||||||||
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) | 3.12 | 3.12 | 3.34 | 3.41 | 3.48 | ||||||||||||||||||||||||
Efficiency ratio, fully tax-equivalent (non-GAAP)(1) | 64.65 | 63.86 | 60.38 | 57.11 | 56.61 | ||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA | |||||||||||||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Common Share Data | |||||||||||||||||||||||||||||
| Book value per common share | $ | 42.98 | $ | 49.00 | $ | 48.79 | $ | 48.50 | $ | 46.13 | |||||||||||||||||||
Tangible book value per common share (non-GAAP)(1) | $ | 28.66 | $ | 34.59 | $ | 34.33 | $ | 33.98 | $ | 31.53 | |||||||||||||||||||
| Common shares outstanding, net of treasury stock | 42,369,908 | 42,275,264 | 42,250,092 | 42,245,452 | 42,173,675 | ||||||||||||||||||||||||
Tangible common equity ratio (non-GAAP)(1) | 6.52 | % | 7.84 | % | 7.89 | % | 8.08 | % | 7.54 | % | |||||||||||||||||||
| Other Selected Trend Information | |||||||||||||||||||||||||||||
| Effective tax rate | 21.95 | % | 17.16 | % | 19.15 | % | 21.11 | % | 22.50 | % | |||||||||||||||||||
| Full time equivalent employees | 2,208 | 2,249 | 2,163 | 2,091 | 2,131 | ||||||||||||||||||||||||
| Loans Held to Maturity | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | 2,814,513 | $ | 2,645,085 | $ | 2,538,369 | $ | 2,518,908 | $ | 2,421,260 | |||||||||||||||||||
| Paycheck Protection Program ("PPP") | 74,065 | 199,883 | 409,247 | 829,175 | 1,155,328 | ||||||||||||||||||||||||
| Owner occupied commercial real estate | 2,266,076 | 2,240,334 | 2,135,227 | 1,940,134 | 1,837,559 | ||||||||||||||||||||||||
| Commercial and business lending | 5,154,654 | 5,085,302 | 5,082,843 | 5,288,217 | 5,414,147 | ||||||||||||||||||||||||
| Non-owner occupied commercial real estate | 2,161,761 | 2,010,591 | 2,020,487 | 1,987,369 | 1,967,183 | ||||||||||||||||||||||||
| Real estate construction | 842,483 | 856,119 | 814,001 | 854,295 | 796,027 | ||||||||||||||||||||||||
| Commercial real estate lending | 3,004,244 | 2,866,710 | 2,834,488 | 2,841,664 | 2,763,210 | ||||||||||||||||||||||||
| Total commercial lending | 8,158,898 | 7,952,012 | 7,917,331 | 8,129,881 | 8,177,357 | ||||||||||||||||||||||||
| Agricultural and agricultural real estate | 766,443 | 753,753 | 684,670 | 679,608 | 683,969 | ||||||||||||||||||||||||
| Residential mortgage | 825,242 | 829,283 | 840,356 | 800,884 | 786,994 | ||||||||||||||||||||||||
| Consumer | 426,802 | 419,524 | 412,550 | 401,641 | 402,136 | ||||||||||||||||||||||||
| Total loans held to maturity | $ | 10,177,385 | $ | 9,954,572 | $ | 9,854,907 | $ | 10,012,014 | $ | 10,050,456 | |||||||||||||||||||
| Total unfunded loan commitments | $ | 4,130,316 | $ | 3,830,219 | $ | 3,583,417 | $ | 3,433,062 | $ | 3,306,042 | |||||||||||||||||||
| (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 | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Allowance for Credit Losses-Loans | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 110,088 | $ | 117,533 | $ | 120,726 | $ | 130,172 | $ | 131,606 | |||||||||||||||||||
| Provision (benefit) for credit losses | 2,628 | (6,808) | (4,448) | (6,466) | 16 | ||||||||||||||||||||||||
| Charge-offs | (13,217) | (1,953) | (1,167) | (3,497) | (2,126) | ||||||||||||||||||||||||
| Recoveries | 1,023 | 1,316 | 2,422 | 517 | 676 | ||||||||||||||||||||||||
| Balance, end of period | $ | 100,522 | $ | 110,088 | $ | 117,533 | $ | 120,726 | $ | 130,172 | |||||||||||||||||||
| Allowance for Unfunded Commitments | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 15,462 | $ | 13,967 | $ | 14,002 | $ | 14,619 | $ | 15,280 | |||||||||||||||||||
