CONTACT: FOR IMMEDIATE RELEASE
John K. Schmidt April 26, 2010
Chief Operating Officer
Chief Financial Officer
(563) 589-1994
jschmidt@htlf.com
HEARTLAND FINANCIAL USA, INC. REPORTS FIRST QUARTER 2010 EARNINGS
First Quarter 2010 Highlights
| § | Net income of $5.3 million for the quarter |
| § | Net interest margin of 4.14% for the quarter |
| § | Net interest income increased $3.6 million or 12% over the first quarter of 2009 |
| § | Nonperforming assets decreased during the quarter to $107.1 million |
| § | Allowance for loan and lease losses increased to 1.96% of total loans and leases |
| § | Total loans increased $38.1 million or 2% since year-end 2009 |
| § | Noninterest income decreased during the quarter as residential mortgage loan refinance activity slowed |
| | | | Quarter Ended March 31, | | | | | |
| | | | 2010 | | | | 2009 | | | | | | | | | |
| Net income (in millions) | | $ | 5.3 | | | $ | 6.1 | | | | | | | | | |
| Net income available to common stockholders (in millions) | | | 4.0 | | | | 4.8 | | | | | | | | | |
| Diluted earnings per common share | | | 0.24 | | | | 0.29 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.41 | % | | | 0.53 | % | | | | | | | | |
| Return on average common equity | | | 6.83 | | | | 8.26 | | | | | | | | | |
| Net interest margin | | | 4.14 | | | | 3.94 | | | | | | | | | |
“Heartland’s first quarter earnings were driven by excellent net interest margin of 4.14 percent and stabilization in the level of nonperforming loans. This was our best quarter of the last four, and what we hope will be the beginning of an improving trend.”
- Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.
Dubuque, Iowa, April 26, 2010—Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $5.3 million for the quarter ended March 31, 2010, compared to net income of $6.1 million for the first quarter of 2009. Net income available to common stockholders was $4.0 million, or $0.24 per diluted common share, for the quarter ended March 31, 2010, compared to $4.8 million, or $0.29 per diluted common share, for the first quarter of 2009. Return on average common equity was 6.83 percent and return on average assets was 0.41 percent for the first quarter of 2010, compared to 8.26 percent and 0.53 percent, respectively, for the same quarter in 2009.
Although earnings for the first quarter of 2010 continued to be negatively affected by a larger loan loss provision than in the first quarter of 2009, the provision for loan losses declined from the fourth quarter of 2009 and profitability for the first quarter of 2010 increased over the previous three quarters. Decreases in the income associated with residential mortgage loan activity and gains on the sales of securities during the first quarter of 2010 compared to the first quarter of 2009 were mitigated by growth in net interest income.
Lynn B. Fuller, Heartland’s chairman, president and chief executive officer said, “Heartland’s first quarter earnings were driven by excellent net interest margin of 4.14 percent and stabilization in the level of nonperforming loans. This was our best quarter of the last four, and what we hope will be the beginning of an improving trend.”
Net Interest Margin Improves; Net Interest Income Grows
Net interest margin, expressed as a percentage of average earning assets, was 4.14 percent during the first quarter of 2010 compared to 3.94 percent for the first quarter of 2009 and 4.04 percent for the fourth quarter of 2009. Management is committed to maintaining margin near the 4.00 percent level and will not compete for loans or deposits strictly for the sake of growth.
Fuller said, “Net interest margin showed exceptional improvement, increasing to 4.14 percent, twenty basis points ahead of one year ago. It is truly remarkable that we have been able to manage our margin above the 4 percent level for three consecutive quarters while reducing risk on our balance sheet at the same time. We continue to focus on disciplined pricing on both sides of the balance sheet.”
Net interest income on a tax-equivalent basis totaled $35.8 million during the first quarter of 2010, an increase of $3.7 million or 12 percent from the $32.1 million recorded during the first quarter of 2009. This increase occurred as Heartland’s interest bearing liabilities repriced downward more quickly than its interest earning assets. Also contributing to this increase was a continued change in the composition of interest bearing liabilities as the percentage of average time deposits, which are typically the highest cost deposits, decreased from 44 percent of total average deposits during the first quarter of 2009 to 33 percent during the first quarter of 2010.
