Highlights
- Quarterly net income available to common stockholders of $20.2 million, a 40% increase from third quarter of prior year
- Diluted earnings per common share of $0.81, a 17% increase from third quarter of prior year
- Net interest margin of 3.97%, fully taxable equivalent (non-GAAP)(1) of 4.14%
- Return on average common equity of 11.64%
- Return on average tangible common equity (non-GAAP)(2) of 14.93%
- Total demand deposits increase $88.8 million or 4% since June 30, 2016
| Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Net income (in millions) | $ | 20.2 | $ | 14.6 | $ | 61.2 | $ | 45.5 | |||||||
| Net income available to common stockholders (in millions) | 20.2 | 14.4 | 61.0 | 44.8 | |||||||||||
| Diluted earnings per common share | 0.81 | 0.69 | 2.48 | 2.16 | |||||||||||
| Return on average assets | 0.98 | % | 0.85 | % | 1.00 | % | 0.91 | % | |||||||
| Return on average common equity | 11.64 | 11.40 | 12.28 | 12.38 | |||||||||||
| Return on average tangible common equity (non-GAAP)(2) | 14.93 | 13.22 | 15.87 | 14.31 | |||||||||||
| Net interest margin | 3.97 | 3.85 | 3.98 | 3.80 | |||||||||||
| Net interest margin, fully taxable equivalent (non-GAAP)(1) | 4.14 | 4.01 | 4.15 | 3.96 | |||||||||||
"Heartland reported another excellent quarter with net income available to common stockholders of $20.2 million, a 40 percent increase over the previous year’s quarter. Among several areas of strength, we attribute our results to a very solid net interest margin of 4.14 percent for the quarter."
Lynn B. Fuller, chairman and chief executive officer, Heartland Financial USA, Inc.
(1) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Taxable Equivalent (non-GAAP)" table included in this earnings release.
(2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table included in this earnings release.
DUBUQUE, Iowa, Oct. 31, 2016 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $20.2 million, or $0.81 per diluted common share, for the quarter ended September 30, 2016, compared to $14.4 million, or $0.69 per diluted common share, for the third quarter of 2015. Return on average common equity was 11.64% and return on average assets was 0.98% for the third quarter of 2016, compared to 11.40% and 0.85%, respectively, for the same quarter in 2015.
Net income available to common stockholders for the first nine months of 2016 was $61.0 million, or $2.48 per diluted common share, compared to $44.8 million, or $2.16 per diluted common share, for the first nine months of 2015. Return on average common equity was 12.28% and return on average assets was 1.00% for the first nine months of 2016, compared to 12.38% and 0.91%, respectively, for the same period in 2015.
Commenting on Heartland’s 2016 third quarter results, Lynn B. Fuller, Heartland’s chairman and chief executive officer said, "Heartland reported another excellent quarter with net income available to common stockholders of $20.2 million, a 40 percent increase over the previous year’s quarter. Among several areas of strength, we attribute our results to a very solid net interest margin of 4.14 percent for the quarter."
Fully Taxable Equivalent Net Interest Margin Remains Above 4.00%
Net interest margin, expressed as a percentage of average earning assets, was 3.97% (4.14% on a fully taxable equivalent basis) during the third quarter of 2016, compared to 3.95% (4.12% on a fully taxable equivalent basis) during the second quarter of 2016 and 3.85% (4.01% on a fully taxable equivalent basis) during the third quarter of 2015.
Fuller said, “Net interest margin widened to 4.14 percent for the quarter and stands at 4.15 percent year-to-date. Yields on loans and securities increased while funding costs decreased for the quarter and year-to-date.”
Interest income for the third quarter of 2016 was $81.7 million, an increase of $14.4 million or 21%, compared to the $67.3 million recorded in the third quarter of 2015. The taxable equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $3.2 million for the third quarter of 2016 and $2.6 million for the third quarter of 2015. With these adjustments, interest income on a tax-equivalent basis was $84.9 million for the third quarter of 2016, an increase of $15.1 million or 22%, compared to $69.9 million for the third quarter of 2015. The increase in interest income in the third quarter of 2016, as compared to the third quarter of 2015, was primarily due to an increase in average earning assets, which totaled $7.38 billion during the third quarter of 2016 compared to $6.16 billion during the third quarter of 2015, a $1.22 billion or 20% increase. A majority of this growth was attributable to the acquisition of Premier Valley Bank completed on November 30, 2015, and acquisition of CIC Bancshares, Inc. completed on February 5, 2016.
Interest expense for the third quarter of 2016 was $8.0 million, an increase of $462,000 or 6% from $7.5 million in the third quarter of 2015. Average interest bearing liabilities increased $733.1 million or 16% for the quarter ended September 30, 2016, from $4.49 billion in the same quarter in 2015, while the average interest rate paid on Heartland's interest bearing deposits and borrowings declined 6 basis points from 0.67% in the third quarter of 2015 to 0.61% in the third quarter of 2016. The average interest rate paid on savings deposits was 0.22% during both the third quarter of 2016 and the third quarter of 2015, and the average interest rate paid on time deposits was 0.79% during the third quarter of 2016 compared to 0.91% during the third quarter of 2015.
Net interest income increased $14.0 million or 23% to $73.7 million in the third quarter of 2016 from the $59.7 million recorded in the third quarter of 2015. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $76.9 million during the third quarter of 2016, an increase of $14.6 million or 23% from the $62.3 million recorded during the third quarter of 2015.
Noninterest Income and Noninterest Expenses Increase From Same Quarter Last Year
Noninterest income totaled $28.5 million during the third quarter of 2016 compared to $25.0 million during the third quarter of 2015, an increase of $3.5 million or 14%. Service charges and fees totaled $8.3 million during the third quarter of 2016 compared to $6.4 million during the third quarter of 2015, an increase of $1.9 million or 30%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which is attributable to the acquisitions completed during the last quarter of 2015 and first quarter of 2016. Gains on sale of loans held for sale totaled $11.5 million during the third quarter of 2016 compared to $9.8 million during the third quarter of 2015, an increase of $1.7 million or 17%.
For the third quarter of 2016, noninterest expenses totaled $68.4 million compared to $62.0 million during the third quarter of 2015, an increase of $6.4 million or 10%. The category with the most significant increase was salaries and employee benefits, which increased $3.7 million or 10%. Other categories experiencing increases, primarily attributable to the recent acquisitions, were occupancy, furniture and equipment, professional fees and intangible assets amortization.
Fuller stated, "I am also pleased to announce significant progress toward lowering Heartland’s efficiency ratio, which dropped to 63.9 percent for the quarter, meeting our objective to reach 65 percent by year-end 2016."
Heartland's effective tax rate was 29.02% for the third quarter of 2016 compared to 25.32% for the third quarter of 2015. Included in Heartland's income taxes for the third quarter of 2015 were federal historic rehabilitation tax credits totaling $1.1 million associated with Heartland's ownership interest in a qualifying real estate project. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $304,000 during the third quarter of 2016 compared to $145,000 during the third quarter of 2015. Heartland's effective tax rate was also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 21.01% during the third quarter of 2016 compared to 24.61% during the third quarter of 2015.
Loans and Deposits Increase Since Year-End Due to First Quarter Acquisition
Total assets were $8.20 billion at September 30, 2016, an increase of $507.5 million or 7% from $7.69 billion at year-end 2015. Included in this growth, at fair value, were $772.6 million of assets acquired in the CIC Bancshares, Inc. transaction. Securities represented 24% of total assets at both September 30, 2016, and December 31, 2015.
