Second Quarter
Highlights
- Quarterly net income available to
common stockholders of $37.7 million or $0.88 per common
share.
- Adjusted earnings available to
common stockholders of $49.6 million or $1.15 adjusted diluted
earnings per common share (non-GAAP).
- $6.0 million of acquisition,
integration and restructuring expenses in the quarter.
- Sold $108.4 million of securities
with CRE exposure at a pre-tax loss of $10.6 million to improve the
risk and liquidity profile of the Company.
- Common equity ratio increased to
10.19%; Tangible common equity ratio (non-GAAP) improved 40 basis
points to 7.28%.
- Net interest margin, full
tax-equivalent (non-GAAP) increased to 3.73% for the quarter ended
June 30, 2024 from 3.57% for the quarter ended March 31, 2024.
- Annualized loan yield increased 13 basis points to 6.76%.
- Annualized cost of deposits decreased 3 basis points to
2.08%.
- Closed on the sale of all nine
Rocky Mountain Bank branches in Montana in mid-July, including
loans of $343.8 million and deposits of $531.8 million. The
expected gain of $30 million will be realized in the third quarter
of 2024 and may potentially be utilized to offset future losses
related to selling securities or disposing of real estate.
| |
For the Quarter Ended |
|
Six Months Ended June 30, |
|
|
6/30/2024 |
|
3/31/2024 |
|
6/30/2023 |
|
|
2024 |
|
|
|
2023 |
|
|
Earnings Summary: |
|
|
|
|
|
|
|
|
|
|
Net income/(loss) available to common stockholders (in
millions) |
$ |
37.7 |
|
|
$ |
49.7 |
|
|
$ |
47.4 |
|
|
$ |
87.4 |
|
|
$ |
98.2 |
|
|
Diluted earnings/(loss) per common share |
|
0.88 |
|
|
|
1.16 |
|
|
|
1.11 |
|
|
|
2.03 |
|
|
|
2.30 |
|
|
Return on average assets |
|
0.84 |
% |
|
|
1.08 |
% |
|
|
0.98 |
% |
|
|
0.96 |
% |
|
|
1.02 |
% |
|
Return on average common equity |
|
8.14 |
|
|
|
10.90 |
|
|
|
11.01 |
|
|
|
9.51 |
|
|
|
11.70 |
|
|
Return on average tangible common equity
(non-GAAP)(1) |
|
12.28 |
|
|
|
16.49 |
|
|
|
17.31 |
|
|
|
14.36 |
|
|
|
18.62 |
|
|
Net interest margin |
|
3.68 |
|
|
|
3.52 |
|
|
|
3.19 |
|
|
|
3.60 |
|
|
|
3.27 |
|
|
Net interest margin, fully tax-equivalent
(non-GAAP)(1) |
|
3.73 |
|
|
|
3.57 |
|
|
|
3.23 |
|
|
|
3.65 |
|
|
|
3.32 |
|
|
Efficiency ratio |
|
65.70 |
|
|
|
62.46 |
|
|
|
60.93 |
|
|
|
64.05 |
|
|
|
60.94 |
|
|
Adjusted efficiency ratio, fully-tax equivalent
(non-GAAP)(1) |
|
57.73 |
|
|
|
58.77 |
|
|
|
59.88 |
|
|
|
58.25 |
|
|
|
58.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Summary (1): |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings available to common stockholders (in
millions) |
$ |
49.6 |
|
|
$ |
52.4 |
|
|
$ |
46.5 |
|
|
$ |
102.0 |
|
|
$ |
100.2 |
|
|
Adjusted diluted earnings per common share |
|
1.15 |
|
|
|
1.22 |
|
|
|
1.09 |
|
|
|
2.37 |
|
|
|
2.34 |
|
|
Adjusted annualized return on average assets |
|
1.09 |
% |
|
|
1.13 |
% |
|
|
0.96 |
% |
|
|
1.11 |
% |
|
|
1.04 |
% |
|
Adjusted annualized return on average common equity |
|
10.71 |
|
|
|
11.50 |
|
|
|
10.80 |
|
|
|
11.10 |
|
|
|
11.95 |
|
|
Adjusted annualized return on average tangible common equity |
|
16.05 |
|
|
|
17.38 |
|
|
|
17.00 |
|
|
|
16.70 |
|
|
|
19.00 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to "Non-GAAP Measures" in this
earnings release for additional information on the usage and
presentation of these non-GAAP measures, and refer to the financial
tables for reconciliations to the most directly comparable GAAP
measures.
|
|
"HTLF delivered a solid second quarter. Net interest income
increased while our adjusted efficiency ratio decreased. Our margin
expanded through increased loan yields and decreased deposit costs
as we continue to pay down high cost wholesale deposits. In July we
completed the sale of Rocky Mountain Bank in Montana, a result of
our strategic initiatives that will drive efficiency, enhance EPS
growth, deliver higher return on assets and more efficient use of
capital. We’re excited to be working closely with our partners at
UMB on integration planning for our two companies as we continue
towards an expected Q1 2025 transaction close date." |
|
|
|
Bruce K. Lee, President and Chief Executive Officer,
HTLF |
|
DENVER, July 30, 2024 (GLOBE NEWSWIRE) -- Heartland
Financial USA, Inc. (NASDAQ: HTLF) today reported the
following results for the quarter ended June 30, 2024, compared to
the quarter ended June 30, 2023:
- Net income
available to common stockholders of $37.7 million compared to $47.4
million, a decrease of $9.7 million or 20%.
- Earnings per
diluted common share of $0.88 compared to $1.11, a decrease of
$0.23 or 21%.
- Adjusted
earnings available to common stockholders(1) of $49.6
million or $1.15 per diluted common share compared to $46.5 million
or $1.09 per diluted common share. Adjusted earnings in the second
quarter of 2024 excludes $10.1 million of loss of security sales
and $6.0 million of acquisition, integration and restructuring
costs.
- Net interest
income of $158.7 million compared to $147.1 million, an increase of
$11.6 million or 8%.
- Annualized
return on average assets of 0.84% compared to 0.98%. Adjusted
annualized return on average assets(1) of 1.09% compared
to 0.96%.
- Annualized
return on average common equity of 8.14% compared to 11.01%.
Adjusted annualized return on average common equity(1)
of 10.71% compared to 10.80%.
- Annualized return on average
tangible common equity(1) of 12.28% compared to 17.31%.
Adjusted annualized return on average tangible common
equity(1) of 16.05% compared to 17.00%.
Rocky Mountain Bank Sale
HTLF Bank closed on the sale of all nine Rocky
Mountain Bank branches in Montana in mid-July along with all
associated deposits and certain related assets to two purchasers.
Loans of $348.8 million, deposits of $538.3 million and fixed
assets of $13.2 million have been moved to available for sale
categories as of June 30, 2024.
Net Interest Income and Net Interest
Margin
Net interest margin, expressed as a percentage
of average earning assets, was 3.68% (3.73% on a fully
tax-equivalent basis, non-GAAP) for the second quarter of 2024
compared to 3.52% (3.57% on a fully tax-equivalent basis, non-GAAP)
for the first quarter of 2024, and 3.19% (3.23% on a fully
tax-equivalent basis, non-GAAP) for the second quarter of 2023.
Total interest income and average earning asset
changes for the second quarter of 2024 compared to the second
quarter of 2023 were:
- Total interest
income was $255.6 million compared to $235.5 million, an increase
of $20.1 million or 9%, primarily attributable to an increase in
yields on average earning assets. Interest income on loans during
the second quarter of 2024 was positively impacted by $2.0 million
due to the payoff of a $29.6 million owner-occupied commercial real
estate loan which had previously been on nonaccrual.
- Total interest
income on a tax-equivalent basis (non-GAAP) was $257.6 million, an
increase of $20.0 million or 8%, from $237.6 million.
- Average earning
assets decreased $1.19 billion or 6% to $17.33 billion compared to
$18.52 billion, primarily due to the sale of $865.4 million of
securities during the fourth quarter of 2023, and $108.4 million of
securities during the second quarter of 2024. The proceeds were
utilized to pay down high-cost wholesale deposits and
borrowings.
- The average rate on earning assets
increased 83 basis points to 5.98% from 5.15%, primarily due to
recent interest rate increases on earning assets.
Total interest expense and average
interest-bearing liability changes for the second quarter of 2024
compared to the second quarter of 2023 were:
- Total interest
expense was $96.9 million, an increase of $8.5 million from $88.4
million, primarily due to increases in the average interest rate
paid on interest-bearing liabilities, partially offset by decreases
in average interest-bearing liabilities.
- The average
interest rate paid on interest-bearing liabilities increased 45
basis points to 3.13% from 2.68%.
- Average
interest-bearing deposits decreased $1.54 billion or 12% to $11.21
billion from $12.75 billion.
- The average
interest rate paid on interest-bearing deposits increased 31 basis
points to 2.89% from 2.58%.
- Average borrowings increased $792.9
million or 172% to $1.25 billion from $461.7 million, and the
average interest rate paid on borrowings was 5.26% compared to
5.55%.
Net interest income changes for the second
quarter of 2024 compared to the second quarter of 2023 were:
- Net interest
income totaled $158.7 million compared to $147.1 million, an
increase of $11.6 million or 8%.
- Net interest income on a
tax-equivalent basis (non-GAAP) totaled $160.7 million compared to
$149.3 million, an increase of $11.5 million or 8%.
Noninterest Income and Noninterest
Expense
Total noninterest income was $18.2 million
during the second quarter of 2024 compared to $32.5 million during
the second quarter of 2023, a decrease of $14.3 million or 44%.
Significant changes within the noninterest income category for the
second quarter of 2024 compared to the second quarter of 2023
were:
- Net security
losses increased $9.8 million to $10.1 million compared to net
security losses of $314,000.
- Service charges
and fees decreased $2.7 million or 14% to $17.0 million from $19.6
million, primarily attributable to a decrease in consumer NSF and
overdraft fees. In the fourth quarter of 2023, HTLF instituted a
new fee policy across our single charter customer base in response
to industry changes related to consumer overdraft fees.
- Capital market
fees decreased $2.0 million or 51% to $2.0 million from $4.0
million due to lower capital markets activity.
- Net gains on
sales of loans held for sale decreased $1.1 million or 100% to $0
from $1.1 million, due to HTLF ceasing originations of residential
mortgage loans to be sold to the secondary market.
Total noninterest expense was $116.2 million
during the second quarter of 2024 compared to $109.4 million during
the second quarter of 2023, an increase of $6.8 million or 6%.
Significant changes within the noninterest expense category for the
second quarter of 2024 compared to the second quarter of 2023
were:
- Acquisition,
integration, and restructuring costs totaled $6.0 million compared
to $1.9 million, an increase of $4.1 million primarily attributable
to expenses related to the pending UMB merger.
- Salaries and
employee benefits totaled $65.1 million compared to $62.1 million,
an increase of $3.0 million or 5%. The increase was attributable to
higher benefit costs including incentive compensation and
retirement plans partially offset by a reduction of full-time
equivalent employees. Full-time equivalent employees totaled 1,843
compared to 1,966, a decrease of 123 or 6%.
- FDIC insurance
assessments totaled $3.3 million compared to $3.0 million, an
increase of $305,000.
- Loss on sale of
assets totaled $193,000 compared to a gain on assets of $3.4
million. During the second quarter of 2023, the recordkeeping and
administration services component of HTLF's Retirement Plan
Services business was sold, which generated a gain of $4.3
million.
- Other noninterest expense totaled
$14.3 million compared to $15.6 million, a decrease of $1.3 million
or 8%, in conjunction with HTLF's 3.0 efficiency efforts.