On a tax-equivalent basis, interest income in the first quarter of 2010 was consistent with the interest income earned in the first quarter of 2009 at $50.8 million. The $200.5 million or 6 percent growth in average earning assets during the first quarter of 2010 compared to the same quarter in 2009 was equally offset by the impact of a decrease in the average interest rate earned on these assets. The composition of average earning assets continued to change as the percentage of loans, which are typically the highest yielding asset, to total average earning assets was 67 percent during the first quarter of 2010 compared to 72 percent during the first quarter of 2009. Nearly half of Heartland’s commercial and agricultural loan portfolios consist of floating rate loans that reprice immediately upon a change in the national prime inter est rate, thus changes in the national prime rate impact interest income more quickly than if there were more fixed rate loans. The national prime interest rate was 3.25 percent during both three month periods. A large portion of Heartland’s floating rate loans that reprice immediately with a change in national prime have interest rate floors that are currently in effect. Additionally, Heartland has one $50.0 million derivative transaction on the loan portfolio that is at its floor interest rate and will expire on September 21, 2010.
Interest expense for the first quarter of 2010 was $15.0 million, a decrease of $3.7 million or 20 percent from $18.7 million in the first quarter of 2009, and a decrease of $1.4 million or 9 percent from $16.4 million in the fourth quarter of 2009. Interest rates paid on Heartland’s deposits and borrowings were significantly lower during the first quarter of 2010 compared to the first and fourth quarters of 2009 and we anticipate further improvements in interest expense during the second quarter of 2010. Despite an increase in average interest bearing liabilities of $244.4 million or 8 percent for the quarter ended March 31, 2010, as compared to the same quarter in 2009, the average interest rates paid on Heartland’s deposits and borrowings declined 68 basis points from 2.60 percent in 2009 to 1.92 percent in 2010. Approximat ely 31 percent of Heartland’s certificate of deposit accounts will mature within the next six months at a weighted average rate of 1.71 percent.
Noninterest Income Decreases; Noninterest Expense Grows Modestly
Noninterest income was $10.6 million during the first quarter of 2010 compared to $12.8 million during the first quarter of 2009, a decrease of $2.2 million or 17 percent, primarily due to decreases in loan servicing income, securities gains and gains on sale of loans. A portion of the decreases in these noninterest income categories was offset by a $317,000 or 11 percent increase in service charges and fees and a $484,000 or 29 percent increase in trust fees. Loan servicing income decreased $1.4 million or 49 percent. Included in loan servicing income is mortgage servicing rights income, which was $694,000 during the first quarter of 2010 compared to $3.1 million during the first quarter of 2009, and amortization of mortgage servicing rights, which was $603,000 during the first quarter of 2010 compared to $1.4 million during the first qu arter of 2009. These components of loan servicing income decreased during the first quarter of 2010 as the volume of mortgage loans originated and sold into the secondary market returned to more normal levels. Also included in loan servicing income are the fees collected for the servicing of mortgage loans for others, which was $722,000 during the first quarter of 2010 compared to $466,000 during the first quarter of 2009. The portfolio of mortgage loans serviced for others by Heartland totaled $1.18 billion at March 31, 2010, compared to $868.6 million at March 31, 2009. Securities gains totaled $1.5 million during the first quarter of 2010 compared to $3.0 million during the first quarter of 2009. There was a higher volume of securities sales during the first quarter of 2009 as securities designed to outperform in a declining rate environment were sold and replaced with securities that are expected to outperform as rates rise. Gains on sale of loans totaled $798,000 during the first quarter of 2010 compare d to $1.8 million during the first quarter of 2009. As long-term mortgage loan rates fell below 5.00 percent during the first quarter of 2009, refinancing activity significantly increased on 15- and 30-year, fixed-rate mortgage loans which Heartland normally elects to sell into the secondary market and retain the servicing.
