Highlights
- Quarterly net income available to common stockholders of $18.0 million in comparison with $19.8 million for the first quarter of the prior year
- Diluted earnings per common share of $0.68 in comparison with $0.82 for the first quarter of the prior year
- Net interest margin of 3.95%, fully tax-equivalent (non-GAAP)(1) of 4.16%
- Return on average common equity of 9.71% and return on average tangible common equity (non-GAAP)(2) of 12.25%
- Non-time deposits increased $269.3 million or 4% since December 31, 2016, and included $111.6 million of organic growth
- Tangible capital ratio (non-GAAP)(3) of 7.50%
- Completed acquisition of Founders Bancorp and systems conversion of Founders Community Bank
- Announced definitive merger agreement with Citywide Banks of Colorado, Inc.
| Quarter Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| Net income (in millions) | $ | 18.0 | $ | 20.0 | ||||
| Net income available to common stockholders (in millions) | 18.0 | 19.8 | ||||||
| Diluted earnings per common share | 0.68 | 0.82 | ||||||
| Return on average assets | 0.89 | % | 0.99 | % | ||||
| Return on average common equity | 9.71 | 12.68 | ||||||
| Return on average tangible common equity (non-GAAP)(2) | 12.25 | 16.45 | ||||||
| Net interest margin | 3.95 | 4.02 | ||||||
| Net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.16 | 4.19 | ||||||
"Heartland reported first quarter net income of $18 million, or $0.68 per diluted common share, reflective of results that were somewhat mixed. We experienced strong non-time deposit growth, a solid net interest margin and an improved tangible common equity ratio; however, weakness in loan growth and lower mortgage loan activity led to earnings that were a bit short of our expectations."
Lynn B. Fuller, chairman and chief executive officer, Heartland Financial USA, Inc.
(1) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-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.
(3) Refer to the "Reconciliation of Tangible Capital Ratio (non-GAAP)" table included in this earnings release.
DUBUQUE, Iowa, April 24, 2017 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $18.0 million, or $0.68 per diluted common share, for the quarter ended March 31, 2017, compared to $19.8 million, or $0.82 per diluted common share, for the first quarter of 2016. Return on average common equity was 9.71% and return on average assets was 0.89% for the first quarter of 2017, compared to 12.68% and 0.99%, respectively, for the same quarter in 2016.
Commenting on Heartland’s first quarter 2017 results, Lynn B. Fuller, Heartland’s chairman and chief executive officer said, "Heartland reported first quarter net income of $18 million, or $0.68 per diluted common share, reflective of results that were somewhat mixed. We experienced strong non-time deposit growth, a solid net interest margin and an improved tangible common equity ratio; however, weakness in loan growth and lower mortgage loan activity led to earnings that were a bit short of our expectations."
On February 28, 2017, Heartland completed the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. Based on Heartland's closing common stock price of $49.55 per share as of February 28, 2017, the aggregate consideration was $31.0 million, with 30% of the consideration paid in cash and 70% by delivery of Heartland common stock. Simultaneous with the closing of the transaction, Founders Community Bank merged into Heartland's Premier Valley Bank subsidiary. As of the close date, Founders Community Bank had, at fair value, total assets of $213.3 million, total loans of $96.4 million and total deposits of $181.5 million. The systems conversion for this transaction occurred two weeks after the closing.
On February 13, 2017, Heartland entered into a definitive merger agreement with Citywide Banks of Colorado, Inc., parent company of Citywide Banks, headquartered in Aurora, Colorado. Under the terms of the definitive merger agreement, Heartland will acquire Citywide Banks of Colorado Inc., in a transaction valued at approximately $203.0 million as of the announcement date, subject to certain adjustments. Citywide Banks of Colorado, Inc. common shareholders will receive a combination of Heartland common stock and cash. The transaction is subject to customary closing conditions, including approval by the shareholders of Citywide Banks of Colorado, Inc., and bank regulatory authorities. The transaction is also subject to Heartland shareholders' approval of an increase in the number of authorized shares of common stock. The transaction is expected to close in the third quarter of 2017, and simultaneous with the close, Citywide Banks will merge into Heartland's Centennial Bank and Trust subsidiary. The combined entity will operate as Citywide Banks. As of December 31, 2016, Citywide Banks had total assets of $1.38 billion, including $977.6 million in net loans outstanding, and $1.20 billion of deposits.
Fuller commented, “Expansion of our banking franchise through mergers and acquisitions remains a high priority for Heartland. In the first quarter, we announced the signing of a definitive agreement to acquire Citywide Banks of Colorado, Inc. When the merger is completed, Citywide will join with Centennial Bank and Trust to create a premier community banking organization in Colorado with assets of $2.3 billion and 29 banking centers in one of the country’s best growth markets.”
Fully Tax-Equivalent Net Interest Margin Remains Above 4.00%
Net interest margin, expressed as a percentage of average earning assets, was 3.95% (4.16% on a fully tax-equivalent basis) during the first quarter of 2017, compared to 3.96% (4.14% on a fully tax-equivalent basis) during the fourth quarter of 2016 and 4.02% (4.19% on a fully tax-equivalent basis) during the first quarter of 2016.
Fuller said, "We are very pleased with our net interest margin, which reached 4.16% on a fully tax-equivalent basis for the quarter, reflecting our continued pricing discipline. We remain among the leaders in our peer group on this significant financial metric."
Interest income for the first quarter of 2017 was $80.6 million compared to the $80.7 million recorded in the first quarter of 2016. The taxable equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $3.9 million for the first quarter of 2017 and $3.0 million for the first quarter of 2016. With these adjustments, interest income on a tax-equivalent basis was $84.4 million for the first quarter of 2017, an increase of $686,000 or 1%, compared to $83.7 million for the first quarter of 2016. The increase in interest income on a fully tax-equivalent basis in the first quarter of 2017, as compared to the first quarter of 2016, was primarily due to an increase in average earning assets, which totaled $7.50 billion during the first quarter of 2017 compared to $7.28 billion during the first quarter of 2016, a $225.8 million or 3% increase. A majority of this growth was attributable to the CIC Bancshares, Inc. acquisition completed on February 5, 2016, and the Founders Bancorp acquisition completed on February 28, 2017.
