| AT THE COMPANY: | AT FINANCIAL RELATIONS BOARD: |
| John K. Schmidt | Leslie Loyet |
| Chief Operating Officer | General Inquiries |
| Chief Financial Officer | (312) 640-6672 |
| (563) 589-1994 | lloyet @frbircom |
| jschmidt @htlf.com | |
FOR IMMEDIATE RELEASE
MONDAY, JULY 24, 2006
HEARTLAND FINANCIAL USA, INC. REPORTS SECOND QUARTER 2006 EARNINGS
Second Quarter 2006 Highlights
| § | Net income increased by 15% over second quarter 2005 |
| § | Net interest margin improved by 16 basis points compared to second quarter 2005 |
| § | Average earning assets increased 9% over second quarter 2005 |
| § | Acquisition of Bank of the Southwest completed |
| | | | Quarter Ended June 30, | | | | Six Months Ended June 30, | |
| | | | 2006 | | | | 2005 | | | | 2006 | | | | 2005 | |
| Net income (in millions) | | $ | 6.2 | | | $ | 5.4 | | | $ | 10.7 | | | $ | 10.7 | |
| Diluted earnings per share | | | 0.37 | | | | 0.32 | | | | 0.64 | | | | 0.64 | |
| | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.87 | % | | | 0.81 | % | | | 0.76 | % | | | 0.81 | % |
| Return on average equity | | | 13.10 | | | | 12.12 | | | | 11.34 | | | | 12.09 | |
| Net interest margin | | | 4.19 | | | | 4.03 | | | | 4.17 | | | | 4.00 | |
“Heartland’s strong second quarter performance is very gratifying. Despite intense competition in every market, our banks collectively widened the company’s margin since the first quarter by five basis points to 4.19%. Contributing to this improvement is our continued expansion into the West.”-- Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA
Dubuque, Iowa, July 24, 2006—Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported increased earnings for the second quarter of 2006. Net income for the quarter ended June 30, 2006, was $6.2 million, or $0.37 per diluted share, compared to net income of $5.4 million, or $0.32 per diluted share, during the second quarter of 2005, an increase of $816,000 or 15 percent. Return on average equity was 13.10 percent and return on average assets was 0.87 percent for the second quarter of 2006, compared to 12.12 percent and 0.81 percent, respectively, for the same quarter in 2005.
Net income for the first six months of 2006 remained consistent with the net income recorded for the first six months of 2005 at $10.7 million, or $0.64 per diluted share. Return on average equity was 11.34 percent and return on average assets was 0.76 percent for the first six months of 2006, compared to 12.09 percent and 0.81 percent, respectively, for the same period in 2005. During the first quarter of 2006, a pre-tax judgment of $2.4 million against Heartland and Wisconsin Community Bank was recorded as noninterest expense, while a $286,000 award under a counterclaim was recorded as a loan loss recovery. The net after tax adjustment to net income for this one-time event was $1.3 million. Exclusive of this expense, Heartland’s net income for the first six months of 2006 was $12.0 million, or $0.72 per diluted share, an increase of $1.3 million or 12 percent over the first six months of 2005. Because of the non-recurring nature of this expense, Heartland believes that this pro-forma presentation is important for investors to understand Heartland’s financial performance for the first six months of 2006.
Lynn B. Fuller, Heartland’s chairman, president and chief executive officer stated, “Heartland’s strong second quarter performance is very gratifying. Despite intense competition in every market, our banks collectively widened the company’s margin since the first quarter by five basis points to 4.19%. Contributing to this improvement is our continued expansion into the West.”
On May 15, 2006, the acquisition of Bank of the Southwest was completed and became a part of Arizona Bank & Trust, Heartland’s de novo bank chartered in 2003. As of the acquisition date, total assets at Bank of the Southwest were $63.2 million, total loans were $52.4 million and total deposits were $44.4 million. The purchase price was $18.1 million, all in cash. The resultant acquired customer relationship intangible of $540,000 is being amortized over a period of eight years. The remaining excess purchase price over the fair value of tangible and identifiable intangible assets acquired of $5.1 million was recorded as goodwill.
Net interest margin, expressed as a percentage of average earning assets, was 4.19 percent during the second quarter of 2006 compared to 4.03 percent for the second quarter of 2005 and 4.14 percent for the first quarter of 2006. Net interest income on a tax-equivalent basis totaled $27.0 million during the second quarter of 2006, an increase of $3.1 million or 13 percent from the $23.9 million recorded during the second quarter of 2005. For the six-month period during 2006, net interest income on a tax-equivalent basis was $52.7 million, an increase of $6.0 million or 13 percent from the $46.7 million recorded during the first six months of 2005. Contributing to these increases was the $203.5 million or 9 percent growth in average earning assets during the quarter and the $194.7 million or 8 percent growth in average earning assets during the first six months of 2006 compared to 2005. Also contributing to this improvement was a shift in balances to loans from securities. The percentage of average loans to total average assets increased from 69 percent during the second quarter of 2005 to 71 percent during the second quarter of 2006. For the six month comparative period, the percentage of average loans to total average assets increased from 68 percent in 2005 to 71 percent in 2006.
On a tax-equivalent basis, interest income in the second quarter of 2006 totaled $47.9 million compared to $38.5 million in the second quarter of 2005, an increase of $9.5 million or 25 percent. For the first six months of 2006, interest income on a tax-equivalent basis increased $18.0 million or 24 percent over the same period in 2005. More than half of the loans in Heartland’s commercial and agricultural loan portfolios are floating rate loans, thus increases in the national prime rate, as experienced during the first six months of 2006, have an immediate positive impact on interest income. Interest expense for the second quarter of 2006 was $20.9 million compared to $14.5 million in the second quarter of 2005, an increase of $6.4 million or 44 percent. On a six-month comparative basis, interest expense increased $12.0 million or 44 percent. As rates continued to move upward during the first six months of 2006, Heartland experienced some movement in deposit balances from lower yielding accounts into higher yielding money market and certificate of deposit accounts.
Net interest income simulations reflect an asset sensitive posture leading to stronger earnings performance in a rising interest rate environment. Should the current rising rate environment reverse, net interest income would likely decline. In order to reduce the potentially negative impact a downward movement in interest rates would have on net interest income, Heartland entered into a two-year floor transaction on a notional $100.0 million in July 2005, a five-year collar transaction on a notional $50.0 million in September 2005 and an additional three-year collar transaction on a notional $50.0 million in April 2006.
