Volume Volume 12, Issue 2 Second Quarter2004 INVESTMENTPROFILEispublished quarterly to keep current and potentialHeartlandstockholdersinformed of company activities and to provide an overview of the Company’scurrent financial performance. CommunityBanking DubuqueBank & TrustGalenaState Bank FirstCommunity Bank Riverside CommunityBank Wisconsin CommunityBank NewMexico Bank& Trust ArizonaBank & Trust Rocky Mountain Bank ConsumerFinance CitizensFinance InvestmentBanking HTLFCapital Corp. VehicleLeasing and FleetManagement ULTEA Contact JohnK. Schmidt (563)589-1994 jschmidt@htlf.com | Highlights §Net income increased by 9% for the quarter ended June 30, 2004. §Net interest income improved by 14% over the second quarter of 2003, primarily as a result of the 18% growth in average earnings assets. §The acquisition of Rocky Mountain Bancorporation, the holding company for Rocky Mountain Bank, was completed effective June 1, 2004. The purchase price of $34.5 million consisted of $10.4 million in cash and the remainder in 1,387,227 shares of Heartland common stock. At May 31, 2004, Rocky Mountain Bank had total assets of $35 million, total loans of $278.1 million and total deposits of $285.7 million. §Exclusive of Rocky Mountain Bank, total loans and leases increased $99.2 million or 7%, and total deposits grew by $42.4 million or 3%. §Noninterest income increased 14%. In addition to growth in service charges and fees, there was a reversal in the valuation allowance on mortgage servicing rights during the second quarter of 2004 compared to an increase in the valuation allowance during the same quarter of 2003. These improvements were partially offset by a reduction in gains on sale of loans, as refinancing activity on residential mortgageloans was at historically high levels during 2003. §Noninterest expense increased 16%, reflecting increased costs related to the opening of Arizona Bank & Trust in August 2003 and its opening of a second branch in May 2004, as well as the acquisition of Rocky Mountain Bank. §Our acquisition of the personal trust division of Colonial Trust Company, headquartered in Phoenix, Arizona, is expected to close prior to the end of the third quarter. | InvestorInformation Heartland’s common stock is traded on the NASDAQ National Market System under the symbol "HTLF." Heartland is its own stock transfer agent. Any correspondence may be directed to Lois K. Pearce, Corporate Secretary. Primary market makers are: §Howe Barnes Investments, Inc., 135 S. LaSalle Street, Chicago, IL 60603-4398, Phone 800-800-4693 §FTN Financial Securities Corporation, 350 Madison Avenue, 19th Floor, New York, NY 10017, Phone 866-268-6529 Heartland’s trust preferred securities are traded on the American Stock Exchange under the symbol "HFT.Pr." Additional information about Heartland is available through our website atwww.htlf.com. StockValue Per Share(1) PE Ratio - Diluted (6/30/04): 14.798 52-Week Price Range (6/30/04): $16.75-$21.26 Closing Price (6/30/04): $18.35 Book Value (6/30/04): $9.98 Price/Book Value (6/30/04): 183.87% Current Dividend: $0.32 Yield: 1.74% Shares Outstanding (6/30/04): 16,452,884 * Restated to reflect two-for-three stock split effected in the form of a dividend on December 29, 2003. |