Interest expense for the first quarter of 2017 was $7.5 million, a decrease of $454,000 or 6% from $8.0 million in the first quarter of 2016. Average interest bearing liabilities decreased $82.2 million or 2% for the quarter ended March 31, 2017, from $5.27 billion in the same quarter in 2016, while the average interest rate paid on Heartland's interest bearing deposits and borrowings declined 2 basis points from 0.61% in the first quarter of 2016 to 0.59% in the first quarter of 2017.
Net interest income was $73.0 million during the first quarter of 2017 compared to $72.7 million during the first quarter of 2016, an increase of $321,000 or less than 1%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $76.9 million during the first quarter of 2017 compared to $75.7 million during the first quarter of 2016, an increase of $1.1 million or 2%.
Noninterest Income Decreases and Noninterest Expenses Increase From Same Quarter Last Year
Noninterest income totaled $25.9 million during the first quarter of 2017 compared to $29.6 million during the first quarter of 2016, a decrease of $3.7 million or 12%. Service charges and fees totaled $9.5 million during the first quarter of 2017 compared to $7.2 million during the first quarter of 2016, an increase of $2.3 million or 32%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which was the result of the CIC Bancshares, Inc. acquisition completed during the first quarter of 2016, and increased interchange revenue from commercial card activity. Gains on sale of loans held for sale totaled $6.1 million during the first quarter of 2017 compared to $11.1 million during the first quarter of 2016, a decrease of $4.9 million or 44%, due to lower mortgage loan activity.
For the first quarter of 2017, noninterest expenses totaled $71.7 million compared to $70.3 million during the first quarter of 2016, an increase of $1.4 million or 2%. The categories with the most significant increases were professional fees, which increased $1.3 million or 19%, and advertising, which increased $1.1 million or 89%.
Heartland's effective tax rate was 23.49% for the first quarter of 2017 compared to 33.10% for the first quarter of 2016. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $304,000 during the first quarter of both 2017 and 2016. 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 30.46% during the first quarter of 2017 compared to 18.88% during the first quarter of 2016. As a result of the adoption of ASU 2016-09, "Compensation-Stock Compensation (Topic 718)" on January 1, 2017, Heartland's income taxes during the first quarter of 2017 included a tax benefit of $888,000 upon the vesting of outstanding restricted stock unit awards. The majority of Heartland's restricted stock unit awards vest annually in the first quarter. Exclusive of the effect of this tax benefit, Heartland's effective tax rate for the first quarter of 2017 was 27.26%.
Loans and Deposits Increase Since December 31, 2016
Total assets were $8.36 billion at March 31, 2017, an increase of $114.8 million or 1% from $8.25 billion at year-end 2016. Included in this growth, at fair value, were $213.3 million of assets acquired in the Founders Bancorp transaction. Securities represented 26% of total assets at both March 31, 2017, and December 31, 2016.
Total loans held to maturity were $5.36 billion at March 31, 2017, compared to $5.35 billion at year-end 2016, an increase of $9.9 million or less than 1%. This increase includes $96.4 million of total loans held to maturity, at fair value, acquired in the Founders Bancorp transaction. Exclusive of this transaction, total loans held to maturity decreased $86.6 million or 2% during the first quarter of 2017.
Total deposits were $7.09 billion as of March 31, 2017, compared to $6.85 billion at year-end 2016, an increase of $242.5 million or 4%. This increase included $181.5 million of deposits, at fair value, acquired in the Founders Bancorp transaction. Exclusive of this transaction, total deposits increased $61.0 million during the first quarter of 2017. Non-time deposits totaled $6.26 billion at March 31, 2017, an increase of $269.3 million or 4% from $5.99 billion at year-end 2016, with $157.7 million of the increase attributable to the Founders Bancorp transaction. Exclusive of this transaction, non-time deposits increased $111.6 million or 2% during the first quarter of 2017.
Fuller said, “In addition to solid growth in non-time deposits, we are delighted to see a continuing favorable shift in our deposit mix with non-time funding representing 88% of total deposits, up from 83.5% one year ago. Likewise, our demand deposits now constitute almost 33% of the mix, up from 30% one year ago.”
Nonperforming Assets Increase Since December 31, 2016
Nonperforming assets were $75.7 million or 0.90% of total assets at March 31, 2017, compared to $74.8 million or 0.91% of total assets at December 31, 2016. Nonperforming loans were $63.7 million or 1.19% of total loans at March 31, 2017, compared to $64.4 million or 1.20% of total loans at December 31, 2016.
The allowance for loan losses at March 31, 2017, was 1.03% of loans and 86.29% of nonperforming loans, compared to 1.02% of loans and 84.37% of nonperforming loans at December 31, 2016. The provision for loan losses was $3.6 million for the first quarter of 2017 compared to $2.1 million for the first quarter of 2016.
