CONTACT:
John K. Schmidt
Chief Operating Officer
Chief Financial Officer
(563) 589-1994
jschmidt@htlf.com
FOR IMMEDIATE RELEASE
MONDAY, JANUARY 28, 2008
HEARTLAND FINANCIAL USA, INC. REPORTS FOURTH QUARTER 2007 EARNINGS
Highlights
| § | Maintained fourth quarter net interest margin at 3.87% compared to third quarter 2007 |
| § | Net income for the year increased $531,000 or 2% over the year 2006 |
| § | Noninterest income for the year grew 9% over the year 2006 |
| § | Total loans increased $132.2 million or 6% compared to year-end 2006 |
| § | Total deposits increased $64.6 million or 3% compared to year-end 2006 |
| § | Filed application for opening of Minnesota Bank & Trust |
| | | | Quarter Ended December 31, | | | | Year Ended December 31, | |
| | | | 2007 | | | | 2006 | | | | 2007 | | | | 2006 | |
| Net income (in millions) | | $ | 6.8 | | | $ | 7.5 | | | $ | 25.6 | | | $ | 25.1 | |
| Income from continuing operations (in millions) | | | 6.8 | | | | 7.5 | | | | 24.0 | | | | 24.3 | |
| Diluted earnings per share | | | 0.41 | | | | 0.45 | | | | 1.54 | | | | 1.50 | |
| Diluted earnings per share from continuing operations | | | 0.41 | | | | 0.44 | | | | 1.44 | | | | 1.45 | |
| | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.83 | % | | | 0.98 | % | | | 0.81 | % | | | 0.86 | % |
| Return on average equity | | | 11.86 | | | | 14.62 | | | | 11.88 | | | | 12.86 | |
| Net interest margin | | | 3.87 | | | | 4.04 | | | | 3.95 | | | | 4.17 | |
“For 2007, a difficult year for most banks and the economy in general, Heartland achieved an increase in total earnings and earnings per share. The Company turned in a good performance with growth in loans, deposits and noninterest income while controlling noninterest expense.”-- Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.
Dubuque, Iowa, January 28, 2008—Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported earnings for the fourth quarter of 2007. Net income was $6.8 million, or $0.41 per diluted share, for the quarter ended December 31, 2007, compared to $7.5 million, or $0.45 per diluted share, earned during the fourth quarter of 2006. Return on average equity was 11.86 percent and return on average assets was 0.83 percent for the fourth quarter of 2007, compared to 14.62 percent and 0.98 percent, respectively, for the same quarter in 2006.
Net income for the year 2007 was $25.6 million, or $1.54 per diluted share, an increase of $531,000 or 2 percent over net income of $25.1 million, or $1.50 per diluted share, recorded during 2006. Return on average equity was 11.88 percent and return on average assets was 0.81 percent for 2007, compared to 12.86 percent and 0.86 percent, respectively, for 2006. During 2006, a pre-tax judgment of $2.4 million 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 2006 was $26.4 million, or $1.58 per diluted share. Because of the non-recurring nature of this expense, management believes that this pro-forma presentation can help investors understand Heartland’s financial performance for 2006.
Lynn B. Fuller, Heartland’s chairman, president and chief executive officer stated, “For 2007, a difficult year for most banks and the economy in general, Heartland achieved an increase in total earnings and earnings per share. The Company turned in a good performance with growth in loans, deposits and noninterest income while controlling noninterest expense.”
The sale of Rocky Mountain Bank’s branch banking office in Broadus, Montana, was completed on June 22, 2007. Included in the sale were $20.9 million of loans and $30.2 million of deposits. The results of operations of the branch are reflected on the income statement as discontinued operations for the prior periods reported. Also included on the income statement as discontinued operations for the prior periods are the results of operations of ULTEA, Inc., Heartland’s fleet leasing subsidiary, which was sold to ALD Automotive on December 22, 2006. During 2007, income from discontinued operations included a $2.4 million pre-tax gain recorded as a result of the sale of the Broadus branch.
Income from continuing operations was $6.8 million, or $0.41 per diluted share, during the fourth quarter of 2007 compared to $7.5 million, or $0.44 per diluted share, during the fourth quarter of 2006. This decrease in earnings from continuing operations was primarily a result of a higher provision for loan losses, which was $3.3 million during the fourth quarter of 2007 compared to a reversal of $157,000 during the fourth quarter of 2006. For the year 2007, income from continuing operations was $24.0 million, or $1.44 per diluted share, compared to $24.3 million, or $1.45 per diluted share, during 2006. Exclusive of the $1.3 million one-time expense associated with the court case mentioned earlier, Heartland’s net income from continuing operations for 2006 was $25.6 million, or $1.53 per diluted share. Growth in net interest income and noninterest income during 2007 partially offset the additional provision for loan losses and noninterest expenses recorded.
Net Interest Margin Constrained; Net Interest Income Grows
Net interest margin, expressed as a percentage of average earning assets, was 3.87 percent during the fourth quarter of 2007 compared to 4.04 percent for the fourth quarter of 2006 and 3.87 percent for the third quarter of 2007. Affecting the net interest margin throughout 2007 was the impact of foregone interest on Heartland’s nonperforming loans which had increased to $32 million by year-end. Additionally, early in the third quarter of 2007, a $20.5 million investment was made in bank owned life insurance upon which interest expense associated with the funding of this investment affects net interest margin while the corresponding earnings on this investment is recorded as noninterest income.
Fuller said, “Net interest margin, which gradually fell through much of last year, has leveled off at 3.87 percent due to managed pricing of loans and deposits. Given the asset sensitive posture of Heartland’s balance sheet, the most recent 75 basis point rate cut by the Fed and the possibility of additional rate cuts, Heartland will be challenged to maintain its net interest margin at the current level. We will continue to proactively manage pricing in concert with changes in market interest rates.”
Net interest income on a tax-equivalent basis totaled $28.4 million during the fourth quarter of 2007, an increase of $724,000 or 3 percent from the $27.7 million recorded during the fourth quarter of 2006. For the year 2007, net interest income on a tax-equivalent basis was $113.0 million, an increase of $4.7 million or 4 percent from the $108.3 million recorded during 2006. Contributing to these increases was the $194.2 million or 7 percent growth in average earning assets during the comparable quarterly periods and the $266.3 million or 10 percent growth in average earning assets during the year 2007 compared to 2006.
On a tax-equivalent basis, interest income in the fourth quarter of 2007 totaled $54.7 million compared to $52.2 million in the fourth quarter of 2006, an increase of $2.5 million or 5 percent. For the year 2007, interest income on a tax-equivalent basis increased $25.2 million or 13 percent over 2006. 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 impact interest income more quickly than if there were more fixed rate loans.