Noninterest income increased by $1.3 million or 13 percent during the second quarter of 2006 compared to the same quarter in 2005. The categories experiencing the largest increases were service charges and fees, loan servicing income and securities gains. For the first six months of 2006, noninterest income increased $2.7 million or 14 percent over the same period in 2005. In addition to the aforementioned categories, trust fees and rental income on operating leases were contributors to this improvement.
For the second quarter of 2006, noninterest expense increased $3.3 million or 14 percent in comparison with the same period in 2005. The largest component of noninterest expense, salaries and employee benefits, increased $1.5 million or 13 percent during the second quarter of 2006 in comparison to the second quarter of 2005. This growth in salaries and employee benefits expense was a result of additional staffing at the holding company to provide support services to the growing number of bank subsidiaries, the addition of branches at New Mexico Bank & Trust and Arizona Bank & Trust, and the new bank subsidiary being formed in Denver, Colorado, which began operations in October 2005 as a loan production office under the Rocky Mountain umbrella. For the six-month period ended June 30, 2006, noninterest expense increased $9.1 million or 20 percent when compared to the same six-month period in 2005. Again, the largest contributor to this increase was salaries and employee benefits which grew by $3.4 million or 15 percent during this six-month comparative period. In addition to staffing increases as a result of the expansion efforts, merit increases for all salaried employees are made on January 1 of each year. Total full-time equivalent employees increased to 961 at June 30, 2006, from 884 at June 30, 2005. The acquisition of the Bank of the Southwest was responsible for 12 of the full-time equivalent employees at June 30, 2006. The $2.4 million judgment against Heartland and a bank subsidiary recorded during the first quarter of 2006 was also a major factor in the increase in noninterest expense for the six-month comparative period. Exclusive of the judgment, noninterest expense increased $6.7 million or 15 percent in comparison to the first six months of 2005.
Fuller commented, “The company continues to channel its resources into expansion of our banking franchise. In an extremely busy quarter, Heartland and its subsidiaries completed the purchase of Bank of the Southwest in Phoenix, Arizona, opened a new branch in Phoenix, a new finance office in the Chicago market, broke ground for new locations in Madison, Wisconsin and Santa Fe, New Mexico and filed an application for a new bank charter in the Denver market. We view each of these new locations as strategic investments in future growth and profitability. This expansion activity, with a continued preference for the West, builds toward our goal of an equal distribution of assets between our Midwest and Western banks. As of June 30, 2006, the ratio stood at 60% in our Midwestern markets and 40% out West. This compares with 36% of our assets in the West one year ago.”
Heartland’s effective tax rate was 32.00 percent for the second quarter of 2006 compared to 32.81 percent during the second quarter of 2005. On a six-month comparative basis, Heartland’s effective tax rate was 30.70 percent during 2006 and 31.83 percent during 2005. The two primary contributors to the variations in our effective tax rates during the periods were changes in the amount of tax-exempt income and tax credits. Tax-exempt interest income as a percentage of pre-tax income was 18.49 percent during the second quarter of 2006 compared to 19.14 percent during the same quarter of 2005. For the six-month periods ended on June 30, 2006 and 2005, tax-exempt income as a percentage of pre-tax income was 21.41 percent and 19.04 percent, respectively. Income taxes recorded during the first six months of 2005 included anticipated low-income housing and historic rehabilitation tax credits totaling $436,000 for the year. During the first six months of 2006, these anticipated credits had decreased to approximately $225,000 for the year.
At June 30, 2006, total assets were $2.9 billion, an increase of $117.0 million or 8 percent annualized since year-end 2005. Total loans and leases were $2.1 billion at June 30, 2006, an increase of $124.3 million or 13 percent annualized since year-end 2005. The acquisition of Bank of the Southwest accounted for $50.9 million or 41 percent of this growth. The Heartland subsidiary banks experiencing notable loan growth since year-end 2005 were Dubuque Bank and Trust Company, New Mexico Bank & Trust and Rocky Mountain Bank. The commercial and commercial real estate loan category grew by $117.1 million or 18 percent annualized. Exclusive of the $21.0 million in commercial and commercial real estate loans acquired in the Bank of the Southwest acquisition, this loan category increased by $96.2 million or 15 percent annualized.
Total deposits at June 30, 2006, were $2.3 billion, an increase of $135.1 million or 13 percent annualized since year-end 2005. The acquisition of Bank of the Southwest accounted for $44.4 million or 33 percent of this growth. All of Heartland’s subsidiary banks experienced growth in deposits since year-end 2005 except for First Community Bank, with the most significant growth occurring at New Mexico Bank & Trust. Demand deposits experienced a $25.5 million or 14 percent annualized increase, with $17.0 million or 66 percent of this increase resulting from the Bank of the Southwest acquisition. Savings deposit balances increased by $45.5 million or 12 percent annualized and time deposit balances increased $64.0 million or 13 percent annualized. The Bank of the Southwest acquisition accounted for $17.4 million or 38 percent of the growth in savings deposit balances and $10.0 million or 16 percent of the growth in time deposit balances. Of particular note is that a large portion of the growth in time deposits occurred in deposits from local markets as total brokered deposits increased by only $9.5 million from $145.5 million at year-end 2005 to $155.1 million at June 30, 2006. As interest rates have continued to move upward, many deposit customers have shifted a portion of their lower yielding deposit balances into higher yielding money market and certificate of deposit accounts. The Heartland bank subsidiaries have priced these products competitively in order to retain existing deposit customers, as well as to attract new customers.
The allowance for loan and lease losses at June 30, 2006, was 1.44 percent of loans and 246 percent of nonperforming loans, compared to 1.42 percent of loans and 185 percent of nonperforming loans at December 31, 2005. The provision for loan losses decreased $151,000 or 9 percent during the second quarter of 2006 compared to the same quarter of 2005 and $343,000 or 11 percent during the first six months of the year. Nonperforming loans were $12.2 million or 0.59 percent of total loans and leases at June 30, 2006, compared to $15.0 million or 0.77 percent of total loans and leases at December 31, 2005, and $14.9 million or 0.80 percent of total loans and leases at June 30, 2005. Net charge-offs for the first six months of 2006 were $1.1 million compared to $1.0 million for the first six months of 2005. The reduction in Heartland’s nonperforming loans without a corresponding significant increase in net charge-offs during the first six months of 2006 confirms management’s belief that losses on Heartland’s nonperforming loans were not expected to be significant due to the net realizable value of collateral, guarantees and other factors. Additionally, any probable losses had been specifically provided for in the allowance for loan and lease losses.