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 April 23, 2018, 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 110 banking locations serving 87 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 Three Months Ended March 31, | |||||||
| 2017 | 2016 | ||||||
| Interest Income | |||||||
| Interest and fees on loans | $ | 66,898 | $ | 68,425 | |||
| Interest on securities: | |||||||
| Taxable | 8,253 | 8,644 | |||||
| Nontaxable | 5,191 | 3,510 | |||||
| Interest on federal funds sold | — | 10 | |||||
| Interest bearing deposits with the Federal Reserve Bank and other banks and other short-term investments | 209 | 95 | |||||
| Total Interest Income | 80,551 | 80,684 | |||||
| Interest Expense | |||||||
| Interest on deposits | 3,730 | 4,173 | |||||
| Interest on short-term borrowings | 137 | 329 | |||||
| Interest on other borrowings | 3,656 | 3,475 | |||||
| Total Interest Expense | 7,523 | 7,977 | |||||
| Net Interest Income | 73,028 | 72,707 | |||||
| Provision for loan losses | 3,641 | 2,067 | |||||
| Net Interest Income After Provision for Loan Losses | 69,387 | 70,640 | |||||
| Noninterest Income | |||||||
| Service charges and fees | 9,457 | 7,162 | |||||
| Loan servicing income | 1,724 | 1,268 | |||||
| Trust fees | 3,631 | 3,813 | |||||
| Brokerage and insurance commissions | 1,036 | 1,022 | |||||
| Securities gains, net | 2,482 | 3,526 | |||||
| Net gains on sale of loans held for sale | 6,147 | 11,065 | |||||
| Valuation adjustment on commercial servicing rights | 5 | — | |||||
| Income on bank owned life insurance | 617 | 522 | |||||
| Other noninterest income | 794 | 1,200 | |||||
| Total Noninterest Income | 25,893 | 29,578 | |||||
| Noninterest Expense | |||||||
| Salaries and employee benefits | 41,767 | 41,714 | |||||
| Occupancy | 5,073 | 5,003 | |||||
| Furniture and equipment | 2,501 | 2,113 | |||||
| Professional fees | 8,309 | 7,010 | |||||
| FDIC insurance assessments | 807 | 1,168 | |||||
| Advertising | 2,424 | 1,284 | |||||
| Core deposit intangibles and customer relationship intangibles amortization | 1,171 | 1,895 | |||||
| Other real estate and loan collection expenses | 828 | 572 | |||||
| (Gain)/loss on sales/valuations of assets, net | 412 | 313 | |||||
| Other noninterest expenses | 8,448 | 9,237 | |||||
| Total Noninterest Expense | 71,740 | 70,309 | |||||
| Income Before Income Taxes | 23,540 | 29,909 | |||||
| Income taxes | 5,530 | 9,900 | |||||
| Net Income | 18,010 | 20,009 | |||||
| Preferred dividends | (19 | ) | (168 | ) | |||
| Interest expense on convertible preferred debt | 5 | — | |||||
| Net Income Available to Common Stockholders | $ | 17,996 | $ | 19,841 | |||
| Earnings per common share-diluted | $ | 0.68 | $ | 0.82 | |||
| Weighted average shares outstanding-diluted | 26,627,830 | 24,117,384 | |||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Interest and fees on loans | $ | 66,898 | $ | 69,848 | $ | 70,046 | $ | 69,809 | $ | 68,425 | |||||||||
| Interest on securities: | |||||||||||||||||||
| Taxable | 8,253 | 8,480 | 7,831 | 7,903 | 8,644 | ||||||||||||||
| Nontaxable | 5,191 | 4,292 | 3,717 | 3,566 | 3,510 | ||||||||||||||
| Interest on federal funds sold | — | — | 1 | 1 | 10 | ||||||||||||||
| Interest bearing deposits with the Federal Reserve Bank and other banks and other short-term investments | 209 | 157 | 92 | 52 | 95 | ||||||||||||||
| Total Interest Income | 80,551 | 82,777 | 81,687 | 81,331 | 80,684 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest on deposits | 3,730 | 3,744 | 4,001 | 4,021 | 4,173 | ||||||||||||||
| Interest on short-term borrowings | 137 | 119 | 235 | 519 | 329 | ||||||||||||||
| Interest on other borrowings | 3,656 | 3,754 | 3,770 | 3,673 | 3,475 | ||||||||||||||
| Total Interest Expense | 7,523 | 7,617 | 8,006 | 8,213 | 7,977 | ||||||||||||||
| Net Interest Income | 73,028 | 75,160 | 73,681 | 73,118 | 72,707 | ||||||||||||||
| Provision for loan losses | 3,641 | 2,181 | 5,328 | 2,118 | 2,067 | ||||||||||||||
| Net Interest Income After Provision for Loan Losses | 69,387 | 72,979 | 68,353 | 71,000 | 70,640 | ||||||||||||||
| Noninterest Income | |||||||||||||||||||
| Service charges and fees | 9,457 | 8,128 | 8,278 | 8,022 | 7,162 | ||||||||||||||
| Loan servicing income | 1,724 | 1,068 | 873 | 1,292 | 1,268 | ||||||||||||||
| Trust fees | 3,631 | 3,718 | 3,689 | 3,625 | 3,813 | ||||||||||||||
| Brokerage and insurance commissions | 1,036 | 955 | 1,006 | 886 | 1,022 | ||||||||||||||
| Securities gains, net | 2,482 | 1,608 | 1,584 | 4,622 | 3,526 | ||||||||||||||
| Net gains on sale of loans held for sale | 6,147 | 5,840 | 11,459 | 11,270 | 11,065 | ||||||||||||||
| Valuation adjustment on commercial servicing rights | 5 | 8 | 5 | (46 | ) | — | |||||||||||||
| Income on bank owned life insurance | 617 | 542 | 620 | 591 | 522 | ||||||||||||||
| Other noninterest income | 794 | 2,588 | 1,028 | 764 | 1,200 | ||||||||||||||
| Total Noninterest Income | 25,893 | 24,455 | 28,542 | 31,026 | 29,578 | ||||||||||||||
| Noninterest Expense | |||||||||||||||||||