| Provision (benefit) for credit losses | 617 | 1,495 | (35) | (617) | (661) | ||||||||||||||||||||||||
| Balance, end of period | $ | 16,079 | $ | 15,462 | $ | 13,967 | $ | 14,002 | $ | 14,619 | |||||||||||||||||||
| Allowance for lending related credit losses | $116,601 | $125,550 | $131,500 | $134,728 | $144,791 | ||||||||||||||||||||||||
| Provision for Credit Losses | |||||||||||||||||||||||||||||
| Provision (benefit) for credit losses-loans | $ | 2,628 | $ | (6,808) | $ | (4,448) | $ | (6,466) | $ | 16 | |||||||||||||||||||
| Provision (benefit) for credit losses-unfunded commitments | 617 | 1,495 | (35) | (617) | (661) | ||||||||||||||||||||||||
| Provision (benefit) for credit losses-held to maturity securities | — | — | (51) | 3 | (3) | ||||||||||||||||||||||||
| Total provision (benefit) for credit losses | $ | 3,245 | $ | (5,313) | $ | (4,534) | $ | (7,080) | $ | (648) | |||||||||||||||||||
| Asset Quality | |||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 64,174 | $ | 69,369 | $ | 82,375 | $ | 85,268 | $ | 91,718 | |||||||||||||||||||
| Loans past due ninety days or more | 246 | 550 | 861 | 97 | 171 | ||||||||||||||||||||||||
| Other real estate owned | 1,422 | 1,927 | 4,744 | 6,314 | 6,236 | ||||||||||||||||||||||||
| Other repossessed assets | 34 | 43 | 166 | 50 | 239 | ||||||||||||||||||||||||
| Total nonperforming assets | $ | 65,876 | $ | 71,889 | $ | 88,146 | $ | 91,729 | $ | 98,364 | |||||||||||||||||||
| Performing troubled debt restructured loans | $ | 882 | $ | 817 | $ | 1,817 | $ | 2,122 | $ | 2,394 | |||||||||||||||||||
| Nonperforming Assets Activity | |||||||||||||||||||||||||||||
| Balance, beginning of period | $ | 71,889 | $ | 88,146 | $ | 91,729 | $ | 98,364 | $ | 94,970 | |||||||||||||||||||
| Net loan (charge offs)/recoveries | (12,194) | (637) | 1,255 | (2,980) | (1,450) | ||||||||||||||||||||||||
| New nonperforming loans | 15,832 | 5,886 | 6,908 | 7,989 | 14,936 | ||||||||||||||||||||||||
Reduction of nonperforming loans(1) | (8,448) | (18,429) | (8,581) | (10,948) | (8,884) | ||||||||||||||||||||||||
| Net OREO/repossessed assets sales proceeds and losses | (1,203) | (3,077) | (3,165) | (696) | (1,208) | ||||||||||||||||||||||||
| Balance, end of period | $ | 65,876 | $ | 71,889 | $ | 88,146 | $ | 91,729 | $ | 98,364 | |||||||||||||||||||
| Asset Quality Ratios | |||||||||||||||||||||||||||||
| Ratio of nonperforming loans to total loans | 0.63 | % | 0.70 | % | 0.84 | % | 0.85 | % | 0.91 | % | |||||||||||||||||||
| Ratio of nonperforming loans and performing trouble debt restructured loans to total loans | 0.64 | 0.71 | 0.86 | 0.87 | 0.94 | ||||||||||||||||||||||||
| Ratio of nonperforming assets to total assets | 0.34 | 0.37 | 0.46 | 0.50 | 0.54 | ||||||||||||||||||||||||
| Annualized ratio of net loan charge-offs/(recoveries) to average loans | 0.49 | 0.03 | (0.05) | 0.12 | 0.06 | ||||||||||||||||||||||||
| Allowance for loan credit losses as a percent of loans | 0.99 | 1.11 | 1.19 | 1.21 | 1.30 | ||||||||||||||||||||||||
| Allowance for lending related credit losses as a percent of loans | 1.15 | 1.26 | 1.33 | 1.35 | 1.44 | ||||||||||||||||||||||||
| Allowance for loan credit losses as a percent of nonperforming loans | 156.04 | 157.45 | 141.20 | 141.42 | 141.66 | ||||||||||||||||||||||||
| Loans delinquent 30-89 days as a percent of total loans | 0.10 | 0.07 | 0.12 | 0.17 | 0.16 | ||||||||||||||||||||||||