According to Fuller, “Nonperforming loans showed marked improvement during the quarter. We are pleased to return to an asset quality number reflective of our continued emphasis on credit quality.”
As previously disclosed, Heartland and Wisconsin Community Bank, a wholly-owned bank subsidiary, were defendants in a lawsuit regarding a breach of contract claim relating to the 2002 sale of Wisconsin Community Bank’s Eau Claire branch. Heartland and Wisconsin Community Bank filed a counterclaim against the plaintiff. The matters were tried in the State of Wisconsin Circuit Court, St. Croix County, in December, 2005. On May 3, 2006, Heartland was notified by the court that a verdict was entered awarding the plaintiff $2.4 million for its original claim and awarding Heartland $286,000 for its counterclaim against the plaintiff. Heartland recorded the judgments in the quarter ended March 31, 2006. Heartland and its legal counsel are considering what post-trial actions to pursue.
Conference Call Details
Heartland will host a conference call for investors at 3:00 p.m. CDT today. To participate, dial 800-218-4007 at least five minutes before start time or log onto www.htlf.com. If you are unable to participate on the call, a replay will be available through July 31, 2006, by dialing 800-405-2236, code 11065942, or by logging onto www.htlf.com.
About Heartland Financial USA:
Heartland Financial USA, Inc. is a $2.9 billion diversified financial services company providing banking, mortgage, wealth management, insurance, fleet management and consumer finance services to individuals and businesses in 43 communities in eight states -- Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Massachusetts. Heartland Financial USA, Inc. is listed on NASDAQ. Its trading symbol is HTLF.
Additional information about Heartland Financial USA, Inc. is available through our website at www.htlf.com.
This release may contain, and future oral and written statements of the Company and its management may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as believe, expect, anticipate, plan, intend, estimate, may, will, would, could, should or similar expressions. Additionally, all statements in this release, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.
A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (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 or threats thereof, (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 loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including other factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
-FINANCIAL TABLES FOLLOW-
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended | | For the Six Months Ended |
| | | | 6/30/2006 | | | | 6/30/2005 | | | | 6/30/2006 | | | | 6/30/2005 | |
Interest Income | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 41,411 | | | $ | 32,596 | | | $ | 79,329 | | | $ | 62,584 | |
| Interest on securities and other: | | | | | | | | | | | | | | | | |
Taxable | | | 3,991 | | | | 3,567 | | | | 7,874 | | | | 7,098 | |
Nontaxable | | | 1,469 | | | | 1,333 | | | | 2,897 | | | | 2,658 | |
| Interest on federal funds sold | | | 127 | | | | 57 | | | | 301 | | | | 104 | |
| Interest on interest bearing deposits in other financial institutions | | | 7 | | | | 79 | | | | 12 | | | | 147 | |
Total Interest Income | | | 47,005 | | | | 37,632 | | | | 90,413 | | | | 72,591 | |
Interest Expense | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 14,852 | | | | 10,282 | | | | 27,939 | | | | 19,464 | |
| Interest on short-term borrowings | | | 2,932 | | | | 1,709 | | | | 5,383 | | | | 2,973 | |
| Interest on other borrowings | | | 3,151 | | | | 2,540 | | | | 6,195 | | | | 5,046 | |
Total Interest Expense | | | 20,935 | | | | 14,531 | | | | 39,517 | | | | 27,483 | |
Net Interest Income | | | 26,070 | | | | 23,101 | | | | 50,896 | | | | 45,108 | |
| Provision for loan and lease losses | | | 1,485 | | | | 1,636 | | | | 2,657 | | | | 3,000 | |
Net Interest Income After Provision for Loan and Lease Losses | | | 24,585 | | | | 21,465 | | | | 48,239 | | | | 42,108 | |
Noninterest Income | | | | | | | | | | | | | | | | |
| Service charges and fees | | | 2,738 | | | | 2,307 | | | | 5,339 | | | | 4,547 | |
| Loan servicing income | | | 1,058 | | | | 726 | | | | 2,038 | | | | 1,384 | |
| Trust fees | | | 1,741 | | | | 1,605 | | | | 3,558 | | | | 3,200 | |
| Brokerage commissions | | | 369 | | | | 255 | | | | 612 | | | | 478 | |
| Insurance commissions | | | 141 | | | | 129 | | | | 277 | | | | 266 | |
| Securities gains (losses), net | | | 229 | | | | (20) | | | | 361 | | | | 33 | |
| Gain (loss) on trading account securities | | | (25) | | | | (26) | | | | 8 | | | | (8) | |
| Rental income on operating leases | | | 4,007 | | | | 3,845 | | | | 8,068 | | | | 7,416 | |
| Gains on sale of loans | | | 577 | | | | 644 | | | | 1,127 | | | | 1,176 | |
| Valuation adjustment on mortgage servicing rights | | | - | | | | (34) | | | | - | | | | (18) | |
| Income on bank owned life insurance | | | 235 | | | | 243 | | | | 528 | | | | 506 | |
| Other noninterest income | | | 244 | | | | 366 | | | | 583 | | | | 775 | |
Total Noninterest Income | | | 11,314 | | | | 10,040 | | | | 22,499 | | | | 19,755 | |