| Salaries and employee benefits | 41,767 | 39,115 | 40,733 | 41,985 | 41,714 | ||||||||||||||
| Occupancy | 5,073 | 5,076 | 5,099 | 5,220 | 5,003 | ||||||||||||||
| Furniture and equipment | 2,501 | 2,944 | 2,746 | 2,442 | 2,113 | ||||||||||||||
| Professional fees | 8,309 | 7,195 | 5,985 | 7,486 | 7,010 | ||||||||||||||
| FDIC insurance assessments | 807 | 717 | 1,180 | 1,120 | 1,168 | ||||||||||||||
| Advertising | 2,424 | 2,274 | 1,339 | 1,551 | 1,284 | ||||||||||||||
| Core deposit intangibles and customer relationship intangibles amortization | 1,171 | 1,147 | 1,291 | 1,297 | 1,895 | ||||||||||||||
| Other real estate and loan collection expenses | 828 | 572 | 640 | 659 | 572 | ||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 412 | 414 | 794 | (43 | ) | 313 | |||||||||||||
| Other noninterest expenses | 8,448 | 10,458 | 8,620 | 9,303 | 9,237 | ||||||||||||||
| Total Noninterest Expense | 71,740 | 69,912 | 68,427 | 71,020 | 70,309 | ||||||||||||||
| Income Before Income Taxes | 23,540 | 27,522 | 28,468 | 31,006 | 29,909 | ||||||||||||||
| Income taxes | 5,530 | 8,360 | 8,260 | 10,036 | 9,900 | ||||||||||||||
| Net Income | 18,010 | 19,162 | 20,208 | 20,970 | 20,009 | ||||||||||||||
| Preferred dividends | (19 | ) | (19 | ) | (53 | ) | (52 | ) | (168 | ) | |||||||||
| Interest expense on convertible preferred debt | 5 | 3 | 17 | 31 | — | ||||||||||||||
| Net Income Available to Common Stockholders | $ | 17,996 | $ | 19,146 | $ | 20,172 | $ | 20,949 | $ | 19,841 | |||||||||
| Earnings per common share-diluted | $ | 0.68 | $ | 0.74 | $ | 0.81 | $ | 0.84 | $ | 0.82 | |||||||||
| Weighted average shares outstanding-diluted | 26,627,830 | 25,800,472 | 24,922,946 | 24,974,995 | 24,117,384 | ||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As Of | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 129,386 | $ | 151,290 | $ | 196,234 | $ | 222,718 | $ | 124,060 | |||||||||
| Interest bearing deposits with the Federal Reserve Bank and other banks and other short-term investments | 43,765 | 7,434 | 5,855 | 7,232 | 9,168 | ||||||||||||||
| Cash and cash equivalents | 173,151 | 158,724 | 202,089 | 229,950 | 133,228 | ||||||||||||||
| Time deposits in other financial institutions | 41,539 | 2,105 | 2,105 | 2,105 | 2,355 | ||||||||||||||
| Securities: | |||||||||||||||||||
| Available for sale, at fair value | 1,893,528 | 1,845,864 | 1,655,696 | 1,566,592 | 1,690,516 | ||||||||||||||
| Held to maturity, at cost | 260,616 | 263,662 | 265,302 | 270,423 | 271,300 | ||||||||||||||
| Other investments, at cost | 21,557 | 21,560 | 22,082 | 22,680 | 22,325 | ||||||||||||||
| Loans held for sale | 49,009 | 61,261 | 78,317 | 82,538 | 76,565 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Held to maturity | 5,361,604 | 5,351,719 | 5,438,715 | 5,482,258 | 5,503,005 | ||||||||||||||
| Allowance for loan losses | (54,999 | ) | (54,324 | ) | (54,653 | ) | (51,756 | ) | (49,738 | ) | |||||||||
| Loans, net | 5,306,605 | 5,297,395 | 5,384,062 | 5,430,502 | 5,453,267 | ||||||||||||||
| Premises, furniture and equipment, net | 165,425 | 164,028 | 165,841 | 168,701 | 164,788 | ||||||||||||||
| Goodwill | 141,461 | 127,699 | 127,699 | 127,699 | 127,699 | ||||||||||||||
| Core deposit intangibles and customer relationship intangibles, net | 24,068 | 22,775 | 23,922 | 25,213 | 26,510 | ||||||||||||||
| Servicing rights, net | 35,441 | 35,778 | 35,906 | 35,654 | 34,910 | ||||||||||||||
| Cash surrender value on life insurance | 117,613 | 112,615 | 112,060 | 111,425 | 110,834 | ||||||||||||||
| Other real estate, net | 11,188 | 9,744 | 10,740 | 11,003 | 11,338 | ||||||||||||||
| Other assets | 120,644 | 123,869 | 116,394 | 119,916 | 128,144 | ||||||||||||||
| Total Assets | $ | 8,361,845 | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | |||||||||
| Liabilities and Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Demand | $ | 2,319,256 | $ | 2,202,036 | $ | 2,238,736 | $ | 2,149,911 | $ | 2,079,521 | |||||||||
| Savings | 3,940,146 | 3,788,089 | 3,753,300 | 3,691,791 | 3,702,431 | ||||||||||||||
| Time | 830,459 | 857,286 | 920,657 | 995,870 | 1,142,368 | ||||||||||||||
| Total deposits | 7,089,861 | 6,847,411 | 6,912,693 | 6,837,572 | 6,924,320 | ||||||||||||||
| Short-term borrowings | 155,025 | 306,459 | 214,105 | 303,707 | 325,741 | ||||||||||||||
| Other borrowings | 282,051 | 288,534 | 294,493 | 296,895 | 265,760 | ||||||||||||||
| Accrued expenses and other liabilities | 53,596 | 63,759 | 76,536 | 78,264 | 68,415 | ||||||||||||||
| Total Liabilities | 7,580,533 | 7,506,163 | 7,497,827 | 7,516,438 | 7,584,236 | ||||||||||||||
| Stockholders' Equity | |||||||||||||||||||
| Preferred equity | 938 | 1,357 | 1,357 | 3,777 | 3,777 | ||||||||||||||
| Common stock | 26,674 | 26,120 | 24,683 | 24,544 | 24,520 | ||||||||||||||
| Capital surplus | 351,423 | 328,376 | 279,316 | 274,682 | 273,310 | ||||||||||||||
| Retained earnings | 431,219 | 416,109 | 402,179 | 384,479 | 366,014 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (28,942 | ) | (31,046 | ) | (3,079 | ) | 513 | 1,924 | |||||||||||