The effective tax rate was 23.12% for the second
quarter of 2024 compared to 23.74% for second quarter of 2023. The
following items impacted the second quarter 2024 and 2023 tax
calculations:
- Various tax
credits of $629,000 compared to $568,000.
- Tax-exempt interest income as a
percentage of pre-tax income of 14.49% compared to 12.40%.
- Tax benefit of $92,000 compared to
a tax expense of $121,000 resulting from the vesting of restricted
stock units.
- Tax expense of $1.1 million
compared to $1.1 million resulting from the disallowed interest
expense related to tax-exempt loans and securities.
Total Assets, Total Loans and Total
Deposits
Total assets were $18.81 billion at June 30,
2024, a decrease of $599.0 million or 3% from $19.41 billion at
year-end 2023. Securities represented 27% and 29% of total assets
at June 30, 2024, and December 31, 2023, respectively.
Total loans held to maturity were $11.61 billion
at June 30, 2024, compared to $11.64 billion at March 31, 2024, and
$12.07 billion at December 31, 2023. Loans decreased $36.3 million
or less than 1% during the second quarter of 2024 and $460.3
million or 4% since year-end 2023. Excluding the impact of the
transfer of $348.8 million of loans to held for sale related to the
planned sale of Rocky Mountain Bank, loans held to maturity
decreased $40.3 million or less than 1% during the second quarter
of 2024 and $111.6 million or 1% since year-end 2023. Significant
changes by loan category at June 30, 2024 compared to March 31,
2024 included:
- Commercial and
business lending, which includes commercial and industrial, PPP and
owner occupied commercial real estate loans, increased $6.8 million
or less than 1% to $6.10 billion compared to $6.09 billion.
Excluding the transfer related to Rocky Mountain Bank, commercial
and business lending increased $5.1 million or less than 1%.
- Commercial real
estate lending, which includes non-owner occupied commercial real
estate and construction loans, decreased $19.7 million or less than
1% to $3.52 billion compared to $3.54 billion. Excluding the
transfer related to Rocky Mountain Bank, commercial real estate
lending decreased $22.6 million or less than 1%.
- Agricultural and
agricultural real estate loans decreased $6.9 million or 1% to
$803.0 million compared to $809.9 million. Excluding the transfer
related to Rocky Mountain Bank, agricultural and agricultural real
estate loans decreased $4.3 million or less than 1%.
- Residential mortgage loans
decreased $22.6 million or 3% to $733.4 million compared to $756.0
million. Excluding the transfer related to Rocky Mountain Bank,
residential mortgage loans decreased $23.3 million or 3%.
Significant changes by loan category at June 30,
2024 compared to December 31, 2023 included:
- Commercial and
business lending, which includes commercial and industrial, PPP and
owner occupied commercial real estate loans, decreased $193.9
million or 3% to $6.10 billion compared to $6.29 billion. Excluding
the transfer related to Rocky Mountain Bank, commercial and
business lending decreased $35.9 million or 1%.
- Commercial real
estate lending, which includes non-owner occupied commercial real
estate and construction loans, decreased $48.4 million or 1% to
$3.52 billion compared to $3.57 billion. Excluding the transfer
related to Rocky Mountain Bank, commercial real estate lending
increased $13.1 million or less than 1%.
- Agricultural and
agricultural real estate loans decreased $116.2 million or 13% to
$803.0 million compared to $919.2 million. Excluding the transfer
related to Rocky Mountain Bank, agricultural and agricultural real
estate loans decreased $50.8 million or 6%.
- Residential mortgage loans
decreased $64.4 million or 8% to $733.4 million compared to $797.8
million. Excluding the transfer related to Rocky Mountain Bank,
residential mortgage loans decreased $33.2 million or 4%.
Total deposits were $14.96 billion as of June
30, 2024, compared to $15.30 billion as of March 31, 2024, a
decrease of $345.6 million or 2%. Total deposits were $14.96
billion as of June 30, 2024, compared to $16.20 billion at December
31, 2023, which was a decrease of $1.25 billion or 8%. Excluding
the impact of the transfer of $538.3 million of deposits to held
for sale related to the planned sale of Rocky Mountain Bank,
deposits decreased $403.6 million or 3% during the second quarter
of 2024 and $706.8 million or 4% since year-end 2023.
Total customer deposits were $14.13 billion as
of June 30, 2024, compared to $14.27 billion at March 31, 2024, a
decrease of $135.6 million or less than 1%. Excluding the impact of
the transfer of $538.3 million of deposits to held for sale related
to the planned sale of Rocky Mountain Bank, customer deposits
decreased $193.7 million or 1%. Significant customer deposit
changes by category at June 30, 2024, compared to March 31, 2024,
included:
- Customer demand
deposits decreased $20.2 million or less than 1% to $4.24 billion
compared to $4.26 billion. Excluding the transfer related to Rocky
Mountain Bank, customer demand deposits decreased $31.6 million or
less than 1%.
- Customer savings
deposits decreased $118.2 million or 1% to $8.15 billion compared
to $8.27 billion. Excluding the transfer related to Rocky Mountain
Bank, customer savings deposits decreased $157.0 million or
2%.
- Customer time deposits increased
$2.8 million or less than 1% to $1.74 billion compared to $1.73
billion. Excluding the transfer related to Rocky Mountain Bank,
customer time deposits decreased $5.0 million or less than
1%.
Total customer deposits were $14.13 billion as
of June 30, 2024, compared to $14.86 billion at December 31, 2023,
a decrease of $722.7 million or 5%. Excluding the impact of the
transfer of $538.3 million of deposits to held for sale related to
the planned sale of Rocky Mountain Bank, customer deposits
decreased $184.4 million. Significant customer deposit changes by
category at June 30, 2024, compared to December 31, 2023,
included:
- Customer demand
deposits decreased $256.1 million or 6% to $4.24 billion compared
to $4.50 billion. Excluding the transfer related to Rocky Mountain
Bank, customer demand deposits decreased $123.5 million or 3%.
- Customer savings
deposits decreased $259.4 million or 3% to $8.15 billion compared
to $8.41 billion. Excluding the transfer related to Rocky Mountain
Bank, customer savings deposits increased $32.0 million or less
than 1%.
- Customer time deposits decreased
$207.2 million or 11% to $1.74 billion compared to $1.94 billion.
Excluding the transfer related to Rocky Mountain Bank, customer
time deposits decreased $92.9 million or 5%.
Total wholesale and institutional deposits were
$822.9 million as of June 30, 2024, a decrease of $209.9 million or
20% from $1.03 billion at March 31, 2024. Significant wholesale and
institutional deposit changes by category at June 30, 2024 compared
to March 31, 2024 included:
- Wholesale and
institutional savings deposits decreased $80.6 million or 20% to
$318.6 million compared to $399.3 million.
- Wholesale time deposits decreased
$129.3 million or 20% to $504.3 million compared to $633.6
million.
Total wholesale and institutional deposits were
$822.9 million as of June 30, 2024, which was a decrease of $522.4
million or 39% from $1.35 billion at December 31, 2023. Significant
wholesale and institutional deposit changes by category at June 30,
2024 compared to December 31, 2023 included:
- Wholesale and
institutional savings deposits decreased $75.7 million or 19% to
$318.6 million compared to $394.4 million.
- Wholesale time deposits decreased
$446.6 million or 47% to $504.3 million compared to $950.9
million.
Provision and Allowance
Provision and Allowance for Credit Losses
for Loans
Provision for credit losses for loans for the second quarter of
2024 was $9.7 million, an increase of $1.9 million from $7.8
million recorded in the second quarter of 2023.
The allowance for credit losses for loans
totaled $126.9 million at June 30, 2024 and $122.6 million at
December 31, 2023. The following items impacted the allowance for
credit losses for loans at June 30, 2024:
- Provision
expense for the six months ended June 30, 2024, totaled $13.4
million. Provision expense was primarily impacted in the second
quarter of 2024 by one new nonperforming food manufacturing loan
which increased the specific reserve by $10.0 million.
- Net charge-offs of $9.1 million, of
which the majority have been reserved for in prior periods, were
recorded for the first six months of 2024.
Provision and Allowance for Credit Losses
for Unfunded Commitments
The allowance for unfunded commitments decreased $3.4 million or
21% to $13.1 million at June 30, 2024, from $16.5 million at
December 31, 2023. The following impacted HTLF's allowance for
credit losses for unfunded commitments during 2024:
- Provision
benefit for the six months ended June 30, 2024, totaled $3.4
million.
- Reduction of
$84.6 million in unfunded commitments for construction loans, which
carry the highest loss rate.
- Total unfunded
commitments decreased $244.2 million or 5% to $4.38 billion at June
30, 2024 compared to $4.63 billion at December 31, 2023.
Total Provision and Allowance for Lending
Related Credit Losses
The total provision expense for lending related credit losses was
$9.0 million for the second quarter of 2024 compared to $5.4
million for the second quarter of 2023. The total allowance for
lending related credit losses was $139.9 million or 1.21% of total
loans at June 30, 2024, compared to $139.0 million or 1.15% of
total loans as of December 31, 2023.
Nonperforming Assets
Nonperforming assets were $111.3 million or
0.59% of total assets at June 30, 2024, compared to $110.5 million
or 0.57% of total assets at December 31, 2023. Nonperforming assets
were reduced by the payoff of a $29.6 million owner occupied
commercial real estate loan relationship. The reduction was offset
by an increase primarily due to the addition of a $33.2 million
food manufacturing customer and the addition of an $8.0 million
agriculture customer. Nonperforming loans were $103.8 million or
0.89% of total loans at June 30, 2024, compared to $97.9 million or
0.81% of total loans at December 31, 2023. At June 30, 2024, loans
delinquent 30-89 days were 0.25% of total loans compared to 0.09%
of total loans at December 31, 2023. The increase in the 30-89 day
delinquencies was due to a single $9.2 million real estate
construction loan which became current subsequent to June 30, 2024.
Other real estate owned, net, decreased $5.0 million or 40% to $7.5
million at June 30, 2024 from $12.5 million at December 31,
2023.
Non-GAAP Financial Measures
This earnings release contains references to
financial measures which are not defined by generally accepted
accounting principles ("GAAP"). Management believes the non-GAAP
measures are helpful for investors to analyze and evaluate the
company's financial condition and operating results. However, these
non-GAAP measures have inherent limitations and should not be
considered a substitute for operating results determined in
accordance with GAAP. Additionally, because non-GAAP measures are
not standardized, it may not be possible to compare the non-GAAP
measures in this earnings release with other companies' non-GAAP
measures. Reconciliations of each non-GAAP measure to the most
directly comparable GAAP measure may be found in the financial
tables in this earnings release.
Below are the non-GAAP measures included in this earnings
release, management's reason for including each measure and the
method of calculating each measure:
- Adjusted earnings available to
common stockholders and adjusted diluted earnings per common share,
adjust net income for the gain/loss from sale of securities, and
other non-operating expenses as well as the tax effect of those
transactions. Management believes these measures enhance the
comparability net income available to common stockholders as it
reflects adjustments commonly made by management, investors and
analysts to evaluate the ongoing operations and enhance
comparability with the results of prior periods.
- Adjusted annualized return on
average assets, adjusts net income for the gain/loss from sale of
securities, and other non-operating expenses as well as the tax
effect of those transactions. Management believes this measure
enhances the comparability of annualized return on average assets
as it reflects adjustments commonly made by management, investors
and analysts to evaluate the ongoing operations and enhance
comparability with the results of prior periods.
- Annualized net
interest margin, fully tax-equivalent, adjusts net interest income
for the tax-favored status of certain loans and securities.
Management believes this measure enhances the comparability of net
interest income arising from taxable and tax-exempt sources.