Total loans held to maturity were $5.44 billion at September 30, 2016, compared to $5.00 billion at year-end 2015, an increase of $437.2 million or 9%. This increase includes $581.5 million of total loans held to maturity, at fair value, acquired in the CIC Bancshares, Inc. transaction. Exclusive of this transaction, total loans held to maturity decreased $43.5 million during the third quarter of 2016, $20.7 million during the second quarter of 2016 and $80.0 million during the first quarter of 2016.
Total deposits were $6.91 billion as of September 30, 2016, compared to $6.41 billion at year-end 2015, an increase of $506.9 million or 8%. This increase included $648.1 million of deposits, at fair value, acquired in the CIC Bancshares, Inc. acquisition. Exclusive of this transaction, total deposits increased $75.1 million during the third quarter of 2016, decreased $86.8 million during the second quarter of 2016 and decreased $129.6 million during the first quarter of 2016. Demand deposits totaled $2.24 billion at September 30, 2016, an increase of $324.6 million or 17% from $1.91 billion at year-end 2015, with $164.3 million of the increase attributable to the CIC Bancshares, Inc. transaction. Exclusive of this transaction, demand deposits increased $88.8 million during the third quarter of 2016, $70.4 million during the second quarter of 2016 and $1.1 million during the first quarter of 2016.
Fuller commented, "We continue to emphasize growth of non-time deposits and are very pleased with the 4 percent growth quarter over quarter in non-interest demand deposits. These now comprise 33 percent of the deposit mix."
Nonperforming Assets Increase Since Year-End
Nonperforming assets were $69.5 million or 0.85% of total assets at September 30, 2016, compared to $51.7 million or 0.67% of total assets at December 31, 2015. Exclusive of $3.5 million of nonperforming assets, at fair value, acquired in the CIC Bancshares, Inc. transaction, nonperforming assets increased $14.3 million or 28% since year-end 2015. Nonperforming loans were $57.9 million or 1.06% of total loans at September 30, 2016, compared to $39.7 million or 0.79% of total loans at December 31, 2015. Contributing to the year-to-date increase in nonperforming loans during 2016 was a $9.8 million agribusiness relationship at Dubuque Bank and Trust Company which is in the process of collection. Based upon a current valuation of the collateral securing this loan relationship, no loss is anticipated on this credit.
The allowance for loan losses at September 30, 2016, was 1.00% of loans and 94.39% of nonperforming loans, compared to 0.97% of loans and 122.77% of nonperforming loans at December 31, 2015. The provision for loan losses was $5.3 million for the third quarter of 2016 compared to $3.2 million for the third quarter of 2015. A contributing factor to the 2016 third quarter provision for loan losses was a $946,000 allowance for impairment recorded on two agricultural loans at New Mexico Bank & Trust classified as impaired during the quarter. Also affecting the provision for loan losses during the third quarter of 2016 were higher charge-offs at Citizens Finance Co., Heartland's consumer finance company.
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 30, 2017, by logging on to www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a diversified financial services company with assets exceeding $8 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 108 banking locations serving 85 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.
Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war; (iii) changes in state and federal laws, regulations and governmental policies concerning the company's general business; (iv) changes in interest rates and prepayment rates of the company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions; (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the company; and (xi) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.
-FINANCIAL TABLES FOLLOW-
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||
| For the Quarter Ended September 30, | For the Nine Months Ended September 30, 2016 | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Interest Income | |||||||||||||||
| Interest and fees on loans | $ | 70,046 | $ | 58,328 | $ | 208,280 | $ | 167,201 | |||||||
| Interest on securities: | |||||||||||||||
| Taxable | 7,917 | 5,858 | 24,604 | 19,729 | |||||||||||
| Nontaxable | 3,717 | 3,077 | 10,793 | 8,867 | |||||||||||
| Interest on federal funds sold | 1 | 1 | 12 | 3 | |||||||||||
| Interest on deposits in other financial institutions | 6 | 4 | 13 | 11 | |||||||||||
| Total Interest Income | 81,687 | 67,268 | 243,702 | 195,811 | |||||||||||
| Interest Expense | |||||||||||||||
| Interest on deposits | 4,001 | 3,767 | 12,195 | 11,758 | |||||||||||
| Interest on short-term borrowings | 235 | 228 | 1,083 | 638 | |||||||||||
| Interest on other borrowings | 3,770 | 3,549 | 10,918 | 12,117 | |||||||||||
| Total Interest Expense | 8,006 | 7,544 | 24,196 | 24,513 | |||||||||||
| Net Interest Income | 73,681 | 59,724 | 219,506 | 171,298 | |||||||||||
| Provision for loan losses | 5,328 | 3,181 | 9,513 | 10,526 | |||||||||||
| Net Interest Income After Provision for Loan Losses | 68,353 | 56,543 | 209,993 | 160,772 | |||||||||||
| Noninterest Income | |||||||||||||||
| Service charges and fees | 8,278 | 6,350 | 23,462 | 17,654 | |||||||||||
| Loan servicing income | 873 | 1,368 | 3,433 | 3,572 | |||||||||||
| Trust fees | 3,689 | 3,507 | 11,127 | 11,051 | |||||||||||
| Brokerage and insurance commissions | 1,006 | 869 | 2,914 | 2,872 | |||||||||||
| Securities gains, net | 1,584 | 1,767 | 9,732 | 9,230 | |||||||||||
| Gains on sale of loans held for sale | 11,459 | 9,823 | 33,794 | 38,164 | |||||||||||
| Valuation adjustment on commercial servicing rights | 5 | — | (41 | ) | — | ||||||||||
| Income on bank owned life insurance | 620 | 372 | 1,733 | 1,355 | |||||||||||
| Other noninterest income | 1,028 | 924 | 2,992 | 2,406 | |||||||||||
| Total Noninterest Income | 28,542 | 24,980 | 89,146 | 86,304 | |||||||||||
| Noninterest Expense | |||||||||||||||