| (1) Includes principal reductions, transfers to performing status and transfers to OREO. | |||||||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2022 | December 31, 2021 | March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | Average Balance | Interest | Rate | |||||||||||||||||||||||||||||||||||||||||||||
| Earning Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable | $ | 6,501,664 | $ | 32,620 | 2.03 | % | $ | 6,730,511 | $ | 30,637 | 1.81 | % | $ | 5,693,097 | $ | 30,443 | 2.17 | % | |||||||||||||||||||||||||||||||||||
Nontaxable(1) | 1,106,951 | 7,851 | 2.88 | 964,712 | 7,082 | 2.91 | 730,565 | 5,700 | 3.16 | ||||||||||||||||||||||||||||||||||||||||||||
| Total securities | 7,608,615 | 40,471 | 2.16 | 7,695,223 | 37,719 | 1.94 | 6,423,662 | 36,143 | 2.28 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest on deposits with other banks and short-term investments | 216,451 | 71 | 0.13 | 218,809 | 86 | 0.16 | 204,488 | 66 | 0.13 | ||||||||||||||||||||||||||||||||||||||||||||
| Federal funds sold | 11 | — | — | — | — | — | 14,020 | 1 | 0.03 | ||||||||||||||||||||||||||||||||||||||||||||
Loans:(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial(1) | 2,744,336 | 27,053 | 4.00 | 2,614,685 | 26,465 | 4.02 | 2,500,250 | 28,222 | 4.58 | ||||||||||||||||||||||||||||||||||||||||||||
| PPP loans | 132,050 | 4,323 | 13.28 | 302,829 | 8,106 | 10.62 | 992,517 | 10,149 | 4.15 | ||||||||||||||||||||||||||||||||||||||||||||
| Owner occupied commercial real estate | 2,243,522 | 21,278 | 3.85 | 2,166,768 | 22,007 | 4.03 | 1,778,829 | 19,565 | 4.46 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-owner occupied commercial real estate | 2,060,548 | 21,163 | 4.17 | 1,996,186 | 21,744 | 4.32 | 1,937,564 | 22,121 | 4.63 | ||||||||||||||||||||||||||||||||||||||||||||
| Real estate construction | 847,250 | 9,276 | 4.44 | 837,716 | 9,390 | 4.45 | 806,315 | 9,698 | 4.88 | ||||||||||||||||||||||||||||||||||||||||||||
| Agricultural and agricultural real estate | 745,348 | 7,006 | 3.81 | 697,521 | 7,089 | 4.03 | 681,279 | 8,051 | 4.79 | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 843,881 | 8,085 | 3.89 | 853,208 | 8,615 | 4.01 | 849,923 | 9,830 | 4.69 | ||||||||||||||||||||||||||||||||||||||||||||
| Consumer | 426,659 | 4,655 | 4.42 | 417,114 | 4,793 | 4.56 | 405,475 | 5,367 | 5.37 | ||||||||||||||||||||||||||||||||||||||||||||
| Less: allowance for credit losses-loans | (111,604) | — | — | (118,142) | — | — | (134,198) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Net loans | 9,931,990 | 102,839 | 4.20 | 9,767,885 | 108,209 | 4.40 | 9,817,954 | 113,003 | 4.67 | ||||||||||||||||||||||||||||||||||||||||||||
| Total earning assets | 17,757,067 | 143,381 | 3.27 | % | 17,681,917 | 146,014 | 3.28 | % | 16,460,124 | 149,213 | 3.68 | % | |||||||||||||||||||||||||||||||||||||||||
| Nonearning Assets | 1,472,805 | 1,469,774 | 1,504,599 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 19,229,872 | $ | 19,151,691 | $ | 17,964,723 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings | $ | 8,889,950 | $ | 2,394 | 0.11 | % | $ | 8,609,596 | $ | 2,160 | 0.10 | % | $ | 8,032,308 | $ | 2,430 | 0.12 | % | |||||||||||||||||||||||||||||||||||
| Time deposits | 1,071,675 | 583 | 0.22 | 1,048,785 | 1,008 | 0.38 | 1,233,682 | 1,965 | 0.65 | ||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 119,588 | 46 | 0.16 | 176,956 | 123 | 0.28 | 240,037 | 152 | 0.26 | ||||||||||||||||||||||||||||||||||||||||||||