- Adjusted
efficiency ratio, fully tax equivalent, expresses noninterest
expenses as a percentage of fully tax-equivalent net interest
income and noninterest income. This efficiency ratio is presented
on a tax-equivalent basis which adjusts net interest income and
noninterest expenses for the tax favored status of certain loans,
securities, and tax credit projects. Management believes the
presentation of this non-GAAP measure provides supplemental useful
information for proper understanding of the financial results as it
enhances the comparability of income and expenses arising from
taxable and nontaxable sources and excludes specific items as noted
in reconciliation contained in this earnings release.
- Net interest
income, fully tax equivalent, is net income adjusted for the
tax-favored status of certain loans and securities. Management
believes this measure enhances the comparability of net interest
income arising from taxable and tax-exempt sources. Net interest
margin, fully tax equivalent, is net interest income adjusted for
the tax-favored status of certain loans and securities divided by
average earning assets.
- Tangible book
value per common share is total common equity less goodwill and
core deposit and customer relationship intangibles, net, divided by
common shares outstanding, net of treasury. This measure is
included as it is considered to be a critical metric to analyze and
evaluate use of equity, financial condition and capital
strength.
- Tangible common
equity ratio is total common equity less goodwill and core deposit
and customer relationship intangibles, net, divided by total assets
less goodwill and core deposit and customer relationship
intangibles, net. This measure is included as it is considered to
be a critical metric to analyze and evaluate financial condition
and capital strength.
- Adjusted
annualized return on average common equity, adjusts net income for
the loss from sale of securities, and other non-operating expenses
as well as the tax effect of those transactions. Management
believes this measure enhances the comparability of annualized
return on average assets as it reflects adjustments commonly made
by management, investors and analysts to evaluate the ongoing
operations and enhance comparability with the results of prior
periods.
- Annualized
return on average tangible common equity is net income excluding
intangible amortization calculated as (1) net income excluding
tax-effected core deposit and customer relationship intangibles
amortization, divided by (2) average common equity less goodwill
and core deposit and customer relationship intangibles, net. This
measure is included as it is considered to be a critical metric to
analyze and evaluate use of equity, financial condition and capital
strength.
- Adjusted
annualized return on average tangible common equity, adjusts net
income available to common stockholders for the loss from sale of
securities, and other non-operating expenses as well as the tax
effect of those transactions. Management believes this measure
enhances the comparability of annualized return on average assets
as it reflects adjustments commonly made by management, investors
and analysts to evaluate the ongoing operations and enhance
comparability with the results of prior periods.
- Annualized ratio of core expenses
to average assets adjusts noninterest expenses to exclude specific
items noted in the reconciliation. Management includes this measure
as it is considered to be a critical metric to analyze and evaluate
controllable expenses related to primary business
operations.
About HTLF
Heartland Financial USA, Inc., is a Denver,
Colorado-based bank holding company operating under the brand name
HTLF, with assets of $18.81 billion as of June 30, 2024. HTLF's
banks serve communities in Arizona, California, Colorado, Illinois,
Iowa, Kansas, Minnesota, Missouri, New Mexico, Texas and Wisconsin.
HTLF is committed to its core commercial business, supported by a
strong retail operation, and provides a diversified line of
financial services including treasury management, wealth
management, investments and residential mortgage. Additional
information is available at www.htlf.com.
Safe Harbor Statement
This release (including any information
incorporated herein by reference), and future oral and written
statements of the company and its management, may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, with respect to the
business, financial condition, results of operations, plans,
objectives and future performance of HTLF.
Any statements about the company's expectations,
beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking.
Forward-looking statements may include information about possible
or assumed future results of the company's operations or
performance. These forward-looking statements are generally
identified by the use of the words such as "believe", "expect",
"intent", "anticipate", "plan", "intend", "estimate", "project",
"may", "will", "would", "could", "should", "may", "view",
"opportunity", "potential", or similar or negative expressions of
these words or phrases that are used in this release, and future
oral and written statements of the company and its management.
Although the company may make these statements based on
management’s experience, beliefs, expectations, assumptions and
best estimate of future events, the ability of the company to
predict results or the actual effect or outcomes of plans or
strategies is inherently uncertain, and there may be events or
factors that management has not anticipated. Therefore, the
accuracy and achievement of such forward-looking statements and
estimates are subject to a number of risks, many of which are
beyond the ability of management to control or predict, that could
cause actual results to differ materially from those in its
forward-looking statements. These factors, which the company
currently believes could have a material effect on its operations
and future prospects, are detailed below and in the risk factors in
HTLF's reports filed with the Securities and Exchange Commission
("SEC"), including the "Risk Factors" section under Item 1A of Part
I of the company’s Annual Report on Form 10-K for the year ended
December 31, 2023 and updates in HTLF's Forms 10-Q filed
thereafter, and include, among others:
- Economic and
Market Conditions Risks, including risks related to the
deterioration of the U.S. economy in general and in the local
economies in which HTLF conducts its operations and future civil
unrest, natural disasters, pandemics and governmental measures
addressing them, climate change and climate-related regulations,
persistent inflation, higher interest rates, supply chain issues,
labor shortages, terrorist threats or acts of war;
- Credit Risks,
including risks of increasing credit losses due to deterioration in
the financial condition of HTLF's borrowers, changes in asset and
collateral values due to climate and other borrower industry risks,
which may impact the provision for credit losses and net
charge-offs;
- Liquidity and
Interest Rate Risks, including the impact of capital market
conditions, rising interest rates and changes in monetary policy on
our borrowings and net interest income;
- Risks related to
the planned merger with UMB Financial Corporation (the “Merger”),
the fluctuation of the market value of the merger consideration,
risks related to combining our businesses, including expenses
related to the Merger and integration of the combined entity, risks
that the Merger may not occur, and the risk of litigation related
to the Merger;
- Operational
Risks, including processing, information systems, cybersecurity,
vendor, business interruption, and fraud risks;
- Strategic and
External Risks, including economic, political, and competitive
forces impacting our business;
- Legal,
Compliance and Reputational Risks, including regulatory and
litigation risks; and
- Risks of Owning Stock in HTLF,
including stock price volatility and dilution as a result of future
equity offerings and acquisitions.
There can be no assurance that other factors not
currently anticipated by HTLF will not materially and adversely
affect HTLF's business, financial condition and results of