Noninterest Expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 13,043 | | | | 11,529 | | | | 26,127 | | | | 22,711 | |
| Occupancy | | | 1,820 | | | | 1,534 | | | | 3,613 | | | | 3,160 | |
| Furniture and equipment | | | 1,719 | | | | 1,542 | | | | 3,410 | | | | 2,909 | |
| Depreciation on equipment under operating leases | | | 3,202 | | | | 3,141 | | | | 6,457 | | | | 6,069 | |
| Outside services | | | 2,599 | | | | 1,957 | | | | 4,755 | | | | 3,955 | |
| Advertising | | | 1,027 | | | | 767 | | | | 2,151 | | | | 1,576 | |
| Other intangible amortization | | | 238 | | | | 237 | | | | 466 | | | | 507 | |
| Other noninterest expenses | | | 3,101 | | | | 2,752 | | | | 8,326 | | | | 5,323 | |
Total Noninterest Expense | | | 26,749 | | | | 23,459 | | | | 55,305 | | | | 46,210 | |
Income Before Income Taxes | | | 9,150 | | | | 8,046 | | | | 15,433 | | | | 15,653 | |
| Income taxes | | | 2,928 | | | | 2,640 | | | | 4,738 | | | | 4,983 | |
Net Income | | $ | 6,222 | | | $ | 5,406 | | | $ | 10,695 | | | $ | 10,670 | |
Earnings per common share-basic | | $ | .38 | | | $ | .33 | | | $ | .65 | | | $ | .65 | |
Earnings per common share-diluted | | $ | .37 | | | $ | .32 | | | $ | .64 | | | $ | .64 | |
Weighted average shares outstanding-basic | | | 16,540,587 | | | | 16,420,073 | | | | 16,485,886 | | | | 16,450,097 | |
Weighted average share outstanding-diluted | | | 16,798,654 | | | | 16,722,383 | | | | 16,727,750 | | | | 16,754,056 | |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended |
| | | 6/30/2006 | 3/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 |
Interest Income | | | | | | |
| Interest and fees on loans and leases | | $ 41,411 | $ 37,918 | $ 36,283 | $ 34,975 | $ 32,596 |
| Interest on securities and other: | | | | | | |
| Taxable | | 3,991 | 3,883 | 3,469 | 3,329 | 3,567 |
| Nontaxable | | 1,469 | 1,428 | 1,469 | 1,385 | 1,333 |
| Interest on federal funds sold | | 127 | 174 | 327 | 44 | 57 |
| Interest on interest bearing deposits in other financial institutions | | 7 | 5 | 68 | 62 | 79 |
Total Interest Income | | 47,005 | 43,408 | 41,616 | 39,795 | 37,632 |
Interest Expense | | | | | | |
| Interest on deposits | | 14,852 | 13,087 | 12,473 | 11,446 | 10,282 |
| Interest on short-term borrowings | | 2,932 | 2,451 | 2,146 | 1,866 | 1,709 |
| Interest on other borrowings | | 3,151 | 3,044 | 2,915 | 2,806 | 2,540 |
Total Interest Expense | | 20,935 | 18,582 | 17,534 | 16,118 | 14,531 |
Net Interest Income | | 26,070 | 24,826 | 24,082 | 23,677 | 23,101 |
| Provision for loan and lease losses | | 1,485 | 1,172 | 2,169 | 1,395 | 1,636 |
Net Interest Income After Provision for Loan and Lease Losses | | 24,585 | 23,654 | 21,913 | 22,282 | 21,465 |
Noninterest Income | | | | | | |
| Service charges and fees | | 2,738 | 2,601 | 2,339 | 2,437 | 2,307 |
| Loan servicing income | | 1,058 | 980 | 886 | 823 | 726 |
| Trust fees | | 1,741 | 1,817 | 1,742 | 1,588 | 1,605 |
| Brokerage commissions | | 369 | 243 | 193 | 185 | 255 |
| Insurance commissions | | 141 | 136 | 150 | 129 | 129 |
| Securities gains (losses), net | | 229 | 132 | 105 | 60 | (20) |
| Gain (loss) on trading account securities | | (25) | 33 | - | (3) | (26) |
| Rental income on operating leases | | 4,007 | 4,061 | 4,045 | 4,002 | 3,845 |
| Gains on sale of loans | | 577 | 550 | 600 | 796 | 644 |
| Valuation adjustment on mortgage servicing rights | | - | - | 33 | 24 | (34) |
| Income on bank owned life insurance | | 235 | 293 | 317 | 220 | 243 |
| Other noninterest income | | 244 | 339 | 277 | 882 | 366 |
Total Noninterest Income | | 11,314 | 11,185 | 10,687 | 11,143 | 10,040 |
Noninterest Expense | | | | | | |
| Salaries and employee benefits | | 13,043 | 13,084 | 11,898 | 11,720 | 11,529 |
| Occupancy | | 1,820 | 1,793 | 1,399 | 1,458 | 1,534 |
| Furniture and equipment | | 1,719 | 1,691 | 1,658 | 1,620 | 1,542 |
| Depreciation on equipment under operating leases | | 3,202 | 3,255 | 3,275 | 3,253 | 3,141 |
| Outside services | | 2,599 | 2,156 | 2,345 | 2,080 | 1,957 |
| Advertising | | 1,027 | 1,124 | 952 | 805 | 767 |
| Other intangibles amortization | | 238 | 228 | 253 | 254 | 237 |
| Other noninterest expenses | | 3,101 | 5,225 | 2,832 | 3,000 | 2,752 |
Total Noninterest Expense | | 26,749 | 28,556 | 24,612 | 24,190 | 23,459 |
Income Before Income Taxes | | 9,150 | 6,283 | 7,988 | 9,235 | 8,046 |
| Income taxes | | 2,928 | 1,810 | 2,224 | 2,943 | 2,640 |
Net Income | | $ 6,222 | $ 4,473 | $ 5,764 | $ 6,292 | $ 5,406 |
Earnings per common share-basic | | $ .38 | $ .27 | $ .35 | $ .38 | $ .33 |
Earnings per common share-diluted | | $ .37 | $ .27 | $ .35 | $ .38 | $ .32 |
Weighted average shares outstanding-basic | | 16,540,587 | 16,430,504 | 16,367,210 | 16,398,747 | 16,420,073 |
Weighted average shares outstanding-diluted | | 16,798,654 | 16,638,458 | 16,659,995 | 16,693,661 | 16,722,383 |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | As Of |
| | | 06/30/2006 | 03/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 |
Assets | | | | | | |
| Cash and cash equivalents | | $ 47,385 | $ 48,355 | $ 81,021 | $ 70,953 | $ 85,011 |
| Securities | | 526,784 | 520,062 | 527,767 | 498,054 | 507,985 |
