| 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@frbir.com |
| jschmidt@htlf.com | |
FOR IMMEDIATE RELEASE
MONDAY, JANUARY 29, 2007
HEARTLAND FINANCIAL USA, INC. REPORTS FOURTH QUARTER 2006 EARNINGS
Fourth Quarter 2006 Highlights
| § | Net income increased by 31% over fourth quarter 2005 |
| § | Net interest margin improved by 2 basis points compared to fourth quarter 2005 |
| § | Average earning assets increased 11% over fourth quarter 2005 |
| § | Summit Bank & Trust opened on November 1, 2006 |
| § | Sale of ULTEA, Inc. completed |
| | | | Quarter Ended December 31, | | | | Year Ended December 31, | |
| | | | 2006 | | | | 2005 | | | | 2006 | | | | 2005 | |
| Net income (in millions) | | $ | 7.5 | | | $ | 5.8 | | | $ | 25.1 | | | $ | 22.7 | |
| Diluted earnings per share | | | 0.45 | | | | 0.34 | | | | 1.50 | | | | 1.36 | |
| | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.98 | % | | | 0.82 | % | | | 0.86 | % | | | 0.84 | % |
| Return on average equity | | | 14.62 | | | | 12.35 | | | | 12.86 | | | | 12.55 | |
| Net interest margin | | | 4.06 | | | | 4.04 | | | | 4.18 | | | | 4.04 | |
“We are extremely pleased with Heartland’s strong showing for the fourth quarter and full year 2006. The company achieved its dual goals of expanding the franchise while returning double digit growth in earnings.”-- Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.
Dubuque, Iowa, January 29, 2007—Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported increased earnings for the fourth quarter of 2006. Net income for the quarter ended December 31, 2006, was $7.5 million, or $0.45 per diluted share, compared to net income of $5.8 million, or $0.34 per diluted share, for the fourth quarter of 2005, an increase of $1.8 million or 31 percent. Return on average equity was 14.62 percent and return on average assets was 0.98 percent for the fourth quarter of 2006, compared to 12.35 percent and 0.82 percent, respectively, for the same quarter in 2005.
Lynn B. Fuller, Heartland’s chairman, president and chief executive officer stated, “We are extremely pleased with Heartland’s strong showing for the fourth quarter and full year 2006. The company achieved its dual goals of expanding the franchise while returning double digit growth in earnings.”
Net income for the year 2006 was $25.1 million, or $1.50 per diluted share, an increase of $2.4 million or 10 percent from the net income of $22.7 million, or $1.36 per diluted share, recorded for the year 2005. Return on average equity was 12.86 percent and return on average assets was 0.86 percent for the year 2006, compared to 12.55 percent and 0.84 percent, respectively, for the year 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 effect to net income for this one-time event was $1.3 million. Exclusive of this expense, Heartland’s net income for the year 2006 was $26.4 million, or $1.58 per diluted share, an increase of $3.7 million or 16 percent over the year 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 year 2006.
The sale of ULTEA Inc., Heartland’s fleet leasing subsidiary, to ALD Automotive was completed on December 22, 2006. All outstanding litigation related to the transaction was also settled at closing. Total assets of ULTEA at closing were $50.3 million. The attached financial statements reflect the results of operations of ULTEA on the income statement as discontinued operations for both the current and prior periods. During the fourth quarter of 2006, income from operations of this discontinued subsidiary included the $20,000 pre-tax gain recorded as a result of the sale. Since negotiations were underway and the sale of ULTEA was highly probable at the end of the third quarter of 2006, the assets and liabilities of ULTEA were classified as assets and liabilities of discontinued operations held for sale on the balance sheet at September 30, 2006.
Referring to the ULTEA sale, Fuller said, "This event represents Heartland’s commitment to focus resources on our core banking and consumer finance businesses and was an important step in our plan to maximize shareholder value by divesting of non-strategic holdings.”
Net interest margin, expressed as a percentage of average earning assets, was 4.06 percent during the fourth quarter of 2006 compared to 4.04 percent for the fourth quarter of 2005 and 4.17 percent for the third quarter of 2006. Heartland’s continued expansion into the Western states of New Mexico, Montana, Arizona and Colorado, where net interest margins tend to be higher than those earned in the Midwestern states, has been a contributing factor to the improvement and maintenance of the net interest margin. Net interest income on a tax-equivalent basis totaled $28.2 million during the fourth quarter of 2006, an increase of $2.8 million or 11 percent from the $25.4 million recorded during the fourth quarter of 2005. For the year 2006, net interest income on a tax-equivalent basis was $109.9 million, an increase of $12.6 million or 13 percent from the $97.3 million recorded during 2005. Contributing to these increases was a $263.8 million or 11 percent growth in average earning assets when comparing the fourth quarter of 2006 to the same quarter in 2005 and the $220.5 million or 9 percent growth in average earning assets when comparing the year 2006 to the year 2005. The percentage of average loans to total average assets increased from 69 percent during 2005 to 70 percent during 2006.
Fuller added, “Throughout 2006, we were successful at maintaining our net interest margin above our internal benchmark of 4.00 percent. Like most other banks, however, Heartland is facing pressure on both sides of the balance sheet. A continued inverted yield curve will make it a challenge to maintain our margin at the 4.00 percent level and we anticipate it will dip below this threshold. The key to continued margins at this threshold will be loan and demand deposit growth.”
On a tax-equivalent basis, interest income in the fourth quarter of 2006 totaled $52.9 million compared to $42.4 million in the fourth quarter of 2005, an increase of $10.5 million or 25 percent. For the year 2006, interest income on a tax-equivalent basis increased $39.4 million or 25 percent over the year 2005. More than half of the loans in Heartland’s commercial and agricultural loan portfolios are floating rate loans, thus changes in the national prime rate have an immediate impact on interest income. Interest expense for the fourth quarter of 2006 was $24.7 million compared to $17.0 million in the fourth quarter of 2005, an increase of $7.7 million or 45 percent. On a full-year comparative basis, interest expense increased $26.7 million or 45 percent. As rates moved upward during the first half of 2006 and continued at those levels during the remainder of the year, Heartland experienced some movement in deposit balances from lower yielding accounts into higher yielding money market and certificate of deposit accounts. Approximately 67 percent of Heartland’s certificate of deposit accounts will mature within the next twelve months at a weighted average rate of 4.64 percent.