operations. Additionally, all statements in this release, including
forward-looking statements speak only as of the date they are made.
HTLF does not undertake and specifically disclaims any obligation
to publicly release the results of any revisions which may be made
to or correct or update any forward-looking statement to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events or to
otherwise update any statement in light of new information or
future events. Further information concerning HTLF and its
business, including additional factors that could materially affect
HTLF's financial results, is included in HTLF’s filings with the
SEC.
-FINANCIAL TABLES FOLLOW-
| CONTACT: |
|
| Kevin L. Thompson |
|
| Executive Vice President |
|
| Chief Financial Officer |
|
| (563) 589-1994 |
|
| kthompson@htlf.com |
|
| |
|
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS
IN THOUSANDS, EXCEPT PER SHARE DATA |
|
|
For the Quarter Ended
June 30, |
|
For the Six Months Ended
June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Interest Income |
|
|
|
|
|
|
|
| Interest and fees on
loans |
$ |
199,161 |
|
|
$ |
168,899 |
|
|
$ |
394,822 |
|
|
$ |
322,742 |
|
| Interest on securities: |
|
|
|
|
|
|
|
|
Taxable |
|
47,381 |
|
|
|
58,172 |
|
|
|
94,395 |
|
|
|
114,148 |
|
|
Nontaxable |
|
6,042 |
|
|
|
6,378 |
|
|
|
12,083 |
|
|
|
12,406 |
|
| Interest on federal funds
sold |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Interest on deposits with
other banks and short-term investments |
|
3,045 |
|
|
|
2,051 |
|
|
|
6,051 |
|
|
|
3,182 |
|
| Total Interest
Income |
|
255,629 |
|
|
|
235,500 |
|
|
|
507,351 |
|
|
|
452,478 |
|
| Interest
Expense |
|
|
|
|
|
|
|
| Interest on deposits |
|
80,499 |
|
|
|
81,975 |
|
|
|
164,633 |
|
|
|
138,873 |
|
| Interest on borrowings |
|
10,825 |
|
|
|
848 |
|
|
|
18,349 |
|
|
|
3,270 |
|
| Interest on term debt |
|
5,564 |
|
|
|
5,545 |
|
|
|
11,413 |
|
|
|
10,991 |
|
| Total Interest
Expense |
|
96,888 |
|
|
|
88,368 |
|
|
|
194,395 |
|
|
|
153,134 |
|
| Net Interest
Income |
|
158,741 |
|
|
|
147,132 |
|
|
|
312,956 |
|
|
|
299,344 |
|
| Provision for credit
losses |
|
9,008 |
|
|
|
5,379 |
|
|
|
9,994 |
|
|
|
8,453 |
|
| Net Interest Income
After Provision for Credit Losses |
|
149,733 |
|
|
|
141,753 |
|
|
|
302,962 |
|
|
|
290,891 |
|
| Noninterest
Income |
|
|
|
|
|
|
|
| Service charges and fees |
|
16,964 |
|
|
|
19,627 |
|
|
|
34,027 |
|
|
|
36,763 |
|
| Loan servicing income |
|
107 |
|
|
|
411 |
|
|
|
238 |
|
|
|
1,125 |
|
| Trust fees |
|
5,532 |
|
|
|
5,419 |
|
|
|
10,575 |
|
|
|
11,076 |
|
| Brokerage and insurance
commissions |
|
894 |
|
|
|
677 |
|
|
|
1,648 |
|
|
|
1,373 |
|
| Capital markets fees |
|
1,996 |
|
|
|
4,037 |
|
|
|
2,887 |
|
|
|
6,486 |
|
| Securities gains (losses),
net |
|
(10,111 |
) |
|
|
(314 |
) |
|
|
(10,053 |
) |
|
|
(1,418 |
) |
| Unrealized gain/(loss) on
equity securities, net |
|
133 |
|
|
|
(41 |
) |
|
|
228 |
|
|
|
152 |
|
| Net gains on sale of loans
held for sale |
|
— |
|
|
|
1,050 |
|
|
|
104 |
|
|
|
2,881 |
|
| Income on bank owned life
insurance |
|
1,326 |
|
|
|
1,220 |
|
|
|
2,503 |
|
|
|
2,184 |
|
| Other noninterest income |
|
1,366 |
|
|
|
407 |
|
|
|
3,713 |
|
|
|
1,870 |
|
| Total Noninterest
Income |
|
18,207 |
|
|
|
32,493 |
|
|
|
45,870 |
|
|
|
62,492 |
|
| Noninterest
Expense |
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
65,120 |
|
|
|
62,099 |
|
|
|
129,075 |
|
|
|
124,248 |
|
| Occupancy |
|
6,262 |
|
|
|
6,691 |
|
|
|
13,525 |
|
|
|
13,900 |
|
| Furniture and equipment |
|
2,155 |
|
|
|
3,063 |
|
|
|
4,492 |
|
|
|
5,978 |
|
| Professional fees |
|
15,372 |
|
|
|
15,194 |
|
|
|
30,903 |
|
|
|
27,991 |
|
| FDIC insurance
assessments |
|
3,340 |
|
|
|
3,035 |
|
|
|
8,309 |
|
|
|
6,314 |
|
| Advertising |
|
1,368 |
|
|
|
3,052 |
|
|
|
2,726 |
|
|
|
5,037 |
|
| Core deposit intangibles
amortization |
|
1,421 |
|
|
|
1,715 |
|
|
|
2,913 |
|
|
|
3,503 |
|
| Other real estate and loan
collection expenses, net |
|
515 |
|
|
|
348 |
|
|
|
1,027 |
|
|
|
503 |
|
| (Gain) loss on
sales/valuations of assets, net |
|
193 |
|
|
|
(3,372 |
) |
|
|
407 |
|
|
|
(2,257 |
) |
| Acquisition, integration and
restructuring costs |
|
5,973 |
|
|
|
1,892 |
|
|
|
7,348 |
|
|
|
3,565 |
|
| Partnership investment in tax
credit projects |
|
222 |
|
|
|
154 |
|
|
|
716 |
|
|
|
692 |
|
| Other noninterest expense |
|
14,303 |
|
|
|
15,575 |
|
|
|
28,398 |
|
|
|
31,015 |
|
| Total Noninterest
Expense |
|
116,244 |
|
|
|
109,446 |
|
|
|
229,839 |
|
|
|
220,489 |
|
| Income Before Income
Taxes |
|
51,696 |
|
|
|
64,800 |
|
|
|
118,993 |
|
|
|
132,894 |
|
| Income taxes |
|
11,954 |
|
|
|
15,384 |
|
|
|
27,544 |
|
|
|
30,702 |
|
| Net
Income/(Loss) |
|
39,742 |
|
|
|
49,416 |
|
|
|
91,449 |
|
|
|
102,192 |
|
| Preferred dividends |
|
(2,012 |
) |
|
|
(2,012 |
) |
|
|
(4,025 |
) |
|
|
(4,025 |
) |
| Net Income/(Loss)
Available to Common Stockholders |
$ |
37,730 |
|
|
$ |
47,404 |
|
|
$ |
87,424 |
|
|
$ |
98,167 |
|
| Earnings/(loss) per
common share-diluted |
$ |
0.88 |
|
|
$ |
1.11 |
|
|
$ |
2.03 |
|
|
$ |
2.30 |
|
| Weighted average
shares outstanding-diluted |
|
43,060,354 |
|
|
|
42,757,603 |
|
|
|
43,001,157 |
|
|
|
42,753,197 |
|
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS
IN THOUSANDS, EXCEPT PER SHARE DATA |
|
|
For the Quarter Ended |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Interest Income |
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
199,161 |
|
|
$ |
195,661 |
|
|
$ |
192,861 |
|
|
$ |
182,394 |
|
|
$ |
168,899 |
|
| Interest on securities: |
|
|
|
|
|
|
|
|
|
|
Taxable |
|
47,381 |
|
|
|
47,014 |
|
|
|
54,573 |
|
|
|
54,800 |
|
|
|
58,172 |
|
|
Nontaxable |
|
6,042 |
|
|
|
6,041 |
|
|
|
6,278 |
|
|
|
6,584 |
|
|
|
6,378 |
|
| Interest on federal funds
sold |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
| Interest on deposits with
other banks and short-term investments |
|
3,045 |
|
|
|
3,006 |
|
|
|
2,174 |
|
|
|
1,651 |
|
|
|
2,051 |
|
| Total Interest
Income |
|
255,629 |
|
|
|
251,722 |
|
|
|
255,886 |
|
|
|
245,432 |
|
|
|
235,500 |
|
| Interest
Expense |
|
|
|
|
|
|
|
|
|
| Interest on deposits |
|
80,499 |
|
|
|
84,134 |
|
|
|
88,071 |
|
|
|
92,744 |
|
|
|
81,975 |
|
| Interest on borrowings |
|
10,825 |
|
|
|
7,524 |
|
|
|
5,874 |
|
|
|
1,167 |
|
|
|
848 |
|
| Interest on term debt |
|
5,564 |
|
|
|
5,849 |
|
|
|
5,804 |
|
|
|
5,765 |
|
|
|
5,545 |
|
| Total Interest
Expense |
|
96,888 |
|
|
|
97,507 |
|
|
|
99,749 |
|
|
|
99,676 |
|
|
|
88,368 |
|
| Net Interest
Income |
|
158,741 |
|
|
|
154,215 |
|
|
|
156,137 |
|
|
|
145,756 |
|
|
|
147,132 |
|
| Provision for credit
losses |
|
9,008 |
|
|
|
986 |
|
|
|
11,738 |
|
|
|
1,516 |
|
|
|
5,379 |
|
| Net Interest Income
After Provision for Credit Losses |
|
149,733 |
|
|
|
153,229 |
|
|
|
144,399 |
|
|
|
144,240 |
|
|
|
141,753 |
|
| Noninterest
Income |
|
|
|
|
|
|
|
|
|
| Service charges and fees |
|
16,964 |
|
|
|
17,063 |
|
|
|
18,708 |
|
|
|
18,553 |
|
|
|
19,627 |
|
| Loan servicing income |
|
107 |
|
|
|
131 |
|
|
|
158 |
|
|
|
278 |
|
|
|
411 |
|
| Trust fees |
|
5,532 |
|
|
|
5,043 |
|
|
|
4,905 |
|
|
|
4,734 |
|
|
|
5,419 |
|
| Brokerage and insurance
commissions |
|
894 |
|
|
|
754 |
|
|
|
729 |
|
|
|
692 |
|
|
|
677 |
|
| Capital markets fees |
|
1,996 |
|
|
|
891 |
|
|
|
1,676 |
|
|
|
1,845 |
|
|
|
4,037 |
|
| Securities gains (losses),
net |
|
(10,111 |
) |
|
|
58 |
|
|
|
(140,007 |
) |
|
|
(114 |
) |
|
|
(314 |
) |
| Unrealized gain/(loss) on
equity securities, net |
|
133 |
|
|
|
95 |
|
|
|
75 |
|
|
|
13 |
|
|
|
(41 |
) |
| Net gains on sale of loans
held for sale |
|
— |
|
|
|
104 |
|
|
|
94 |
|
|
|
905 |
|
|
|
1,050 |
|
| Income on bank owned life
insurance |
|
1,326 |
|
|
|
1,177 |
|
|
|
729 |
|
|
|
858 |
|
|
|
1,220 |
|
| Other noninterest income |
|
1,366 |
|
|
|
2,347 |
|
|
|
1,132 |
|
|
|
619 |
|
|
|
407 |
|
| Total Noninterest
Income |
|
18,207 |
|
|
|
27,663 |
|
|
|
(111,801 |
) |
|
|
28,383 |
|
|
|
32,493 |
|
| Noninterest
Expense |
|
|
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
65,120 |
|
|
|
63,955 |
|
|
|
64,766 |
|
|
|
62,262 |
|
|
|
62,099 |
|
| Occupancy |
|
6,262 |
|
|
|
7,263 |
|
|
|
6,509 |
|
|
|
6,438 |
|
|
|
6,691 |
|
| Furniture and equipment |
|