| Treasury stock at cost | — | — | (68 | ) | (32 | ) | (2 | ) | |||||||||||
| Total Equity | 781,312 | 740,916 | 704,388 | 687,963 | 669,543 | ||||||||||||||
| Total Liabilities and Equity | $ | 8,361,845 | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | |||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Average Balances | |||||||||||||||||||
| Assets | $ | 8,233,510 | $ | 8,280,042 | $ | 8,172,683 | $ | 8,211,326 | $ | 8,025,070 | |||||||||
| Loans, net of unearned | 5,365,654 | 5,473,001 | 5,538,088 | 5,582,878 | 5,358,102 | ||||||||||||||
| Deposits | 6,896,821 | 6,928,978 | 6,839,334 | 6,806,259 | 6,679,010 | ||||||||||||||
| Earning assets | 7,502,496 | 7,551,997 | 7,382,860 | 7,446,849 | 7,276,703 | ||||||||||||||
| Interest bearing liabilities | 5,190,955 | 5,206,393 | 5,224,172 | 5,363,477 | 5,273,164 | ||||||||||||||
| Common stockholders' equity | 751,671 | 726,455 | 689,637 | 669,930 | 629,294 | ||||||||||||||
| Total stockholders' equity | 752,958 | 727,812 | 692,404 | 673,707 | 695,771 | ||||||||||||||
| Tangible common stockholders' equity(1) | 596,006 | 575,412 | 537,375 | 516,347 | 485,108 | ||||||||||||||
| Key Performance Ratios | |||||||||||||||||||
| Annualized return on average assets | 0.89 | % | 0.92 | % | 0.98 | % | 1.03 | % | 0.99 | % | |||||||||
| Annualized return on average common equity (GAAP) | 9.71 | % | 10.48 | % | 11.64 | % | 12.58 | % | 12.68 | % | |||||||||
| Annualized return on average common tangible equity (non-GAAP)(2) | 12.25 | % | 13.24 | % | 14.93 | % | 16.32 | % | 16.45 | % | |||||||||
| Annualized ratio of net charge-offs to average loans | 0.22 | % | 0.18 | % | 0.17 | % | 0.01 | % | 0.08 | % | |||||||||
| Annualized net interest margin (GAAP) | 3.95 | % | 3.96 | % | 3.97 | % | 3.95 | % | 4.02 | % | |||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP)(3) | 4.16 | % | 4.14 | % | 4.14 | % | 4.12 | % | 4.19 | % | |||||||||
| Efficiency ratio, fully tax-equivalent(4) | 69.95 | % | 66.29 | % | 63.88 | % | 67.95 | % | 66.90 | % | |||||||||
| Reconciliation of Return on Average Common Tangible Equity (non-GAAP)(5) | |||||||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 17,996 | $ | 19,146 | $ | 20,172 | $ | 20,949 | $ | 19,841 | |||||||||
| Average common stockholders' equity (GAAP) | $ | 751,671 | $ | 726,455 | $ | 689,637 | $ | 669,930 | $ | 629,294 | |||||||||
| Less average goodwill | 132,440 | 127,699 | 127,699 | 127,699 | 119,750 | ||||||||||||||
| Less average core deposit intangibles and customer relationship intangibles, net | 23,225 | 23,344 | 24,563 | 25,884 | 24,436 | ||||||||||||||
| Average common tangible equity (non-GAAP) | $ | 596,006 | $ | 575,412 | $ | 537,375 | $ | 516,347 | $ | 485,108 | |||||||||
| Annualized return on average common equity (GAAP) | 9.71 | % | 10.48 | % | 11.64 | % | 12.58 | % | 12.68 | % | |||||||||
| Annualized return on average common tangible equity (non-GAAP) | 12.25 | % | 13.24 | % | 14.93 | % | 16.32 | % | 16.45 | % | |||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)(6) | |||||||||||||||||||
| Net Interest Income (GAAP) | $ | 73,028 | $ | 75,160 | $ | 73,681 | $ | 73,118 | $ | 72,707 | |||||||||
| Plus taxable equivalent adjustment(7) | 3,860 | 3,511 | 3,221 | 3,146 | 3,041 | ||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) | $ | 76,888 | $ | 78,671 | $ | 76,902 | $ | 76,264 | $ | 75,748 | |||||||||
| Average earning assets | $ | 7,502,496 | $ | 7,551,997 | $ | 7,382,860 | $ | 7,446,849 | $ | 7,276,703 | |||||||||
| Annualized net interest margin (GAAP) | 3.95 | % | 3.96 | % | 3.97 | % | 3.95 | % | 4.02 | % | |||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.16 | % | 4.14 | % | 4.14 | % | 4.12 | % | 4.19 | % | |||||||||
| (1) Calculated as common stockholders' equity less goodwill and core deposit intangibles and customer relationship 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 Tax-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 and customer relationship 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 tax-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 tax-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 | |||||||||||||||||||
| Reconciliation of Non-GAAP Measure-Efficiency Ratio(1) | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | ||||||||||||||
| Net interest income | $ | 73,028 | $ | 75,160 | $ | 73,681 | $ | 73,118 | $ | 72,707 | |||||||||
| Tax-equivalent adjustment(2) | 3,860 | 3,511 | 3,221 | 3,146 | 3,041 | ||||||||||||||
| Fully tax-equivalent net interest income | 76,888 | 78,671 | 76,902 | 76,264 | 75,748 | ||||||||||||||
| Noninterest income | 25,893 | 24,455 | 28,542 | 31,026 | 29,578 | ||||||||||||||
| Securities gains, net | (2,482 | ) | (1,608 | ) | (1,584 | ) | (4,622 | ) | (3,526 | ) | |||||||||
| Adjusted income | $ | 100,299 | $ | 101,518 | $ | 103,860 | $ | 102,668 | $ | 101,800 | |||||||||
| Total noninterest expenses | $ | 71,740 | $ | 69,912 | $ | 68,427 | $ | 71,020 | $ | 70,309 | |||||||||