Noninterest income increased by $1.0 million or 16 percent during the fourth quarter of 2006 compared to the same quarter in 2005. The categories experiencing the largest increases were service charges and fees, loan servicing income, trust fees and brokerage commissions. For the year 2006, noninterest income increased $3.6 million or 14 percent over the year 2005. Recorded in other noninterest income during the third quarter of 2005 was the forgiveness of $500,000 in debt as Heartland fulfilled the job creation requirements of its Community Development Block Grant Loan Agreement with the City of Dubuque. Exclusive of this one-time income item, noninterest income increased $4.1 million or 16 percent during the years under comparison. In addition to the aforementioned categories, securities gains were a contributor to this improvement.
For the fourth quarter of 2006, noninterest expense increased $2.2 million or 11 percent in comparison with the same period in 2005. The largest component of noninterest expense, salaries and employee benefits, increased $1.0 million or 8 percent during the fourth quarter of 2006 in comparison to the fourth quarter of 2005. This growth in salaries and employee benefits had stabilized during the fourth quarter of 2006 as fewer growth initiatives were underway. Additionally, the increase in salaries and employee benefits expense was less than had been experienced during previous quarters of the year due to an accrual adjustment for employer contributions to Heartland’s retirement plan to reflect staffing changes that had occurred during the year. For the year 2006, noninterest expense increased $13.8 million or 17 percent when compared to the year 2005. Again, the largest contributor to this increase was salaries and employee benefits, which grew by $6.1 million or 13 percent during this one-year comparative period. This growth in salaries and employee benefits expense was primarily the result of additional staffing at Heartland’s operations center to provide support services to the growing number of bank subsidiaries, the addition of branches at New Mexico Bank & Trust and Arizona Bank & Trust, the acquisition of the Bank of the Southwest, and the formation of Summit Bank & Trust, which began operations in October 2005 as a loan production office under the Rocky Mountain Bank umbrella. Total full-time equivalent employees increased to 959 at December 31, 2006, from 909 at December 31, 2005. Salaries and employee benefits expense is anticipated to experience a more significant increase during the first quarter of 2007 as merit increases for all salaried employees are made on January 1 of each year. 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 one-year comparative period. Exclusive of the judgment, noninterest expense increased $11.4 million or 14 percent in comparison to the year 2005. Costs associated with the expansion efforts have also contributed to increases in occupancy, advertising and other noninterest expense during both the fourth-quarter and the one-year comparative periods.
Fuller commented, “Heartland continues to focus on growth opportunities in the western United States. In the fourth quarter, we celebrated the opening of Summit Bank & Trust, our most recent de novo bank, located in the Denver suburb of Broomfield, Colorado. Our westward expansion activity continues to gather momentum as we step closer toward our goal of an equal distribution of assets between our Midwest and Western banks. At year end, the ratio of our assets stood at 58 percent in our Midwestern markets and 42 percent in our Western markets. This compares with 38 percent of our assets in the West just one year ago. Presently, we have new branch office locations under development or construction in Thornton, Colorado; Santa Fe, New Mexico; Gilbert, Arizona and Madison, Wisconsin.”
Heartland’s effective tax rate was 36.93 percent for the fourth quarter of 2006 compared to 27.84 percent during the fourth quarter of 2005. On a full-year comparative basis, Heartland’s effective tax rate was 33.26 percent during 2006 and 30.87 percent during 2005. Changes in the amount of tax-exempt income and tax credits have contributed to the variations in our effective tax rates during the periods. Tax-exempt interest income as a percentage of pre-tax income was 14.11 percent during the fourth quarter of 2006 compared to 20.77 percent during the same quarter of 2005. For the years ended on December 31, 2006 and 2005, tax-exempt income as a percentage of pre-tax income was 17.71 percent and 18.83 percent, respectively. Income taxes recorded during 2005 included low-income housing and historic rehabilitation tax credits totaling $436,000. During 2006, these credits had decreased to approximately $225,000 for the year. Additionally, during the fourth quarter of 2006, a tax provision was recorded to reflect taxes associated with the disposition of goodwill and life insurance policies at ULTEA due to the sale of that subsidiary that had not been previously recorded, as these items were appropriately treated as permanent tax differences in prior periods.
At December 31, 2006, total assets exceeded $3.0 billion, an increase of $239.9 million or 9 percent since year-end 2005. Total loans and leases were $2.1 billion at December 31, 2006, an increase of $194.8 million or 10 percent since year-end 2005. The May 15, 2006, acquisition of Bank of the Southwest by Arizona Bank & Trust accounted for $50.9 million or 26 percent of this growth. The Heartland subsidiary banks experiencing notable loan growth since year-end 2005 were New Mexico Bank & Trust, Arizona Bank & Trust and Rocky Mountain Bank. The commercial and commercial real estate loan category grew by $179.7 million or 14 percent. 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 $158.7 million or 12 percent.
Total deposits at December 31, 2006, were $2.3 billion, an increase of $193.5 million or 9 percent since year-end 2005. The acquisition of Bank of the Southwest accounted for $44.4 million or 23 percent of this growth. All of Heartland’s subsidiary banks except for First Community Bank and Galena State Bank experienced growth in deposits since year-end 2005 with 70 percent of the growth occurring in our banks located in the West. Demand deposits experienced an $18.8 million or 5 percent increase with the Bank of the Southwest acquisition contributing $17.0 million in demand deposit balances at closing. Savings deposit balances increased by $68.6 million or 9 percent. At closing, the Bank of the Southwest accounted for $17.4 million in savings deposit balances. Brokered time deposits decreased $45.0 million or 31 percent while other time deposit balances increased $151.1 million or 17 percent since year-end 2005. The Bank of the Southwest acquisition contributed $10.0 million in other time deposit balances. Of particular note is that we were able to replace a large portion of the maturing brokered time deposits with deposits from our local markets. As interest rates moved upward during the first half of the year and remained at those levels, many deposit customers 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 to retain existing deposit customers, as well as to attract new customers.