| Loans held for sale | | 44,686 | 38,885 | 40,745 | 47,987 | 50,329 |
| Loans and leases: | | | | | | |
Held to maturity | | 2,077,393 | 1,990,852 | 1,953,066 | 1,915,430 | 1,854,926 |
| Allowance for loan and lease losses | | (29,941) | (28,674) | (27,791) | (27,362) | (26,676) |
| Loans and leases, net | | 2,047,452 | 1,962,178 | 1,925,275 | 1,888,068 | 1,828,250 |
| Assets under operating lease | | 39,852 | 39,634 | 40,644 | 40,222 | 41,045 |
| Premises, furniture and equipment, net | | 105,146 | 102,462 | 92,769 | 91,087 | 88,440 |
| Goodwill | | 40,531 | 35,398 | 35,398 | 35,398 | 35,398 |
| Other intangible assets, net | | 9,327 | 8,958 | 9,159 | 9,354 | 9,568 |
| Cash surrender value on life insurance | | 33,386 | 33,124 | 32,804 | 32,460 | 32,439 |
| Other assets | | 40,762 | 33,705 | 32,750 | 32,853 | 33,563 |
Total Assets | | $ 2,935,311 | $ 2,822,761 | $ 2,818,332 | $ 2,746,436 | $ 2,712,028 |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | |
| Liabilities | | | | | | |
| Deposits: | | | | | | |
| Demand | | $ 378,211 | $ 334,940 | $ 352,707 | $ 349,763 | $ 329,577 |
| Savings | | 799,884 | 778,960 | 754,360 | 741,104 | 764,918 |
| Time | | 1,075,134 | 1,017,955 | 1,011,111 | 992,592 | 957,918 |
| Total deposits | | 2,253,229 | 2,131,855 | 2,118,178 | 2,083,459 | 2,052,413 |
| Short-term borrowings | | 229,723 | 232,506 | 255,623 | 214,808 | 231,532 |
| Other borrowings | | 225,650 | 232,025 | 220,871 | 229,653 | 211,654 |
| Accrued expenses and other liabilities | | 35,251 | 36,243 | 35,848 | 33,338 | 34,183 |
Total Liabilities | | 2,743,853 | 2,632,629 | 2,630,520 | 2,561,258 | 2,529,782 |
Stockholders’ Equity | | 191,458 | 190,132 | 187,812 | 185,178 | 182,246 |
Total Liabilities and Stockholders’ Equity | | $ 2,935,311 | $ 2,822,761 | $ 2,818,332 | $ 2,746,436 | $ 2,712,028 |
| | | | | | | |
Common Share Data | | | | | | |
| Book value per common share | | $ 11.59 | $ 11.49 | $ 11.46 | $ 11.31 | $ 11.11 |
| FAS 115 effect on book value per common share | | $ (0.30) | $ (0.13) | $ (0.06) | $ 0.06 | $ 0.15 |
| Common shares outstanding, net of treasury stock | | 16,520,820 | 16,547,079 | 16,390,416 | 16,368,161 | 16,399,470 |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended For the Six Months Ended |
| | | | 06/30/2006 | 6/30/2005 | 6/30/2006 | 6/30/2005 |
| | | | | | | |
Average Balances | | | | | | |
| Assets | | | $ 2,883,367 | $ 2,680,435 | $ 2,840,791 | $ 2,651,892 |
| Loans and leases, net of unearned | | | 2,078,473 | 1,865,302 | 2,040,125 | 1,835,427 |
| Deposits | | | 2,165,673 | 2,022,879 | 2,134,729 | 2,000,418 |
| Earning assets | | | 2,585,195 | 2,381,733 | 2,549,912 | 2,355,202 |
| Interest bearing liabilities | | | 2,307,581 | 2,146,900 | 2,275,766 | 2,120,714 |
| Stockholders’ equity | | | 190,519 | 178,894 | 190,161 | 177,985 |
| | | | | | | |
Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | | 0.87% | 0.81% | 0.76% | 0.81% |
| Annualized return on average equity | | | 13.10 | 12.12 | 11.34 | 12.09 |
Annualized net interest margin(1) | | | 4.19 | 4.03 | 4.17 | 4.00 |
Efficiency ratio(2) | | | 70.27 | 69.02 | 73.92 | 69.56 |
Efficiency ratio, banks only(2) | | | 61.38 | 62.15 | 65.89 | 63.32 |
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended |
| | | 06/30/2006 | 03/31/2006 | 12/31/2005 | 9/30/2005 | 6/30/2005 |
| | | | | | | |
Average Balances | | | | | | |
| Assets | | $ 2,883,367 | $ 2,798,216 | $ 2,782,541 | $ 2,747,631 | $ 2,680,435 |
| Loans and leases, net of unearned | | 2,078,473 | 2,001,778 | 1,971,707 | 1,939,220 | 1,865,302 |
| Deposits | | 2,165,673 | 2,103,785 | 2,101,318 | 2,075,004 | 2,022,879 |
| Earning assets | | 2,585,195 | 2,514,629 | 2,498,735 | 2,437,936 | 2,381,733 |
| Interest bearing liabilities | | 2,307,581 | 2,243,951 | 2,214,483 | 2,190,156 | 2,146,900 |
| Stockholders’ equity | | 190,519 | 189,803 | 185,229 | 182,906 | 178,894 |
| | | | | | | |
Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | 0.87% | 0.65% | 0.82% | 0.91% | 0.81% |
| Annualized return on average equity | | 13.10 | 9.56 | 12.35 | 13.65 | 12.12 |
Annualized net interest margin(1) | | 4.19 | 4.14 | 3.97 | 3.99 | 4.03 |
Efficiency ratio(2) | | 70.27 | 77.71 | 69.22 | 67.96 | 69.02 |
Efficiency ratio, banks only(2) | | 61.38 | 70.66 | 62.24 | 62.62 | 62.15 |
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | As of and For | As of and For | As of and For | As of and For |
| | the Six Months Ended | the Year | the Six Months | the Year |
| | Ended | Ended | Ended | Ended |
| | 6/30/2006 | 12/31/2005 | 6/30/2005 | 12/31/2004 |
Loan and Lease Data | | | | |
| Commercial and commercial real estate | $ 1,421,228 | $ 1,304,080 | $ 1,199,450 | $ 1,162,103 |
| Residential mortgage | 213,673 | 219,671 | 227,377 | 212,842 |
| Agricultural and agricultural real estate | 233,072 | 230,357 | 231,548 | 217,860 |
| Consumer | 193,008 | 181,019 | 181,907 | 167,109 |
| Direct financing leases, net | 20,051 | 21,586 | 17,922 | 16,284 |
| Unearned discount and deferred loan fees | (3,639) | (3,647) | (3,278) | (3,244) |
Total loans and leases | $ 2,077,393 | $ 1,953,066 | $ 1,854,926 | $ 1,772,954 |
| | | | | |
Asset Quality | | | | |