| Less: | |||||||||||||||||||
| Core deposit intangibles and customer relationship intangibles amortization | 1,171 | 1,147 | 1,291 | 1,297 | 1,895 | ||||||||||||||
| Partnership investment in historic rehabilitation tax credits | — | 1,051 | — | — | — | ||||||||||||||
| (Gain)/loss on sales/valuation of assets, net | 412 | 414 | 794 | (43 | ) | 313 | |||||||||||||
| Adjusted noninterest expenses | $ | 70,157 | $ | 67,300 | $ | 66,342 | $ | 69,766 | $ | 68,101 | |||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 69.95 | % | 66.29 | % | 63.88 | % | 67.95 | % | 66.90 | % | |||||||||
| (1) 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 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 | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Common Share Data | |||||||||||||||||||
| Book value per common share | $ | 29.26 | $ | 28.31 | $ | 28.48 | $ | 27.88 | $ | 27.15 | |||||||||
| Tangible book value per common share (non-GAAP)(1) | $ | 23.05 | $ | 22.55 | $ | 22.34 | $ | 21.65 | $ | 20.86 | |||||||||
| ASC 320 effect on book value per common share | $ | (1.06 | ) | $ | (1.15 | ) | $ | 0.03 | $ | 0.21 | $ | 0.23 | |||||||
| Common shares outstanding, net of treasury stock | 26,674,121 | 26,119,929 | 24,681,380 | 24,543,376 | 24,519,928 | ||||||||||||||
| Tangible capital ratio (non-GAAP)(2) | 7.50 | % | 7.28 | % | 6.85 | % | 6.60 | % | 6.32 | % | |||||||||
| Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(3) | |||||||||||||||||||
| Common stockholders' equity (GAAP) | $ | 780,374 | $ | 739,559 | $ | 703,031 | $ | 684,186 | $ | 665,766 | |||||||||
| Less goodwill | 141,461 | 127,699 | 127,699 | 127,699 | 127,699 | ||||||||||||||
| Less core deposit intangibles and customer relationship intangibles, net | 24,068 | 22,775 | 23,922 | 25,213 | 26,510 | ||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | $ | 614,845 | $ | 589,085 | $ | 551,410 | $ | 531,274 | $ | 511,557 | |||||||||
| Common shares outstanding, net of treasury stock | 26,674,121 | 26,119,929 | 24,681,380 | 24,543,376 | 24,519,928 | ||||||||||||||
| Common stockholders' equity (book value) per share (GAAP) | $ | 29.26 | $ | 28.31 | $ | 28.48 | $ | 27.88 | $ | 27.15 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 23.05 | $ | 22.55 | $ | 22.34 | $ | 21.65 | $ | 20.86 | |||||||||
| Reconciliation of Tangible Capital Ratio (non-GAAP)(4) | |||||||||||||||||||
| Total assets (GAAP) | $ | 8,361,845 | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | |||||||||
| Less goodwill | 141,461 | 127,699 | 127,699 | 127,699 | 127,699 | ||||||||||||||
| Less core deposit intangibles and customer relationship intangibles, net | 24,068 | 22,775 | 23,922 | 25,213 | 26,510 | ||||||||||||||
| Total tangible assets (non-GAAP) | $ | 8,196,316 | $ | 8,096,605 | $ | 8,050,594 | $ | 8,051,489 | $ | 8,099,570 | |||||||||
| Tangible capital ratio (non-GAAP) | 7.50 | % | 7.28 | % | 6.85 | % | 6.60 | % | 6.32 | % | |||||||||
| Loan Data | |||||||||||||||||||
| Loans held to maturity: | |||||||||||||||||||
| Commercial and commercial real estate | $ | 3,849,748 | $ | 3,825,847 | $ | 3,900,612 | $ | 3,930,879 | $ | 3,951,839 | |||||||||
| Residential mortgage | 604,902 | 617,924 | 625,965 | 644,267 | 666,184 | ||||||||||||||
| Agricultural and agricultural real estate | 481,125 | 489,318 | 489,387 | 480,883 | 471,271 | ||||||||||||||
| Consumer | 427,962 | 420,613 | 425,582 | 428,730 | 417,114 | ||||||||||||||
| Unearned discount and deferred loan fees | (2,133 | ) | (1,983 | ) | (2,831 | ) | (2,501 | ) | (3,403 | ) | |||||||||
| Total loans held to maturity | $ | 5,361,604 | $ | 5,351,719 | $ | 5,438,715 | $ | 5,482,258 | $ | 5,503,005 | |||||||||
| Other Selected Trend Information | |||||||||||||||||||
| Effective tax rate | 23.49 | % | 30.38 | % | 29.02 | % | 32.37 | % | 33.10 | % | |||||||||
| Full time equivalent employees | 1,896 | 1,864 | 1,846 | 1,888 | 1,907 | ||||||||||||||
| Total residential mortgage loan applications | $ | 248,614 | $ | 304,018 | $ | 445,107 | $ | 440,907 | $ | 406,999 | |||||||||
| Residential mortgage loans originated | $ | 161,851 | $ | 278,065 | $ | 324,337 | $ | 324,633 | $ | 238,266 | |||||||||
| Residential mortgage loans sold | $ | 172,521 | $ | 269,333 | $ | 315,917 | $ | 302,448 | $ | 220,381 | |||||||||
| Residential mortgage loan servicing portfolio | $ | 4,338,311 | $ | 4,308,580 | $ | 4,259,459 | $ | 4,203,429 | $ | 4,112,519 | |||||||||
| (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 core deposit intangibles and customer relationship intangibles, 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 core deposit intangibles and customer relationship intangibles, net, divided by total assets less goodwill and core deposit intangibles and customer relationship intangibles, 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 | |||||||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||
| Balance, beginning of period | $ | 54,324 | $ | 54,653 | $ | 51,756 | $ | 49,738 | $ | 48,685 | |||||||||