The allowance for loan and lease losses at December 31, 2006, was 1.40 percent of loans and 356 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 $2.3 million or 107 percent during the fourth quarter of 2006 compared to the same quarter of 2005 and $2.6 million or 41 percent during the year 2006 compared to the year 2005. Nonperforming loans were $8.4 million or 0.39 percent of total loans and leases at December 31, 2006, compared to $15.0 million or 0.77 percent of total loans and leases at December 31, 2005. Compared to September 30, 2006, loans past due ninety days or more had improved significantly at December 31, 2006, as a workout plan on one large credit was completed during the fourth quarter. Additionally, workout plans were completed on a few of the other large credits that had been on nonaccrual since year-end 2005. The positive resolution on a significant portion of our nonperforming and nonaccrual loans, along with a $1.2 million or 34 percent decline in net charge offs during 2006 compared to 2005, contributed to the reduction in the provision for loan losses during 2006. Management believes that losses on Heartland’s nonperforming loans will not be significant due to the net realizable value of collateral, borrower guarantees and other factors. Additionally, any probable losses have been specifically provided for in the allowance for loan and lease losses.
According to Fuller, “Our overall credit quality is the best we have seen in recent memory. The company’s asset quality ratios reflect healthy economies in our markets and diligent management of our loan portfolios.”
Conference Call Details
Heartland will host a conference call for investors at 3:00 p.m. CDT today. To participate, dial 800-218-0713 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 February 5, 2007, by dialing 800-405-2236, code 11080934, or by logging onto www.htlf.com.
About Heartland Financial USA:
Heartland Financial USA, Inc. is a $3.0 billion diversified financial services company providing banking, mortgage, wealth management, insurance and consumer finance services to individuals and businesses. The Company currently has 55 banking locations in 37 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana and Colorado.
Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.
Safe Harbor Statement
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 Years Ended |
| | | | 12/31/2006 | | | | 12/31/2005 | | | | 12/31/2006 | | | | 12/31/2005 | |
Interest Income | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 45,242 | | | $ | 36,139 | | | $ | 168,496 | | | $ | 133,244 | |
| Interest on securities and other: | | | | | | | | | | | | | | | | |
Taxable | | | 5,128 | | | | 3,469 | | | | 17,593 | | | | 13,896 | |
Nontaxable | | | 1,445 | | | | 1,469 | | | | 5,783 | | | | 5,512 | |
| Interest on federal funds sold | | | 221 | | | | 327 | | | | 645 | | | | 475 | |
| Interest on deposits in other financial institutions | | | 6 | | | | 68 | | | | 22 | | | | 277 | |
Total Interest Income | | | 52,042 | | | | 41,472 | | | | 192,539 | | | | 153,404 | |
Interest Expense | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 18,298 | | | | 12,473 | | | | 63,293 | | | | 43,383 | |
| Interest on short-term borrowings | | | 2,939 | | | | 1,598 | | | | 9,866 | | | | 5,373 | |
| Interest on other borrowings | | | 3,508 | | | | 2,906 | | | | 13,051 | | | | 10,706 | |
Total Interest Expense | | | 24,745 | | | | 16,977 | | | | 86,210 | | | | 59,462 | |
Net Interest Income | | | 27,297 | | | | 24,495 | | | | 106,329 | | | | 93,942 | |
| Provision for loan and lease losses | | | (157 | ) | | | 2,171 | | | | 3,886 | | | | 6,533 | |
Net Interest Income After Provision for Loan and Lease Losses | | | 27,454 | | | | 22,324 | | | | 102,443 | | | | 87,409 | |
Noninterest Income | | | | | | | | | | | | | | | | |
| Service charges and fees | | | 2,740 | | | | 2,339 | | | | 11,199 | | | | 9,323 | |
| Loan servicing income | | | 1,091 | | | | 886 | | | | 4,279 | | | | 3,093 | |
| Trust fees | | | 1,926 | | | | 1,742 | | | | 7,258 | | | | 6,530 | |
| Brokerage commissions | | | 383 | | | | 193 | | | | 1,266 | | | | 856 | |
| Insurance commissions | | | 149 | | | | 150 | | | | 605 | | | | 545 | |
| Securities gains, net | | | 125 | | | | 105 | | | | 553 | | | | 198 | |
| Gain (loss) on trading account securities | | | 80 | | | | - | | | | 141 | | | | (11 | ) |
| Impairment loss on equity securities | | | - | | | | - | | | | (76 | ) | | | - | |
| Gains on sale of loans | | | 611 | | | | 600 | | | | 2,289 | | | | 2,572 | |
| Valuation adjustment on mortgage servicing rights | | | - | | | | 33 | | | | - | | | | 39 | |
| Income on bank owned life insurance | | | 382 | | | | 308 | | | | 1,151 | | | | 1,022 | |
| Other noninterest income | | | (5 | ) | | | 97 | | | | 422 | | | | 1,307 | |
Total Noninterest Income | | | 7,482 | | | | 6,453 | | | | 29,087 | | | | 25,474 | |
Noninterest Expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 12,607 | | | | 11,622 | | | | 51,321 | | | | 45,247 | |