This newsletter may contain forward-looking statements. Actual events and results may differ significantly from those described in such forward-looking statements, due to changes in the economy, interest rates or other factors. For additional information about these factors, please review our filings with the Securities and Exchange Commission. Heartland undertakes no obligation to update any statement in this newsletter in light of new information or future events
Financial Highlights(Dollars in thousands, except per share data) | ||||||||||||||||
For the Six Months Ended June 30, | For the Years EndedDecember 31, | |||||||||||||||
2004 | 2003 | 2003 | 2002 | 2001 | ||||||||||||
IncomeStatement Data | ||||||||||||||||
Net interest income (tax-equivalent)(1) | $ | 35,324 | $ | 32,024 | $ | 63,373 | $ | 59,253 | $ | 50,080 | ||||||
| Provision for loan losses | 2,347 | 2,226 | 4,183 | 3,553 | 4,258 | |||||||||||
| Noninterest income | 19,309 | 16,886 | 36,541 | 30,645 | 28,620 | |||||||||||
| Noninterest expense | 37,228 | 32,632 | 67,692 | 60,659 | 56,692 | |||||||||||
| Income tax expense | 4,223 | 4,263 | 8,137 | 7,523 | 5,530 | |||||||||||
| Income from continuing operations | 9,641 | 8,731 | 17,719 | 16,590 | 11,129 | |||||||||||
| Income (loss) on discontinued operations | - | - | - | 2,277 | 285 | |||||||||||
| Net income | 9,641 | 8,731 | 17,719 | 18,867 | 11,414 | |||||||||||
Ratios | ||||||||||||||||
| Return on average equity | 13.22 | % | 13.84 | % | 13.46 | % | 16.44 | % | 11.32 | % | ||||||
| Return on average assets | 0.92 | 0.98 | 0.95 | 1.13 | 0.72 | |||||||||||
Net interest margin (tax-equivalent)(1) | 3.81 | 3.99 | 3.79 | 4.04 | 3.67 | |||||||||||
| Allowance as a percent of total loans | 1.38 | 1.40 | 1.37 | 1.37 | 1.33 | |||||||||||
Earnings per share-diluted(2) | $ | 0.62 | $ | 0.58 | $ | 1.16 | $ | 1.28 | $ | 0.79 | ||||||
Earnings per share from continuing operations- diluted(2) (3) | 0.62 | 0.58 | 1.16 | 1.12 | 0.77 | |||||||||||
Adjusted earnings per share - diluted(2) (4) | 0.62 | 0.58 | 1.16 | 1.28 | 0.85 | |||||||||||
Adjusted earnings per share from continuing operations- diluted(2) (5) | 0.62 | 0.58 | 1.16 | 1.12 | 0.84 | |||||||||||
| Dividends per share | 0.16 | 0.14 | 0.27 | 0.27 | 0.25 | |||||||||||
| Book value per share | 9.98 | 8.99 | 9.29 | 8.40 | 7.37 | |||||||||||
Balance Sheet Data | ||||||||||||||||
| Total assets | $ | 2,476,836 | $ | 1,855,235 | $ | 2,018,366 | $ | 1,785,979 | $ | 1,644,064 | ||||||
| Total loans and leases, net of unearned | 1,731,307 | 1,255,418 | 1,348,227 | 1,175,236 | 1,105,205 | |||||||||||
| Total deposits | 1,829,878 | 1,403,234 | 1,492,488 | 1,337,985 | 1,205,159 | |||||||||||
| Stockholders' equity | 164,208 | 136,952 | 140,923 | 124,041 | 107,090 | |||||||||||
(1) Tax equivalent basis is calculated using an effective tax rate of 34%. | ||||||||||||||||
(2) Restated to reflect two-for-three stock split effected in the form of a dividend on December 29, 2003. | ||||||||||||||||
(3) Excludes discontinued operations of our Eau Claire branch. | ||||||||||||||||
(4) Excludes goodwill amortization discontinued with the adoption of FAS Nos. 142 and 147. | ||||||||||||||||
(5) Excludes goodwill amortization discontinued with the adoption of FAS Nos. 142 and 147 and the discontinued operations of our Eau Claire branch. | ||||||||||||||||
Total Assets (In thousands) Total Loans (In thousands) Total Deposits (In thousands)
[GRAPHS DEPICTING VALUES IN THE TABLE ABOVE]
Earings Per Share from Continuing Operations-Diluted Net Interest Margin (Tax equivalent) Allowance as Percent of Total Loans
[GRAPHS DEPICTING VALUES IN THE TABLE ABOVE]