| Salaries and employee benefits | 40,733 | 37,033 | 124,432 | 110,522 | |||||||||||
| Occupancy | 5,099 | 4,307 | 15,322 | 12,594 | |||||||||||
| Furniture and equipment | 2,746 | 2,121 | 7,301 | 6,403 | |||||||||||
| Professional fees | 5,985 | 5,251 | 20,481 | 16,544 | |||||||||||
| FDIC insurance assessments | 1,180 | 1,018 | 3,468 | 2,873 | |||||||||||
| Advertising | 1,339 | 1,327 | 4,174 | 3,841 | |||||||||||
| Intangible assets amortization | 1,291 | 734 | 4,483 | 2,080 | |||||||||||
| Other real estate and loan collection expenses | 640 | 496 | 1,871 | 1,714 | |||||||||||
| (Gain)/loss on sales/valuations of assets, net | 794 | 721 | 1,064 | 2,583 | |||||||||||
| Other noninterest expenses | 8,620 | 8,988 | 27,160 | 25,938 | |||||||||||
| Total Noninterest Expense | 68,427 | 61,996 | 209,756 | 185,092 | |||||||||||
| Income Before Income Taxes | 28,468 | 19,527 | 89,383 | 61,984 | |||||||||||
| Income taxes | 8,260 | 4,945 | 28,196 | 16,533 | |||||||||||
| Net Income | 20,208 | 14,582 | 61,187 | 45,451 | |||||||||||
| Preferred dividends | (53 | ) | (205 | ) | (273 | ) | (613 | ) | |||||||
| Interest expense on convertible preferred debt | 17 | — | 48 | — | |||||||||||
| Net Income Available to Common Stockholders | $ | 20,172 | $ | 14,377 | $ | 60,962 | $ | 44,838 | |||||||
| Earnings per common share-diluted | $ | 0.81 | $ | 0.69 | $ | 2.48 | $ | 2.16 | |||||||
| Weighted average shares outstanding-diluted | 24,922,946 | 20,893,312 | 24,580,897 | 20,751,664 | |||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Interest and fees on loans | $ | 70,046 | $ | 69,809 | $ | 68,425 | $ | 59,905 | $ | 58,328 | |||||||||
| Interest on securities: | |||||||||||||||||||
| Taxable | 7,917 | 7,952 | 8,735 | 6,917 | 5,858 | ||||||||||||||
| Nontaxable | 3,717 | 3,566 | 3,510 | 3,311 | 3,077 | ||||||||||||||
| Interest on federal funds sold | 1 | 1 | 10 | 21 | 1 | ||||||||||||||
| Interest on deposits in other financial institutions | 6 | 3 | 4 | 3 | 4 | ||||||||||||||
| Total Interest Income | 81,687 | 81,331 | 80,684 | 70,157 | 67,268 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest on deposits | 4,001 | 4,021 | 4,173 | 3,772 | 3,767 | ||||||||||||||
| Interest on short-term borrowings | 235 | 519 | 329 | 200 | 228 | ||||||||||||||
| Interest on other borrowings | 3,770 | 3,673 | 3,475 | 3,485 | 3,549 | ||||||||||||||
| Total Interest Expense | 8,006 | 8,213 | 7,977 | 7,457 | 7,544 | ||||||||||||||
| Net Interest Income | 73,681 | 73,118 | 72,707 | 62,700 | 59,724 | ||||||||||||||
| Provision for loan losses | 5,328 | 2,118 | 2,067 | 2,171 | 3,181 | ||||||||||||||
| Net Interest Income After Provision for Loan Losses | 68,353 | 71,000 | 70,640 | 60,529 | 56,543 | ||||||||||||||
| Noninterest Income | |||||||||||||||||||
| Service charges and fees | 8,278 | 8,022 | 7,162 | 6,654 | 6,350 | ||||||||||||||
| Loan servicing income | 873 | 1,292 | 1,268 | 1,704 | 1,368 | ||||||||||||||
| Trust fees | 3,689 | 3,625 | 3,813 | 3,230 | 3,507 | ||||||||||||||
| Brokerage and insurance commissions | 1,006 | 886 | 1,022 | 917 | 869 | ||||||||||||||
| Securities gains, net | 1,584 | 4,622 | 3,526 | 3,913 | 1,767 | ||||||||||||||
| Impairment loss on securities | — | — | — | (769 | ) | — | |||||||||||||
| Gains on sale of loans held for sale | 11,459 | 11,270 | 11,065 | 7,085 | 9,823 | ||||||||||||||
| Valuation adjustment on commercial servicing rights | 5 | (46 | ) | — | — | — | |||||||||||||
| Income on bank owned life insurance | 620 | 591 | 522 | 644 | 372 | ||||||||||||||
| Other noninterest income | 1,028 | 764 | 1,200 | 1,003 | 924 | ||||||||||||||
| Total Noninterest Income | 28,542 | 31,026 | 29,578 | 24,381 | 24,980 | ||||||||||||||
| Noninterest Expense | |||||||||||||||||||
| Salaries and employee benefits | 40,733 | 41,985 | 41,714 | 33,583 | 37,033 | ||||||||||||||
| Occupancy | 5,099 | 5,220 | 5,003 | 4,334 | 4,307 | ||||||||||||||
| Furniture and equipment | 2,746 | 2,442 | 2,113 | 2,344 | 2,121 | ||||||||||||||
| Professional fees | 5,985 | 7,486 | 7,010 | 6,503 | 5,251 | ||||||||||||||
| FDIC insurance assessments | 1,180 | 1,120 | 1,168 | 886 | 1,018 | ||||||||||||||
| Advertising | 1,339 | 1,551 | 1,284 | 1,624 | 1,327 | ||||||||||||||
| Intangible assets amortization | 1,291 | 1,297 | 1,895 | 898 | 734 | ||||||||||||||
| Other real estate and loan collection expenses | 640 | 659 | 572 | 723 | 496 | ||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 794 | (43 | ) | 313 | 4,238 | 721 | |||||||||||||
| Other noninterest expenses | 8,620 | 9,303 | 9,237 | 10,821 | 8,988 | ||||||||||||||
| Total Noninterest Expense | 68,427 | 71,020 | 70,309 | 65,954 | 61,996 | ||||||||||||||
| Income Before Income Taxes | 28,468 | 31,006 | 29,909 | 18,956 | 19,527 | ||||||||||||||
| Income taxes | 8,260 | 10,036 | 9,900 | 4,365 | 4,945 | ||||||||||||||
| Net Income | 20,208 | 20,970 | 20,009 | 14,591 | 14,582 | ||||||||||||||
| Preferred dividends | (53 | ) | (52 | ) | (168 | ) | (204 | ) | (205 | ) | |||||||||
| Interest expense on convertible preferred debt | 17 | 31 | — | — | — | ||||||||||||||
| Net Income Available to Common Stockholders | $ | 20,172 | $ | 20,949 | $ | 19,841 | $ | 14,387 | $ | 14,377 | |||||||||
| Earnings per common share-diluted | $ | 0.81 | $ | 0.84 | $ | 0.82 | $ | 0.67 | $ | 0.69 | |||||||||
| Weighted average shares outstanding-diluted | 24,922,946 | 24,974,995 | 24,117,384 | 21,491,699 | 20,893,312 | ||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As Of | |||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 196,234 | $ | 222,718 | $ | 124,060 | $ | 237,841 | $ | 76,954 | |||||||||
| Federal funds sold and other short-term investments | 5,855 | 7,232 | 9,168 | 20,958 | 14,151 | ||||||||||||||
| Cash and cash equivalents | 202,089 | 229,950 | 133,228 | 258,799 | 91,105 | ||||||||||||||
| Time deposits in other financial institutions | 2,105 | 2,105 | 2,355 | 2,355 | 2,355 | ||||||||||||||
| Securities: | |||||||||||||||||||
| Available for sale, at fair value | 1,655,696 | 1,566,592 | 1,690,516 | 1,578,434 | 1,261,687 | ||||||||||||||
| Held to maturity, at cost | 265,302 | 270,423 | 271,300 | 279,117 | 282,200 | ||||||||||||||