| Occupancy | | | 1,928 | | | | 1,370 | | | | 7,320 | | | | 5,913 | |
| Furniture and equipment | | | 1,745 | | | | 1,673 | | | | 6,763 | | | | 6,199 | |
| Outside services | | | 2,456 | | | | 2,382 | | | | 9,414 | | | | 8,312 | |
| Advertising | | | 1,055 | | | | 877 | | | | 4,293 | | | | 3,240 | |
| Other intangibles amortization | | | 261 | | | | 253 | | | | 987 | | | | 1,014 | |
| Other noninterest expenses | | | 3,116 | | | | 2,759 | | | | 14,423 | | | | 10,845 | |
Total Noninterest Expense | | | 23,168 | | | | 20,936 | | | | 94,521 | | | | 80,770 | |
Income Before Income Taxes | | | 11,768 | | | | 7,841 | | | | 37,009 | | | | 32,113 | |
| Income taxes | | | 4,052 | | | | 2,170 | | | | 11,989 | | | | 9,859 | |
Income From Continuing Operations | | | 7,716 | | | | 5,671 | | | | 25,020 | | | | 22,254 | |
Discontinued Operations | | | | | | | | | | | | | | | | |
Income from operations of discontinued subsidiary | | | 175 | | | | 147 | | | | 602 | | | | 763 | |
Income taxes | | | 358 | | | | 54 | | | | 520 | | | | 291 | |
Income (Loss) From Discontinued Operations | | | (183 | ) | | | 93 | | | | 82 | | | | 472 | |
Net Income | | $ | 7,533 | | | $ | 5,764 | | | $ | 25,102 | | | $ | 22,726 | |
Earnings per common share-basic | | $ | .46 | | | $ | .35 | | | $ | 1.52 | | | $ | 1.38 | |
Earnings per common share-diluted | | $ | .45 | | | $ | .34 | | | $ | 1.50 | | | $ | 1.36 | |
Earnings per common share from continuing operations- basic | | $ | .47 | | | $ | .35 | | | $ | 1.52 | | | $ | 1.36 | |
Earnings per common share from continuing operations- diluted | | $ | .46 | | | $ | .34 | | | $ | 1.50 | | | $ | 1.33 | |
Weighted average shares outstanding-basic | | | 16,531,998 | | | | 16,367,210 | | | | 16,507,960 | | | | 16,415,182 | |
Weighted average shares outstanding-diluted | | | 16,784,656 | | | | 16,659,995 | | | | 16,734,989 | | | | 16,702,146 | |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended |
| | | 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 |
Interest Income | | | | | | |
| Interest and fees on loans and leases | | $ 45,242 | $ 44,191 | $ 41,283 | $ 37,780 | $ 36,139 |
| Interest on securities and other: | | | | | | |
| Taxable | | 5,128 | 4,591 | 3,991 | 3,883 | 3,469 |
| Nontaxable | | 1,445 | 1,441 | 1,469 | 1,428 | 1,469 |
| Interest on federal funds sold | | 221 | 123 | 127 | 174 | 327 |
| Interest on deposits in other financial institutions | | 6 | 4 | 7 | 5 | 68 |
Total Interest Income | | 52,042 | 50,350 | 46,877 | 43,270 | 41,472 |
Interest Expense | | | | | | |
| Interest on deposits | | 18,298 | 17,056 | 14,852 | 13,087 | 12,473 |
| Interest on short-term borrowings | | 2,939 | 2,721 | 2,331 | 1,875 | 1,598 |
| Interest on other borrowings | | 3,508 | 3,348 | 3,151 | 3,044 | 2,906 |
Total Interest Expense | | 24,745 | 23,125 | 20,334 | 18,006 | 16,977 |
Net Interest Income | | 27,297 | 27,225 | 26,543 | 25,264 | 24,495 |
| Provision for loan and lease losses | | (157) | 1,381 | 1,487 | 1,175 | 2,171 |
Net Interest Income After Provision for Loan and Lease Losses | | 27,454 | 25,844 | 25,056 | 24,089 | 22,324 |
Noninterest Income | | | | | | |
| Service charges and fees | | 2,740 | 3,120 | 2,738 | 2,601 | 2,339 |
| Loan servicing income | | 1,091 | 1,150 | 1,058 | 980 | 886 |
| Trust fees | | 1,926 | 1,774 | 1,741 | 1,817 | 1,742 |
| Brokerage commissions | | 383 | 271 | 369 | 243 | 193 |
| Insurance commissions | | 149 | 179 | 141 | 136 | 150 |
| Securities gains, net | | 125 | 67 | 229 | 132 | 105 |
| Gain (loss) on trading account securities | | 80 | 53 | (25) | 33 | - |
| Impairment loss on equity securities | | - | (76) | - | - | - |
| Gains on sale of loans | | 611 | 551 | 577 | 550 | 600 |
| Valuation adjustment on mortgage servicing rights | | - | - | - | - | 33 |
| Income on bank owned life insurance | | 382 | 250 | 230 | 289 | 308 |
| Other noninterest income | | (5) | 199 | 91 | 137 | 97 |
Total Noninterest Income | | 7,482 | 7,538 | 7,149 | 6,918 | 6,453 |
Noninterest Expense | | | | | | |
| Salaries and employee benefits | | 12,607 | 13,125 | 12,781 | 12,808 | 11,622 |
| Occupancy | | 1,928 | 1,834 | 1,793 | 1,765 | 1,370 |
| Furniture and equipment | | 1,745 | 1,601 | 1,728 | 1,689 | 1,673 |
| Outside services | | 2,456 | 2,273 | 2,565 | 2,120 | 2,314 |
| Advertising | | 1,055 | 1,099 | 1,020 | 1,119 | 945 |
| Other intangibles amortization | | 261 | 260 | 238 | 228 | 253 |
| Other noninterest expenses | | 3,116 | 3,106 | 3,040 | 5,161 | 2,759 |
Total Noninterest Expense | | 23,168 | 23,298 | 23,165 | 24,890 | 20,936 |
Income Before Income Taxes | | 11,768 | 10,084 | 9,040 | 6,117 | 7,841 |
| Income taxes | | 4,052 | 3,304 | 2,886 | 1,747 | 2,170 |
Income From Continuing Operations | | 7,716 | 6,780 | 6,154 | 4,370 | 5,671 |
Discontinued Operations | | | | | | |
| Income from operations of discontinued subsidiary | | 175 | 151 | 110 | 166 | 147 |
| Income taxes | | 358 | 57 | 42 | 63 | 54 |