| Other borrowings | 372,187 | 3,560 | 3.88 | 371,918 | 3,554 | 3.79 | 411,132 | 3,300 | 3.26 | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | 10,453,400 | 6,583 | 0.26 | % | 10,207,255 | 6,845 | 0.27 | % | 9,917,159 | 7,847 | 0.32 | % | |||||||||||||||||||||||||||||||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest bearing deposits | 6,497,753 | 6,607,095 | 5,778,571 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued interest and other liabilities | 164,590 | 164,663 | 194,614 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest bearing liabilities | 6,662,343 | 6,771,758 | 5,973,185 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity | 2,114,129 | 2,172,678 | 2,074,379 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Equity | $ | 19,229,872 | $ | 19,151,691 | $ | 17,964,723 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) | $ | 136,798 | $ | 139,169 | $ | 141,366 | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest spread(1) | 3.01 | % | 3.01 | % | 3.36 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets | 3.12 | % | 3.12 | % | 3.48 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest bearing liabilities to earning assets | 58.87 | % | 57.73 | % | 60.25 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| (1) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Nonaccrual loans and loans held for sale are included in the average loans outstanding. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) | |||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||
| As of and For the Quarter Ended | |||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||
| Total Assets | |||||||||||||||||
| Arizona Bank & Trust | $ | 1,903,616 | $ | 1,969,184 | $ | 1,808,943 | $ | 1,645,816 | $ | 1,614,740 | |||||||
| Bank of Blue Valley | 1,419,999 | 1,441,980 | 1,460,751 | 1,419,003 | 1,425,434 | ||||||||||||
| Citywide Banks | 2,647,931 | 2,696,695 | 2,685,554 | 2,611,842 | 2,632,199 | ||||||||||||
| Dubuque Bank and Trust Company | 2,292,161 | 2,235,630 | 1,968,612 | 1,990,040 | 1,932,234 | ||||||||||||
| First Bank & Trust | 2,892,823 | 2,878,173 | 2,855,671 | 2,882,969 | 2,991,053 | ||||||||||||
| Illinois Bank & Trust | 1,708,750 | 1,686,038 | 1,680,558 | 1,671,240 | 1,584,561 | ||||||||||||
| Minnesota Bank & Trust | 877,851 | 865,825 | 872,291 | 955,638 | 995,692 | ||||||||||||
| New Mexico Bank & Trust | 2,578,150 | 2,623,597 | 2,586,951 | 2,494,257 | 2,356,918 | ||||||||||||
| Premier Valley Bank | 1,225,543 | 1,224,396 | 1,198,540 | 1,126,807 | 1,062,607 | ||||||||||||
| Rocky Mountain Bank | 716,300 | 713,930 | 718,956 | 646,821 | 620,800 | ||||||||||||
| Wisconsin Bank & Trust | 1,210,498 | 1,224,689 | 1,209,954 | 1,252,096 | 1,264,009 | ||||||||||||
| Total Deposits | |||||||||||||||||
| Arizona Bank & Trust | $ | 1,732,187 | $ | 1,768,793 | $ | 1,617,732 | $ | 1,450,248 | $ | 1,453,888 | |||||||
| Bank of Blue Valley | 1,185,749 | 1,179,294 | 1,192,868 | 1,168,617 | 1,178,114 | ||||||||||||
| Citywide Banks | 2,275,838 | 2,291,912 | 2,282,703 | 2,174,237 | 2,231,320 | ||||||||||||
| Dubuque Bank and Trust Company | 1,793,770 | 1,750,071 | 1,705,753 | 1,471,564 | 1,565,782 | ||||||||||||
| First Bank & Trust | 2,454,620 | 2,397,350 | 2,367,353 | 2,361,391 | 2,427,920 | ||||||||||||
| Illinois Bank & Trust | 1,575,274 | 1,496,262 | 1,509,847 | 1,512,106 | 1,426,426 | ||||||||||||
| Minnesota Bank & Trust | 752,210 | 719,489 | 734,292 | 762,549 | 813,693 | ||||||||||||
| New Mexico Bank & Trust | 2,332,574 | 2,308,939 | 2,206,099 | 2,195,838 | 2,077,304 | ||||||||||||
| Premier Valley Bank | 1,074,076 | 1,051,286 | 988,579 | 963,459 | 896,715 | ||||||||||||
| Rocky Mountain Bank | 648,497 | 640,757 | 602,155 | 568,961 | 549,894 | ||||||||||||