| Other investments, at cost | 22,082 | 22,680 | 22,325 | 21,443 | 19,292 | ||||||||||||||
| Loans held for sale | 78,317 | 82,538 | 76,565 | 74,783 | 102,569 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Held to maturity | 5,438,715 | 5,482,258 | 5,503,005 | 5,001,486 | 4,642,523 | ||||||||||||||
| Allowance for loan losses | (54,653 | ) | (51,756 | ) | (49,738 | ) | (48,685 | ) | (47,105 | ) | |||||||||
| Loans, net | 5,384,062 | 5,430,502 | 5,453,267 | 4,952,801 | 4,595,418 | ||||||||||||||
| Premises, furniture and equipment, net | 165,841 | 168,701 | 164,788 | 150,148 | 147,486 | ||||||||||||||
| Goodwill | 127,699 | 127,699 | 127,699 | 97,852 | 56,828 | ||||||||||||||
| Core deposit intangibles, net | 23,922 | 25,213 | 26,510 | 22,019 | 14,937 | ||||||||||||||
| Servicing rights, net | 35,906 | 35,654 | 34,910 | 34,926 | 33,758 | ||||||||||||||
| Cash surrender value on life insurance | 112,060 | 111,425 | 110,834 | 110,297 | 99,564 | ||||||||||||||
| Other real estate, net | 10,740 | 11,003 | 11,338 | 11,524 | 17,041 | ||||||||||||||
| Other assets | 116,394 | 119,916 | 128,144 | 100,256 | 81,644 | ||||||||||||||
| Total Assets | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | $ | 6,805,884 | |||||||||
| Liabilities and Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Demand | $ | 2,238,736 | $ | 2,149,911 | $ | 2,079,521 | $ | 1,914,141 | $ | 1,632,005 | |||||||||
| Savings | 3,753,300 | 3,691,791 | 3,702,431 | 3,367,479 | 2,936,611 | ||||||||||||||
| Time | 920,657 | 995,870 | 1,142,368 | 1,124,203 | 938,621 | ||||||||||||||
| Total deposits | 6,912,693 | 6,837,572 | 6,924,320 | 6,405,823 | 5,507,237 | ||||||||||||||
| Short-term borrowings | 214,105 | 303,707 | 325,741 | 293,898 | 335,845 | ||||||||||||||
| Other borrowings | 294,493 | 296,895 | 265,760 | 263,214 | 302,086 | ||||||||||||||
| Accrued expenses and other liabilities | 76,536 | 78,264 | 68,415 | 68,646 | 69,707 | ||||||||||||||
| Total Liabilities | 7,497,827 | 7,516,438 | 7,584,236 | 7,031,581 | 6,214,875 | ||||||||||||||
| Stockholders' Equity | |||||||||||||||||||
| Preferred equity | 1,357 | 3,777 | 3,777 | 81,698 | 81,698 | ||||||||||||||
| Common stock | 24,683 | 24,544 | 24,520 | 22,436 | 20,640 | ||||||||||||||
| Capital surplus | 279,316 | 274,682 | 273,310 | 216,436 | 149,613 | ||||||||||||||
| Retained earnings | 402,179 | 384,479 | 366,014 | 348,630 | 337,421 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (3,079 | ) | 513 | 1,924 | (6,027 | ) | 1,731 | ||||||||||||
| Treasury stock at cost | (68 | ) | (32 | ) | (2 | ) | — | (94 | ) | ||||||||||
| Total Equity | 704,388 | 687,963 | 669,543 | 663,173 | 591,009 | ||||||||||||||
| Total Liabilities and Equity | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | $ | 6,805,884 | |||||||||
| 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, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Average Balances | |||||||||||||||
| Assets | $ | 8,172,683 | $ | 6,726,196 | $ | 8,136,492 | $ | 6,603,085 | |||||||
| Loans, net of unearned | 5,538,088 | 4,654,179 | 5,493,187 | 4,457,715 | |||||||||||
| Deposits | 6,839,334 | 5,423,418 | 6,775,103 | 5,296,771 | |||||||||||
| Earning assets | 7,382,860 | 6,161,495 | 7,368,856 | 6,030,612 | |||||||||||
| Interest bearing liabilities | 5,224,172 | 4,491,089 | 5,286,708 | 4,447,165 | |||||||||||
| Common stockholders' equity | 689,637 | 500,399 | 663,050 | 484,418 | |||||||||||
| Total stockholders' equity | 692,404 | 582,097 | 687,312 | 566,116 | |||||||||||
| Tangible common stockholders' equity(1) | 537,375 | 431,304 | 513,031 | 419,059 | |||||||||||
| Key Performance Ratios | |||||||||||||||
| Annualized return on average assets | 0.98 | % | 0.85 | % | 1.00 | % | 0.91 | % | |||||||
| Annualized return on average common equity | 11.64 | % | 11.40 | % | 12.28 | % | 12.38 | % | |||||||
| Annualized return on average common tangible equity(2) | 14.93 | % | 13.22 | % | 15.87 | % | 14.31 | % | |||||||
| Annualized ratio of net charge-offs to average loans | 0.17 | % | 0.14 | % | 0.09 | % | 0.15 | % | |||||||
| Annualized net interest margin, fully taxable equivalent(3) | 4.14 | % | 4.01 | % | 4.15 | % | 3.96 | % | |||||||
| Efficiency ratio, fully taxable equivalent(4) | 63.88 | % | 69.85 | % | 66.23 | % | 69.37 | % | |||||||
| Reconciliation of Return on Average Common Tangible Equity (non-GAAP)(5) | |||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 20,172 | $ | 14,377 | $ | 60,962 | $ | 44,838 | |||||||
| Average common stockholders' equity (GAAP) | $ | 689,637 | $ | 500,399 | $ | 663,050 | $ | 484,418 | |||||||
| Less average goodwill | 127,699 | 55,073 | 125,061 | 52,251 | |||||||||||
| Less average other intangibles, net | 24,563 | 14,022 | 24,958 | 13,108 | |||||||||||
| Average common tangible equity (non-GAAP) | $ | 537,375 | $ | 431,304 | $ | 513,031 | $ | 419,059 | |||||||
| Annualized return on average common equity (GAAP) | 11.64 | % | 11.40 | % | 12.28 | % | 12.38 | % | |||||||
| Annualized return on average common tangible equity (non-GAAP) | 14.93 | % | 13.22 | % | 15.87 | % | 14.31 | % | |||||||
| Reconciliation of Annualized Net Interest Margin, Fully Taxable Equivalent (non-GAAP)(6) | |||||||||||||||
| Net Interest Income (GAAP) | $ | 73,681 | $ | 59,724 | $ | 219,506 | $ | 171,298 | |||||||
| Plus taxable equivalent adjustment(7) | 3,221 | 2,588 | 9,408 | 7,389 | |||||||||||
| Net interest income - taxable equivalent (non-GAAP) | $ | 76,902 | $ | 62,312 | $ | 228,914 | $ | 178,687 | |||||||
| Average earning assets | $ | 7,382,860 | $ | 6,161,495 | $ | 7,368,856 | $ | 6,030,612 | |||||||
| Annualized net interest margin (GAAP) | 3.97 | % | 3.85 | % | 3.98 | % | 3.80 | % | |||||||
| Annualized net interest margin, fully taxable equivalent (non-GAAP) | 4.14 | % | 4.01 | % | 4.15 | % | 3.96 | % | |||||||
| (1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net. | |||||||||||||||
| (2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table. | |||||||||||||||
| (3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Taxable Equivalent (non-GAAP)" table. | |||||||||||||||
| (4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure. | |||||||||||||||