Income (Loss) From Discontinued Operations | | (183) | 94 | 68 | 103 | 93 |
Net Income | | $ 7,533 | $ 6,874 | $ 6,222 | $ 4,473 | $ 5,764 |
Earnings per common share-basic | | $ .46 | $ .42 | $ .38 | $ .27 | $ .35 |
Earnings per common share-diluted | | $ .45 | $ .41 | $ .37 | $ .27 | $ .34 |
Earnings per common share from continuing operations-basic | | $ .47 | $ .41 | $ .37 | $ .27 | $ .35 |
Earnings per common share from continuing operations-diluted | | $ .46 | $ .40 | $ .37 | $ .26 | $ .34 |
Weighted average shares outstanding-basic | | 16,531,998 | 16,521,527 | 16,540,587 | 16,430,504 | 16,367,210 |
Weighted average shares outstanding-diluted | | 16,784,656 | 16,775,749 | 16,798,654 | 16,638,458 | 16,659,995 |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | As Of |
| | | 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 |
Assets | | | | | | |
| Cash and cash equivalents | | $ 49,143 | $ 45,483 | $ 47,385 | $ 48,355 | $ 81,021 |
| Securities | | 617,040 | 593,103 | 526,784 | 520,062 | 527,767 |
| Loans held for sale | | 50,381 | 42,561 | 44,686 | 38,885 | 40,745 |
| Loans and leases: | | | | | | |
Held to maturity | | 2,147,845 | 2,122,156 | 2,077,393 | 1,990,852 | 1,953,066 |
| Allowance for loan and lease losses | | (29,981) | (30,684) | (29,941) | (28,674) | (27,791) |
| Loans and leases, net | | 2,117,864 | 2,091,472 | 2,047,452 | 1,962,178 | 1,925,275 |
| Assets under operating lease | | - | - | 39,852 | 39,634 | 40,644 |
| Premises, furniture and equipment, net | | 108,567 | 106,937 | 105,146 | 102,462 | 92,769 |
| Goodwill | | 39,817 | 39,817 | 40,531 | 35,398 | 35,398 |
| Other intangible assets, net | | 9,010 | 9,198 | 9,327 | 8,958 | 9,159 |
| Cash surrender value on life insurance | | 33,371 | 32,962 | 33,386 | 33,124 | 32,804 |
| Assets of discontinued operations held for sale | | - | 51,122 | - | - | - |
| Other assets | | 33,049 | 40,934 | 40,762 | 33,705 | 32,750 |
Total Assets | | $ 3,058,242 | $ 3,053,589 | $ 2,935,311 | $ 2,822,761 | $ 2,818,332 |
| | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | |
| Liabilities | | | | | | |
| Deposits: | | | | | | |
| Demand | | $ 371,465 | $ 367,133 | $ 378,211 | $ 334,940 | $ 352,707 |
| Savings | | 822,915 | 813,573 | 799,884 | 778,960 | 754,360 |
| Brokered time deposits | | 100,572 | 147,669 | 155,079 | 115,416 | 145,534 |
| Other time deposits | | 1,016,705 | 962,809 | 920,055 | 902,539 | 865,577 |
| Total deposits | | 2,311,657 | 2,291,184 | 2,253,229 | 2,131,855 | 2,118,178 |
| Short-term borrowings | | 275,694 | 239,531 | 229,723 | 232,506 | 255,623 |
| Other borrowings | | 224,523 | 243,987 | 225,650 | 232,025 | 220,871 |
| Liabilities of discontinued operations held for sale | | - | 47,424 | - | - | - |
| Accrued expenses and other liabilities | | 36,657 | 29,480 | 35,251 | 36,243 | 35,848 |
Total Liabilities | | 2,848,531 | 2,851,606 | 2,743,853 | 2,632,629 | 2,630,520 |
Stockholders’ Equity | | 209,711 | 201,983 | 191,458 | 190,132 | 187,812 |
Total Liabilities and Stockholders’ Equity | | $ 3,058,242 | $ 3,053,589 | $ 2,935,311 | $ 2,822,761 | $ 2,818,332 |
| | | | | | | |
Common Share Data | | | | | | |
| Book value per common share | | $ 12.65 | $ 12.22 | $ 11.59 | $ 11.49 | $ 11.46 |
| FAS 115 effect on book value per common share | | $ 0.05 | $ 0.01 | $ (0.30) | $ (0.13) | $ (0.06) |
| Common shares outstanding, net of treasury stock | | 16,572,080 | 16,530,266 | 16,520,820 | 16,547,079 | 16,390,416 |
| | | | | | | |
Tangible Capital Ratio(1) | | 5.46% | 5.18% | 5.02% | 5.36% | 5.28% |
(1) Total stockholders’ equity less intangible assets (excluding mortgage servicing rights) divided by total assets less intangible assets (excluding mortgage servicing rights).
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | | | |
| | | | For the Quarters Ended | For the Years Ended |
| | | | 12/31/2006 | 12/31/2005 | 12/31/2006 | 12/31/2005 |
| | | | | | | |
Average Balances | | | | | | |
| Assets | | | $ 3,051,995 | $ 2,782,541 | $ 2,929,702 | $ 2,708,496 |
| Loans and leases, net of unearned | | | 2,175,636 | 1,963,686 | 2,094,645 | 1,891,382 |
| Deposits | | | 2,302,466 | 2,101,318 | 2,207,323 | 2,044,290 |
| Earning assets | | | 2,754,509 | 2,490,747 | 2,628,207 | 2,407,722 |
| Interest bearing liabilities | | | 2,422,513 | 2,173,596 | 2,312,047 | 2,126,611 |
| Stockholders’ equity | | | 204,438 | 185,229 | 195,124 | 181,036 |
| | | | | | | |
Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | | 0.98% | 0.82% | 0.86% | 0.84% |
| Annualized return on average equity | | | 14.62 | 12.35 | 12.86 | 12.55 |
Annualized net interest margin(1) | | | 4.06 | 4.04 | 4.18 | 4.04 |
Efficiency ratio(2) | | | 65.16 | 65.97 | 68.26 | 65.91 |
(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 |
| | | 12/31/2006 | 9/30/2006 | 6/30/2006 | 3/31/2006 | 12/31/2005 |
| | | | | | | |
Average Balances | | | | | | |
| Assets | | $ 3,051,995 | $ 2,985,231 | $ 2,883,367 | $ 2,798,216 | $ 2,782,541 |