| Wisconsin Bank & Trust | 1,063,490 | 1,070,161 | 1,048,367 | 1,093,119 | 1,067,735 | ||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA | |||||||||||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP) | |||||||||||||||||||||||||||||
| Net income available to common stockholders (GAAP) | $ | 41,076 | $ | 47,568 | $ | 53,911 | $ | 59,593 | $ | 50,801 | |||||||||||||||||||
Plus core deposit and customer relationship intangibles amortization, net of tax(1) | 1,623 | 1,713 | 1,814 | 1,907 | 1,988 | ||||||||||||||||||||||||
| Net income available to common stockholders excluding intangible amortization (non-GAAP) | $ | 42,699 | $ | 49,281 | $ | 55,725 | $ | 61,500 | $ | 52,789 | |||||||||||||||||||
| Average common equity (GAAP) | $ | 2,003,424 | $ | 2,061,973 | $ | 2,072,593 | $ | 1,980,904 | $ | 1,963,674 | |||||||||||||||||||
| Less average goodwill | 576,005 | 576,005 | 576,005 | 576,005 | 576,005 | ||||||||||||||||||||||||
| Less average core deposit and customer relationship intangibles, net | 31,931 | 34,018 | 36,279 | 38,614 | 41,399 | ||||||||||||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,395,488 | $ | 1,451,950 | $ | 1,460,309 | $ | 1,366,285 | $ | 1,346,270 | |||||||||||||||||||
| Annualized return on average common equity (GAAP) | 8.32 | % | 9.15 | % | 10.32 | % | 12.07 | % | 10.49 | % | |||||||||||||||||||
| Annualized return on average tangible common equity (non-GAAP) | 12.41 | % | 13.47 | % | 15.14 | % | 18.05 | % | 15.90 | % | |||||||||||||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) | |||||||||||||||||||||||||||||
| Net Interest Income (GAAP) | $ | 134,679 | $ | 137,194 | $ | 142,543 | $ | 141,218 | $ | 139,605 | |||||||||||||||||||
Plus tax-equivalent adjustment(1) | 2,119 | 1,975 | 1,714 | 1,762 | 1,761 | ||||||||||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) | $ | 136,798 | $ | 139,169 | $ | 144,257 | $ | 142,980 | $ | 141,366 | |||||||||||||||||||
| Average earning assets | $ | 17,757,067 | $ | 17,681,917 | $ | 17,123,824 | $ | 16,819,978 | $ | 16,460,124 | |||||||||||||||||||
| Annualized net interest margin (GAAP) | 3.08 | % | 3.08 | % | 3.30 | % | 3.37 | % | 3.44 | % | |||||||||||||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 3.12 | 3.12 | 3.34 | 3.41 | 3.48 | ||||||||||||||||||||||||
| Net purchase accounting discount amortization on loans included in annualized net interest margin | 0.05 | 0.05 | 0.08 | 0.09 | 0.12 | ||||||||||||||||||||||||
| Reconciliation of Tangible Book Value Per Common Share (non-GAAP) | |||||||||||||||||||||||||||||
| Common equity (GAAP) | $ | 1,821,152 | $ | 2,071,473 | $ | 2,061,547 | $ | 2,049,081 | $ | 1,945,502 | |||||||||||||||||||
| Less goodwill | 576,005 | 576,005 | 576,005 | 576,005 | 576,005 | ||||||||||||||||||||||||
| Less core deposit and customer relationship intangibles, net | 30,934 | 32,988 | 35,157 | 37,452 | 39,867 | ||||||||||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 1,214,213 | $ | 1,462,480 | $ | 1,450,385 | $ | 1,435,624 | $ | 1,329,630 | |||||||||||||||||||
| Common shares outstanding, net of treasury stock | 42,369,908 | 42,275,264 | 42,250,092 | 42,245,452 | 42,173,675 | ||||||||||||||||||||||||
| Common equity (book value) per share (GAAP) | $ | 42.98 | $ | 49.00 | $ | 48.79 | $ | 48.50 | $ | 46.13 | |||||||||||||||||||
| Tangible book value per common share (non-GAAP) | $ | 28.66 | $ | 34.59 | $ | 34.33 | $ | 33.98 | $ | 31.53 | |||||||||||||||||||
| Reconciliation of Tangible Common Equity Ratio (non-GAAP) | |||||||||||||||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 1,214,213 | $ | 1,462,480 | $ | 1,450,385 | $ | 1,435,624 | $ | 1,329,630 | |||||||||||||||||||