Interest expense for the fourth quarter of 2007 was $26.2 million compared to $24.5 million in the fourth quarter of 2006, an increase of $1.7 million or 7 percent. On a yearly comparative basis, interest expense increased $20.5 million or 24 percent. Approximately 77 percent of Heartland’s certificate of deposit accounts will mature within the next twelve months at a weighted average rate of 4.87 percent.
Noninterest Income Rises; Noninterest Expense Moderates Despite Investments in New Facilities
Noninterest income increased by $389,000 or 5 percent during the fourth quarter of 2007 compared to the same quarter in 2006. The categories experiencing the largest increases for the comparative quarters were brokerage and insurance commissions and gains on sale of loans. During the fourth quarter of 2007, Heartland sold its credit card portfolio, resulting in a gain of $1.0 million. The increases in these categories were partially offset by losses on trading account securities and the amortization of investments made during the third quarter of 2007 in limited liability companies that own certified historic structures for which historic rehabilitation tax credits apply. For the year 2007, noninterest income increased $2.5 million or 9 percent over 2006, primarily from increased trust fees, brokerage and insurance commissions, gains on sale of loans and income on bank owned life insurance.
Fuller stated, “We are pleased that income from our Wealth Management Group and brokerage unit made healthy contributions in 2007. These businesses grew their revenue by 11% and 66%, respectively. The sale of our credit card portfolio in the fourth quarter of 2007 also added a one-time gain in this category, resulting in pre-tax revenue of $1.0 million.”
For the fourth quarter of 2007, noninterest expense increased $268,000 or 1 percent in comparison with the same period in 2006. The largest component of noninterest expense, salaries and employee benefits, decreased $630,000 or 5 percent during the fourth quarter of 2007 in comparison to the fourth quarter of 2006. This reduction in salaries and employee benefits expense was primarily related to a $2.3 million adjustment for lower employer incentive payouts and employer contributions to the company’s retirement plan. For the year 2007, noninterest expense increased $3.4 million or 4 percent when compared to 2006. Exclusive of the $2.4 million judgment recorded during 2006, noninterest expense increased $5.8 million or 6 percent in comparison to 2006. The largest contributor to this increase was salaries and employee benefits which grew by $3.6 million or 7 percent during the yearly comparative period, primarily due to branch expansions, including the formation of Summit Bank & Trust and Minnesota Bank & Trust, and additional staffing at Heartland’s operations center to provide support services to the growing number of bank subsidiaries. Total full-time equivalent employees increased to 982 at December 31, 2007, from 959 at December 31, 2006.
Recapping Heartland’s expansion efforts, Fuller said, “In 2007, we opened five new branch offices, relocated one office and initiated the organization of our newest de novo bank charter, Minnesota Bank & Trust. Looking into 2008, we plan to continue to make strategic investments in future growth by expanding our banking franchise in existing markets, albeit at a somewhat slower pace.”
Referring to the new bank being formed in Minnesota, Fuller said, “The organization of Heartland’s tenth independent charter is proceeding very well. Applications have been filed with regulatory agencies and we are looking forward to a second quarter grand opening. In the meantime, we have opened a loan production office now to gather momentum so the new bank can hit the ground running.”
Heartland’s effective tax rate was 22.9 percent for the fourth quarter of 2007 compared to 36.9 percent for the fourth quarter of 2006. On a yearly comparative basis, Heartland’s effective tax rate was 29.0 percent during 2007 and 33.3 percent during 2006. The decrease in Heartland’s effective tax rate during the fourth quarter of 2007 resulted from $1.3 million in projected federal rehabilitation tax credits associated with Dubuque Bank and Trust Company’s newly acquired 99.9 percent ownership interest in two limited liability companies that own certified historic structures.
Heartland’s effective tax rate is also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 19.29 percent during the fourth quarter of 2007 compared to 14.11 percent during the same quarter of 2006. For the years 2007 and 2006, tax-exempt income as a percentage of pre-tax income was 19.00 percent and 17.71 percent, respectively. The tax-equivalent adjustment for this tax-exempt interest income was $909,000 during the fourth quarter of 2007 compared to $907,000 during the same quarter in 2006. For the yearly comparative period, the tax-equivalent adjustment for tax-exempt interest income was $3.7 million for 2007 and $3.6 million for 2006.
Solid Loan Growth; Slower Growth in Deposits
At December 31, 2007, total assets had increased $205.9 million or 7 percent since year-end 2006, primarily because of loan growth. Despite the loss of $20.9 million in loans as a result of the sale of the Broadus branch of Rocky Mountain Bank in the second quarter of 2007, total loans and leases grew to $2.3 billion at December 31, 2007, an increase of $132.3 million or 6 percent since year-end 2006. The growth in loans was balanced between Heartland’s Midwestern and Western markets. The Heartland subsidiary banks experiencing notable loan growth this year were Dubuque Bank and Trust Company, New Mexico Bank & Trust, Rocky Mountain Bank and Summit Bank & Trust. The commercial and commercial real estate loan category grew by $148.9 million or 10 percent. Included in this change was the reclassification of $28.3 million of commercial real estate loans at Wisconsin Community Bank from the loans held for sale portfolio to the loans held to maturity portfolio as management intends to hold those loans in its portfolio.
Fuller commented, “While year over year loan growth was good, we saw loan demand slow as the year progressed. Despite this, we anticipate 2008 will be a reasonably good year in loan production, though we are focusing much more attention on controlling our existing nonperformers.”
Despite the loss of $30.2 million in deposits as a result of the Broadus branch sale, total deposits grew to $2.38 billion at December 31, 2007, an increase of $64.6 million or 3 percent since year-end 2006. The sale of the Broadus branch of Rocky Mountain Bank included deposits of $30.2 million. Growth in deposits was weighted more heavily in Heartland’s Midwestern markets. Demand deposits experienced a $10.0 million or 3 percent increase and savings deposit balances experienced a $32.1 million or 4 percent increase despite the $3.4 million in demand deposits and $10.6 million in savings deposits lost as part of the Broadus branch sale. The increase in savings deposits primarily resulted from the promotion of a new money market product. Time deposits, excluding brokered time deposits, increased $54.1 million or 5 percent with a majority of the growth at the Midwestern banks where depositors tend to favor the term deposit product. Included in the Broadus branch sale were $16.2 million in time deposits. Brokered time deposit balances decreased $31.6 million or 31 percent during the year. At December 31, 2007, brokered time deposits totaled $69.0 million or 3 percent of total deposits compared to $100.6 million or 4 percent of total deposits at year-end 2006.