| Loans and leases, net of unearned | | 2,175,636 | 2,137,075 | 2,071,562 | 1,994,308 | 1,963,686 |
| Deposits | | 2,302,466 | 2,257,369 | 2,165,673 | 2,103,785 | 2,101,318 |
| Earning assets | | 2,754,509 | 2,672,820 | 2,578,312 | 2,507,189 | 2,490,747 |
| Interest bearing liabilities | | 2,422,513 | 2,353,394 | 2,268,561 | 2,203,721 | 2,173,596 |
| Stockholders’ equity | | 204,438 | 195,737 | 190,519 | 189,803 | 185,229 |
| | | | | | | |
Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | 0.98% | 0.91% | 0.87% | 0.65% | 0.82% |
| Annualized return on average equity | | 14.62 | 13.93 | 13.10 | 9.56 | 12.35 |
Annualized net interest margin(1) | | 4.06 | 4.17 | 4.27 | 4.23 | 4.04 |
Efficiency ratio(2) | | 65.16 | 65.45 | 67.39 | 75.61 | 65.97 |
(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 |
| | | the Year | the Year | the Year |
| | | Ended | Ended | Ended |
| | | 12/31/2006 | 12/31/2005 | 12/31/2004 |
Loan and Lease Data | | | | |
| Commercial and commercial real estate | | $ 1,483,738 | $ 1,304,080 | $ 1,162,103 |
| Residential mortgage | | 225,343 | 219,671 | 212,842 |
| Agricultural and agricultural real estate | | 233,748 | 230,357 | 217,860 |
| Consumer | | 194,652 | 181,019 | 167,109 |
| Direct financing leases, net | | 14,359 | 21,586 | 16,284 |
| Unearned discount and deferred loan fees | | (3,995) | (3,647) | (3,244) |
Total loans and leases | | $ 2,147,845 | $ 1,953,066 | $ 1,772,954 |
| | | | | |
Asset Quality | | | | |
| Nonaccrual loans | | $ 8,104 | $ 14,877 | $ 9,837 |
Loans past due ninety days or more as to interest or principal payments | | 315 | 115 | 88 |
| Other real estate owned | | 1,575 | 1,586 | 425 |
| Other repossessed assets | | 349 | 471 | 313 |
Total nonperforming assets | | $ 10,343 | $ 17,049 | $ 10,663 |
| | | | | |
Allowance for Loan and Lease Losses | | | | |
| Balance, beginning of period | | $ 27,791 | $ 24,973 | $ 18,490 |
Provision for loan and lease losses from continuing operations | | 3,886 | 6,533 | 4,846 |
Provision for loan and lease losses from discontinued operations | | (8) | 31 | - |
| Loans charged off | | (3,989) | (4,579) | (3,617) |
| Recoveries | | 1,733 | 1,152 | 1,005 |
| Reclass for unfunded commitments to other liabilities | | - | (319) | - |
| Addition related to acquired bank | | 591 | - | 4,249 |
| Reduction related to discontinued operations | | (23) | - | - |
Balance, end of period | | $ 29,981 | $ 27,791 | $ 24,973 |
| | | | | |
Asset Quality Ratios | | | | |
| Ratio of nonperforming loans to total loans and leases | | 0.39% | 0.77% | 0.56% |
| Ratio of nonperforming assets to total assets | | 0.34 | 0.60 | 0.41 |
| Ratio of net loan chargeoffs to average loans and leases | | 0.11 | 0.18 | 0.16 |
Allowance for loan losses as a percent of loans and leases | | 1.40 | 1.42 | 1.41 |
| Allowance for loan losses as a percent of nonperforming loans and leases loans and leases loans and leases | | 356.11 | 185.37 | 251.62 |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS |
| | | For the Quarters Ended |
| | | 12/31/2006 | | 12/31/2005 |
| | | Average Balance | | Interest | | Rate | | Average Balance | | Interest | | Rate |
Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 464,166 | | | $ | 5,129 | | | 4.38 | % | | $ | 387,981 | | | $ | 3,469 | | | 3.55 | % |
Nontaxable(1) | | | 131,268 | | | | 2,186 | | | 6.61 | | | | 126,232 | | | | 2,260 | | | 7.10 | |
Total securities | | | 595,434 | | | | 7,315 | | | 4.87 | | | | 514,213 | | | | 5,729 | | | 4.42 | |
| Interest bearing deposits | | | 790 | | | | 6 | | | 3.01 | | | | 6,956 | | | | 68 | | | 3.88 | |
| Federal funds sold | | | 13,975 | | | | 221 | | | 6.27 | | | | 33,666 | | | | 327 | | | 3.85 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,487,133 | | | | 29,615 | | | 7.90 | | | | 1,303,463 | | | | 22,778 | | | 6.93 | |
| Residential mortgage | | | 242,701 | | | | 4,067 | | | 6.65 | | | | 234,403 | | | | 3,619 | | | 6.13 | |
Agricultural and agricultural real estate(1) | | | 238,175 | | | | 4,973 | | | 8.28 | | | | 230,805 | | | | 4,104 | | | 7.05 | |
Consumer | | | 193,491 | | | | 4,932 | | | 10.11 | | | | 181,059 | | | | 4,209 | | | 9.22 | |
Direct financing leases, net | | | 14,136 | | | | 211 | | | 5.92 | | | | 13,956 | | | | 201 | | | 5.71 | |
Fees on loans | | | - | | | | 1,609 | | | - | | | | - | | | | 1,331 | | | - | |
| Less: allowance for loan and lease losses | | | (31,326 | ) | | | - | | | - | | | | (27,774 | ) | | | - | | | - | |
Net loans and leases | | | 2,144,310 | | | | 45,407 | | | 8.40 | | | | 1,935,912 | | | | 36,242 | | | 7.43 | |
Total earning assets | | | 2,754,509 | | | | 52,949 | | | 7.63 | | | | 2,490,747 | | | | 42,366 | | | 6.75 | |
Nonearning Assets | | | 297,486 | | | | - | | | - | | | | 291,794 | | | | - | | | - | |
Total Assets | | $ | 3,051,995 | | | $ | 52,949 | | | 6.88 | % | | $ | 2,782,541 | | | $ | 42,366 | | | 6.04 | % |
Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
| Savings | | $ | 814,462 | | | $ | 5,510 | | | 2.68 | % | | $ | 753,173 | | | $ | 3,363 | | | 1.77 | % |