| (5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||
| (6) Annualized net interest margin, fully taxable equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||
| (7) Computed on a taxable equivalent basis using an effective tax rate of 35%. | |||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Average Balances | |||||||||||||||||||
| Assets | $ | 8,172,683 | $ | 8,211,326 | $ | 8,025,070 | $ | 7,241,104 | $ | 6,726,196 | |||||||||
| Loans, net of unearned | 5,538,088 | 5,582,878 | 5,358,102 | 4,827,844 | 4,654,179 | ||||||||||||||
| Deposits | 6,839,334 | 6,806,259 | 6,679,010 | 5,938,905 | 5,423,418 | ||||||||||||||
| Earning assets | 7,382,860 | 7,446,849 | 7,276,703 | 6,512,565 | 6,161,495 | ||||||||||||||
| Interest bearing liabilities | 5,224,172 | 5,363,477 | 5,273,164 | 4,781,797 | 4,491,089 | ||||||||||||||
| Common stockholders' equity | 689,637 | 669,930 | 629,294 | 533,845 | 500,399 | ||||||||||||||
| Total stockholders' equity | 692,404 | 673,707 | 695,771 | 615,543 | 582,097 | ||||||||||||||
| Tangible common stockholders' equity(1) | 537,375 | 516,347 | 485,108 | 446,370 | 431,304 | ||||||||||||||
| Key Performance Ratios | |||||||||||||||||||
| Annualized return on average assets | 0.98 | % | 1.03 | % | 0.99 | % | 0.79 | % | 0.85 | % | |||||||||
| Annualized return on average common equity | 11.64 | % | 12.58 | % | 12.68 | % | 10.69 | % | 11.40 | % | |||||||||
| Annualized return on average common tangible equity(2) | 14.93 | % | 16.32 | % | 16.45 | % | 12.79 | % | 13.22 | % | |||||||||
| Annualized ratio of net charge-offs to average loans | 0.17 | % | 0.01 | % | 0.08 | % | 0.05 | % | 0.14 | % | |||||||||
| Annualized net interest margin, fully taxable equivalent(3) | 4.14 | % | 4.12 | % | 4.19 | % | 3.99 | % | 4.01 | % | |||||||||
| Efficiency ratio, fully taxable equivalent(4) | 63.88 | % | 67.95 | % | 66.90 | % | 68.53 | % | 69.85 | % | |||||||||
| Reconciliation of Return on Average Common Tangible Equity (non-GAAP)(5) | |||||||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 20,172 | $ | 20,949 | $ | 19,841 | $ | 14,387 | $ | 14,377 | |||||||||
| Average common stockholders' equity (GAAP) | $ | 689,637 | $ | 669,930 | $ | 629,294 | $ | 533,845 | $ | 500,399 | |||||||||
| Less average goodwill | 127,699 | 127,699 | 119,750 | 70,222 | 55,073 | ||||||||||||||
| Less average other intangibles, net | 24,563 | 25,884 | 24,436 | 17,253 | 14,022 | ||||||||||||||
| Average common tangible equity (non-GAAP) | $ | 537,375 | $ | 516,347 | $ | 485,108 | $ | 446,370 | $ | 431,304 | |||||||||
| Annualized return on average common equity (GAAP) | 11.64 | % | 12.58 | % | 12.68 | % | 10.69 | % | 11.40 | % | |||||||||
| Annualized return on average common tangible equity (non-GAAP) | 14.93 | % | 16.32 | % | 16.45 | % | 12.79 | % | 13.22 | % | |||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Taxable Equivalent (non-GAAP)(6) | |||||||||||||||||||
| Net Interest Income (GAAP) | $ | 73,681 | $ | 73,118 | $ | 72,707 | $ | 62,700 | $ | 59,724 | |||||||||
| Plus taxable equivalent adjustment(7) | 3,221 | 3,146 | 3,041 | 2,827 | 2,588 | ||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP) | $ | 76,902 | $ | 76,264 | $ | 75,748 | $ | 65,527 | $ | 62,312 | |||||||||
| Average earning assets | $ | 7,382,860 | $ | 7,446,849 | $ | 7,276,703 | $ | 6,512,565 | $ | 6,161,495 | |||||||||
| Annualized net interest margin (GAAP) | 3.97 | % | 3.95 | % | 4.02 | % | 3.82 | % | 3.85 | % | |||||||||
| Annualized net interest margin, fully taxable equivalent (non-GAAP) | 4.14 | % | 4.12 | % | 4.19 | % | 3.99 | % | 4.01 | % | |||||||||
| (1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net. | |||||||||||||||||||
| (2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table. | |||||||||||||||||||
| (3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Taxable Equivalent (non-GAAP)" table. | |||||||||||||||||||
| (4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure. | |||||||||||||||||||
| (5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (6) Annualized net interest margin, fully taxable equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (7) Computed on a taxable equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
| Reconciliation of Non-GAAP Measure-Efficiency Ratio(1) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Net interest income | $ | 73,681 | $ | 59,724 | $ | 219,506 | $ | 171,298 | |||||||||||
| Taxable equivalent adjustment(2) | 3,221 | 2,588 | 9,408 | 7,389 | |||||||||||||||
| Fully taxable equivalent net interest income | 76,902 | 62,312 | 228,914 | 178,687 | |||||||||||||||
| Noninterest income | 28,542 | 24,980 | 89,146 | 86,304 | |||||||||||||||
| Securities gains, net | (1,584 | ) | (1,767 | ) | (9,732 | ) | (9,230 | ) | |||||||||||
| Adjusted income | $ | 103,860 | $ | 85,525 | $ | 308,328 | $ | 255,761 | |||||||||||
| Total noninterest expenses | $ | 68,427 | $ | 61,996 | $ | 209,756 | $ | 185,092 | |||||||||||
| Less: | |||||||||||||||||||
| Intangible assets amortization | 1,291 | 734 | 4,483 | 2,080 | |||||||||||||||
| Partnership investment in historic rehabilitation tax credits | — | 805 | — | 2,995 | |||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 794 | 721 | 1,064 | 2,583 | |||||||||||||||
| Adjusted noninterest expenses | $ | 66,342 | $ | 59,736 | $ | 204,209 | $ | 177,434 | |||||||||||
| Efficiency ratio, fully taxable equivalent | 63.88 | % | 69.85 | % | 66.23 | % | 69.37 | % | |||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| Reconciliation of Non-GAAP Measure-Efficiency Ratio(1) | For the Quarter Ended | ||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Net interest income | $ | 73,681 | $ | 73,118 | $ | 72,707 | $ | 62,700 | $ | 59,724 | |||||||||
| Taxable equivalent adjustment(2) | 3,221 | 3,146 | 3,041 | 2,827 | 2,588 | ||||||||||||||
| Fully taxable equivalent net interest income | 76,902 | 76,264 | 75,748 | 65,527 | 62,312 | ||||||||||||||
| Noninterest income | 28,542 | 31,026 | 29,578 | 24,381 | 24,980 | ||||||||||||||
| Securities gains, net | (1,584 | ) | (4,622 | ) | (3,526 | ) | (3,913 | ) | (1,767 | ) | |||||||||
| Impairment loss on securities | — | — | — | 769 | — | ||||||||||||||