| Total assets (GAAP) | $ | 19,230,879 | $ | 19,274,549 | $ | 18,996,225 | $ | 18,371,006 | $ | 18,244,427 | |||||||||||||||||||
| Less goodwill | 576,005 | 576,005 | 576,005 | 576,005 | 576,005 | ||||||||||||||||||||||||
| Less core deposit and customer relationship intangibles, net | 30,934 | 32,988 | 35,157 | 37,452 | 39,867 | ||||||||||||||||||||||||
| Total tangible assets (non-GAAP) | $ | 18,623,940 | $ | 18,665,556 | $ | 18,385,063 | $ | 17,757,549 | $ | 17,628,555 | |||||||||||||||||||
| Tangible common equity ratio (non-GAAP) | 6.52 | % | 7.84 | % | 7.89 | % | 8.08 | % | 7.54 | % | |||||||||||||||||||
| (1) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||||||||||||
| Reconciliation of Efficiency Ratio (non-GAAP) | For the Quarter Ended | ||||||||||||||||||||||||||||
| 3/31/2022 | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | |||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 134,679 | $ | 137,194 | $ | 142,543 | $ | 141,218 | $ | 139,605 | |||||||||||||||||||
Tax-equivalent adjustment(1) | 2,119 | 1,975 | 1,714 | 1,762 | 1,761 | ||||||||||||||||||||||||
| Fully tax-equivalent net interest income | 136,798 | 139,169 | 144,257 | 142,980 | 141,366 | ||||||||||||||||||||||||
| Noninterest income | 34,569 | 32,730 | 32,724 | 33,164 | 30,317 | ||||||||||||||||||||||||
| Securities (gains)/losses, net | (2,872) | (1,563) | (1,535) | (2,842) | 30 | ||||||||||||||||||||||||
| Unrealized (gain)/loss on equity securities, net | 283 | 27 | (112) | (83) | 110 | ||||||||||||||||||||||||
| Valuation adjustment on servicing rights | (1,658) | (502) | (195) | 526 | (917) | ||||||||||||||||||||||||
| Adjusted revenue (non-GAAP) | $ | 167,120 | $ | 169,861 | $ | 175,139 | $ | 173,745 | $ | 170,906 | |||||||||||||||||||
| Total noninterest expenses (GAAP) | $ | 110,797 | $ | 115,386 | $ | 110,627 | $ | 103,376 | $ | 102,423 | |||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||
| Core deposit and customer relationship intangibles amortization | 2,054 | 2,169 | 2,295 | 2,415 | 2,516 | ||||||||||||||||||||||||
| Partnership investment in tax credit projects | 77 | 2,549 | 2,374 | 1,345 | 35 | ||||||||||||||||||||||||
| (Gain)/loss on sales/valuation of assets, net | 46 | 214 | (3) | 183 | 194 | ||||||||||||||||||||||||
| Acquisition, integration and restructuring costs | 576 | 1,989 | 204 | 210 | 2,928 | ||||||||||||||||||||||||
| Adjusted noninterest expenses (non-GAAP) | $ | 108,044 | $ | 108,465 | $ | 105,757 | $ | 99,223 | $ | 96,750 | |||||||||||||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 64.65 | % | 63.86 | % | 60.38 | % | 57.11 | % | 56.61 | % | |||||||||||||||||||
| Acquisition, integration and restructuring costs | |||||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 340 | $ | — | $ | — | $ | 44 | $ | 534 | |||||||||||||||||||
| Occupancy | — | — | — | 1 | 9 | ||||||||||||||||||||||||
| Furniture and equipment | — | — | 7 | 41 | 607 | ||||||||||||||||||||||||
| Professional fees | 236 | 1,989 | 145 | 63 | 670 | ||||||||||||||||||||||||
| Advertising | — | — | 11 | 6 | 156 | ||||||||||||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | — | — | 39 | — | — | ||||||||||||||||||||||||
| Other noninterest expenses | — | — | 2 | 55 | 952 | ||||||||||||||||||||||||
| Total acquisition, integration and restructuring costs | $ | 576 | $ | 1,989 | $ | 204 | $ | 210 | $ | 2,928 | |||||||||||||||||||
After tax impact on diluted earnings per common share(1) | $ | 0.01 | $ | 0.05 | $ | — | $ | — | $ | 0.05 | |||||||||||||||||||
| (1) Computed on a tax-equivalent basis using an effective tax rate of 21%. | |||||||||||||||||||||||||||||