Increase in Nonperforming Loans
The allowance for loan and lease losses at December 31, 2007, was 1.45 percent of loans and 104 percent of nonperforming loans, compared to 1.40 percent of loans and 356 percent of nonperforming loans at December 31, 2006, and 1.38 percent of loans and 104 percent of nonperforming loans at September 30, 2007. Additions to the allowance for loan and lease losses were primarily driven by the continued softening of the economy and reduced real estate values, particularly in the Phoenix market. Nonperforming loans were $31.8 million or 1.40 percent of total loans and leases at December 31, 2007, compared to $8.4 million or 0.39 percent of total loans and leases at December 31, 2006, and $30.4 million or 1.33 percent of total loans and leases at September 30, 2007. The majority of the $23.4 million increase in nonperforming loans from December 31, 2006, occurred during the second and third quarters of 2007. Over half of this increase was attributable to nonperforming loans at Wisconsin Community Bank totaling $10.2 million, of which $2.5 million in outstanding balances is covered by government guarantees, and nonperforming loans at Arizona Bank & Trust totaling $5.3 million. The remaining increase was distributed among the other bank subsidiaries and related to a few loan customers. Net charge-offs during the fourth quarter of 2007 were $1.7 million compared to $1.9 million, $2.9 million and $362,000 during the third, second and first quarters of 2007, respectively. Management monitors the loan portfolio of each bank subsidiary and, at this point, does not feel that the increase in nonperforming loans is any indication of a systemic problem but is more likely a result of the continuing shift in the economy in some of Heartland’s markets. With all the recent attention given to subprime lending, Heartland feels it is important to inform investors that its bank subsidiaries have not been active in the origination of subprime loans. Because of the net realizable value of collateral, guarantees and other factors, management expects losses on Heartland’s nonperforming loans during 2008 to be below the amounts experienced during 2007.
Fuller concluded, “A great deal of time and talent is now focused on reducing the level of our nonperforming loans to unlock the earnings potential as those dollars are converted back into earning assets. Other steps we are taking this year to enhance the long-term value of our financial network include programs to grow core demand deposits, as well as, aggressive expense management.”
Conference Call Details
Heartland will host a conference call for investors at 3:00 p.m. CDT today. To participate, dial 800-218-0204 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 4, 2008, by dialing 800-405-2236, code 11106765, or by logging onto www.htlf.com.
About Heartland Financial USA, Inc.:
Heartland Financial USA, Inc. is a $3.3 billion diversified financial services company providing banking, mortgage, wealth management, insurance and consumer finance services to individuals and businesses. The Company currently has 59 banking locations in 40 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montanaand Colorado. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.
Safe Harbor Statement
This release, 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 Heartland’s financial condition, results of operations, plans, objectives, future performance and business. 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, (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 Risk Factors section of its Annual Report on Form 10-K and in its other 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 |
| | | | 12/31/2007 | | | | 12/31/2006 | | | | 12/31/2007 | | | | 12/31/2006 | |
| Interest Income | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 46,083 | | | $ | 44,738 | | | $ | 186,795 | | | $ | 166,588 | |
| Interest on securities and other: | | | | | | | | | | | | | | | | |
Taxable | | | 5,927 | | | | 5,128 | | | | 21,937 | | | | 17,593 | |
Nontaxable | | | 1,665 | | | | 1,445 | | | | 6,079 | | | | 5,783 | |
| Interest on federal funds sold | | | 77 | | | | - | | | | 387 | | | | 164 | |
| Interest on deposits in other financial institutions | | | 13 | | | | 6 | | | | 33 | | | | 22 | |
Total Interest Income | | | 53,765 | | | | 51,317 | | | | 215,231 | | | | 190,150 | |
| Interest Expense | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 19,540 | | | | 18,073 | | | | 77,865 | | | | 62,530 | |
| Interest on short-term borrowings | | | 2,748 | | | | 2,952 | | | | 13,293 | | | | 9,828 | |
| Interest on other borrowings | | | 3,971 | | | | 3,508 | | | | 14,733 | | | | 13,051 | |
Total Interest Expense | | | 26,259 | | | | 24,533 | | | | 105,891 | | | | 85,409 | |
Net Interest Income | | | 27,506 | | | | 26,784 | | | | 109,340 | | | | 104,741 | |
| Provision for loan and lease losses | | | 3,304 | | | | (157 | ) | | | 10,073 | | | | 3,883 | |
Net Interest Income After Provision for Loan and Lease Losses | | | 24,202 | | | | 26,941 | | | | 99,267 | | | | 100,858 | |
| Noninterest Income | | | | | | | | | | | | | | | | |
| Service charges and fees | | | 2,821 | | | | 2,704 | | | | 11,108 | | | | 11,058 | |
| Loan servicing income | | | 1,273 | | | | 1,091 | | | | 4,376 | | | | 4,279 | |
| Trust fees | | | 1,788 | | | | 1,926 | | | | 8,053 | | | | 7,258 | |
| Brokerage and insurance commissions | | | 939 | | | | 532 | | | | 3,097 | | | | 1,871 | |