Fuller stated, “Consistent with our industry, noninterest income decreased from last year’s quarter due to lower mortgage banking revenue and reduced securities gains. We see opportunity in residential mortgage lending and are channeling resources to build this line of business at all of our banks.”
For the first quarter of 2010, noninterest expense totaled $28.9 million, an increase of $615,000 or 2 percent from the $28.3 million recorded during the same quarter in 2009. The largest component of noninterest expense, salaries and employee benefits, decreased $1.0 million or 6 percent during the first quarter of 2010 compared to the first quarter of 2009. Total full-time equivalent employees were 1,015 at March 31, 2010, compared to 1,049 at March 31, 2009. The noninterest expense category to experience a significant increase during the quarters under comparison was net loss on repossessed assets, which totaled $2.1 million during the first quarter of 2010 compared to $620,000 during the first quarter of 2009. A majority of the increased loss in the first quarter of 2010 resulted from valuation adjustments due to continued reductions in real estate values, particularly in our Phoenix, Arizona and Bozeman, Montana markets.
Heartland’s effective tax rate was 28.87 percent for the first quarter of 2010 compared to 31.72 percent for the first quarter of 2009. Heartland’s effective tax rate is affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 28.37 percent during the first quarter of 2010 compared to 21.70 percent during the first quarter of 2009. The tax-equivalent adjustment for this tax-exempt interest income was $1.1 million during the first quarter of 2010 compared to $1.0 million during the first quarter of 2009.
Loan Demand Picks Up in the Midwest; Deposit Growth Continues
At March 31, 2010, total assets had experienced a slight decrease of $14.7 million or 1 percent annualized since year-end 2009. Securities represented 31 percent of total assets at March 31, 2010, compared to 29 percent of total assets at December 31, 2009.
Total loans and leases, exclusive of those covered by the FDIC loss share agreements, were $2.37 billion at March 31, 2010, compared to $2.33 billion at year-end 2009, an increase of $38.1 million or 7 percent annualized. The loan category experiencing the majority of this growth was commercial and commercial real estate loans, which totaled $1.71 billion at March 31, 2010, an increase of $40.6 million or 10 percent annualized since year-end 2009. This growth occurred at Dubuque Bank and Trust Company and Wisconsin Community Bank.
Total deposits were $3.04 billion at March 31, 2010, compared to $3.05 billion at year-end 2009, a decrease of $13.0 million or 2 percent annualized. The Heartland banks experiencing an increase in deposits during the first quarter of 2010 were New Mexico Bank & Trust with an increase of $18.6 million, Arizona Bank & Trust with an increase of $28.0 million and Minnesota Bank & Trust with an increase of $5.3 million. Dubuque Bank and Trust experienced a $57.6 million decrease in total deposits as one large depositor shifted a large portion of its deposits into retail repurchase agreements with the bank. We continued to improve the composition of our deposits in the first quarter of 2010, as demand deposits increased $29.2 million or 25 percent annualized since year-end 2009 and savings deposit balances increased $17.5 million o r 5 percent annualized since year-end 2009. Conversely, time deposits, exclusive of brokered deposits, experienced a decrease of $55.2 million or 22 percent annualized since year-end 2009. At March 31, 2010, brokered time deposits totaled $37.3 million or 1 percent of total deposits compared to $41.8 million or 1 percent of total deposits at year-end 2009.
“Heartland continues to attract deposits at a significant rate, growing by nearly 9 percent since last March,” Fuller added. “We have maintained our focus on attracting non-maturity deposits and are pleased to see annual increases of 19 percent in demand deposits and 33 percent in savings deposits over the first quarter of last year. Simultaneously, we’ve seen brokered deposits and certificate accounts decrease by 16 percent and 18 percent, respectively.”