2,155 |
|
|
|
2,337 |
|
|
|
2,901 |
|
|
|
2,720 |
|
|
|
3,063 |
|
| Professional fees |
|
15,372 |
|
|
|
15,531 |
|
|
|
17,060 |
|
|
|
13,616 |
|
|
|
15,194 |
|
| FDIC insurance
assessments |
|
3,340 |
|
|
|
4,969 |
|
|
|
10,313 |
|
|
|
3,313 |
|
|
|
3,035 |
|
| Advertising |
|
1,368 |
|
|
|
1,358 |
|
|
|
1,677 |
|
|
|
1,633 |
|
|
|
3,052 |
|
| Core deposit intangibles
amortization |
|
1,421 |
|
|
|
1,492 |
|
|
|
1,611 |
|
|
|
1,625 |
|
|
|
1,715 |
|
| Other real estate and loan
collection expenses, net |
|
515 |
|
|
|
512 |
|
|
|
505 |
|
|
|
481 |
|
|
|
348 |
|
| (Gain) loss on
sales/valuations of assets, net |
|
193 |
|
|
|
214 |
|
|
|
2,072 |
|
|
|
108 |
|
|
|
(3,372 |
) |
| Acquisition, integration and
restructuring costs |
|
5,973 |
|
|
|
1,375 |
|
|
|
4,365 |
|
|
|
2,429 |
|
|
|
1,892 |
|
| Partnership investment in tax
credit projects |
|
222 |
|
|
|
494 |
|
|
|
3,573 |
|
|
|
1,136 |
|
|
|
154 |
|
| Other noninterest expense |
|
14,303 |
|
|
|
14,095 |
|
|
|
14,933 |
|
|
|
15,292 |
|
|
|
15,575 |
|
| Total Noninterest
Expense |
|
116,244 |
|
|
|
113,595 |
|
|
|
130,285 |
|
|
|
111,053 |
|
|
|
109,446 |
|
| Income Before Income
Taxes |
|
51,696 |
|
|
|
67,297 |
|
|
|
(97,687 |
) |
|
|
61,570 |
|
|
|
64,800 |
|
| Income taxes |
|
11,954 |
|
|
|
15,590 |
|
|
|
(27,324 |
) |
|
|
13,479 |
|
|
|
15,384 |
|
| Net
Income/(Loss) |
|
39,742 |
|
|
|
51,707 |
|
|
|
(70,363 |
) |
|
|
48,091 |
|
|
|
49,416 |
|
| Preferred dividends |
|
(2,012 |
) |
|
|
(2,013 |
) |
|
|
(2,012 |
) |
|
|
(2,013 |
) |
|
|
(2,012 |
) |
| Net Income/(Loss)
Available to Common Stockholders |
$ |
37,730 |
|
|
$ |
49,694 |
|
|
$ |
(72,375 |
) |
|
$ |
46,078 |
|
|
$ |
47,404 |
|
| Earnings/(loss) per
common share-diluted |
$ |
0.88 |
|
|
$ |
1.16 |
|
|
$ |
(1.69 |
) |
|
$ |
1.08 |
|
|
$ |
1.11 |
|
| Weighted average
shares outstanding-diluted |
|
43,060,354 |
|
|
|
42,915,768 |
|
|
|
42,838,405 |
|
|
|
42,812,563 |
|
|
|
42,757,603 |
|
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS
IN THOUSANDS, EXCEPT PER SHARE DATA |
|
|
As of |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
226,735 |
|
|
$ |
208,176 |
|
|
$ |
275,554 |
|
|
$ |
248,756 |
|
|
$ |
317,303 |
|
| Interest-bearing deposits with
other banks and short-term investments |
|
147,211 |
|
|
|
236,190 |
|
|
|
47,459 |
|
|
|
99,239 |
|
|
|
82,884 |
|
| Cash and cash equivalents |
|
373,946 |
|
|
|
444,366 |
|
|
|
323,013 |
|
|
|
347,995 |
|
|
|
400,187 |
|
| Time deposits in other
financial institutions |
|
1,340 |
|
|
|
1,240 |
|
|
|
1,240 |
|
|
|
1,490 |
|
|
|
1,490 |
|
| Securities: |
|
|
|
|
|
|
|
|
|
|
Carried at fair value |
|
4,185,054 |
|
|
|
4,418,222 |
|
|
|
4,646,891 |
|
|
|
5,482,687 |
|
|
|
5,798,041 |
|
|
Held to maturity, at cost |
|
842,980 |
|
|
|
841,055 |
|
|
|
838,241 |
|
|
|
835,468 |
|
|
|
834,673 |
|
|
Other investments, at cost |
|
70,684 |
|
|
|
68,524 |
|
|
|
91,277 |
|
|
|
90,001 |
|
|
|
72,291 |
|
| Loans held for sale |
|
348,761 |
|
|
|
352,744 |
|
|
|
5,071 |
|
|
|
6,262 |
|
|
|
14,353 |
|
| Loans: |
|
|
|
|
|
|
|
|
|
|
Held to maturity |
|
11,608,309 |
|
|
|
11,644,641 |
|
|
|
12,068,645 |
|
|
|
11,872,436 |
|
|
|
11,717,974 |
|
|
Allowance for credit losses |
|
(126,861 |
) |
|
|
(123,934 |
) |
|
|
(122,566 |
) |
|
|
(110,208 |
) |
|
|
(111,198 |
) |
| Loans, net |
|
11,481,448 |
|
|
|
11,520,707 |
|
|
|
11,946,079 |
|
|
|
11,762,228 |
|
|
|
11,606,776 |
|
| Premises, furniture and
equipment, net |
|
175,953 |
|
|
|
176,582 |
|
|
|
181,070 |
|
|
|
187,436 |
|
|
|
190,420 |
|
| Goodwill |
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
| Core deposit intangibles,
net |
|
15,501 |
|
|
|
16,923 |
|
|
|
18,415 |
|
|
|
20,026 |
|
|
|
21,651 |
|
| Cash surrender value on life
insurance |
|
199,036 |
|
|
|
197,671 |
|
|
|
197,085 |
|
|
|
196,694 |
|
|
|
195,793 |
|
| Other real estate, net |
|
7,533 |
|
|
|
2,590 |
|
|
|
12,548 |
|
|
|
14,362 |
|
|
|
2,677 |
|
| Other assets |
|
534,429 |
|
|
|
516,198 |
|
|
|
574,772 |
|
|
|
609,139 |
|
|
|
510,359 |
|
| Total
Assets |
$ |
18,812,670 |
|
|
$ |
19,132,827 |
|
|
$ |
19,411,707 |
|
|
$ |
20,129,793 |
|
|
$ |
20,224,716 |
|
| Liabilities and
Equity |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
| Demand |
$ |
4,244,169 |
|
|
$ |
4,264,390 |
|
|
$ |
4,500,304 |
|
|
$ |
4,792,813 |
|
|
$ |
4,897,858 |
|
| Savings |
|
8,470,416 |
|
|
|
8,669,221 |
|
|
|
8,805,597 |
|
|
|
8,754,911 |
|
|
|
8,772,596 |
|
| Time |
|
2,242,005 |
|
|
|
2,368,555 |
|
|
|
2,895,813 |
|
|
|
3,553,269 |
|
|
|
3,993,089 |
|
| Total deposits |
|
14,956,590 |
|
|
|
15,302,166 |
|
|
|
16,201,714 |
|
|
|
17,100,993 |
|
|
|
17,663,543 |
|
| Deposits held for sale |
|
538,308 |
|
|
|
596,328 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Borrowings |
|
694,909 |
|
|
|
650,033 |
|
|
|
622,255 |
|
|
|
392,634 |
|
|
|
44,364 |
|
| Term debt |
|
372,988 |
|
|
|
372,652 |
|
|
|
372,396 |
|
|
|
372,059 |
|
|
|
372,403 |
|
| Accrued expenses and other
liabilities |
|
222,025 |
|
|
|
232,815 |
|
|
|
282,225 |
|
|
|
438,577 |
|
|
|
285,416 |
|
| Total
Liabilities |
|
16,784,820 |
|
|
|
17,153,994 |
|
|
|
17,478,590 |
|
|
|
18,304,263 |
|
|
|
18,365,726 |
|
| Stockholders'
Equity |
|
|
|
|
|
|
|
|
|
| Preferred equity |
|
110,705 |
|
|
|
110,705 |
|
|
|
110,705 |
|
|
|
110,705 |
|
|
|
110,705 |
|
| Common stock |
|
42,852 |
|
|
|
42,784 |
|
|
|
42,688 |
|
|
|
42,656 |
|
|
|
42,645 |
|
| Capital surplus |
|
1,096,619 |
|
|
|
1,093,207 |
|
|
|
1,090,740 |
|
|
|
1,088,267 |
|
|
|
1,087,358 |
|
| Retained earnings |
|
1,203,092 |
|
|
|
1,178,330 |
|
|
|
1,141,501 |
|
|
|
1,226,740 |
|
|
|
1,193,522 |
|
| Accumulated other
comprehensive income/(loss) |
|
(425,418 |
) |
|
|
(446,193 |
) |
|
|
(452,517 |
) |
|
|
(642,838 |
) |
|
|
(575,240 |
) |
| Total
Equity |
|
2,027,850 |
|
|
|
1,978,833 |
|
|
|
1,933,117 |
|
|
|
1,825,530 |
|
|
|
1,858,990 |
|
| Total Liabilities and
Equity |
$ |
18,812,670 |
|
|
$ |
19,132,827 |
|
|
$ |
19,411,707 |
|
|
$ |
20,129,793 |
|
|
$ |
20,224,716 |
|
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
|
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| |
For the Quarter Ended |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Average Balances |
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
19,043,362 |
|
|
$ |
19,296,638 |
|
|
$ |
19,667,825 |
|
|
$ |
20,207,920 |
|
|
$ |
20,221,511 |
|
| Loans, net of unearned |
|
12,010,289 |
|
|
|
12,021,930 |
|
|
|
11,938,272 |
|
|
|
11,800,064 |
|
|
|
11,625,442 |
|
| Total deposits |
|
15,562,920 |
|
|
|
16,042,402 |
|
|
|
16,709,394 |
|
|
|
17,507,813 |
|
|
|
17,689,138 |
|
|
Customer deposits |
|
14,768,407 |
|
|
|
14,816,652 |
|
|
|
14,969,948 |
|
|
|
14,699,235 |
|
|
|
14,655,535 |
|
| Earning assets |
|
17,331,435 |
|
|
|
17,597,068 |
|
|
|
17,853,957 |
|
|
|
18,439,010 |
|
|
|
18,523,552 |
|
| Interest-bearing
liabilities |
|
12,461,957 |
|
|
|
12,607,745 |
|
|
|
12,721,680 |
|
|
|
13,158,631 |
|
|
|
13,209,794 |
|
| Common equity |
|
1,863,236 |
|
|
|
1,832,959 |
|
|
|
1,729,086 |
|
|
|
1,746,818 |
|
|
|
1,727,013 |
|
| Total stockholders'
equity |
|
1,973,941 |
|
|
|
1,943,664 |
|
|
|
1,839,791 |
|
|
|
1,857,523 |
|
|
|
1,837,718 |
|
| Tangible common equity
(non-GAAP)(1) |
|
1,271,046 |
|
|
|
1,239,313 |
|
|
|
1,133,888 |
|
|
|
1,149,992 |
|
|
|
1,128,527 |
|
| |
|
|
|
|
|
|
|
|
|
| Key Performance
Ratios |
|
|
|
|
|
|
|
|
|
| Annualized return on average
assets |
|
0.84 |
% |
|
|
1.08 |
% |
|
(1.42 |
)% |
|
|
0.94 |
% |
|
|
0.98 |
% |
| Adjusted annualized return on
average assets (non-GAAP)(1) |
|
1.09 |
|
|
|
1.13 |
|
|
|
0.96 |
|
|
|
0.98 |
|
|
|
0.96 |
|
| Annualized return on average
common equity (GAAP) |
|
8.14 |
|
|
|
10.90 |
|
|
|
(16.61 |
) |
|
|
10.47 |
|
|
|
11.01 |
|
| Adjusted annualized return on
average common equity (non-GAAP)(1) |
|
10.71 |
|
|
|
11.50 |
|
|
|
10.46 |
|
|
|
10.92 |
|
|
|
10.80 |
|
| Annualized return on average
tangible common equity (non-GAAP)(1) |
|
12.28 |
|
|
|
16.49 |
|
|
|
(24.89 |
) |
|
|
16.32 |
|
|
|
17.31 |
|
| Adjusted annualized return on
average tangible common equity (non-GAAP)(1) |
|
16.05 |
|
|
|
17.38 |
|
|
|
16.38 |
|
|
|
17.02 |
|
|
|
17.00 |
|
| Annualized ratio of net
charge-offs/(recoveries) to average loans |
|
0.23 |
|
|
|
0.08 |
|
|
|
0.01 |
|
|
|
0.12 |
|
|