| Nonaccrual loans | $ 11,817 | $ 14,877 | $ 14,523 | $ 9,837 |
Loans past due ninety days or more as to interest or principal payments | 343 | 115 | 378 | 88 |
| Other real estate owned | 1,693 | 1,586 | 1,611 | 425 |
| Other repossessed assets | 329 | 471 | 386 | 313 |
Total nonperforming assets | $ 14,182 | $ 17,049 | $ 16,898 | $ 10,663 |
| | | | | |
Allowance for Loan and Lease Losses | | | | |
| Balance, beginning of period | $ 27,791 | $ 24,973 | $ 24,973 | $ 18,490 |
| Provision for loan and lease losses | 2,657 | 6,564 | 3,000 | 4,846 |
| Loans charged off | (1,792) | (4,579) | (1,777) | (3,617) |
| Recoveries | 694 | 1,152 | 799 | 1,005 |
| Reclass for unfunded commitments to other liabilities | - | (319) | (319) | - |
| Addition related to acquired bank | 591 | - | - | 4,249 |
Balance, end of period | $ 29,941 | $ 27,791 | $ 26,676 | $ 24,973 |
| | | | |
Asset Quality Ratios | | | | |
| Ratio of nonperforming loans to total loans and leases | 0.59% | 0.77% | 0.80% | 0.56% |
| Ratio of nonperforming assets to total assets | 0.48 | 0.60 | 0.62 | 0.41 |
| Ratio of net loan chargeoffs to average loans and leases | 0.05 | 0.18 | 0.05 | 0.16 |
Allowance for loan losses as a percent of loans and leases | 1.44 | 1.42 | 1.44 | 1.41 |
| Allowance for loan losses as a percent of nonperforming loans and leases | 246.23 | 185.37 | 179.02 | 251.62 |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS |
| | | For the Quarters Ended |
| | | 6/30/2006 | | 6/30/2005 |
| | | Average Balance | | Interest | | Rate | | Average Balance | | Interest | | Rate |
Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 392,465 | | | $ | 3,990 | | | 4.08 | % | | $ | 408,720 | | | $ | 3,567 | | | 3.50 | % |
Nontaxable(1) | | | 132,467 | | | | 2,262 | | | 6.85 | | | | 118,125 | | | | 2,052 | | | 6.97 | |
Total securities | | | 524,932 | | | | 6,252 | | | 4.78 | | | | 526,845 | | | | 5,619 | | | 4.28 | |
| Interest bearing deposits | | | 718 | | | | 7 | | | 3.91 | | | | 7,574 | | | | 79 | | | 4.13 | |
| Federal funds sold | | | 10,392 | | | | 127 | | | 4.90 | | | | 8,508 | | | | 57 | | | 2.69 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,422,301 | | | | 26,871 | | | 7.58 | | | | 1,211,184 | | | | 19,453 | | | 6.44 | |
Residential mortgage | | | 223,095 | | | | 3,660 | | | 6.58 | | | | 233,383 | | | | 3,474 | | | 5.97 | |
Agricultural and agricultural real estate(1) | | | 225,983 | | | | 4,509 | | | 8.00 | | | | 228,259 | | | | 3,993 | | | 7.02 | |
Consumer | | | 186,399 | | | | 4,654 | | | 10.01 | | | | 179,474 | | | | 3,828 | | | 8.56 | |
Direct financing leases, net | | | 20,695 | | | | 336 | | | 6.51 | | | | 13,002 | | | | 278 | | | 8.58 | |
Fees on loans | | | - | | | | 1,501 | | | - | | | | - | | | | 1,681 | | | - | |
Less: allowance for loan and lease losses | | | (29,320 | ) | | | - | | | - | | | | (26,496 | ) | | | - | | | - | |
Net loans and leases | | | 2,049,153 | | | | 41,531 | | | 8.13 | | | | 1,838,806 | | | | 32,707 | | | 7.13 | |
Total earning assets | | | 2,585,195 | | | | 47,917 | | | 7.43 | | | | 2,381,733 | | | | 38,462 | | | 6.48 | |
Nonearning Assets | | | 298,172 | | | | - | | | - | | | | 298,702 | | | | - | | | - | |
Total Assets | | $ | 2,883,367 | | | $ | 47,917 | | | 6.67 | % | | $ | 2,680,435 | | | $ | 38,462 | | | 5.76 | % |
Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 791,368 | | | $ | 4,594 | | | 2.33 | % | | $ | 754,578 | | | $ | 2,553 | | | 1.36 | % |
Time, $100,000 and over | | | 215,738 | | | | 2,130 | | | 3.96 | | | | 196,886 | | | | 1,500 | | | 3.06 | |
Other time deposits | | | 811,596 | | | | 8,128 | | | 4.02 | | | | 749,708 | | | | 6,229 | | | 3.33 | |
| Short-term borrowings | | | 262,755 | | | | 2,932 | | | 4.48 | | | | 234,301 | | | | 1,709 | | | 2.93 | |
| Other borrowings | | | 226,124 | | | | 3,151 | | | 5.59 | | | | 211,427 | | | | 2,540 | | | 4.82 | |
Total interest bearing liabilities | | | 2,307,581 | | | | 20,935 | | | 3.64 | | | | 2,146,900 | | | | 14,531 | | | 2.71 | |
Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 346,971 | | | | - | | | - | | | | 321,707 | | | | - | | | - | |
| Accrued interest and other liabilities | | | 38,296 | | | | - | | | - | | | | 32,934 | | | | - | | | - | |
Total noninterest bearing liabilities | | | 385,267 | | | | - | | | - | | | | 354,641 | | | | - | | | - | |
Stockholders’ Equity | | | 190,519 | | | | - | | | - | | | | 178,894 | | | | - | | | - | |
Total Liabilities and Stockholders’ Equity | | $ | 2,883,367 | | | $ | 20,935 | | | 2.91 | % | | $ | 2,680,435 | | | $ | 14,531 | | | 2.17 | % |
Net interest income(1) | | | | | | $ | 26,982 | | | | | | | | | | $ | 23,931 | | | | |
Net interest income to total earning assets(1) | | | | | | | | | | 4.19 | % | | | | | | | | | | 4.03 | % |
| Interest bearing liabilities to earning assets | | | 89.26 | % | | | | | | | | | | 90.14 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(1) Tax equivalent basis is calculated using an effective tax rate of 35%. |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS |
| | For the Six Months Ended |
| | 6/30/2006 | | 6/30/2005 |
| | Average Balance | | Interest | | Rate | | Average Balance | | Interest | | Rate |