| Adjusted income | $ | 103,860 | $ | 102,668 | $ | 101,800 | $ | 86,764 | $ | 85,525 | |||||||||
| Total noninterest expenses | $ | 68,427 | $ | 71,020 | $ | 70,309 | $ | 65,954 | $ | 61,996 | |||||||||
| Less: | |||||||||||||||||||
| Intangible assets amortization | 1,291 | 1,297 | 1,895 | 898 | 734 | ||||||||||||||
| Partnership investment in historic rehabilitation tax credits | — | — | — | 1,362 | 805 | ||||||||||||||
| (Gain)/loss on sales/valuation of assets, net | 794 | (43 | ) | 313 | 4,238 | 721 | |||||||||||||
| Adjusted noninterest expenses | $ | 66,342 | $ | 69,766 | $ | 68,101 | $ | 59,456 | $ | 59,736 | |||||||||
| Efficiency ratio, fully taxable equivalent | 63.88 | % | 67.95 | % | 66.90 | % | 68.53 | % | 69.85 | % | |||||||||
| (1) Efficiency ratio, fully taxable equivalent, expresses noninterest expenses as a percentage of fully taxable equivalent net interest income and noninterest income. This efficiency ratio is presented on a taxable equivalent basis, which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities and historic rehabilitation tax credits. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items, as noted in the table. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (2) Computed on a tax equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Common Share Data | |||||||||||||||||||
| Book value per common share | $ | 28.48 | $ | 27.88 | $ | 27.15 | $ | 25.92 | $ | 24.68 | |||||||||
| Tangible book value per common share (non-GAAP)(5) | $ | 22.34 | $ | 21.65 | $ | 20.86 | $ | 20.57 | $ | 21.20 | |||||||||
| ASC 320 effect on book value per common share | $ | 0.03 | $ | 0.21 | $ | 0.23 | $ | (0.18 | ) | $ | 0.22 | ||||||||
| Common shares outstanding, net of treasury stock | 24,681,380 | 24,543,376 | 24,519,928 | 22,435,693 | 20,637,321 | ||||||||||||||
| Tangible capital ratio (non-GAAP)(6) | 6.85 | % | 6.60 | % | 6.32 | % | 6.09 | % | 6.50 | % | |||||||||
| Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(3) | |||||||||||||||||||
| Common stockholders' equity (GAAP) | $ | 703,031 | $ | 684,186 | $ | 665,766 | $ | 581,475 | $ | 509,311 | |||||||||
| Less goodwill | 127,699 | 127,699 | 127,699 | 97,852 | 56,828 | ||||||||||||||
| Less other intangible assets, net | 23,922 | 25,213 | 26,510 | 22,019 | 14,937 | ||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | $ | 551,410 | $ | 531,274 | $ | 511,557 | $ | 461,604 | $ | 437,546 | |||||||||
| Common shares outstanding, net of treasury stock | 24,681,380 | 24,543,376 | 24,519,928 | 22,435,693 | 20,637,321 | ||||||||||||||
| Common stockholders' equity (book value) per share (GAAP) | $ | 28.48 | $ | 27.88 | $ | 27.15 | $ | 25.92 | $ | 24.68 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 22.34 | $ | 21.65 | $ | 20.86 | $ | 20.57 | $ | 21.20 | |||||||||
| Reconciliation of Tangible Capital Ratio (non-GAAP)(4) | |||||||||||||||||||
| Total assets (GAAP) | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | $ | 6,805,884 | |||||||||
| Less goodwill | 127,699 | 127,699 | 127,699 | 97,852 | 56,828 | ||||||||||||||
| Less other intangible assets, net | 23,922 | 25,213 | 26,510 | 22,019 | 14,937 | ||||||||||||||
| Total tangible assets (non-GAAP) | $ | 8,050,594 | $ | 8,051,489 | $ | 8,099,570 | $ | 7,574,883 | $ | 6,734,119 | |||||||||
| Tangible capital ratio (non-GAAP) | 6.85 | % | 6.60 | % | 6.32 | % | 6.09 | % | 6.50 | % | |||||||||
| Loan Data | |||||||||||||||||||
| Loans held to maturity: | |||||||||||||||||||
| Commercial and commercial real estate | $ | 3,900,612 | $ | 3,930,879 | $ | 3,951,839 | $ | 3,605,574 | $ | 3,303,098 | |||||||||
| Residential mortgage | 625,965 | 644,267 | 666,184 | 539,555 | 491,667 | ||||||||||||||
| Agricultural and agricultural real estate | 489,387 | 480,883 | 471,271 | 471,870 | 469,381 | ||||||||||||||
| Consumer | 425,582 | 428,730 | 417,114 | 386,867 | 379,903 | ||||||||||||||
| Unearned discount and deferred loan fees | (2,831 | ) | (2,501 | ) | (3,403 | ) | (2,380 | ) | (1,526 | ) | |||||||||
| Total loans held to maturity | $ | 5,438,715 | $ | 5,482,258 | $ | 5,503,005 | $ | 5,001,486 | $ | 4,642,523 | |||||||||
| Other Selected Trend Information | |||||||||||||||||||
| Effective tax rate | 29.02 | % | 32.37 | % | 33.10 | % | 23.03 | % | 25.32 | % | |||||||||
| Full time equivalent employees | 1,846 | 1,888 | 1,907 | 1,799 | 1,736 | ||||||||||||||
| Total Residential Mortgage Loan Applications | $ | 445,107 | $ | 440,907 | $ | 406,999 | $ | 307,163 | $ | 443,294 | |||||||||
| Residential Mortgage Loans Originated | $ | 324,337 | $ | 324,633 | $ | 238,266 | $ | 258,939 | $ | 370,956 | |||||||||
| Residential Mortgage Loans Sold | $ | 315,917 | $ | 302,448 | $ | 220,381 | $ | 260,189 | $ | 360,172 | |||||||||
| Residential Mortgage Loan Servicing Portfolio | $ | 4,259,459 | $ | 4,203,429 | $ | 4,112,519 | $ | 4,057,861 | $ | 3,963,677 | |||||||||
| (1) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table. | |||||||||||||||||||
| (2) Refer to the "Reconciliation of Tangible Capital Ratio (non-GAAP)" table. | |||||||||||||||||||
| (3) Tangible book value per common share is total common stockholders' equity less goodwill and intangible assets, net divided by common shares outstanding, net of treasury. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (4) The tangible capital ratio is total common stockholders' equity less goodwill and intangible assets, net divided by total assets less goodwill and intangible assets, net. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||
| Balance, beginning of period | $ | 51,756 | $ | 49,738 | $ | 48,685 | $ | 47,105 | $ | 45,614 | |||||||||
| Provision for loan losses | 5,328 | 2,118 | 2,067 | 2,171 | 3,181 | ||||||||||||||
| Charge-offs | (3,283 | ) | (2,951 | ) | (1,605 | ) | (1,837 | ) | (2,439 | ) | |||||||||
| Recoveries | 852 | 2,851 | 591 | 1,246 | 749 | ||||||||||||||
| Balance, end of period | $ | 54,653 | $ | 51,756 | $ | 49,738 | $ | 48,685 | $ | 47,105 | |||||||||
| Asset Quality | |||||||||||||||||||
| Nonaccrual loans | $ | 57,799 | $ | 57,053 | $ | 47,750 | $ | 39,655 | $ | 32,577 | |||||||||