|
0.32 |
|
| Annualized net interest margin
(GAAP) |
|
3.68 |
|
|
|
3.52 |
|
|
|
3.47 |
|
|
|
3.14 |
|
|
|
3.19 |
|
| Annualized net interest
margin, fully tax-equivalent (non-GAAP)(1) |
|
3.73 |
|
|
|
3.57 |
|
|
|
3.52 |
|
|
|
3.18 |
|
|
|
3.23 |
|
| Annualized cost of
deposits |
|
2.08 |
|
|
|
2.11 |
|
|
|
2.09 |
|
|
|
2.10 |
|
|
|
1.86 |
|
| Efficiency ratio (GAAP) |
|
65.70 |
|
|
|
62.46 |
|
|
|
293.86 |
|
|
|
63.77 |
|
|
|
60.93 |
|
| Adjusted efficiency ratio,
fully tax-equivalent (non-GAAP)(1) |
|
57.73 |
|
|
|
58.77 |
|
|
|
59.31 |
|
|
|
59.95 |
|
|
|
59.88 |
|
| Annualized ratio of total
noninterest expenses to average assets (GAAP) |
|
2.46 |
|
|
|
2.37 |
|
|
|
2.63 |
|
|
|
2.18 |
|
|
|
2.17 |
|
| Annualized ratio of core
expenses to average assets (non-GAAP)(1) |
|
2.30 |
|
|
|
2.25 |
|
|
|
2.23 |
|
|
|
2.08 |
|
|
|
2.16 |
|
| |
|
|
|
|
|
|
|
|
|
| |
For the Quarter Ended
June 30, |
|
For the Six Months Ended
June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Average Balances |
|
|
|
|
|
|
|
| Assets |
$ |
19,043,362 |
|
|
$ |
20,221,511 |
|
|
$ |
19,170,002 |
|
|
$ |
20,170,044 |
|
| Loans, net of unearned |
|
12,010,289 |
|
|
|
11,625,442 |
|
|
|
12,016,110 |
|
|
|
11,502,443 |
|
| Total deposits |
|
15,562,920 |
|
|
|
17,689,138 |
|
|
|
15,802,661 |
|
|
|
17,598,009 |
|
|
Customer deposits |
|
14,768,407 |
|
|
|
14,655,535 |
|
|
|
14,792,530 |
|
|
|
14,888,066 |
|
| Earning assets |
|
17,331,435 |
|
|
|
18,523,552 |
|
|
|
17,464,253 |
|
|
|
18,458,462 |
|
| Interest-bearing
liabilities |
|
12,461,957 |
|
|
|
13,209,794 |
|
|
|
12,534,852 |
|
|
|
12,897,747 |
|
| Common equity |
|
1,863,236 |
|
|
|
1,727,013 |
|
|
|
1,848,098 |
|
|
|
1,691,633 |
|
| Total stockholders'
equity |
|
1,973,941 |
|
|
|
1,837,718 |
|
|
|
1,958,803 |
|
|
|
1,802,338 |
|
| Tangible common equity
(non-GAAP)(1) |
|
1,271,046 |
|
|
|
1,128,527 |
|
|
|
1,255,180 |
|
|
|
1,092,273 |
|
| |
|
|
|
|
|
|
|
| Key Performance
Ratios |
|
|
|
|
|
|
|
| Annualized return on average
assets |
|
0.84 |
% |
|
|
0.98 |
% |
|
|
0.96 |
% |
|
|
1.02 |
% |
| Adjusted annualized return on
average assets (non-GAAP)(1) |
|
1.09 |
|
|
|
0.96 |
|
|
|
1.11 |
|
|
|
1.04 |
|
| Annualized return on average
common equity (GAAP) |
|
8.14 |
|
|
|
11.01 |
|
|
|
9.51 |
|
|
|
11.70 |
|
| Adjusted annualized return on
average common equity (non-GAAP)(1) |
|
10.71 |
|
|
|
10.80 |
|
|
|
11.10 |
|
|
|
11.95 |
|
| Annualized return on average
tangible common equity (non-GAAP)(1) |
|
12.28 |
|
|
|
17.31 |
|
|
|
14.36 |
|
|
|
18.62 |
|
| Adjusted annualized return on
average tangible common equity (non-GAAP)(1) |
|
16.05 |
|
|
|
17.00 |
|
|
|
16.70 |
|
|
|
19.00 |
|
| Annualized ratio of net
charge-offs/(recoveries) to average loans |
|
0.23 |
|
|
|
0.32 |
|
|
|
0.15 |
|
|
|
0.15 |
|
| Annualized net interest margin
(GAAP) |
|
3.68 |
|
|
|
3.19 |
|
|
|
3.60 |
|
|
|
3.27 |
|
| Annualized net interest
margin, fully tax-equivalent (non-GAAP)(1) |
|
3.73 |
|
|
|
3.23 |
|
|
|
3.65 |
|
|
|
3.32 |
|
| Annualized cost of
deposits |
|
2.08 |
|
|
|
1.86 |
|
|
|
2.10 |
|
|
|
1.59 |
|
| Efficiency ratio (GAAP) |
|
65.70 |
|
|
|
60.93 |
|
|
|
64.05 |
|
|
|
60.94 |
|
| Adjusted efficiency ratio,
fully tax-equivalent (non-GAAP)(1) |
|
57.73 |
|
|
|
59.88 |
|
|
|
58.25 |
|
|
|
58.51 |
|
| Annualized ratio of total
noninterest expenses to average assets (GAAP) |
|
2.46 |
|
|
|
2.17 |
|
|
|
2.41 |
|
|
|
2.20 |
|
| Annualized ratio of core
expenses to average assets (non-GAAP)(1) |
|
2.30 |
|
|
|
2.16 |
|
|
|
2.28 |
|
|
|
2.15 |
|
| |
|
|
|
|
|
|
|
|
(1) Refer to "Non-GAAP Measures" in this earnings release for
additional information on the usage and presentation of these
non-GAAP measures, and refer to these financial tables for the
reconciliations to the most directly comparable GAAP measures. |
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
|
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME
EQUIVALENT EMPLOYEE DATA |
| |
As of and for the Quarter Ended |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Common Share Data |
|
|
|
|
|
|
|
|
|
|
Book value per common share |
$ |
44.74 |
|
|
$ |
43.66 |
|
|
$ |
42.69 |
|
|
$ |
40.20 |
|
|
$ |
41.00 |
|
| Tangible book value per common
share (non-GAAP)(1) |
|
30.94 |
|
|
|
29.81 |
|
|
|
28.77 |
|
|
|
26.23 |
|
|
|
26.98 |
|
| ASC 320 effect on book value
per common share |
|
(10.82 |
) |
|
|
(11.18 |
) |
|
|
(11.00 |
) |
|
|
(16.27 |
) |
|
|
(14.04 |
) |
| |
|
|
|
|
|
|
|
|
|
| Common shares outstanding, net
of treasury stock |
|
42,852,180 |
|
|
|
42,783,670 |
|
|
|
42,688,008 |
|
|
|
42,656,303 |
|
|
|
42,644,544 |
|
| |
|
|
|
|
|
|
|
|
|
| Capital
Ratios |
|
|
|
|
|
|
|
|
|
| Common equity ratio |
|
10.19 |
% |
|
|
9.76 |
% |
|
|
9.39 |
% |
|
|
8.52 |
% |
|
|
8.64 |
% |
| Tangible common equity ratio
(non-GAAP)(1) |
|
7.28 |
|
|
|
6.88 |
|
|
|
6.53 |
|
|
|
5.73 |
|
|
|
5.86 |
|
| Tier 1 leverage ratio |
|
10.13 |
|
|
|
9.84 |
|
|
|
9.44 |
|
|
|
9.59 |
|
|
|
9.40 |
|
| Common equity tier 1
ratio(2) |
|
11.68 |
|
|
|
11.40 |
|
|
|
10.97 |
|
|
|
11.37 |
|
|
|
11.33 |
|
| Total risk based capital
ratio(2) |
|
15.32 |
|
|
|
14.99 |
|
|
|
14.53 |
|
|
|
14.90 |
|
|
|
14.93 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Selected Trend
Information |
|
|
|
|
|
|
|
|
|
| Effective tax rate |
|
23.12 |
% |
|
|
23.17 |
% |
|
|
27.97 |
% |
|
|
21.89 |
% |
|
|
23.74 |
% |
| Full time equivalent
employees |
|
1,843 |
|
|
|
1,888 |
|
|
|
1,970 |
|
|
|
1,965 |
|
|
|
1,966 |
|
| |
|
|
|
|
|
|
|
|
|
| Loans Held to
Maturity |
|
|
|
|
|
|
|
|
|
| Commercial and industrial |
$ |
3,541,239 |
|
|
$ |
3,545,051 |
|
|
$ |
3,652,047 |
|
|
$ |
3,591,809 |
|
|
$ |
3,590,680 |
|
| Paycheck Protection Program
("PPP") |
|
1,864 |
|
|
|
2,172 |
|
|
|
2,777 |
|
|
|
3,750 |
|
|
|
4,139 |
|
| Owner occupied commercial real
estate |
|
2,555,964 |
|
|
|
2,545,033 |
|
|
|
2,638,175 |
|
|
|
2,429,659 |
|
|
|
2,398,698 |
|
|
Commercial and business lending |
|
6,099,067 |
|
|
|
6,092,256 |
|
|
|
6,292,999 |
|
|
|
6,025,218 |
|
|
|
5,993,517 |
|
| Non-owner occupied commercial
real estate |
|
2,434,258 |
|
|
|
2,495,068 |
|
|
|
2,553,711 |
|
|
|
2,656,358 |
|
|
|
2,530,736 |
|
| Real estate construction |
|
1,082,726 |
|
|
|
1,041,583 |
|
|
|
1,011,716 |
|
|
|
1,029,554 |
|
|
|
1,013,134 |
|
|
Commercial real estate lending |
|
3,516,984 |
|
|
|
3,536,651 |
|
|
|
3,565,427 |
|
|
|
3,685,912 |
|
|
|
3,543,870 |
|
|
Total commercial lending |
|
9,616,051 |
|
|
|
9,628,907 |
|
|
|
9,858,426 |
|
|
|
9,711,130 |
|
|
|
9,537,387 |
|
| Agricultural and agricultural
real estate |
|
802,958 |
|
|
|
809,876 |
|
|
|
919,184 |
|
|
|
842,116 |
|
|
|
839,817 |
|
| Residential mortgage |
|
733,401 |
|
|
|
756,021 |
|
|
|
797,829 |
|
|
|
813,803 |
|
|
|
828,437 |
|
| Consumer |
|
455,899 |
|
|
|
449,837 |
|
|
|
493,206 |
|
|
|
505,387 |
|
|
|
512,333 |
|
| Total loans held to
maturity |
$ |
11,608,309 |
|
|
$ |
11,644,641 |
|
|
$ |
12,068,645 |
|
|
$ |
11,872,436 |
|
|
$ |
11,717,974 |
|
| |
|
|
|
|
|
|
|
|
|
| Total unfunded loan
commitments |
$ |
4,381,565 |
|
|
$ |
4,537,718 |
|
|
$ |
4,625,768 |
|
|
$ |
4,813,798 |
|
|
$ |
4,905,147 |
|
| |
|
|
|
|
|
|
|
|
|
| Deposits |
|
|
|
|
|
|
|
|
|
| Demand-customer |
$ |
4,244,169 |
|
|
$ |
4,264,390 |
|
|
$ |
4,500,304 |
|
|
$ |
4,792,813 |
|
|
$ |
4,897,858 |
|
| Savings-customer |
|
8,151,794 |
|
|
|
8,269,956 |
|
|
|
8,411,240 |
|
|
|
8,190,430 |
|
|
|
8,149,596 |
|
| Savings-wholesale and
institutional |
|
318,622 |
|
|
|
399,265 |
|
|
|
394,357 |
|
|
|
564,481 |
|
|
|
623,000 |
|
|
Total savings |
|
8,470,416 |
|
|
|
8,669,221 |
|
|
|
8,805,597 |
|
|
|
8,754,911 |
|
|
|
8,772,596 |
|
| Time-customer |
|
1,737,723 |
|
|
|
1,734,971 |
|
|
|
1,944,884 |
|
|
|
1,814,335 |
|
|
|
1,597,849 |
|
| Time-wholesale |
|
504,282 |
|
|
|
633,584 |
|
|
|
950,929 |
|
|
|
1,738,934 |
|
|
|
2,395,240 |
|
|
Total time |
|
2,242,005 |
|
|
|
2,368,555 |
|
|
|
2,895,813 |
|
|
|
3,553,269 |
|
|
|
3,993,089 |
|
| Total
deposits |
$ |
14,956,590 |
|
|
$ |
15,302,166 |
|
|
$ |
16,201,714 |
|
|
$ |
17,100,993 |
|
|
$ |
17,663,543 |
|
| |
|
|
|
|
|
|
|
|
|
| Total customer deposits |
$ |
14,133,686 |
|
|
$ |
14,269,317 |
|
|
$ |
14,856,428 |
|
|
$ |
14,797,578 |
|
|
$ |
14,645,303 |
|
| Total wholesale and