Earning Assets | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | |
Taxable | $ | 393,984 | | | $ | 7,874 | | | 4.03 | % | | $ | 412,730 | | | $ | 7,099 | | | 3.47 | % |
Nontaxable(1) | | 131,018 | | | | 4,457 | | | 6.86 | | | | 117,508 | | | | 4,089 | | | 7.02 | |
Total securities | | 525,002 | | | | 12,331 | | | 4.74 | | | | 530,238 | | | | 11,188 | | | 4.25 | |
| Interest bearing deposits | | 572 | | | | 12 | | | 4.23 | | | | 7,274 | | | | 147 | | | 4.08 | |
| Federal funds sold | | 12,947 | | | | 301 | | | 4.69 | | | | 8,183 | | | | 104 | | | 2.56 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | 1,389,827 | | | | 51,203 | | | 7.43 | | | | 1,194,366 | | | | 37,445 | | | 6.32 | |
Residential mortgage | | 223,217 | | | | 7,141 | | | 6.45 | | | | 227,295 | | | | 6,907 | | | 6.13 | |
Agricultural and agricultural real estate(1) | | 222,505 | | | | 8,747 | | | 7.93 | | | | 224,372 | | | | 7,634 | | | 6.86 | |
Consumer | | 183,682 | | | | 8,919 | | | 9.79 | | | | 174,698 | | | | 7,372 | | | 8.51 | |
Direct financing leases, net | | 20,894 | | | | 675 | | | 6.51 | | | | 14,696 | | | | 505 | | | 6.93 | |
Fees on loans | | - | | | | 2,863 | | | - | | | | - | | | | 2,894 | | | - | |
Less: allowance for loan and lease losses | | (28,734 | ) | | | | | | - | | | | (25,920 | ) | | | - | | | - | |
Net loans and leases | | 2,011,391 | | | | 79,548 | | | 7.98 | | | | 1,809,507 | | | | 62,757 | | | 6.99 | |
Total earning assets | | 2,549,912 | | | | 92,192 | | | 7.29 | | | | 2,355,202 | | | | 74,196 | | | 6.35 | |
Nonearning Assets | | 290,879 | | | | - | | | - | | | | 296,690 | | | | - | | | - | |
Total Assets | $ | 2,840,791 | | | $ | 92,192 | | | 6.54 | % | | $ | 2,651,892 | | | $ | 74,196 | | | 5.64 | % |
Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | |
Savings | $ | 777,641 | | | $ | 8,434 | | | 2.19 | % | | $ | 752,642 | | | $ | 4,593 | | | 1.23 | % |
Time, $100,000 and over | | 218,494 | | | | 4,191 | | | 3.87 | | | | 181,686 | | | | 2,687 | | | 2.98 | |
Other time deposits | | 798,422 | | | | 15,314 | | | 3.87 | | | | 747,583 | | | | 12,184 | | | 3.29 | |
| Short-term borrowings | | 253,100 | | | | 5,383 | | | 4.29 | | | | 231,781 | | | | 2,973 | | | 2.59 | |
| Other borrowings | | 228,109 | | | | 6,195 | | | 5.48 | | | | 207,022 | | | | 5,046 | | | 4.92 | |
Total interest bearing liabilities | | 2,275,766 | | | | 39,517 | | | 3.50 | | | | 2,120,714 | | | | 27,483 | | | 2.61 | |
Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | 340,172 | | | | - | | | | | | | 318,507 | | | | - | | | - | |
| Accrued interest and other liabilities | | 34,692 | | | | - | | | | | | | 34,686 | | | | - | | | - | |
Total noninterest bearing liabilities | | 374,864 | | | | | | | | | | | 353,193 | | | | - | | | - | |
Stockholders’ Equity | | 190,161 | | | | - | | | | | | | 177,985 | | | | - | | | - | |
Total Liabilities and Stockholders’ Equity | $ | 2,840,791 | | | $ | 39,517 | | | 2.81 | % | | $ | 2,651,892 | | | $ | 27,483 | | | 2.09 | % |
Net interest income(1) | | | | | $ | 52,675 | | | | | | | | | | $ | 46,713 | | | | |
Net interest income to total earning assets(1) | | | | | | | | | 4.17 | % | | | | | | | | | | 4.00 | % |
| Interest bearing liabilities to earning assets | | 89.25 | % | | | | | | | | | | 90.04 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
(1) Tax equivalent basis is calculated using an effective tax rate of 35%. |
| |
| HEARTLAND FINANCIAL USA, INC. |
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) |
| DOLLARS IN THOUSANDS |
| | | As of and For the Six Months Ended 6/30/2006 | | | | | As of and For the Year Ended 12/31/2005 | | | As of and For the Six Months Ended 6/30/2005 | | | As of and For
the Year Ended 12/31/2004 | |
Total Assets | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | $ | 827,761 | | | | $ | 833,885 | | $ | 800,089 | | $ | 750,517 | |
| New Mexico Bank & Trust | | 577,555 | | | | | 557,062 | | | 506,470 | | | 490,582 | |
| Wisconsin Community Bank | | 393,371 | | | | | 390,842 | | | 390,667 | | | 385,116 | |
| Rocky Mountain Bank | | 401,111 | | | | | 388,149 | | | 386,324 | | | 374,242 | |
| Galena State Bank and Trust Company | | 237,562 | | | | | 241,719 | | | 232,892 | | | 220,018 | |
| Riverside Community Bank | | 209,760 | | | | | 195,099 | | | 198,970 | | | 193,314 | |
| Arizona Bank & Trust | | 222,700 | | | | | 136,832 | | | 102,908 | | | 85,850 | |
| First Community Bank | | 117,249 | | | | | 121,337 | | | 122,854 | | | 116,654 | |
| | | | | | | | | | | | | | | |
Total Deposits | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | $ | 624,125 | | | | $ | 608,687 | | $ | 592,083 | | $ | 579,895 | |
| New Mexico Bank & Trust | | 429,968 | | | | | 388,935 | | | 372,052 | | | 325,527 | |
| Wisconsin Community Bank | | 317,334 | | | | | 311,436 | | | 324,634 | | | 327,221 | |
| Rocky Mountain Bank | | 320,845 | | | | | 306,967 | | | 293,949 | | | 290,390 | |
| Galena State Bank and Trust Company | | 189,077 | | | | | 179,437 | | | 175,235 | | | 168,109 | |
| Riverside Community Bank | | 161,468 | | | | | 153,791 | | | 148,900 | | | 143,797 | |
| Arizona Bank & Trust | | 168,800 | | | | | 118,959 | | | 76,934 | | | 73,199 | |
| First Community Bank | | 92,320 | | | | | 95,506 | | | 94,473 | | | 95,529 | |
