Heartland Financial USA (HTLF) 8-K Other Events

 

Volume 13, Issue 1 First Quarter 2005 INVESTMENT PROFILE is published quarterly to keep current and potentialHeartland stockholders informed of company activities and to provide an overview of the Company’s current financial performance.   Community Banking   Dubuque Bank & Trust Galena State Bank First Community Bank Riverside Community Bank Wisconsin Community Bank New Mexico Bank & Trust Arizona Bank & Trust Rocky Mountain Bank   Consumer Finance   Citizens Finance   Investment Banking   HTLF Capital Corp.   Vehicle Leasing and Fleet Management   ULTEA   Contact   John K. Schmidt (563) 589-1994 jschmidt@htlf.com Highlights ■Income before taxes, exclusive of securities     gains, improved by 34% over firstquarter     2004. ■Since the acquisition of Rocky Mountain Bank  
    was completed on June 1, 2004, their earnings 
    were not included in the first-quarter 2004   
    results. Their contribution to net income 
    during the first quarter of 2005 was $457,000. ■Net interest income increased 31% during the     first quarter of 2005, primarily due to the 31%     growth in average earning assets, of which    
    13%resulted from internal growth and 18%
    from theacquisition of Rocky Mountain Bank. ■ Net interest margin as a percentage of average     earning assets remained steady at 3.97% during     the first quarter of 2005 compared to 3.99% for     the fourth quarter of 2004 and 3.94% for the   
    firstquarter of 2004. ■Exclusive of securities gains, noninterest 
    incomeincreased 19%. Service charges and
    fees increased26%,over half of which was due
    to the additionof Rocky Mountain Bank.Trust
    fees improved 56%,primarily as a result of
    additional fees generatedby the accounts
    acquired from the Wealth ManagementGroup
    of Colonial Trust Company onAugust 31, 2004. ■Noninterest expense increased 26%, reflecting     increased costs related to the acquisitions of     Rocky Mountain Bank and the Wealth  
    ManagementGroup.Total full-time equivalent
    employeesincreased 182 for the quarters
    under comparison,123 of whom are at Rocky
    Mountain Bank and13 at the acquired trust
    operations in Arizona. ■Full integration of Rocky Mountain Bank will     continue to proceed during the second and 
    thirdquarters of this year. Conversion to our  
    mainframesoftware was completed in April. ■ Nine new locations are on the docket for 2005     as follows:     ■ Three at New Mexico Bank & Trust     ■ Two each at Arizona Bank & Trust and 
        RockyMountain Bank     ■ One each at Riverside Community Bank and         Wisconsin Community Bank Investor Information Heartland’s common stock is traded on the NASDAQ®National Market System under the symbol “HTLF.” Heartland is its own stock transfer agent.Any correspondencemay be directed to Lois K. Pearce, CorporateSecretary. Primary market makers are:   ■Howe Barnes Investments, Inc., 222 S. Riverside     Plaza, 7th Floor, Chicago, IL 60606-5808, Phone     800-800-4693 ■FTN Financial Securities Corp., 350 Madison
    Avenue,19th Floor, New York, NY 10017, Phone     866-268-6529   Additional information about Heartland is available through our website atwww.htlf.com   Stock Value Per Share Closing Price (3/31/05): $19.86 52-Week Price Range (3/31/05): $16.75-$22.07 Book Value (3/31/05): $10.68 Price/Book Value (3/31/05): 185.96% Current Dividend: $0.32 Yield: 1.61% PE Ratio - Diluted (3/31/05): 15.516 Shares Outstanding (3/31/05): 16,481,082     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 Securitiesand 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 Qtrs Ended March 31,				For the Years Ended December 31,
		2004		2003		2004		2003		2002
Income Statement Data
Net Interest income	$	22,007	$	16,843	$	77,130	$	61,190	$	57,680
Provision for loan losses		1,364		1,356		4,846		4,183		3,553
Noninterest income		9,715		9,721		37,841		36,541		30,645
Noninterest expense		22,751		18,016		81,936		67,692		60,659
Income tax expense		2,343		2,126		7,937		8,137		7,523
Income from continuing operations		5,264		5,066		20,252		17,719		16,590
Income from operations of discontinued         branch		-		-		-		-		2,277
Net income		5,264		5,066		20,252		17,719		18,867

Ratios
Return on average equity		12.06	%	14.26	%		12.82	%	13.46	%	16.44	%
Return on average assets		0.81		1.02			0.87		0.95		1.13
Net interest margin (tax equivalent)(1)		3.97		3.94			3.87		3.80		4.04
Allowance as a percent of total loans		1.46		1.43			1.41		1.40		1.40
Earnings per share - diluted	$	0.32	$	0.33		$	1.26	$	1.16	$	1.28
Earnings per share from continuing  operations-diluted(2)		0.32		0.33			1.26		1.16		1.12
Dividends per share		0.08		0.08			0.32		0.27		0.27
Book value per share		10.68		9.63			10.69		9.29		8.40

Balance Sheet Data
Total assets	$	2,631,737	$	2,053,759	$	2,629,055	$	2,018,366	$	1,785,979
Total loans and leases, net of unearned		1,783,256		1,339,829		1,772,954		1,322,549		1,152,069
Total deposits		1,990,575		1,473,192		1,983,846		1,492,488		1,337,985
Stockholders' equity		175,999		145,899		175,782		140,923		124,041

⁽¹⁾Tax-equivalent basis is calculated using an effective tax rate of 35%. /⁽²⁾Excludes discontinuedoperations of our Eau Claire branch.

Total Assets (In thousands)  Total Loans (In thousands)  Total Deposits (In thousands)

[GRAPHS DEPICTING VALUES IN THE TABLE ABOVE]

Earnings Per Share from Continuing Operations - Diluted   Net Interest Margin (Tax equivalent)Allowance as Percent of Total Loans

[GRAPHS DEPICTING VALUES IN THE TABLE ABOVE]