institutional deposits |
|
822,904 |
|
|
|
1,032,849 |
|
|
|
1,345,286 |
|
|
|
2,303,415 |
|
|
|
3,018,240 |
|
| Total
deposits |
$ |
14,956,590 |
|
|
$ |
15,302,166 |
|
|
$ |
16,201,714 |
|
|
$ |
17,100,993 |
|
|
$ |
17,663,543 |
|
| |
|
|
|
|
|
|
|
|
|
|
(1) Refer to "Non-GAAP Measures" in this earnings release for
additional information on the usage and presentation of these
non-GAAP measures, and refer to these financial tables for the
reconciliations to the most directly comparable GAAP measures. |
|
(2) June 30, 2024 calculation is preliminary. |
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS
IN THOUSANDS, EXCEPT PER SHARE DATA |
|
|
As of and for the Quarter Ended |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Allowance for Credit Losses-Loans |
|
|
|
|
|
|
|
|
|
|
Balance, beginning of period |
$ |
123,934 |
|
|
$ |
122,566 |
|
|
$ |
110,208 |
|
|
$ |
111,198 |
|
|
$ |
112,707 |
|
| Provision for credit
losses |
|
9,737 |
|
|
|
3,668 |
|
|
|
12,750 |
|
|
|
2,672 |
|
|
|
7,829 |
|
| Charge-offs |
|
(7,388 |
) |
|
|
(4,093 |
) |
|
|
(3,886 |
) |
|
|
(3,964 |
) |
|
|
(9,613 |
) |
| Recoveries |
|
578 |
|
|
|
1,793 |
|
|
|
3,494 |
|
|
|
302 |
|
|
|
275 |
|
| Balance, end of
period |
$ |
126,861 |
|
|
$ |
123,934 |
|
|
$ |
122,566 |
|
|
$ |
110,208 |
|
|
$ |
111,198 |
|
| |
|
|
|
|
|
|
|
|
|
| Allowance for Unfunded
Commitments |
|
|
|
|
|
|
|
|
|
| Balance, beginning of
period |
$ |
13,786 |
|
|
$ |
16,468 |
|
|
$ |
17,480 |
|
|
$ |
18,636 |
|
|
$ |
21,086 |
|
| Provision for credit
losses |
|
(729 |
) |
|
|
(2,682 |
) |
|
|
(1,012 |
) |
|
|
(1,156 |
) |
|
|
(2,450 |
) |
| Balance, end of
period |
$ |
13,057 |
|
|
$ |
13,786 |
|
|
$ |
16,468 |
|
|
$ |
17,480 |
|
|
$ |
18,636 |
|
| |
|
|
|
|
|
|
|
|
|
| Allowance for lending
related credit losses |
$ |
139,918 |
|
|
$ |
137,720 |
|
|
$ |
139,034 |
|
|
$ |
127,688 |
|
|
$ |
129,834 |
|
| |
|
|
|
|
|
|
|
|
|
| Provision for Credit
Losses |
|
|
|
|
|
|
|
|
|
| Provision for credit
losses-loans |
$ |
9,737 |
|
|
$ |
3,668 |
|
|
$ |
12,750 |
|
|
$ |
2,672 |
|
|
$ |
7,829 |
|
| Provision for credit
losses-unfunded commitments |
|
(729 |
) |
|
|
(2,682 |
) |
|
|
(1,012 |
) |
|
|
(1,156 |
) |
|
|
(2,450 |
) |
| Total provision
(benefit) for credit losses |
$ |
9,008 |
|
|
$ |
986 |
|
|
$ |
11,738 |
|
|
$ |
1,516 |
|
|
$ |
5,379 |
|
| |
|
|
|
|
|
|
|
|
|
| Asset
Quality |
|
|
|
|
|
|
|
|
|
| Nonaccrual loans |
$ |
103,123 |
|
|
$ |
94,800 |
|
|
$ |
95,426 |
|
|
$ |
51,304 |
|
|
$ |
61,956 |
|
| Loans past due ninety days or
more |
|
663 |
|
|
|
611 |
|
|
|
2,507 |
|
|
|
511 |
|
|
|
1,459 |
|
| Other real estate owned |
|
7,533 |
|
|
|
2,590 |
|
|
|
12,548 |
|
|
|
14,362 |
|
|
|
2,677 |
|
| Other repossessed assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
5 |
|
| Total nonperforming
assets |
$ |
111,319 |
|
|
$ |
98,001 |
|
|
$ |
110,481 |
|
|
$ |
66,178 |
|
|
$ |
66,097 |
|
| |
|
|
|
|
|
|
|
|
|
| Nonperforming Assets
Activity |
|
|
|
|
|
|
|
|
|
| Balance, beginning of
period |
$ |
98,001 |
|
|
$ |
110,481 |
|
|
$ |
66,178 |
|
|
$ |
66,097 |
|
|
$ |
65,702 |
|
| Net loan (charge-offs)
recoveries |
|
(6,810 |
) |
|
|
(2,300 |
) |
|
|
(392 |
) |
|
|
(3,662 |
) |
|
|
(9,338 |
) |
| New nonperforming loans |
|
48,346 |
|
|
|
5,470 |
|
|
|
61,193 |
|
|
|
19,295 |
|
|
|
19,805 |
|
| Reduction of nonperforming
loans(1) |
|
(28,050 |
) |
|
|
(5,692 |
) |
|
|
(14,278 |
) |
|
|
(14,691 |
) |
|
|
(5,253 |
) |
| OREO/Repossessed assets sales
proceeds |
|
(168 |
) |
|
|
(9,958 |
) |
|
|
(2,220 |
) |
|
|
(861 |
) |
|
|
(4,819 |
) |
| Balance, end of
period |
$ |
111,319 |
|
|
$ |
98,001 |
|
|
$ |
110,481 |
|
|
$ |
66,178 |
|
|
$ |
66,097 |
|
| |
|
|
|
|
|
|
|
|
|
| Asset Quality
Ratios |
|
|
|
|
|
|
|
|
|
| Ratio of nonperforming loans
to total loans |
|
0.89 |
% |
|
|
0.82 |
% |
|
|
0.81 |
% |
|
|
0.44 |
% |
|
|
0.54 |
% |
| Ratio of nonperforming assets
to total assets |
|
0.59 |
|
|
|
0.51 |
|
|
|
0.57 |
|
|
|
0.33 |
|
|
|
0.33 |
|
| Annualized ratio of net loan
charge-offs (recoveries) to average loans |
|
0.23 |
|
|
|
0.08 |
|
|
|
0.01 |
|
|
|
0.12 |
|
|
|
0.32 |
|
| Allowance for loan credit
losses as a percent of loans |
|
1.09 |
|
|
|
1.06 |
|
|
|
1.02 |
|
|
|
0.93 |
|
|
|
0.95 |
|
| Allowance for lending related
credit losses as a percent of loans |
|
1.21 |
|
|
|
1.18 |
|
|
|
1.15 |
|
|
|
1.08 |
|
|
|
1.11 |
|
| Allowance for loan credit
losses as a percent of nonperforming loans |
|
122.23 |
|
|
|
129.89 |
|
|
|
125.15 |
|
|
|
212.70 |
|
|
|
175.35 |
|
| Loans delinquent 30-89 days as
a percent of total loans |
|
0.25 |
|
|
|
0.31 |
|
|
|
0.09 |
|
|
|
0.12 |
|
|
|
0.12 |
|
| |
|
|
|
|
|
|
|
|
|
| (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 |
| |
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
|
|
Average
Balance |
|
Interest |
|
Rate |
|
Average
Balance |
|
Interest |
|
Rate |
|
Average
Balance |
|
Interest |
|
Rate |
|
Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
$ |
4,490,407 |
|
|
$ |
47,381 |
|
4.24 |
% |
|
$ |
4,665,196 |
|
|
$ |
47,014 |
|
4.05 |
% |
|
$ |
5,962,207 |
|
|
$ |
58,172 |
|
3.91 |
% |
|
Nontaxable(1) |
|
759,234 |
|
|
|
7,383 |
|
3.91 |
|
|
|
778,632 |
|
|
|
7,383 |
|
3.81 |
|
|
|
895,458 |
|
|
|
7,896 |
|
3.54 |
|
| Total securities |
|
5,249,641 |
|
|
|
54,764 |
|
4.20 |
|
|
|
5,443,828 |
|
|
|
54,397 |
|
4.02 |
|
|
|
6,857,665 |
|
|
|
66,068 |
|
3.86 |
|
| Interest on deposits with
other banks and short-term investments |
|
194,824 |
|
|
|
3,045 |
|
6.29 |
|
|
|
253,189 |
|
|
|
3,006 |
|
4.78 |
|
|
|
153,622 |
|
|
|
2,051 |
|
5.36 |
|
| Federal funds sold |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
— |
|
— |
|
| Loans:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial(1) |
|
3,638,004 |
|
|
|
69,469 |
|
7.68 |
|
|
|
3,642,588 |
|
|
|
66,985 |
|
7.40 |
|
|
|
3,565,449 |
|
|
|
56,644 |
|
6.37 |
|
|
PPP loans |
|
2,242 |
|
|
|
7 |
|
1.26 |
|
|
|
2,587 |
|
|
|
8 |
|
1.24 |
|
|
|
6,302 |
|
|
|
24 |
|
1.53 |
|
|
Owner occupied commercial real estate |
|
2,615,504 |
|
|
|
37,028 |
|
5.69 |
|
|
|
2,609,773 |
|
|
|
35,517 |
|
5.47 |
|
|
|
2,366,107 |
|
|
|
28,031 |
|
4.75 |
|
|
Non-owner occupied commercial real estate |
|
2,519,346 |
|
|
|
39,272 |
|
6.27 |
|
|
|
2,550,419 |
|
|
|
39,849 |
|
6.28 |
|
|
|
2,462,098 |
|
|
|
35,583 |
|
5.80 |
|
|
Real estate construction |
|
1,093,399 |
|
|
|
21,770 |
|
8.01 |
|
|
|
1,061,843 |
|
|
|
20,849 |
|
7.90 |
|
|
|
1,028,109 |
|
|
|
18,528 |
|
7.23 |
|
|
Agricultural and agricultural real estate |
|
879,707 |
|
|
|
13,390 |
|
6.12 |
|
|
|
878,621 |
|
|
|
13,756 |
|
6.30 |
|
|
|
848,554 |
|
|
|
12,256 |
|
5.79 |
|
|
Residential real estate |
|
776,821 |
|
|
|
9,454 |
|
4.89 |
|
|
|
791,248 |
|
|
|
10,135 |
|
5.15 |
|
|
|
840,741 |
|
|
|
9,383 |
|
4.48 |
|
|
Consumer |
|
485,266 |
|
|
|
9,421 |
|
7.81 |
|
|
|
484,851 |
|
|
|
9,201 |
|
7.63 |
|
|
|
508,082 |
|
|
|
9,068 |
|
7.16 |
|
|
Less: allowance for credit losses |
|
(123,319 |
) |
|
|
— |
|
— |
|
|
|
(121,879 |
) |
|
|
— |
|
— |
|
|
|
(113,177 |
) |
|
|
— |
|
— |
|
| Net loans |
|
11,886,970 |
|
|
|
199,811 |
|
6.76 |
|
|
|
11,900,051 |
|
|
|
196,300 |
|
6.63 |
|
|
|
11,512,265 |
|
|
|
169,517 |
|
5.91 |
|
| Total earning
assets |
|
17,331,435 |
|
|
|
257,620 |
|
5.98 |
% |
|
|
17,597,068 |
|
|
|
253,703 |
|
5.80 |
% |
|
|
18,523,552 |
|
|
|
237,636 |
|
5.15 |
% |
| Nonearning Assets |
|
1,711,927 |
|
|
|
|
|
|
|
1,699,570 |
|
|
|
|
|
|
|
1,697,959 |
|
|
|
|
|
| Total
Assets |
$ |
19,043,362 |
|
|
|
|
|
|
$ |
19,296,638 |
|
|
|
|
|
|
$ |
20,221,511 |
|
|
|
|
|
| Interest-bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Savings |
$ |
8,834,746 |
|
|
$ |
55,440 |
|
2.52 |
% |
|
$ |
8,809,530 |
|
|
$ |
54,667 |
|
2.50 |
% |
|
$ |
8,935,775 |
|
|
$ |
41,284 |
|
1.85 |
% |
| Time deposits |
|
2,372,653 |
|
|
|
25,059 |
|
4.25 |
|
|
|
2,782,195 |
|
|
|
29,467 |
|
4.26 |
|
|
|
3,812,330 |
|
|
|
40,691 |
|
4.28 |
|
| Borrowings |
|
881,738 |
|
|
|
10,825 |
|
4.94 |
|
|
|
643,525 |
|
|
|
7,524 |
|
4.70 |
|
|
|
89,441 |
|
|
|
848 |
|
3.80 |
|
| Term debt |
|
372,820 |
|
|
|
5,564 |
|
6.00 |
|
|
|
372,495 |
|
|
|
5,849 |
|
6.32 |
|
|
|
372,248 |
|
|
|
5,545 |
|
5.97 |
|
| Total interest-bearing
liabilities |
|
12,461,957 |
|
|
|
96,888 |
|
3.13 |
% |
|
|
12,607,745 |
|
|
|
97,507 |
|
3.11 |