| Securities gains, net | | | 38 | | | | 125 | | | | 341 | | | | 553 | |
| Gain (loss) on trading account securities | | | (185 | ) | | | 80 | | | | (105 | ) | | | 141 | |
| Impairment loss on equity securities | | | - | | | | - | | | | - | | | | (76 | ) |
| Gains on sale of loans | | | 1,527 | | | | 611 | | | | 3,578 | | | | 2,289 | |
| Income on bank owned life insurance | | | 565 | | | | 382 | | | | 1,777 | | | | 1,151 | |
| Other noninterest income | | | (676 | ) | | | 250 | | | | (264 | ) | | | 920 | |
Total Noninterest Income | | | 8,090 | | | | 7,701 | | | | 31,961 | | | | 29,444 | |
| Noninterest Expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 11,888 | | | | 12,518 | | | | 54,568 | | | | 50,975 | |
| Occupancy | | | 1,961 | | | | 1,918 | | | | 7,902 | | | | 7,291 | |
| Furniture and equipment | | | 1,848 | | | | 1,737 | | | | 6,972 | | | | 6,724 | |
| Outside services | | | 2,544 | | | | 2,450 | | | | 9,555 | | | | 9,404 | |
| Advertising | | | 948 | | | | 1,030 | | | | 3,642 | | | | 3,893 | |
| Other intangibles amortization | | | 240 | | | | 249 | | | | 892 | | | | 942 | |
| Other noninterest expenses | | | 4,105 | | | | 3,364 | | | | 14,326 | | | | 15,220 | |
Total Noninterest Expense | | | 23,534 | | | | 23,266 | | | | 97,857 | | | | 94,449 | |
Income Before Income Taxes | | | 8,758 | | | | 11,376 | | | | 33,371 | | | | 35,853 | |
| Income taxes | | | 2,006 | | | | 3,913 | | | | 9,409 | | | | 11,578 | |
Income From Continuing Operations | | | 6,752 | | | | 7,463 | | | | 23,962 | | | | 24,275 | |
| Discontinued Operations | | | | | | | | | | | | | | | | |
Income from operations of discontinued operations(1) | | | - | | | | 567 | | | | 2,756 | | | | 1,758 | |
Income taxes | | | - | | | | 497 | | | | 1,085 | | | | 931 | |
Income From Discontinued Operations | | | - | | | | 70 | | | | 1,671 | | | | 827 | |
Net Income | | $ | 6,752 | | | $ | 7,533 | | | $ | 25,633 | | | $ | 25,102 | |
| Earnings per common share-basic | | $ | .41 | | | $ | .46 | | | $ | 1.56 | | | $ | 1.52 | |
| Earnings per common share-diluted | | $ | .41 | | | $ | .45 | | | $ | 1.54 | | | $ | 1.50 | |
| Earnings per common share from continuing operations-basic | | $ | .41 | | | $ | .45 | | | $ | 1.45 | | | $ | 1.47 | |
| Earnings per common share from continuing operations-diluted | | $ | .41 | | | $ | .44 | | | $ | 1.44 | | | $ | 1.45 | |
| Weighted average shares outstanding-basic | | | 16,481,854 | | | | 16,531,998 | | | | 16,477,684 | | | | 16,507,960 | |
| Weighted average shares outstanding-diluted | | | 16,574,540 | | | | 16,784,656 | | | | 16,596,806 | | | | 16,734,989 | |
| | | | | | | | | | | | | | | | | |
(1)Includes a gain of $2,442 on the sale of Rocky Mountain Bank’s Broadus branch during the second quarter of 2007 |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarters Ended |
| | | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 |
| Interest Income | | | | | | |
| Interest and fees on loans and leases | | $ 46,083 | $ 47,406 | $ 47,748 | $ 45,558 | $ 44,738 |
| Interest on securities and other: | | | | | | |
| Taxable | | 5,927 | 5,446 | 5,267 | 5,297 | 5,128 |
| Nontaxable | | 1,665 | 1,513 | 1,443 | 1,458 | 1,445 |
| Interest on federal funds sold | | 77 | 310 | - | - | - |
| Interest on deposits in other financial institutions | | 13 | 2 | 8 | 10 | 6 |
| Total Interest Income | | 53,765 | 54,677 | 54,466 | 52,323 | 51,317 |
| Interest Expense | | | | | | |
| Interest on deposits | | 19,540 | 20,477 | 19,550 | 18,298 | 18,073 |
| Interest on short-term borrowings | | 2,748 | 2,764 | 3,970 | 3,811 | 2,952 |
| Interest on other borrowings | | 3,971 | 4,199 | 3,240 | 3,323 | 3,508 |
| Total Interest Expense | | 26,259 | 27,440 | 26,760 | 25,432 | 24,533 |
| Net Interest Income | | 27,506 | 27,237 | 27,706 | 26,891 | 26,784 |
| Provision for loan and lease losses | | 3,304 | 575 | 4,268 | 1,926 | (157) |
| Net Interest Income After Provision for Loan and Lease Losses | | 24,202 | 26,662 | 23,438 | 24,965 | 26,941 |
| Noninterest Income | | | | | | |
| Service charges and fees | | 2,821 | 2,861 | 2,855 | 2,571 | 2,704 |
| Loan servicing income | | 1,273 | 1,068 | 1,040 | 995 | 1,091 |
| Trust fees | | 1,788 | 2,089 | 2,055 | 2,121 | 1,926 |
| Brokerage and insurance commissions | | 939 | 820 | 845 | 493 | 532 |
| Securities gains, net | | 38 | 31 | 147 | 125 | 125 |
| Gain (loss) on trading account securities | | (185) | (7) | 46 | 41 | 80 |
| Impairment loss on equity securities | | - | - | - | - | - |
| Gains on sale of loans | | 1,527 | 604 | 856 | 591 | 611 |
| Income on bank owned life insurance | | 565 | 595 | 317 | 300 | 382 |
| Other noninterest income | | (676) | (145) | (68) | 374 | 250 |
| Total Noninterest Income | | 8,090 | 7,916 | 8,093 | 7,611 | 7,701 |
| Noninterest Expense | | | | | | |
| Salaries and employee benefits | | 11,888 | 14,301 | 14,210 | 14,169 | 12,518 |
| Occupancy | | 1,961 | 2,004 | 2,010 | 1,927 | 1,918 |
| Furniture and equipment | | 1,848 | 1,669 | 1,779 | 1,676 | 1,737 |
| Outside services | | 2,544 | 2,374 | 2,368 | 2,269 | 2,450 |
| Advertising | | 948 | 886 | 1,039 | 769 | 1,030 |
| Other intangibles amortization | | 240 | 241 | 192 | 219 | 249 |
| Other noninterest expenses | | 4,105 | 3,272 | 3,331 | 3,367 | 3,364 |
| Total Noninterest Expense | | 23,534 | 24,747 | 24,929 | 24,396 | 23,266 |
| Income Before Income Taxes | | 8,758 | 9,831 | 6,602 | 8,180 | 11,376 |
| Income taxes | | 2,006 | 2,906 | 1,965 | 2,532 | 3,913 |
| Income From Continuing Operations | | 6,752 | 6,925 | 4,637 | 5,648 | 7,463 |