| | | | | | | | | | | | | | | |
Return on Average Assets | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | 1.50 | % | | | | 1.28 | % | | 1.32 | % | | 1.38 | % |
| New Mexico Bank & Trust | | 1.11 | | | | | 1.10 | | | 1.14 | | | 1.13 | |
| Wisconsin Community Bank | | 0.10 | | | | | 0.63 | | | 0.59 | | | 0.59 | |
| Rocky Mountain Bank | | 0.83 | | | | | 0.72 | | | 0.53 | | | 1.05 | |
| Galena State Bank and Trust Company | | 1.25 | | | | | 1.22 | | | 1.27 | | | 1.33 | |
| Riverside Community Bank | | 0.50 | | | | | 0.83 | | | 0.77 | | | 0.97 | |
| Arizona Bank & Trust | | 0.25 | | | | | 0.19 | | | 0.11 | | | (1.35 | ) |
| First Community Bank | | 0.99 | | | | | 1.00 | | | 1.03 | | | 1.00 | |
| | | | | | | | | | | | | | | |
Net Interest Margin | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | 3.67 | % | | | | 3.48 | % | | 3.52 | % | | 3.58 | % |
| New Mexico Bank & Trust | | 5.17 | | | | | 4.75 | | | 4.70 | | | 4.98 | |
| Wisconsin Community Bank | | 3.95 | | | | | 3.75 | | | 3.77 | | | 3.50 | |
| Rocky Mountain Bank | | 5.24 | | | | | 4.93 | | | 4.47 | | | 4.63 | |
| Galena State Bank and Trust Company | | 3.37 | | | | | 3.43 | | | 3.54 | | | 3.43 | |
| Riverside Community Bank | | 3.80 | | | | | 3.76 | | | 3.83 | | | 3.74 | |
| Arizona Bank & Trust | | 4.85 | | | | | 5.03 | | | 5.33 | | | 4.94 | |
| First Community Bank | | 3.89 | | | | | 3.80 | | | 3.72 | | | 3.72 | |
| | | | | | | | | | | | | | | |
Net Income | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | $ | 6,103 | | | | $ | 10,156 | | $ | 5,087 | | $ | 10,427 | |
| New Mexico Bank & Trust | | 2,990 | | | | | 5,565 | | | 2,792 | | | 4,712 | |
| Wisconsin Community Bank | | 198 | | | | | 2,444 | | | 1,121 | | | 2,208 | |
| Rocky Mountain Bank | | 1,610 | | | | | 2,757 | | | 984 | | | 2,332 | |
| Galena State Bank and Trust Company | | 1,495 | | | | | 2,808 | | | 1,405 | | | 2,926 | |
| Riverside Community Bank | | 479 | | | | | 1,608 | | | 730 | | | 1,731 | |
| Arizona Bank & Trust | | 193 | | | | | 199 | | | 52 | | | (822 | ) |
| First Community Bank | | 581 | | | | | 1,198 | | | 606 | | | 1,145 | |
| HEARTLAND FINANCIAL USA, INC. |
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) |
| DOLLARS IN THOUSANDS |
| |
| | | Total Portfolio Loans | | Allowance For Loan and Lease Losses | | Nonperforming Loans | | Allowance As Percent Of Total Loans |
As of June 30, 2006: | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 597,613 | | $ | 7,300 | | $ | 308 | | 1.22 | % |
| New Mexico Bank & Trust | | | 351,367 | | | 5,091 | | | 1,795 | | 1.45 | |
| Wisconsin Community Bank | | | 281,955 | | | 4,523 | | | 2,203 | | 1.60 | |
| Rocky Mountain Bank | | | 297,859 | | | 4,435 | | | 5,517 | | 1.49 | |
| Galena State Bank and Trust Company | | | 173,575 | | | 2,148 | | | 674 | | 1.24 | |
| Riverside Community Bank | | | 136,702 | | | 1,692 | | | 188 | | 1.24 | |
| Arizona Bank & Trust | | | 157,988 | | | 1,972 | | | 50 | | 1.25 | |
| First Community Bank | | | 78,046 | | | 1,161 | | | 1,037 | | 1.49 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
As of December 31, 2005: | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 575,293 | | $ | 7,376 | | $ | 2,745 | | 1.28 | % |
| New Mexico Bank & Trust | | | 330,609 | | | 4,497 | | | 2,359 | | 1.36 | |
| Wisconsin Community Bank | | | 270,837 | | | 4,285 | | | 1,321 | | 1.58 | |
| Rocky Mountain Bank | | | 279,230 | | | 4,048 | | | 5,634 | | 1.45 | |
| Galena State Bank and Trust Company | | | 176,813 | | | 2,181 | | | 965 | | 1.23 | |
| Riverside Community Bank | | | 132,781 | | | 1,674 | | | 462 | | 1.26 | |
| Arizona Bank & Trust | | | 94,285 | | | 1,181 | | | 7 | | 1.25 | |
| First Community Bank | | | 83,506 | | | 1,191 | | | 992 | | 1.43 | |
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As of June 30, 2005: | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 553,119 | | $ | 6,825 | | $ | 2,897 | | 1.23 | % |
| New Mexico Bank & Trust | | | 304,840 | | | 4,196 | | | 584 | | 1.38 | |
| Wisconsin Community Bank | | | 264,709 | | | 4,427 | | | 1,449 | | 1.67 | |
| Rocky Mountain Bank | | | 272,848 | | | 4,103 | | | 6,227 | | 1.50 | |
| Galena State Bank and Trust Company | | | 162,215 | | | 1,904 | | | 733 | | 1.17 | |
| Riverside Community Bank | | | 134,505 | | | 1,862 | | | 1,811 | | 1.38 | |
| Arizona Bank & Trust | | | 77,073 | | | 964 | | | 8 | | 1.25 | |
| First Community Bank | | | 80,560 | | | 1,047 | | | 843 | | 1.30 | |
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As of December 31, 2004: | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 525,456 | | $ | 6,584 | | $ | 2,405 | | 1.25 | % |
| New Mexico Bank & Trust | | | 297,695 | | | 4,232 | | | 725 | | 1.42 | |
| Rocky Mountain Bank | | | 262,240 | | | 3,947 | | | 596 | | 1.51 | |
| Wisconsin Community Bank | | | 265,916 | | | 4,098 | | | 2,966 | | 1.54 | |
| Galena State Bank and Trust Company | | | 145,013 | | | 1,749 | | | 697 | | 1.21 | |
| Riverside Community Bank | | | 129,390 | | | 1,553 | | | 1,662 | | 1.20 | |
| Arizona Bank & Trust | | | 61,630 | | | 771 | | | - | | 1.25 | |
| First Community Bank | | | 76,047 | | | 999 | | | 572 | | 1.31 | |