% |
|
|
13,209,794 |
|
|
|
88,368 |
|
2.68 |
% |
| Noninterest-bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing
deposits |
|
4,355,521 |
|
|
|
|
|
|
|
4,450,677 |
|
|
|
|
|
|
|
4,941,033 |
|
|
|
|
|
| Accrued interest and other
liabilities |
|
251,943 |
|
|
|
|
|
|
|
294,552 |
|
|
|
|
|
|
|
232,966 |
|
|
|
|
|
| Total
noninterest-bearing liabilities |
|
4,607,464 |
|
|
|
|
|
|
|
4,745,229 |
|
|
|
|
|
|
|
5,173,999 |
|
|
|
|
|
| Stockholders'
Equity |
|
1,973,941 |
|
|
|
|
|
|
|
1,943,664 |
|
|
|
|
|
|
|
1,837,718 |
|
|
|
|
|
| Total Liabilities and
Stockholders' Equity |
$ |
19,043,362 |
|
|
|
|
|
|
$ |
19,296,638 |
|
|
|
|
|
|
$ |
20,221,511 |
|
|
|
|
|
| Net interest income,
fully tax-equivalent
(non-GAAP)(1)(3) |
|
|
$ |
160,732 |
|
|
|
|
|
$ |
156,196 |
|
|
|
|
|
$ |
149,268 |
|
|
| Net interest
spread(1) |
|
|
|
|
2.85 |
% |
|
|
|
|
|
2.69 |
% |
|
|
|
|
|
2.47 |
% |
| Net interest income,
fully tax-equivalent
(non-GAAP)(1)(3) to
total earning assets |
|
|
|
|
3.73 |
% |
|
|
|
|
|
3.57 |
% |
|
|
|
|
|
3.23 |
% |
| Interest-bearing liabilities
to earning assets |
|
71.90 |
% |
|
|
|
|
|
|
71.65 |
% |
|
|
|
|
|
|
71.31 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Computed on a
tax-equivalent basis using an effective tax rate of 21%. |
|
|
| (2) Nonaccrual
loans and loans held for sale are included in the average loans
outstanding. |
|
(3) Refer to "Non-GAAP Measures" in this earnings release for
additional information on the usage and presentation of these
non-GAAP measures, and refer to these financial tables for the
reconciliations to the most directly comparable GAAP measures. |
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
|
DOLLARS IN THOUSANDS |
| |
For the Six Months Ended |
| |
June 30, 2024 |
|
June 30, 2023 |
|
|
Average
Balance |
|
Interest |
|
Rate |
|
Average
Balance |
|
Interest |
|
Rate |
|
Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
| Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
$ |
4,577,802 |
|
|
$ |
94,395 |
|
4.14 |
% |
|
$ |
6,029,175 |
|
|
$ |
114,148 |
|
3.82 |
% |
|
Nontaxable(1) |
|
768,933 |
|
|
|
14,766 |
|
3.85 |
|
|
|
908,992 |
|
|
|
15,704 |
|
3.48 |
|
| Total securities |
|
5,346,735 |
|
|
|
109,161 |
|
4.11 |
|
|
|
6,938,167 |
|
|
|
129,852 |
|
2.50 |
|
| Interest on deposits with
other banks and other short-term investments |
|
224,007 |
|
|
|
6,051 |
|
5.42 |
|
|
|
129,645 |
|
|
|
3,182 |
|
4.95 |
|
| Federal funds sold |
|
— |
|
|
|
— |
|
— |
|
|
|
— |
|
|
|
— |
|
— |
|
| Loans:(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial(1) |
|
3,640,298 |
|
|
|
136,454 |
|
7.54 |
|
|
|
3,512,807 |
|
|
|
106,551 |
|
6.12 |
|
|
PPP loans |
|
2,415 |
|
|
|
14 |
|
1.17 |
|
|
|
8,126 |
|
|
|
50 |
|
1.24 |
|
|
Owner occupied commercial real estate |
|
2,612,638 |
|
|
|
72,545 |
|
5.58 |
|
|
|
2,327,702 |
|
|
|
54,800 |
|
4.75 |
|
|
Non-owner occupied commercial real estate |
|
2,534,882 |
|
|
|
79,121 |
|
6.28 |
|
|
|
2,397,004 |
|
|
|
66,332 |
|
5.58 |
|
|
Real estate construction |
|
1,077,621 |
|
|
|
42,619 |
|
7.95 |
|
|
|
1,063,372 |
|
|
|
36,659 |
|
6.95 |
|
|
Agricultural and agricultural real estate |
|
879,164 |
|
|
|
27,146 |
|
6.21 |
|
|
|
842,136 |
|
|
|
23,609 |
|
5.65 |
|
|
Residential mortgage |
|
784,034 |
|
|
|
19,589 |
|
5.02 |
|
|
|
846,618 |
|
|
|
18,656 |
|
4.44 |
|
|
Consumer |
|
485,058 |
|
|
|
18,622 |
|
7.72 |
|
|
|
504,678 |
|
|
|
17,310 |
|
6.92 |
|
|
Less: allowance for credit losses-loans |
|
(122,599 |
) |
|
|
— |
|
— |
|
|
|
(111,793 |
) |
|
|
— |
|
— |
|
| Net loans |
|
11,893,511 |
|
|
|
396,110 |
|
6.70 |
|
|
|
11,390,650 |
|
|
|
323,967 |
|
5.74 |
|
| Total earning
assets |
|
17,464,253 |
|
|
|
511,322 |
|
5.89 |
% |
|
|
18,458,462 |
|
|
|
457,001 |
|
4.99 |
% |
| Nonearning Assets |
|
1,705,749 |
|
|
|
|
|
|
|
1,711,582 |
|
|
|
|
|
| Total
Assets |
$ |
19,170,002 |
|
|
|
|
|
|
$ |
20,170,044 |
|
|
|
|
|
| Interest-bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Savings |
$ |
8,822,138 |
|
|
$ |
110,107 |
|
2.51 |
% |
|
$ |
9,330,939 |
|
|
$ |
79,177 |
|
1.71 |
% |
| Time deposits |
|
2,577,424 |
|
|
|
54,526 |
|
4.25 |
|
|
|
3,038,985 |
|
|
|
59,696 |
|
3.96 |
|
| Borrowings |
|
762,632 |
|
|
|
18,349 |
|
4.84 |
|
|
|
155,738 |
|
|
|
3,270 |
|
4.23 |
|
| Term debt |
|
372,658 |
|
|
|
11,413 |
|
6.16 |
|
|
|
372,085 |
|
|
|
10,991 |
|
5.96 |
|
| Total interest-bearing
liabilities |
|
12,534,852 |
|
|
|
194,395 |
|
3.12 |
% |
|
|
12,897,747 |
|
|
|
153,134 |
|
2.39 |
% |
| Noninterest-bearing
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Noninterest-bearing
deposits |
|
4,403,099 |
|
|
|
|
|
|
|
5,228,085 |
|
|
|
|
|
| Accrued interest and other
liabilities |
|
273,248 |
|
|
|
|
|
|
|
241,874 |
|
|
|
|
|
| Total
noninterest-bearing liabilities |
|
4,676,347 |
|
|
|
|
|
|
|
5,469,959 |
|
|
|
|
|
| Stockholders'
Equity |
|
1,958,803 |
|
|
|
|
|
|
|
1,802,338 |
|
|
|
|
|
| Total Liabilities and
Stockholders' Equity |
$ |
19,170,002 |
|
|
|
|
|
|
$ |
20,170,044 |
|
|
|
|
|
| Net interest income,
fully tax-equivalent
(non-GAAP)(1)(3) |
|
|
$ |
316,927 |
|
|
|
|
|
$ |
303,867 |
|
|
| Net interest
spread(1) |
|
|
|
|
2.77 |
% |
|
|
|
|
|
2.60 |
% |
| Net interest income,
fully tax-equivalent
(non-GAAP)(1)(3) to
total earning assets |
|
|
|
|
3.65 |
% |
|
|
|
|
|
3.32 |
% |
| Interest-bearing liabilities
to earning assets |
|
71.77 |
% |
|
|
|
|
|
|
69.87 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| (1) Computed on a
tax-equivalent basis using an effective tax rate of 21%. |
|
|
| (2) Nonaccrual
loans and loans held for sale are included in the average loans
outstanding. |
| (3) Refer to
"Non-GAAP Measures" in this earnings release for additional
information on the usage and presentation of these non-GAAP
measures, and refer to these financial tables for the
reconciliations to the most directly comparable GAAP measures. |
| |
| HEARTLAND
FINANCIAL USA, INC. |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS
IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT
EMPLOYEE DATA |
|
|
For the Quarter Ended |
|
|
6/30/2024 |
|
3/31/2024 |
|
12/31/2023 |
|
9/30/2023 |
|
6/30/2023 |
|
Reconciliation of Annualized Return on Average Tangible
Common Equity (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
Earnings available to common stockholders (GAAP) |
$ |
37,730 |
|
|
$ |
49,694 |
|
|
$ |
(72,375 |
) |
|
$ |
46,078 |
|
|
$ |
47,404 |
|
|
Plus core deposit intangibles amortization, net of
tax(2) |
|
1,081 |
|
|
|
1,131 |
|
|
|
1,229 |
|
|
|
1,240 |
|
|
|
1,309 |
|
| Earnings available to
common stockholders excluding intangible amortization
(non-GAAP) |
$ |
38,811 |
|
|
$ |
50,825 |
|
|
$ |
(71,146 |
) |
|
$ |
47,318 |
|
|
$ |
48,713 |
|
| |
|
|
|
|
|
|
|
|
|
| Average common equity
(GAAP) |
$ |
1,863,236 |
|
|
$ |
1,832,959 |
|
|
$ |
1,729,086 |
|
|
$ |
1,746,818 |
|
|
$ |
1,727,013 |
|
|
Less average goodwill |
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
|
|
576,005 |
|
|
Less average core deposit intangibles, net |
|
16,185 |
|
|
|
17,641 |
|
|
|
19,193 |
|
|
|
20,821 |
|
|
|
22,481 |
|
| Average tangible
common equity (non-GAAP) |
$ |
1,271,046 |
|
|
$ |
1,239,313 |
|
|
$ |
1,133,888 |
|
|
$ |
1,149,992 |
|
|
$ |
1,128,527 |
|
| Annualized return on average
common equity (GAAP) |
|
8.14 |
% |
|
|
10.90 |
% |
|
(16.61 |
)% |
|
|
10.47 |
% |
|
|
11.01 |
% |
| Annualized return on average
tangible common equity (non-GAAP) |
|
12.28 |
% |
|
|
16.49 |
% |
|
(24.89 |
)% |
|
|
16.32 |
% |
|
|
17.31 |
% |
| |
|
|
|
|
|
|
|
|
|
| Reconciliation of
Annualized Net Interest Margin, Fully Tax-Equivalent
(non-GAAP) |
|
|
|
|
|
|
|
|
|
| Net Interest Income
(GAAP) |
$ |
158,741 |
|
|
$ |
154,215 |
|
|
$ |
156,137 |
|
|
$ |
145,756 |
|
|
$ |
147,132 |
|
|
Plus tax-equivalent adjustment(1) |
|
1,991 |
|
|
|
1,981 |
|
|
|
2,058 |
|
|
|
2,152 |
|
|
|
2,136 |
|
| Net interest income,
fully tax-equivalent (non-GAAP) |
$ |
160,732 |
|
|
$ |
156,196 |
|
|
$ |
158,195 |
|
|
$ |
147,908 |
|
|
$ |
149,268 |
|
| |
|
|
|
|
|
|
|
|
|
| Average earning assets |
$ |
17,331,435 |
|
|
$ |
17,597,068 |
|
|
$ |
17,853,957 |
|
|
$ |
18,439,010 |
|
|
$ |
18,523,552 |
|
| |
|
|
|
|
|
|
|
|
|
| Annualized net interest margin
(GAAP) |
|
3.68 |
% |
|
|
3.52 |
% |
|
|
3.47 |
% |
|
|
3.14 |
% |
|