Nonperforming Assets Decrease; Allowance for Loan Losses Increase
The allowance for loan and lease losses at March 31, 2010, was 1.96 percent of loans and leases and 59.21 percent of nonperforming loans compared to 1.80 percent of loans and leases and 53.56 percent of nonperforming loans at December 31, 2009, and 1.58 percent of loans and leases and 55.52 percent of nonperforming loans at March 31, 2009. The first quarter of 2010 provision for loan losses was $8.9 million compared to $10.8 million for the fourth quarter of 2009 and $6.7 million for the first quarter of 2009. Additions to the allowance for loan and lease losses during the first quarter of 2010 were driven by a variety of factors including the continuation of depressed economic conditions, downgrades in internal risk ratings and reductions in appraised values, primarily in Heartland’s Western markets of Arizona and Montana.
Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $78.3 million or 3.30 percent of total loans and leases at March 31, 2010, compared to $78.1 million or 3.35 percent of total loans and leases at December 31, 2009, and $67.1 million or 2.85 percent of total loans and leases at March 31, 2009. Approximately 62 percent, or $48.3 million, of Heartland’s nonperforming loans are to 19 borrowers, with $17.4 million originated by Rocky Mountain Bank, $13.2 million originated by Summit Bank & Trust, $7.5 million originated by Wisconsin Community Bank, $5.7 million originated by Arizona Bank & Trust, $2.8 million originated by New Mexico Bank & Trust and $1.6 million originated by Dubuque Bank and Trust. The portion of Heartland’s nonperforming loans covered by government guarantees was $5.8 million at March 31, 2010.
Other real estate owned, exclusive of assets covered under the loss sharing agreements, was $28.3 million at March 31, 2010, compared to $30.2 million at December 31, 2009, and $29.3 million at March 31, 2009. Liquidation strategies have been identified for all the assets held in other real estate owned. Management plans to market these properties through an orderly liquidation process instead of a quick liquidation process that would likely result in discounts greater than the projected carrying costs.
Net charge-offs during the first quarter of 2010 were $4.4 million compared to $5.0 million during the first quarter of 2009. A large portion of the net charge-offs was related to commercial real estate development loans and residential lot loans.
“We are encouraged that the level of nonperforming assets has decreased from the previous two quarters. We are continuing to actively work with stressed borrowers to find solutions to their debt problems and are diligently marketing our repossessed real estate. Unfortunately, there are no assurances that continued economic stress won’t result in further deterioration. We are cautiously optimistic, however, that the worst is behind us,” Fuller said.
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 877-941-8632 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 until July 25, 2010, by dialing 800-406-7325, pass code 4283848, or by logging onto www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a $4.0 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 61 banking locations in 42 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota. 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 Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland’s financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland’s management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the s trength 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. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in ligh t of new information or future events.