| Loans past due ninety days or more as to interest or principal payments | 105 | — | 639 | — | 1,181 | ||||||||||||||
| Other real estate owned | 10,740 | 11,003 | 11,338 | 11,524 | 17,041 | ||||||||||||||
| Other repossessed assets | 821 | 564 | 426 | 485 | 626 | ||||||||||||||
| Total nonperforming assets | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | $ | 51,425 | |||||||||
| Performing troubled debt restructured loans | $ | 10,281 | $ | 9,923 | $ | 10,711 | $ | 10,968 | $ | 10,154 | |||||||||
| Nonperforming Assets Activity | |||||||||||||||||||
| Balance, beginning of period | $ | 68,620 | $ | 60,153 | $ | 51,664 | $ | 51,425 | $ | 44,237 | |||||||||
| Net loan charge offs | (2,431 | ) | (100 | ) | (1,014 | ) | (591 | ) | (1,690 | ) | |||||||||
| New nonperforming loans | 10,884 | 19,994 | 12,171 | 9,686 | 7,996 | ||||||||||||||
| Acquired nonperforming assets | — | — | 3,516 | 4,956 | 5,328 | ||||||||||||||
| Reduction of nonperforming loans (1) | (6,983 | ) | (10,313 | ) | (3,563 | ) | (6,768 | ) | (2,758 | ) | |||||||||
| OREO/Repossessed assets sales proceeds | (343 | ) | (918 | ) | (2,411 | ) | (2,980 | ) | (1,074 | ) | |||||||||
| OREO/Repossessed assets writedowns, net | (521 | ) | (337 | ) | (182 | ) | (3,909 | ) | (756 | ) | |||||||||
| Net activity at Citizens Finance Co. | 239 | 141 | (28 | ) | (155 | ) | 142 | ||||||||||||
| Balance, end of period | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | $ | 51,425 | |||||||||
| Asset Quality Ratios | |||||||||||||||||||
| Ratio of nonperforming loans to total loans | 1.06 | % | 1.04 | % | 0.88 | % | 0.79 | % | 0.73 | % | |||||||||
| Ratio of nonperforming assets to total assets | 0.85 | % | 0.84 | % | 0.73 | % | 0.67 | % | 0.76 | % | |||||||||
| Annualized ratio of net loan charge-offs to average loans | 0.17 | % | 0.01 | % | 0.08 | % | 0.05 | % | 0.14 | % | |||||||||
| Allowance for loan losses as a percent of loans | 1.00 | % | 0.94 | % | 0.90 | % | 0.97 | % | 1.01 | % | |||||||||
| Allowance for loan losses as a percent of nonperforming loans | 94.39 | % | 90.72 | % | 102.79 | % | 122.77 | % | 139.54 | % | |||||||||
| Loans delinquent 30-89 days as a percent of total loans | 0.40 | % | 0.73 | % | 0.45 | % | 0.31 | % | 0.40 | % | |||||||||
| (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, 2016 | September 30, 2015 | ||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 1,415,446 | $ | 7,917 | 2.23 | % | $ | 1,192,259 | $ | 5,858 | 1.95 | % | |||||||||
| Nontaxable(1) | 473,152 | 5,719 | 4.81 | 348,760 | 4,733 | 5.38 | |||||||||||||||
| Total securities | 1,888,598 | 13,636 | 2.87 | 1,541,019 | 10,591 | 2.73 | |||||||||||||||
| Interest bearing deposits | 7,026 | 6 | 0.34 | 11,567 | 4 | 0.14 | |||||||||||||||
| Federal funds sold | 1,409 | 1 | 0.28 | 1,032 | 1 | 0.38 | |||||||||||||||
| Loans:(2) | |||||||||||||||||||||
| Commercial and commercial real estate(1) | 3,908,623 | 48,334 | 4.92 | 3,252,610 | 38,802 | 4.73 | |||||||||||||||
| Residential mortgage | 717,374 | 7,248 | 4.02 | 570,117 | 5,848 | 4.07 | |||||||||||||||
| Agricultural and agricultural real estate(1) | 486,008 | 5,719 | 4.68 | 461,144 | 5,525 | 4.75 | |||||||||||||||
| Consumer | 426,083 | 8,256 | 7.71 | 370,308 | 7,384 | 7.91 | |||||||||||||||
| Fees on loans | — | 1,708 | — | — | 1,701 | — | |||||||||||||||
| Less: allowance for loan losses | (52,261 | ) | — | — | (46,302 | ) | — | — | |||||||||||||
| Net loans | 5,485,827 | 71,265 | 5.17 | 4,607,877 | 59,260 | 5.10 | |||||||||||||||
| Total earning assets | 7,382,860 | 84,908 | 4.58 | % | 6,161,495 | 69,856 | 4.50 | % | |||||||||||||
| Nonearning Assets | 789,823 | 564,701 | |||||||||||||||||||
| Total Assets | $ | 8,172,683 | $ | 6,726,196 | |||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 3,697,426 | $ | 2,066 | 0.22 | % | $ | 2,870,847 | $ | 1,565 | 0.22 | % | |||||||||
| Time, $100,000 and over | 399,498 | 813 | 0.81 | 337,163 | 741 | 0.87 | |||||||||||||||
| Other time deposits | 570,445 | 1,122 | 0.78 | 622,110 | 1,461 | 0.93 | |||||||||||||||
| Short-term borrowings | 258,783 | 235 | 0.36 | 362,094 | 228 | 0.25 | |||||||||||||||
| Other borrowings | 298,020 | 3,770 | 5.03 | 298,875 | 3,549 | 4.71 | |||||||||||||||
| Total interest bearing liabilities | 5,224,172 | 8,006 | 0.61 | % | 4,491,089 | 7,544 | 0.67 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 2,171,965 | 1,593,298 | |||||||||||||||||||
| Accrued interest and other liabilities | 84,142 | 59,712 | |||||||||||||||||||
| Total noninterest bearing liabilities | 2,256,107 | 1,653,010 | |||||||||||||||||||
| Stockholders' Equity | 692,404 | 582,097 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 8,172,683 | $ | 6,726,196 | |||||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP)(1) | $ | 76,902 | $ | 62,312 | |||||||||||||||||
| Net interest spread(1) | 3.97 | % | 3.83 | % | |||||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP) to total earning assets(3) | 4.14 | % | 4.01 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 70.76 | % | 72.89 | % | |||||||||||||||||
| (1) Computed on a taxable equivalent basis using an effective tax rate of 35% | |||||||||||||||||||||
| (2) Nonaccrual loans are included in the average loans outstanding. | |||||||||||||||||||||
| (3) Annualized net interest margin, fully taxable equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||||||
| September 30, 2016 | September 30, 2015 | ||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 1,464,080 | $ | 24,604 | 2.24 | % | $ | 1,266,546 | $ | 19,729 | 2.08 | % | |||||||||
| Nontaxable(1) | 440,275 | 16,605 | 5.04 | 335,104 | 13,641 | 5.44 | |||||||||||||||
| Total securities | 1,904,355 | 41,209 | 2.89 | 1,601,650 | 33,370 | 2.79 | |||||||||||||||
| Interest bearing deposits | 9,785 | 13 | 0.18 | 10,541 | 11 | 0.14 | |||||||||||||||
| Federal funds sold | 12,509 | 12 | 0.13 | 4,562 | 3 | 0.09 | |||||||||||||||
| Loans:(2) | |||||||||||||||||||||
| Commercial and commercial real estate(1) | 3,840,060 | 141,977 | 4.94 | 3,133,525 | 112,343 | 4.79 | |||||||||||||||
| Residential mortgage | 751,694 | 23,133 | 4.11 | 529,412 | 16,146 | 4.08 | |||||||||||||||
| Agricultural and agricultural real estate(1) | 478,564 | 16,952 | 4.73 | 436,050 | 15,835 | 4.86 | |||||||||||||||