| Time, $100,000 and over | | | 241,303 | | | | 2,848 | | | 4.68 | | | | 223,931 | | | | 2,007 | | | 3.56 | |
Other time deposits | | | 883,647 | | | | 9,940 | | | 4.46 | | | | 779,205 | | | | 7,103 | | | 3.62 | |
| Short-term borrowings | | | 252,004 | | | | 2,939 | | | 4.63 | | | | 194,139 | | | | 1,598 | | | 3.27 | |
| Other borrowings | | | 231,097 | | | | 3,508 | | | 6.02 | | | | 223,148 | | | | 2,906 | | | 5.17 | |
Total interest bearing liabilities | | | 2,422,513 | | | | 24,745 | | | 4.05 | | | | 2,173,596 | | | | 16,977 | | | 3.10 | |
Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 363,054 | | | | - | | | - | | | | 345,009 | | | | - | | | - | |
| Accrued interest and other liabilities | | | 61,990 | | | | - | | | - | | | | 78,707 | | | | - | | | - | |
Total noninterest bearing liabilities | | | 425,044 | | | | - | | | - | | | | 423,716 | | | | - | | | - | |
Stockholders’ Equity | | | 204,438 | | | | - | | | - | | | | 185,229 | | | | - | | | - | |
Total Liabilities and Stockholders’ Equity | | $ | 3,051,995 | | | $ | 24,745 | | | 3.22 | % | | $ | 2,782,541 | | | $ | 16,977 | | | 2.42 | % |
Net interest income(1) | | | | | | $ | 28,204 | | | | | | | | | | $ | 25,389 | | | | |
Net interest income to total earning assets(1) | | | | | | | | | | 4.06 | % | | | | | | | | | | 4.04 | % |
| Interest bearing liabilities to earning assets | | | 87.95 | % | | | | | | | | | | 87.27 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(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 Years Ended |
| | | 12/31/2006 | | 12/31/2005 |
| | | Average Balance | | Interest | | Rate | | Average Balance | | Interest | | Rate |
Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 419,625 | | | $ | 17,594 | | | 4.19 | % | | $ | 400,993 | | | $ | 13,896 | | | 3.47 | % |
Nontaxable(1) | | | 131,149 | | | | 8,843 | | | 6.74 | | | | 121,227 | | | | 8,481 | | | 7.00 | |
Total securities | | | 550,774 | | | | 26,437 | | | 4.80 | | | | 522,220 | | | | 22,377 | | | 4.28 | |
| Interest bearing deposits | | | 555 | | | | 22 | | | 3.96 | | | | 6,994 | | | | 277 | | | 3.96 | |
| Federal funds sold | | | 12,034 | | | | 645 | | | 5.36 | | | | 13,785 | | | | 475 | | | 3.45 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,432,003 | | | | 109,814 | �� | | 7.67 | | | | 1,236,324 | | | | 81,411 | | | 6.58 | |
Residential mortgage | | | 230,043 | | | | 15,050 | | | 6.54 | | | | 233,717 | | | | 14,223 | | | 6.09 | |
Agricultural and agricultural real estate(1) | | | 230,218 | | | | 18,476 | | | 8.03 | | | | 228,949 | | | | 15,892 | | | 6.94 | |
Consumer | | | 188,468 | | | | 18,743 | | | 9.94 | | | | 178,142 | | | | 15,718 | | | 8.82 | |
Direct financing leases, net | | | 13,913 | | | | 839 | | | 6.03 | | | | 14,250 | | | | 790 | | | 5.54 | |
Fees on loans | | | - | | | | 6,099 | | | - | | | | - | | | | 5,576 | | | - | |
| Less: allowance for loan and lease losses | | | (29,801 | ) | | | - | | | - | | | | (26,659 | ) | | | - | | | - | |
Net loans and leases | | | 2,064,844 | | | | 169,021 | | | 8.19 | | | | 1,864,723 | | | | 133,610 | | | 7.17 | |
Total earning assets | | | 2,628,207 | | | | 196,125 | | | 7.46 | | | | 2,407,722 | | | | 156,739 | | | 6.51 | |
Nonearning Assets | | | 301,495 | | | | - | | | - | | | | 300,774 | | | | - | | | - | |
Total Assets | | $ | 2,929,702 | | | $ | 196,125 | | | 6.69 | % | | $ | 2,708,496 | | | $ | 156,739 | | | 5.79 | % |
Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 792,875 | | | $ | 19,167 | | | 2.42 | % | | $ | 754,086 | | | $ | 10,991 | | | 1.46 | % |
Time, $100,000 and over | | | 225,874 | | | | 9,498 | | | 4.20 | | | | 201,377 | | | | 6,505 | | | 3.23 | |
Other time deposits | | | 837,335 | | | | 34,628 | | | 4.14 | | | | 758,448 | | | | 25,887 | | | 3.41 | |
| Short-term borrowings | | | 226,943 | | | | 9,866 | | | 4.35 | | | | 201,142 | | | | 5,373 | | | 2.67 | |
| Other borrowings | | | 229,020 | | | | 13,051 | | | 5.70 | | | | 211,558 | | | | 10,706 | | | 5.06 | |
Total interest bearing liabilities | | | 2,312,047 | | | | 86,210 | | | 3.73 | | | | 2,126,611 | | | | 59,462 | | | 2.80 | |
Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 351,239 | | | | - | | | - | | | | 330,379 | | | | - | | | - | |
| Accrued interest and other liabilities | | | 71,292 | | | | - | | | - | | | | 70,470 | | | | - | | | - | |
Total noninterest bearing liabilities | | | 422,531 | | | | - | | | - | | | | 400,849 | | | | - | | | - | |
Stockholders’ Equity | | | 195,124 | | | | - | | | - | | | | 181,036 | | | | - | | | - | |
Total Liabilities and Stockholders’ Equity | | $ | 2,929,702 | | | $ | 86,210 | | | 2.94 | % | | $ | 2,708,496 | | | $ | 59,462 | | | 2.20 | % |
Net interest income(1) | | | | | | $ | 109,915 | | | | | | | | | | $ | 97,277 | | | | |
Net interest income to total earning assets(1) | | | | | | | | | | 4.18 | % | | | | | | | | | | 4.04 | % |