| Provision for loan losses | 3,641 | 2,181 | 5,328 | 2,118 | 2,067 | ||||||||||||||
| Charge-offs | (3,718 | ) | (3,555 | ) | (3,283 | ) | (2,951 | ) | (1,605 | ) | |||||||||
| Recoveries | 752 | 1,045 | 852 | 2,851 | 591 | ||||||||||||||
| Balance, end of period | $ | 54,999 | $ | 54,324 | $ | 54,653 | $ | 51,756 | $ | 49,738 | |||||||||
| Asset Quality | |||||||||||||||||||
| Nonaccrual loans | $ | 62,868 | $ | 64,299 | $ | 57,799 | $ | 57,053 | $ | 47,750 | |||||||||
| Loans past due ninety days or more as to interest or principal payments | 872 | 86 | 105 | — | 639 | ||||||||||||||
| Other real estate owned | 11,188 | 9,744 | 10,740 | 11,003 | 11,338 | ||||||||||||||
| Other repossessed assets | 739 | 663 | 821 | 564 | 426 | ||||||||||||||
| Total nonperforming assets | $ | 75,667 | $ | 74,792 | $ | 69,465 | $ | 68,620 | $ | 60,153 | |||||||||
| Performing troubled debt restructured loans | $ | 11,010 | $ | 10,380 | $ | 10,281 | $ | 9,923 | $ | 10,711 | |||||||||
| Nonperforming Assets Activity | |||||||||||||||||||
| Balance, beginning of period | $ | 74,792 | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | |||||||||
| Net loan charge offs | (2,966 | ) | (2,510 | ) | (2,431 | ) | (100 | ) | (1,014 | ) | |||||||||
| New nonperforming loans | 14,819 | 23,035 | 10,884 | 19,994 | 12,171 | ||||||||||||||
| Acquired nonperforming assets | — | — | — | — | 3,516 | ||||||||||||||
| Reduction of nonperforming loans (1) | (10,037 | ) | (13,707 | ) | (6,983 | ) | (10,313 | ) | (3,563 | ) | |||||||||
| OREO/Repossessed assets sales proceeds | (715 | ) | (1,037 | ) | (343 | ) | (918 | ) | (2,411 | ) | |||||||||
| OREO/Repossessed assets writedowns, net | (279 | ) | (274 | ) | (521 | ) | (337 | ) | (182 | ) | |||||||||
| Net activity at Citizens Finance Co. | 53 | (180 | ) | 239 | 141 | (28 | ) | ||||||||||||
| Balance, end of period | $ | 75,667 | $ | 74,792 | $ | 69,465 | $ | 68,620 | $ | 60,153 | |||||||||
| Asset Quality Ratios | |||||||||||||||||||
| Ratio of nonperforming loans to total loans | 1.19 | % | 1.20 | % | 1.06 | % | 1.04 | % | 0.88 | % | |||||||||
| Ratio of nonperforming assets to total assets | 0.90 | % | 0.91 | % | 0.85 | % | 0.84 | % | 0.73 | % | |||||||||
| Annualized ratio of net loan charge-offs to average loans | 0.22 | % | 0.18 | % | 0.17 | % | 0.01 | % | 0.08 | % | |||||||||
| Allowance for loan losses as a percent of loans | 1.03 | % | 1.02 | % | 1.00 | % | 0.94 | % | 0.90 | % | |||||||||
| Allowance for loan losses as a percent of nonperforming loans | 86.29 | % | 84.37 | % | 94.39 | % | 90.72 | % | 102.79 | % | |||||||||
| Loans delinquent 30-89 days as a percent of total loans | 0.44 | % | 0.37 | % | 0.40 | % | 0.73 | % | 0.45 | % | |||||||||
| (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, 2017 | March 31, 2016 | ||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 1,449,054 | $ | 8,253 | 2.31 | % | $ | 1,508,432 | $ | 8,735 | 2.33 | % | |||||||||
| Nontaxable(1) | 645,534 | 7,986 | 5.02 | 417,224 | 5,400 | 5.21 | |||||||||||||||
| Total securities | 2,094,588 | 16,239 | 3.14 | 1,925,656 | 14,135 | 2.95 | |||||||||||||||
| Interest bearing deposits with the Federal Reserve Bank and other banks and other short-term investments | 96,270 | 209 | 0.88 | 11,634 | 4 | 0.14 | |||||||||||||||
| Federal funds sold | 314 | — | — | 31,126 | 10 | 0.13 | |||||||||||||||
| Loans:(2) | |||||||||||||||||||||
| Commercial and commercial real estate(1) | 3,813,258 | 45,913 | 4.88 | 3,743,940 | 46,754 | 5.02 | |||||||||||||||
| Residential mortgage | 646,532 | 6,683 | 4.19 | 734,134 | 7,599 | 4.16 | |||||||||||||||
| Agricultural and agricultural real estate(1) | 483,079 | 5,554 | 4.66 | 467,978 | 5,729 | 4.92 | |||||||||||||||
| Consumer | 422,785 | 8,053 | 7.72 | 412,050 | 7,923 | 7.73 | |||||||||||||||
| Fees on loans | 1,760 | — | 1,571 | — | |||||||||||||||||
| Less: allowance for loan losses | (54,330 | ) | — | — | (49,815 | ) | — | — | |||||||||||||
| Net loans | 5,311,324 | 67,963 | 5.19 | 5,308,287 | 69,576 | 5.27 | |||||||||||||||
| Total earning assets | 7,502,496 | 84,411 | 4.56 | % | 7,276,703 | 83,725 | 4.63 | % | |||||||||||||
| Nonearning Assets | 731,014 | 748,367 | |||||||||||||||||||
| Total Assets | $ | 8,233,510 | $ | 8,025,070 | |||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 3,838,001 | $ | 2,105 | 0.22 | % | $ | 3,556,207 | $ | 1,894 | 0.21 | % | |||||||||
| Time, $100,000 and over | 348,782 | 725 | 0.84 | 498,620 | 871 | 0.70 | |||||||||||||||
| Other time deposits | 484,336 | 900 | 0.75 | 642,301 | 1,408 | 0.88 | |||||||||||||||
| Short-term borrowings | 235,432 | 137 | 0.24 | 311,161 | 329 | 0.43 | |||||||||||||||
| Other borrowings | 284,404 | 3,656 | 5.21 | 264,875 | 3,475 | 5.28 | |||||||||||||||
| Total interest bearing liabilities | 5,190,955 | 7,523 | 0.59 | % | 5,273,164 | 7,977 | 0.61 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 2,225,702 | 1,981,882 | |||||||||||||||||||
| Accrued interest and other liabilities | 63,895 | 74,253 | |||||||||||||||||||
| Total noninterest bearing liabilities | 2,289,597 | 2,056,135 | |||||||||||||||||||