-FINANCIAL TABLES FOLLOW-
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | | | For the Quarter Ended March 31, |
| | | | | | | | | | | | 2010 | | | | 2009 | |
| Interest Income | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | | | | | | | | | $ | 37,328 | | | $ | 39,483 | |
| Interest on securities and other: | | | | | | | | | | | | | | | | |
Taxable | | | | | | | | | | | 9,455 | | | | 8,421 | |
Nontaxable | | | | | | | | | | | 2,849 | | | | 1,883 | |
| Interest on federal funds sold | | | | | | | | | | | - | | | | 1 | |
| Interest on deposits in other financial institutions | | | | | | | | | | | 5 | | | | 1 | |
Total Interest Income | | | | | | | | | | | 49,637 | | | | 49,789 | |
| Interest Expense | | | | | | | | | | | | | | | | |
| Interest on deposits | | | | | | | | | | | 10,760 | | | | 14,122 | |
| Interest on short-term borrowings | | | | | | | | | | | 234 | | | | 212 | |
| Interest on other borrowings | | | | | | | | | | | 3,959 | | | | 4,378 | |
Total Interest Expense | | | | | | | | | | | 14,953 | | | | 18,712 | |
Net Interest Income | | | | | | | | | | | 34,684 | | | | 31,077 | |
| Provision for loan and lease losses | | | | | | | | | | | 8,894 | | | | 6,665 | |
Net Interest Income After Provision for Loan and Lease Losses | | | | | | | | | | | 25,790 | | | | 24,412 | |
| Noninterest Income | | | | | | | | | | | | | | | | |
| Service charges and fees | | | | | | | | | | | 3,204 | | | | 2,887 | |
| Loan servicing income | | | | | | | | | | | 1,427 | | | | 2,786 | |
| Trust fees | | | | | | | | | | | 2,181 | | | | 1,697 | |
| Brokerage and insurance commissions | | | | | | | | | | | 712 | | | | 881 | |
| Securities gains, net | | | | | | | | | | | 1,456 | | | | 2,965 | |
| Gain (loss) on trading account securities | | | | | | | | | | | 48 | | | | (286 | ) |
| Gains on sale of loans | | | | | | | | | | | 798 | | | | 1,808 | |
| Income on bank owned life insurance | | | | | | | | | | | 314 | | | | 130 | |
| Other noninterest income | | | | | | | | | | | 453 | | | | (106 | ) |
Total Noninterest Income | | | | | | | | | | | 10,593 | | | | 12,762 | |
| Noninterest Expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | | | | | | | | | 15,423 | | | | 16,433 | |
| Occupancy | | | | | | | | | | | 2,294 | | | | 2,375 | |
| Furniture and equipment | | | | | | | | | | | 1,447 | | | | 1,647 | |
| Professional fees | | | | | | | | | | | 2,211 | | | | 2,170 | |
| FDIC insurance assessments | | | | | | | | | | | 1,420 | | | | 1,047 | |
| Advertising | | | | | | | | | | | 814 | | | | 583 | |
| Intangible assets amortization | | | | | | | | | | | 151 | | | | 235 | |
| Net loss on repossessed assets | | | | | | | | | | | 2,064 | | | | 620 | |
| Other noninterest expenses | | | | | | | | | | | 3,077 | | | | 3,176 | |
Total Noninterest Expense | | | | | | | | | | | 28,901 | | | | 28,286 | |
Income Before Income Taxes | | | | | | | | | | | 7,482 | | | | 8,888 | |
| Income taxes | | | | | | | | | | | 2,160 | | | | 2,819 | |
| Net Income | | | | | | | | | | | 5,322 | | | | 6,069 | |
| Net income attributable to noncontrolling interest, net of tax | | | | | | | | | | | 25 | | | | 59 | |
Net Income Attributable to Heartland | | | | | | | | | | | 5,347 | | | | 6,128 | |
Preferred dividends and discount | | | | | | | | | | | (1,336 | ) | | | (1,336 | ) |
Net Income Available to Common Stockholders | | | | | | | | | | $ | 4,011 | | | $ | 4,792 | |
| | | | | | | | | | | | | | | | | |
| Earnings per common share-diluted | | | | | | | | | | $ | 0.24 | | | $ | 0.29 | |
| Weighted average shares outstanding-diluted | | | | | | | | | | | 16,435,844 | | | | 16,296,839 | |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | For the Quarter Ended |