| Interest bearing liabilities to earning assets | | | 87.97 | % | | | | | | | | | | 88.32 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(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 Year Ended 12/31/2006 | | | As of and For the
Year Ended 12/31/2005 | | | As of and For the Year Ended 12/31/2004 | |
Total Assets | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | | $ | 843,282 | | $ | 833,885 | | $ | 750,517 | |
| New Mexico Bank & Trust | | | | | | | 638,712 | | | 557,062 | | | 490,582 | |
| Wisconsin Community Bank | | | | | | | 413,108 | | | 390,842 | | | 385,116 | |
| Rocky Mountain Bank | | | | | | | 438,972 | | | 388,149 | | | 374,242 | |
| Galena State Bank and Trust Company | | | | | | | 219,863 | | | 241,719 | | | 220,018 | |
| Riverside Community Bank | | | | | | | 199,483 | | | 195,099 | | | 193,314 | |
| Arizona Bank & Trust | | | | | | | 223,567 | | | 136,832 | | | 85,850 | |
| First Community Bank | | | | | | | 118,010 | | | 121,337 | | | 116,654 | |
| Summit Bank & Trust | | | | | | | 21,590 | | | - | | | - | |
Total Deposits | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | | $ | 636,527 | | $ | 608,687 | | $ | 579,895 | |
| New Mexico Bank & Trust | | | | | | | 437,708 | | | 388,935 | | | 325,527 | |
| Wisconsin Community Bank | | | | | | | 336,015 | | | 311,436 | | | 327,221 | |
| Rocky Mountain Bank | | | | | | | 335,053 | | | 306,967 | | | 290,390 | |
| Galena State Bank and Trust Company | | | | | | | 178,388 | | | 179,437 | | | 168,109 | |
| Riverside Community Bank | | | | | | | 162,319 | | | 153,791 | | | 143,797 | |
| Arizona Bank & Trust | | | | | | | 176,438 | | | 118,959 | | | 73,199 | |
| First Community Bank | | | | | | | 95,287 | | | 95,506 | | | 95,529 | |
| Summit Bank & Trust | | | | | | | 6,514 | | | - | | | - | |
Return on Average Assets | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | | | 1.45 | % | | 1.28 | % | | 1.38 | % |
| New Mexico Bank & Trust | | | | | | | 1.21 | | | 1.10 | | | 1.13 | |
| Wisconsin Community Bank | | | | | | | 0.53 | | | 0.63 | | | 0.59 | |
| Rocky Mountain Bank | | | | | | | 1.18 | | | 0.72 | | | 1.05 | |
| Galena State Bank and Trust Company | | | | | | | 1.35 | | | 1.22 | | | 1.33 | |
| Riverside Community Bank | | | | | | | 0.64 | | | 0.83 | | | 0.97 | |
| Arizona Bank & Trust | | | | | | | 0.47 | | | 0.19 | | | (1.35 | ) |
| First Community Bank | | | | | | | 1.01 | | | 1.00 | | | 1.00 | |
| Summit Bank & Trust | | | | | | | (6.31 | ) | | - | | | - | |
Net Interest Margin | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | | | 3.61 | % | | 3.48 | % | | 3.58 | % |
| New Mexico Bank & Trust | | | | | | | 5.05 | | | 4.75 | | | 4.98 | |
| Wisconsin Community Bank | | | | | | | 3.83 | | | 3.75 | | | 3.50 | |
| Rocky Mountain Bank | | | | | | | 5.16 | | | 4.93 | | | 4.63 | |
| Galena State Bank and Trust Company | | | | | | | 3.45 | | | 3.43 | | | 3.43 | |
| Riverside Community Bank | | | | | | | 3.71 | | | 3.76 | | | 3.74 | |
| Arizona Bank & Trust | | | | | | | 4.92 | | | 5.03 | | | 4.94 | |
| First Community Bank | | | | | | | 3.95 | | | 3.80 | | | 3.72 | |
| Summit Bank & Trust | | | | | | | 6.98 | | | - | | | - | |
Net Income | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | | $ | 11,990 | | $ | 10,156 | | $ | 10,427 | |
| New Mexico Bank & Trust | | | | | | | 6,873 | | | 5,565 | | | 4,712 | |
| Wisconsin Community Bank | | | | | | | 2,109 | | | 2,444 | | | 2,208 | |
| Rocky Mountain Bank | | | | | | | 4,840 | | | 2,757 | | | 2,332 | |
| Galena State Bank and Trust Company | | | | | | | 3,167 | | | 2,808 | | | 2,926 | |
| Riverside Community Bank | | | | | | | 1,252 | | | 1,608 | | | 1,731 | |
| Arizona Bank & Trust | | | | | | | 902 | | | 199 | | | (822 | ) |
| First Community Bank | | | | | | | 1,197 | | | 1,198 | | | 1,145 | |
| Summit Bank & Trust | | | | | | | (1,220 | ) | | - | | | - | |
| 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 a Percent Of Total Loans |
As of December 31, 2006: | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 581,166 | | $ | 7,235 | | $ | 1,216 | | 1.24 | % |
| New Mexico Bank & Trust | | | 410,438 | | | 5,352 | | | 2,206 | | 1.30 | |
| Wisconsin Community Bank | | | 272,407 | | | 4,570 | | | 1,966 | | 1.68 | |
| Rocky Mountain Bank | | | 309,943 | | | 4,044 | | | 822 | | 1.30 | |
| Galena State Bank and Trust Company | | | 158,222 | | | 2,049 | | | 370 | | 1.30 | |
| Riverside Community Bank | | | 137,102 | | | 1,747 | | | 602 | | 1.27 | |
| Arizona Bank & Trust | | | 160,614 | | | 2,133 | | | 254 | | 1.33 | |
| First Community Bank | | | 81,498 | | | 1,182 | | | 588 | | 1.45 | |
| Summit Bank & Trust | | | 14,953 | | | 192 | | | - | | 1.28 | |
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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 | |
| Summit Bank & Trust | | | - | | | - | | | - | | - | |
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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 | |
| Summit Bank & Trust | | | - | | | - | | | - | | - | |
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