| Stockholders' Equity | 752,958 | 695,771 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 8,233,510 | $ | 8,025,070 | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 76,888 | $ | 75,748 | |||||||||||||||||
| Net interest spread(1) | 3.97 | % | 4.02 | % | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(3) | 4.16 | % | 4.19 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 69.19 | % | 72.47 | % | |||||||||||||||||
| Reconciliation of annualized net interest margin, fully tax-equivalent (non-GAAP)3 | |||||||||||||||||||||
| Net interest income, fully taxable equivalent (non-GAAP) | $ | 76,888 | $ | 75,748 | |||||||||||||||||
| Adjustments for tax-equivalent interest(1) | (3,860 | ) | (3,041 | ) | |||||||||||||||||
| Net interest income (GAAP) | $ | 73,028 | $ | 72,707 | |||||||||||||||||
| Average earning assets | $ | 7,502,496 | $ | 7,276,703 | |||||||||||||||||
| Annualized net interest margin (GAAP) | 3.95 | % | 4.02 | % | |||||||||||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.16 | % | 4.19 | % | |||||||||||||||||
| (1) Computed on a tax-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 tax-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 | |||||||||||||||
| 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | |||||||||||
| Total Assets | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,436,038 | $ | 1,497,775 | $ | 1,448,796 | $ | 1,473,461 | $ | 1,498,771 | |||||
| New Mexico Bank & Trust | 1,382,480 | 1,374,647 | 1,318,203 | 1,321,113 | 1,304,886 | ||||||||||
| Wisconsin Bank & Trust | 1,033,633 | 1,065,715 | 1,068,288 | 1,080,224 | 1,094,872 | ||||||||||
| Morrill & Janes Bank and Trust Company | 871,819 | 863,544 | 862,767 | 843,069 | 872,274 | ||||||||||
| Premier Valley Bank | 854,838 | 640,684 | 635,620 | 629,423 | 751,137 | ||||||||||
| Centennial Bank and Trust | 839,505 | 901,782 | 892,723 | 909,697 | 927,040 | ||||||||||
| Illinois Bank & Trust | 746,669 | 742,173 | 748,801 | 742,697 | 718,074 | ||||||||||
| Arizona Bank & Trust | 578,597 | 582,266 | 574,561 | 577,002 | 558,369 | ||||||||||
| Rocky Mountain Bank | 479,121 | 477,063 | 481,346 | 473,583 | 479,010 | ||||||||||
| Minnesota Bank & Trust | 213,789 | 229,114 | 238,745 | 230,004 | 220,955 | ||||||||||
| Total Portfolio Loans | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 903,617 | $ | 905,242 | $ | 906,347 | $ | 928,869 | $ | 941,683 | |||||
| New Mexico Bank & Trust | 906,477 | 924,249 | 917,679 | 870,109 | 815,739 | ||||||||||
| Wisconsin Bank & Trust | 644,380 | 650,254 | 711,714 | 732,503 | 758,789 | ||||||||||
| Morrill & Janes Bank and Trust Company | 546,123 | 548,544 | 538,666 | 522,518 | 536,738 | ||||||||||
| Premier Valley Bank | 440,406 | 348,879 | 354,610 | 376,275 | 376,840 | ||||||||||
| Centennial Bank and Trust | 572,254 | 609,760 | 638,006 | 668,547 | 683,085 | ||||||||||
| Illinois Bank & Trust | 469,105 | 473,008 | 469,236 | 466,983 | 465,783 | ||||||||||
| Arizona Bank & Trust | 384,028 | 384,706 | 385,926 | 390,078 | 402,431 | ||||||||||
| Rocky Mountain Bank | 330,921 | 347,839 | 357,346 | 362,475 | 364,189 | ||||||||||
| Minnesota Bank & Trust | 142,736 | 144,098 | 139,581 | 144,009 | 137,412 | ||||||||||
| Total Deposits | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,212,899 | $ | 1,231,016 | $ | 1,182,947 | $ | 1,159,942 | $ | 1,144,470 | |||||
| New Mexico Bank & Trust | 1,184,675 | 1,091,436 | 1,101,550 | 1,062,410 | 1,066,076 | ||||||||||
| Wisconsin Bank & Trust | 868,033 | 899,676 | 889,957 | 911,915 | 921,071 | ||||||||||
| Morrill & Janes Bank and Trust Company | 721,075 | 738,036 | 676,176 | 696,073 | 698,365 | ||||||||||
| Premier Valley Bank | 708,226 | 510,142 | 520,814 | 514,522 | 635,188 | ||||||||||
| Centennial Bank and Trust | 712,377 | 733,449 | 767,128 | 775,417 | 779,607 | ||||||||||
| Illinois Bank & Trust | 641,750 | 636,419 | 671,104 | 653,582 | 629,235 | ||||||||||
| Arizona Bank & Trust | 501,111 | 477,213 | 493,331 | 497,599 | 468,312 | ||||||||||
| Rocky Mountain Bank | 420,067 | 414,344 | 420,581 | 405,888 | 409,787 | ||||||||||
| Minnesota Bank & Trust | 189,324 | 194,368 | 214,651 | 207,228 | 200,343 | ||||||||||
| Net Income | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 2,056 | $ | 806 | $ | 5,112 | $ | 4,475 | $ | 6,073 | |||||
| New Mexico Bank & Trust | 4,419 | 4,061 | 3,824 | 5,642 | 4,094 | ||||||||||
| Wisconsin Bank & Trust | 1,968 | 2,970 | 3,368 | 3,399 | 3,379 | ||||||||||
| Morrill & Janes Bank and Trust Company | 2,227 | 2,519 | 1,707 | 2,133 | 2,525 | ||||||||||
| Premier Valley Bank | 1,306 | 2,969 | 1,804 | 1,695 | 1,960 | ||||||||||
| Centennial Bank and Trust | 1,366 | 1,572 | 925 | 256 | 824 | ||||||||||
| Illinois Bank & Trust | 1,991 | 1,917 | 2,179 | 2,397 | 2,027 | ||||||||||
| Arizona Bank & Trust | 1,486 | 1,305 | 2,034 | 2,121 | 1,841 | ||||||||||
| Rocky Mountain Bank | 1,521 | 1,229 | 1,456 | 1,484 | 1,064 | ||||||||||
| Minnesota Bank & Trust | 591 | 888 | 675 | 559 | 531 | ||||||||||