| Discontinued Operations | | | | | | |
Income from operations of discontinued operations(1) | | - | - | 2,565 | 191 | 567 |
| Income taxes | | - | - | 1,017 | 68 | 497 |
| Income From Discontinued Operations | | - | - | 1,548 | 123 | 70 |
| Net Income | | $ 6,752 | $ 6,925 | $ 6,185 | $ 5,771 | $ 7,533 |
| Earnings per common share-basic | | $ .41 | $ 0.42 | $ .38 | $ .35 | $ .46 |
| Earnings per common share-diluted | | $ .41 | $ 0.42 | $ .37 | $ .34 | $ .45 |
| Earnings per common share from continuingoperations-basic | | $ .41 | $ 0.42 | $ .28 | $ .34 | $ .45 |
| Earnings per common share from continuingoperations-diluted | | $ .41 | $ 0.42 | $ .28 | $ .34 | $ .44 |
| Weighted average shares outstanding-basic | | 16,481,854 | 16,447,270 | 16,451,031 | 16,542,876 | 16,531,998 |
| Weighted average shares outstanding-diluted | | 16,574,540 | 16,543,635 | 16,644,286 | 16,760,688 | 16,784,656 |
| | | | | | | |
(1)Includes a gain of $2,442 on the sale of Rocky Mountain Bank’s Broadus branch during the second quarter of 2007 |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | As Of |
| | | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 |
| Assets | | | | | | |
| Cash and cash equivalents | | $ 46,832 | $ 31,591 | $ 35,721 | $ 62,232 | $ 49,143 |
| Securities | | 689,949 | 648,337 | 590,194 | 587,803 | 617,040 |
| Loans held for sale | | 12,679 | 16,267 | 22,346 | 42,644 | 50,381 |
| Loans and leases: | | | | | | |
| Held to maturity | | 2,280,167 | 2,274,119 | 2,298,256 | 2,224,097 | 2,147,845 |
| Allowance for loan and lease losses | | (32,993) | (31,438) | (32,738) | (31,545) | (29,981) |
| Loans and leases, net | | 2,247,174 | 2,242,681 | 2,265,518 | 2,192,552 | 2,117,864 |
| Premises, furniture and equipment, net | | 120,285 | 119,461 | 115,885 | 112,951 | 108,567 |
| Goodwill | | 40,207 | 40,207 | 40,207 | 40,207 | 39,817 |
| Other intangible assets, net | | 8,369 | 8,378 | 8,530 | 8,997 | 9,010 |
| Cash surrender value on life insurance | | 55,532 | 54,936 | 33,810 | 33,698 | 33,371 |
| Assets of discontinued operations held for sale | | - | - | - | 20,947 | - |
| Other assets | | 43,099 | 40,597 | 42,205 | 34,329 | 33,049 |
| Total Assets | | $ 3,264,126 | $ 3,202,455 | $ 3,154,416 | $ 3,136,360 | $ 3,058,242 |
| | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | |
| Liabilities | | | | | | |
| Deposits: | | | | | | |
| Demand | | $ 381,499 | $ 367,617 | $ 368,234 | $ 360,744 | $ 371,465 |
| Savings | | 855,036 | 850,845 | 804,949 | 825,600 | 822,915 |
| Brokered time deposits | | 68,984 | 116,082 | 119,958 | 118,151 | 100,572 |
| Other time deposits | | 1,070,780 | 1,086,732 | 1,075,024 | 1,045,330 | 1,016,705 |
| Total deposits | | 2,376,299 | 2,421,276 | 2,368,165 | 2,349,825 | 2,311,657 |
| Short-term borrowings | | 354,146 | 256,822 | 274,141 | 304,342 | 275,694 |
| Other borrowings | | 263,607 | 268,716 | 268,758 | 210,804 | 224,523 |
| Liabilities of discontinued operations held for sale | | - | - | - | 32,086 | - |
| Accrued expenses and other liabilities | | 39,474 | 33,366 | 31,709 | 27,453 | 36,657 |
| Total Liabilities | | 3,033,526 | 2,980,180 | 2,942,773 | 2,924,510 | 2,848,531 |
| Stockholders’ Equity | | 230,600 | 222,275 | 211,643 | 211,850 | 209,711 |
| Total Liabilities and Stockholders’ Equity | | $ 3,264,126 | $ 3,202,455 | $ 3,154,416 | $ 3,136,360 | $ 3,058,242 |
| | | | | | | |
| Common Share Data | | | | | | |
| Book value per common share | | $ 14.04 | $ 13.48 | $ 12.88 | $ 12.85 | $ 12.65 |
| FAS 115 effect on book value per common share | | $ 0.37 | $ 0.13 | $ (0.15) | $ 0.10 | $ 0.05 |
| Common shares outstanding, net of treasury stock | | 16,427,016 | 16,492,245 | 16,437,459 | 16,484,541 | 16,572,080 |
| | | | | | | |
Tangible Capital Ratio(1) | | 5.78% | 5.62% | 5.35% | 5.38% | 5.46% |
(1) Total stockholders’ equity less goodwill and 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 |
| | | | 12/31/2007 | 12/31/2006 | 12/31/2007 | 12/31/2006 |
| | | | | | | |
| Average Balances | | | | | | |
| Assets | | | $ 3,211,155 | $ 3,051,995 | $ 3,154,824 | $ 2,929,702 |
| Loans and leases, net of unearned | | | 2,283,591 | 2,151,870 | 2,272,021 | 2,071,662 |
| Deposits | | | 2,409,315 | 2,263,567 | 2,361,003 | 2,176,023 |
| Earning assets | | | 2,910,942 | 2,716,768 | 2,862,036 | 2,595,712 |
| Interest bearing liabilities | | | 2,571,327 | 2,391,269 | 2,527,839 | 2,283,502 |
| Stockholders’ equity | | | 225,945 | 204,438 | 215,740 | 195,124 |
| Tangible stockholders’ equity | | | 184,871 | 162,053 | 174,172 | 154,368 |
| | | | | | | |
| Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | | 0.83% | 0.98% | 0.81% | 0.86% |
| Annualized return on average equity | | | 11.86 | 14.62 | 11.88 | 12.86 |
| Annualized return on average tangible equity | | | 14.49 | 18.44 | 14.72 | 16.26 |
Annualized net interest margin(1) | | | 3.87 | 4.04 | 3.95 | 4.17 |
Efficiency ratio(2) | | | 64.54 | 65.97 | 67.65 | 68.83 |
(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
| | | For the Quarters Ended |
| | | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 |
| | | | | | | |
| Average Balances | | | | | | |
| Assets | | $ 3,211,155 | $ 3,176,715 | $ 3,158,088 | $ 3,073,337 | $ 3,051,995 |
| Loans and leases, net of unearned | | 2,283,591 | 2,287,264 | 2,302,037 | 2,214,852 | 2,151,870 |
| Deposits | | 2,409,315 | 2,415,158 | 2,348,386 | 2,270,678 | 2,263,567 |
| Earning assets | | 2,910,942 | 2,890,761 | 2,857,840 | 2,790,087 | 2,716,768 |