| Consumer | 422,869 | 24,452 | 7.72 | 358,728 | 21,476 | 8.00 | |||||||||||||||
| Fees on loans | 5,362 | — | 4,016 | — | |||||||||||||||||
| Less: allowance for loan losses | (50,980 | ) | — | — | (43,856 | ) | — | — | |||||||||||||
| Net loans | 5,442,207 | 211,876 | 5.20 | 4,413,859 | 169,816 | 5.14 | |||||||||||||||
| Total earning assets | 7,368,856 | 253,110 | 4.59 | % | 6,030,612 | 203,200 | 4.50 | % | |||||||||||||
| Nonearning Assets | 767,636 | 572,473 | |||||||||||||||||||
| Total Assets | $ | 8,136,492 | $ | 6,603,085 | |||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 3,651,370 | $ | 5,988 | 0.22 | % | $ | 2,851,506 | $ | 5,002 | 0.23 | % | |||||||||
| Time, $100,000 and over | 439,609 | 2,417 | 0.73 | 343,369 | 2,373 | 0.92 | |||||||||||||||
| Other time deposits | 599,745 | 3,790 | 0.84 | 570,446 | 4,383 | 1.03 | |||||||||||||||
| Short-term borrowings | 314,367 | 1,083 | 0.46 | 343,537 | 638 | 0.25 | |||||||||||||||
| Other borrowings | 281,617 | 10,918 | 5.18 | 338,307 | 12,117 | 4.79 | |||||||||||||||
| Total interest bearing liabilities | 5,286,708 | 24,196 | 0.61 | % | 4,447,165 | 24,513 | 0.74 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 2,084,379 | 1,531,450 | |||||||||||||||||||
| Accrued interest and other liabilities | 78,093 | 58,354 | |||||||||||||||||||
| Total noninterest bearing liabilities | 2,162,472 | 1,589,804 | |||||||||||||||||||
| Stockholders' Equity | 687,312 | 566,116 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 8,136,492 | $ | 6,603,085 | |||||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP)(1) | $ | 228,914 | $ | 178,687 | |||||||||||||||||
| Net interest spread(1) | 3.98 | % | 3.76 | % | |||||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP) to total earning assets(3) | 4.15 | % | 3.96 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 71.74 | % | 73.74 | % | |||||||||||||||||
| (1) Computed on a taxable equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||||
| (2) Nonaccrual loans are included in the average loans outstanding. | |||||||||||||||||||||
| (3) Annualized net interest margin, fully taxable equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) | |||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||
| As of and For the Quarter Ended | |||||||||||||||
| 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | |||||||||||
| Total Assets | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,448,796 | $ | 1,473,461 | $ | 1,498,771 | $ | 1,617,322 | $ | 1,431,767 | |||||
| New Mexico Bank & Trust | 1,318,203 | 1,321,113 | 1,304,886 | 1,336,004 | 1,282,784 | ||||||||||
| Wisconsin Bank & Trust | 1,068,288 | 1,080,224 | 1,094,872 | 1,139,337 | 1,098,405 | ||||||||||
| Centennial Bank and Trust(1) | 892,723 | 909,697 | 927,040 | 161,806 | 155,114 | ||||||||||
| Morrill & Janes Bank and Trust Company | 862,767 | 843,069 | 872,274 | 902,918 | 845,067 | ||||||||||
| Illinois Bank & Trust | 748,801 | 742,697 | 718,074 | 757,478 | 769,170 | ||||||||||
| Premier Valley Bank | 635,620 | 629,423 | 751,137 | 765,451 | — | ||||||||||
| Arizona Bank & Trust | 574,561 | 577,002 | 558,369 | 591,066 | 599,119 | ||||||||||
| Rocky Mountain Bank | 481,346 | 473,583 | 479,010 | 491,522 | 501,093 | ||||||||||
| Minnesota Bank & Trust | 238,745 | 230,004 | 220,955 | 214,303 | 188,633 | ||||||||||
| Total Portfolio Loans | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 906,347 | $ | 928,869 | $ | 941,683 | $ | 956,517 | $ | 953,273 | |||||
| New Mexico Bank & Trust | 917,679 | 870,109 | 815,739 | 794,744 | 777,433 | ||||||||||
| Wisconsin Bank & Trust | 711,714 | 732,503 | 758,789 | 793,508 | 844,557 | ||||||||||
| Centennial Bank and Trust(1) | 638,006 | 668,547 | 683,085 | 101,449 | 94,127 | ||||||||||
| Morrill & Janes Bank and Trust Company | 538,666 | 522,518 | 536,738 | 539,198 | 527,217 | ||||||||||
| Illinois Bank & Trust | 469,236 | 466,983 | 465,783 | 465,937 | 473,859 | ||||||||||
| Premier Valley Bank | 354,610 | 376,275 | 376,840 | 383,929 | — | ||||||||||
| Arizona Bank & Trust | 385,926 | 390,078 | 402,431 | 444,501 | 444,916 | ||||||||||
| Rocky Mountain Bank | 357,346 | 362,475 | 364,189 | 370,440 | 380,304 | ||||||||||
| Minnesota Bank & Trust | 139,581 | 144,009 | 137,412 | 134,137 | 128,700 | ||||||||||
| Total Deposits | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,182,947 | $ | 1,159,942 | $ | 1,144,470 | $ | 1,209,074 | $ | 1,120,999 | |||||
| New Mexico Bank & Trust | 1,101,550 | 1,062,410 | 1,066,076 | 1,085,052 | 1,047,358 | ||||||||||
| Wisconsin Bank & Trust | 889,957 | 911,915 | 921,071 | 974,001 | 904,803 | ||||||||||
| Centennial Bank and Trust(1) | 767,128 | 775,417 | 779,607 | 128,759 | 139,826 | ||||||||||
| Morrill & Janes Bank and Trust Company | 676,176 | 696,073 | 698,365 | 713,589 | 650,123 | ||||||||||
| Illinois Bank & Trust | 671,104 | 653,582 | 629,235 | 631,010 | 641,024 | ||||||||||
| Premier Valley Bank | 520,814 | 514,522 | 635,188 | 647,022 | — | ||||||||||
| Arizona Bank & Trust | 493,331 | 497,599 | 468,312 | 500,490 | 491,254 | ||||||||||
| Rocky Mountain Bank | 420,581 | 405,888 | 409,787 | 417,426 | 428,234 | ||||||||||
| Minnesota Bank & Trust | 214,651 | 207,228 | 200,343 | 194,373 | 163,291 | ||||||||||
| Net Income (Loss) | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 5,112 | $ | 4,475 | $ | 6,073 | $ | 3,587 | $ | 4,477 | |||||
| New Mexico Bank & Trust | 3,824 | 5,642 | 4,094 | 2,576 | 3,220 | ||||||||||
| Wisconsin Bank & Trust | 3,368 | 3,399 | 3,379 | 2,443 | 3,886 | ||||||||||
| Centennial Bank and Trust(1) | 925 | 256 | 824 | 62 | (6 | ) | |||||||||
| Morrill & Janes Bank and Trust Company | 1,707 | 2,133 | 2,525 | 1,096 | 2,024 | ||||||||||
| Illinois Bank & Trust | 2,179 | 2,397 | 2,027 | 574 | 1,877 | ||||||||||
| Premier Valley Bank | 1,804 | 1,695 | 1,960 | 1,008 | — | ||||||||||
| Arizona Bank & Trust | 2,034 | 2,121 | 1,841 | 968 | 1,254 | ||||||||||
| Rocky Mountain Bank | 1,456 | 1,484 | 1,064 | 1,506 | 1,471 | ||||||||||
| Minnesota Bank & Trust | 675 | 559 | 531 | 166 | 411 | ||||||||||
| (1) Formerly known as Summit Bank & Trust. | |||||||||||||||