| Interest bearing liabilities | | 2,571,327 | 2,558,460 | 2,524,956 | 2,457,797 | 2,391,269 |
| Stockholders’ equity | | 225,945 | 216,038 | 211,639 | 209,338 | 204,438 |
| Tangible stockholders’ equity | | 184,871 | 174,637 | 169,641 | 167,566 | 162,053 |
| | | | | | | |
| Earnings Performance Ratios | | | | | | |
| Annualized return on average assets | | 0.83% | 0.86% | 0.79% | 0.76% | 0.98% |
| Annualized return on average equity | | 11.86 | 12.72 | 11.72 | 11.18 | 14.62 |
| Annualized return on average tangible equity | | 14.49 | 15.91 | 14.62 | 13.97 | 18.44 |
Annualized net interest margin(1) | | 3.87 | 3.87 | 4.02 | 4.04 | 4.04 |
Efficiency ratio(2) | | 64.54 | 68.58 | 68.39 | 69.13 | 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 |
| | | 12/31/2007 | 12/31/2006 | 12/31/2005 |
| Loan and Lease Data | | | | |
| Commercial and commercial real estate | | $ 1,632,597 | $ 1,483,738 | $ 1,304,080 |
| Residential mortgage | | 217,044 | 225,343 | 219,671 |
| Agricultural and agricultural real estate | | 225,663 | 233,748 | 230,357 |
| Consumer | | 199,518 | 194,652 | 181,019 |
| Direct financing leases, net | | 9,158 | 14,359 | 21,586 |
| Unearned discount and deferred loan fees | | (3,813) | (3,995) | (3,647) |
| Total loans and leases | | $ 2,280,167 | $ 2,147,845 | $ 1,953,066 |
| | | | | |
| Asset Quality | | | | |
| Nonaccrual loans | | $ 30,694 | $ 8,104 | $ 14,877 |
| Loans past due ninety days or more as to interest orprincipal payments | | 1,134 | 315 | 115 |
| Other real estate owned | | 2,195 | 1,575 | 1,586 |
| Other repossessed assets | | 438 | 349 | 471 |
| Total nonperforming assets | | $ 34,461 | $ 10,343 | $ 17,049 |
| | | | | |
| Allowance for Loan and Lease Losses | | | | |
| Balance, beginning of period | | $ 29,981 | $ 27,791 | $ 24,973 |
| Provision for loan and lease losses from continuingoperations | | 10,073 | 3,883 | 6,533 |
| Provision for loan and lease losses from discontinuedoperations | | - | (5) | 31 |
| Loans charged off | | (8,564) | (3,989) | (4,579) |
| Recoveries | | 1,641 | 1,733 | 1,152 |
| Reclass for unfunded commitments to other liabilities | | - | - | (319) |
| Additions related to acquired bank | | - | 591 | - |
| Reductions related to discontinued operations | | (138) | (23) | - |
| Balance, end of period | | $ 32,993 | $ 29,981 | $ 27,791 |
| | | | | |
| Asset Quality Ratios | | | | |
| Ratio of nonperforming loans to total loans and leases | | 1.40% | 0.39% | 0.77% |
| Ratio of nonperforming assets to total assets | | 1.06 | 0.34 | 0.60 |
| Ratio of net loan chargeoffs to average loans and leases | | 0.30 | 0.11 | 0.18 |
| Allowance for loan losses as a percent of loans andleases | | 1.45 | 1.40 | 1.42 |
| Allowance for loan losses as a percent of nonperforming loans and leases | | 103.66 | 356.11 | 185.37 |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS |
| | | | For the Quarters Ended | |
| | | | 12/31/2007 | | | | 12/31/2006 | |
| | | | Average | | | | | | | | | | | Average | | | | | | | | |
| | | | Balance | | | | Interest | | | Rate | | | | Balance | | | | Interest | | | Rate | |
| Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 503,504 | | | $ | 5,927 | | | 4.67 | % | | $ | 464,166 | | | $ | 5,129 | | | 4.38 | % |
Nontaxable(1) | | | 147,715 | | | | 2,400 | | | 6.45 | | | | 131,268 | | | | 2,186 | | | 6.61 | |
Total securities | | | 651,219 | | | | 8,327 | | | 5.07 | | | | 595,434 | | | | 7,315 | | | 4.87 | |
| Interest bearing deposits | | | 749 | | | | 13 | | | 6.89 | | | | 790 | | | | 6 | | | 3.01 | |
| Federal funds sold | | | 6,827 | | | | 77 | | | 4.47 | | | | - | | | | - | | | - | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,617,292 | | | | 31,349 | | | 7.69 | | | | 1,482,378 | | | | 29,528 | | | 7.90 | |
Residential mortgage | | | 233,829 | | | | 3,904 | | | 6.62 | | | | 241,786 | | | | 4,044 | | | 6.64 | |
Agricultural and agricultural real estate(1) | | | 224,981 | | | | 4,481 | | | 7.90 | | | | 220,238 | | | | 4,599 | | | 8.28 | |
Consumer | | | 197,394 | | | | 5,173 | | | 10.40 | | | | 193,332 | | | | 4,919 | | | 10.09 | |
Direct financing leases, net | | | 10,096 | | | | 154 | | | 6.05 | | | | 14,136 | | | | 211 | | | 5.92 | |
Fees on loans | | | - | | | | 1,196 | | | - | | | | - | | | | 1,602 | | | - | |
Less: allowance for loan and lease losses | | | (31,445 | ) | | | - | | | - | | | | (31,326 | ) | | | - | | | - | |
Net loans and leases | | | 2,252,147 | | | | 46,257 | | | 8.15 | | | | 2,120,544 | | | | 44,903 | | | 8.40 | |
Total earning assets | | | 2,910,942 | | | $ | 54,674 | | | 7.45 | % | | | 2,716,768 | | | $ | 52,224 | | | 7.63 | % |
| Nonearning Assets | | | 300,213 | | | | | | | | | | | 335,227 | | | | | | | | |
| Total Assets | | $ | 3,211,155 | | | | | | | | | | $ | 3,051,995 | | | | | | | | |
| Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 848,746 | | | $ | 5,272 | | | 2.46 | % | | $ | 802,182 | | | $ | 5,459 | | | 2.70 | % |
Time, $100,000 and over | | | 317,085 | | | | 3,913 | | | 4.90 | | | | 234,815 | | | | 2,785 | | | 4.71 | |
Other time deposits | | | 868,105 | | | | 10,355 | | | 4.73 | | | | 869,070 | | | | 9,829 | | | 4.49 | |
| Short-term borrowings | | | 273,882 | | | | 2,748 | | | 3.98 | | | | 254,105 | | | | 2,952 | | | 4.61 | |
| Other borrowings | | | 263,509 | | | | 3,971 | | | 5.98 | | | | 231,097 | | | | 3,508 | | | 6.02 | |
Total interest bearing liabilities | | | 2,571,327 | | | | 26,259 | | | 4.05 | | | | 2,391,269 | | | | 24,533 | | | 4.07 | |
| Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 375,379 | | | | | | | | | | | 357,500 | | | | | | | | |
| Accrued interest and other liabilities | | | 38,504 | | | | | | | | | | | 98,788 | | | | | | | | |
Total noninterest bearing liabilities | | | 413,883 | | | | | | | | | | | 456,288 | | | | | | | | |
| Stockholders’ Equity | | | 225,945 | | | | | | | | | | | 204,438 | | | | | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 3,211,155 | | | | | | | | | | $ | 3,051,995 | | | | | | | | |
Net interest income(1) | | | | | | $ | 28,415 | | | | | | | | | | $ | 27,691 | | | | |
Net interest spread(1) | | | | | | | | | | 3.40 | % | | | | | | | | | | 3.56 | % |
Net interest income to total earning assets(1) | | | | | | | | | | 3.87 | % | | | | | | | | | | 4.04 | % |
| Interest bearing liabilities to earning assets | | | 88.33 | % | | | | | | | | | | 88.02 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(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 | |
| | | | 12/31/2007 | | | | 12/31/2006 | |
| | | | Average | | | | | | | | | | | Average | | | | | | | | |
| | | | Balance | | | | Interest | | | Rate | | | | Balance | | | | Interest | | | Rate | |
| Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 477,338 | | | $ | 21,937 | | | 4.60 | % | | $ | 419,625 | | | $ | 17,594 | | | 4.19 | % |
Nontaxable(1) | | | 136,552 | | | | 9,077 | | | 6.65 | | | | 131,149 | | | | 8,843 | | | 6.74 | |
Total securities | | | 613,890 | | | | 31,014 | | | 5.05 | | | | 550,774 | | | | 26,437 | | | 4.80 | |
| Interest bearing deposits | | | 700 | | | | 33 | | | 4.71 | | | | 555 | | | | 22 | | | 3.96 | |
| Federal funds sold | | | 7,295 | | | | 387 | | | 5.31 | | | | 2,522 | | | | 164 | | | 6.50 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,597,247 | | | | 125,916 | | | 7.88 | | | | 1,427,989 | | | | 109,495 | | | 7.67 | |
Residential mortgage | | | 240,932 | | | | 16,303 | | | 6.77 | | | | 228,954 | | | | 14,964 | | | 6.54 | |
Agricultural and agricultural real estate(1) | | | 225,471 | | | | 18,209 | | | 8.08 | | | | 212,992 | | | | 17,077 | | | 8.02 | |
Consumer | | | 196,432 | | | | 20,655 | | | 10.52 | | | | 187,814 | | | | 18,684 | | | 9.95 | |
Direct financing leases, net | | | 11,939 | | | | 714 | | | 5.98 | | | | 13,913 | | | | 839 | | | 6.03 | |
Fees on loans | | | - | | | | 5,696 | | | - | | | | - | | | | 6,054 | | | - | |
Less: allowance for loan and lease losses | | | (31,870 | ) | | | - | | | - | | | | (29,801 | ) | | | - | | | - | |
Net loans and leases | | | 2,240,151 | | | | 187,493 | | | 8.37 | | | | 2,041,861 | | | | 167,113 | | | 8.18 | |
Total earning assets | | | 2,862,036 | | | $ | 218,927 | | | 7.65 | % | | | 2,595,712 | | | $ | 193,736 | | | 7.46 | % |
| Nonearning Assets | | | 292,788 | | | | | | | | | | | 333,990 | | | | | | | | |
| Total Assets | | $ | 3,154,824 | | | | | | | | | | $ | 2,929,702 | | | | | | | | |
| Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 831,675 | | | $ | 22,404 | | | 2.69 | % | | $ | 781,636 | | | $ | 18,993 | | | 2.43 | % |
Time, $100,000 and over | | | 291,073 | | | | 14,307 | | | 4.92 | | | | 220,736 | | | | 9,287 | | | 4.21 | |
Other time deposits | | | 876,146 | | | | 41,154 | | | 4.70 | | | | 826,610 | | | | 34,250 | | | 4.14 | |
| Short-term borrowings | | | 287,428 | | | | 13,293 | | | 4.62 | | | | 225,500 | | | | 9,828 | | | 4.36 | |
| Other borrowings | | | 241,517 | | | | 14,733 | | | 6.10 | | | | 229,020 | | | | 13,051 | | | 5.70 | |
Total interest bearing liabilities | | | 2,527,839 | | | | 105,891 | | | 4.19 | | | | 2,283,502 | | | | 85,409 | | | 3.74 | |
| Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 362,109 | | | | | | | | | | | 347,041 | | | | | | | | |
| Accrued interest and other liabilities | | | 49,136 | | | | | | | | | | | 104,035 | | | | | | | | |
Total noninterest bearing liabilities | | | 411,245 | | | | | | | | | | | 451,076 | | | | | | | | |
| Stockholders’ Equity | | | 215,740 | | | | | | | | | | | 195,124 | | | | | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 3,154,824 | | | | | | | | | | $ | 2,929,702 | | | | | | | | |
Net interest income(1) | | | | | | $ | 113,036 | | | | | | | | | | $ | 108,327 | | | | |
Net interest spread(1) | | | | | | | | | | 3.46 | % | | | | | | | | | | 3.72 | % |
Net interest income to total earning assets(1) | | | | | | | | | | 3.95 | % | | | | | | | | | | 4.17 | % |
| Interest bearing liabilities to earning assets | | | 88.32 | % | | | | | | | | | | 87.97 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(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 12/31/2007 | | | As of and For the
Year Ended 12/31/2006 | | | As of and For the Year Ended 12/31/2005 | |
| Total Assets | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 976,489 | | $ | 843,282 | | $ | 833,885 | |
| New Mexico Bank & Trust | | | | | 672,863 | | | 638,712 | | | 557,062 | |
| Wisconsin Community Bank | | | | | 399,532 | | | 413,108 | | | 390,842 | |
| Rocky Mountain Bank | | | | | 427,437 | | | 438,972 | | | 388,149 | |
| Galena State Bank and Trust Company | | | | | 215,698 | | | 219,863 | | | 241,719 | |
| Riverside Community Bank | | | | | 225,206 | | | 199,483 | | | 195,099 | |
| Arizona Bank & Trust | | | | | 222,576 | | | 223,567 | | | 136,832 | |
| First Community Bank | | | | | 127,305 | | | 118,010 | | | 121,337 | |
| Summit Bank & Trust | | | | | 46,668 | | | 21,590 | | | - | |
| Total Deposits | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 670,257 | | $ | 636,527 | | $ | 608,687 | |
| New Mexico Bank & Trust | | | | | 459,530 | | | 437,708 | | | 388,935 | |
| Wisconsin Community Bank | | | | | 321,647 | | | 336,015 | | | 311,436 | |
| Rocky Mountain Bank | | | | | 305,933 | | | 335,053 | | | 306,967 | |
| Galena State Bank and Trust Company | | | | | 177,040 | | | 178,388 | | | 179,437 | |
| Riverside Community Bank | | | | | 187,052 | | | 162,319 | | | 153,791 | |
| Arizona Bank & Trust | | | | | 155,093 | | | 176,438 | | | 118,959 | |
| First Community Bank | | | | | 103,602 | | | 95,287 | | | 95,506 | |
| Summit Bank & Trust | | | | | 30,860 | | | 6,514 | | | - | |
| Return on Average Assets | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | 1.34 | % | | 1.45 | % | | 1.28 | % |
| New Mexico Bank & Trust | | | | | 1.48 | | | 1.21 | | | 1.10 | |
| Wisconsin Community Bank | | | | | 0.62 | | | 0.53 | | | 0.63 | |
| Rocky Mountain Bank | | | | | 1.51 | | | 1.18 | | | 0.72 | |
| Galena State Bank and Trust Company | | | | | 0.92 | | | 1.35 | | | 1.22 | |
| Riverside Community Bank | | | | | 0.55 | | | 0.64 | | | 0.83 | |
| Arizona Bank & Trust | | | | | (0.08 | ) | | 0.47 | | | 0.19 | |
| First Community Bank | | | | | 1.30 | | | 1.01 | | | 1.00 | |
| Summit Bank & Trust | | | | | (2.43 | ) | | (6.31 | ) | | - | |
| Net Interest Margin | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | 3.40 | % | | 3.61 | % | | 3.48 | % |
| New Mexico Bank & Trust | | | | | 4.80 | | | 5.05 | | | 4.75 | |
| Wisconsin Community Bank | | | | | 3.45 | | | 3.83 | | | 3.75 | |
| Rocky Mountain Bank | | | | | 4.76 | | | 5.16 | | | 4.93 | |
| Galena State Bank and Trust Company | | | | | 3.40 | | | 3.45 | | | 3.43 | |
| Riverside Community Bank | | | | | 3.39 | | | 3.71 | | | 3.76 | |
| Arizona Bank & Trust | | | | | 4.56 | | | 4.92 | | | 5.03 | |
| First Community Bank | | | | | 3.80 | | | 3.95 | | | 3.80 | |
| Summit Bank & Trust | | | | | 5.10 | | | 6.98 | | | - | |
| Net Income (Loss) | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 11,907 | | $ | 11,990 | | $ | 10,156 | |
| New Mexico Bank & Trust | | | | | 8,727 | | | 6,873 | | | 5,565 | |
| Wisconsin Community Bank | | | | | 2,355 | | | 2,109 | | | 2,444 | |
| Rocky Mountain Bank | | | | | 6,622 | | | 4,840 | | | 2,757 | |
| Galena State Bank and Trust Company | | | | | 1,895 | | | 3,167 | | | 2,808 | |
| Riverside Community Bank | | | | | 1,055 | | | 1,252 | | | 1,608 | |
| Arizona Bank & Trust | | | | | (154 | ) | | 902 | | | 199 | |
| First Community Bank | | | | | 1,476 | | | 1,197 | | | 1,198 | |
| Summit Bank & Trust | | | | | (965 | ) | | (1,220 | ) | | - | |
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA – SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS |
| | | | | | As of 12/31/2007 | | | As of 12/31/2006 | | | As of 12/31/2005 | |
| Total Portfolio Loans | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 637,782 | | $ | 581,166 | | $ | 575,293 | |
| New Mexico Bank & Trust | | | | | 455,383 | | | 410,438 | | | 330,609 | |
| Wisconsin Community Bank | | | | | 285,010 | | | 272,407 | | | 270,837 | |
| Rocky Mountain Bank | | | | | 316,776 | | | 309,943 | | | 279,230 | |
| Galena State Bank and Trust Company | | | | | 144,152 | | | 158,222 | | | 176,813 | |
| Riverside Community Bank | | | | | 146,925 | | | 137,102 | | | 132,781 | |
| Arizona Bank & Trust | | | | | 160,309 | | | 160,614 | | | 94,285 | |
| First Community Bank | | | | | 84,475 | | | 81,498 | | | 83,506 | |
| Summit Bank & Trust | | | | | 27,493 | | | 14,953 | | | - | |
| Allowance For Loan and Lease Losses | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 7,827 | | $ | 7,235 | | $ | 7,376 | |
| New Mexico Bank & Trust | | | | | 6,079 | | | 5,352 | | | 4,497 | |
| Wisconsin Community Bank | | | | | 4520 | | | 4,570 | | | 4,285 | |
| Rocky Mountain Bank | | | | | 4,061 | | | 4,044 | | | 4,048 | |
| Galena State Bank and Trust Company | | | | | 1,830 | | | 2,049 | | | 2,181 | |
| Riverside Community Bank | | | | | 1,885 | | | 1,747 | | | 1,674 | |
| Arizona Bank & Trust | | | | | 3,605 | | | 2,133 | | | 1,181 | |
| First Community Bank | | | | | 1,179 | | | 1,182 | | | 1,191 | |
| Summit Bank & Trust | | | | | 367 | | | 192 | | | - | |
| Nonperforming Loans | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | $ | 3,344 | | $ | 1,216 | | $ | 2,745 | |
| New Mexico Bank & Trust | | | | | 1,130 | | | 2,206 | | | 2,359 | |
| Wisconsin Community Bank | | | | | 12,152 | | | 1,966 | | | 1,321 | |
| Rocky Mountain Bank | | | | | 2,099 | | | 822 | | | 5,634 | |
| Galena State Bank and Trust Company | | | | | 1,707 | | | 370 | | | 965 | |
| Riverside Community Bank | | | | | 2,671 | | | 602 | | | 462 | |
| Arizona Bank & Trust | | | | | 5,541 | | | 254 | | | 7 | |
| First Community Bank | | | | | 1,312 | | | 588 | | | 992 | |
| Summit Bank & Trust | | | | | 1,376 | | | - | | | - | |
| Allowance As a Percent of Total Loans | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | | | 1.23 | % | | 1.24 | % | | 1.28 | % |
| New Mexico Bank & Trust | | | | | 1.33 | | | 1.30 | | | 1.36 | |
| Wisconsin Community Bank | | | | | 1.59 | | | 1.68 | | | 1.58 | |
| Rocky Mountain Bank | | | | | 1.28 | | | 1.30 | | | 1.45 | |
| Galena State Bank and Trust Company | | | | | 1.27 | | | 1.30 | | | 1.23 | |
| Riverside Community Bank | | | | | 1.28 | | | 1.27 | | | 1.26 | |
| Arizona Bank & Trust | | | | | 2.25 | | | 1.33 | | | 1.25 | |
| First Community Bank | | | | | 1.40 | | | 1.45 | | | 1.43 | |
| Summit Bank & Trust | | | | | 1.33 | | | 1.28 | | | - | |
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