| | | | 3/31/2010 | | | | 12/31/2009 | | | | 9/30/2009 | | | | 6/30/2009 | | | | 3/31/2009 | |
| Interest Income | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans and leases | | $ | 37,328 | | | $ | 38,191 | | | $ | 38,790 | | | $ | 38,423 | | | $ | 39,483 | |
| Interest on securities and other: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 9,455 | | | | 10,513 | | | | 10,809 | | | | 10,039 | | | | 8,421 | |
Nontaxable | | | 2,849 | | | | 2,456 | | | | 2,231 | | | | 2,025 | | | | 1,883 | |
| Interest on federal funds sold | | | - | | | | 1 | | | | - | | | | - | | | | 1 | |
| Interest on deposits in other financial institutions | | | 5 | | | | 9 | | | | 17 | | | | - | | | | 1 | |
Total Interest Income | | | 49,637 | | | | 51,170 | | | | 51,847 | | | | 50,487 | | | | 49,789 | |
| Interest Expense | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 10,760 | | | | 12,000 | | | | 13,046 | | | | 13,576 | | | | 14,122 | |
| Interest on short-term borrowings | | | 234 | | | | 194 | | | | 154 | | | | 173 | | | | 212 | |
| Interest on other borrowings | | | 3,959 | | | | 4,250 | | | | 4,065 | | | | 4,360 | | | | 4,378 | |
Total Interest Expense | | | 14,953 | | | | 16,444 | | | | 17,265 | | | | 18,109 | | | | 18,712 | |
Net Interest Income | | | 34,684 | | | | 34,726 | | | | 34,582 | | | | 32,378 | | | | 31,077 | |
| Provision for loan and lease losses | | | 8,894 | | | | 10,775 | | | | 11,896 | | | | 10,041 | | | | 6,665 | |
| Net Interest Income After Provision for Loan and Lease Losses | | | 25,790 | | | | 23,951 | | | | 22,686 | | | | 22,337 | | | | 24,412 | |
| Noninterest Income | | | | | | | | | | | | | | | | | | | | |
| Service charges and fees | | | 3,204 | | | | 3,257 | | | | 3,288 | | | | 3,109 | | | | 2,887 | |
| Loan servicing income | | | 1,427 | | | | 1,813 | | | | 1,756 | | | | 3,311 | | | | 2,786 | |
| Trust fees | | | 2,181 | | | | 2,156 | | | | 1,949 | | | | 1,971 | | | | 1,697 | |
| Brokerage and insurance commissions | | | 712 | | | | 697 | | | | 824 | | | | 715 | | | | 881 | |
| Securities gains, net | | | 1,456 | | | | 2,186 | | | | 1,291 | | | | 2,206 | | | | 2,965 | |
| Gain (loss) on trading account securities | | | 48 | | | | (61 | ) | | | 210 | | | | 348 | | | | (286 | ) |
| Impairment loss on securities | | | - | | | | (40 | ) | | | - | | | | - | | | | - | |
| Gains on sale of loans | | | 798 | | | | 1,168 | | | | 877 | | | | 2,231 | | | | 1,808 | |
| Income on bank owned life insurance | | | 314 | | | | 362 | | | | 297 | | | | 213 | | | | 130 | |
| Gain on acquisition | | | - | | | | 298 | | | | 998 | | | | - | | | | - | |
| Other noninterest income | | | 453 | | | | 1,534 | | | | 418 | | | | 560 | | | | (106 | ) |
Total Noninterest Income | | | 10,593 | | | | 13,370 | | | | 11,908 | | | | 14,664 | | | | 12,762 | |
| Noninterest Expense | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 15,423 | | | | 14,419 | | | | 14,661 | | | | 14,952 | | | | 16,433 | |
| Occupancy | | | 2,294 | | | | 2,220 | | | | 2,221 | | | | 2,176 | | | | 2,375 | |
| Furniture and equipment | | | 1,447 | | | | 1,638 | | | | 1,594 | | | | 1,695 | | | | 1,647 | |
| Professional fees | | | 2,211 | | | | 2,100 | | | | 2,706 | | | | 2,151 | | | | 2,170 | |
| FDIC insurance assessments | | | 1,420 | | | | 1,320 | | | | 1,393 | | | | 2,818 | | | | 1,047 | |
| Advertising | | | 814 | | | | 1,065 | | | | 740 | | | | 949 | | | | 583 | |
| Goodwill impairment charge | | | - | | | | 12,659 | | | | - | | | | - | | | | - | |
| Intangible assets amortization | | | 151 | | | | 198 | | | | 199 | | | | 234 | | | | 235 | |
| Net loss on repossessed assets | | | 2,064 | | | | 4,015 | | | | 3,680 | | | | 2,532 | | | | 620 | |
| Other noninterest expenses | | | 3,077 | | | | 3,800 | | | | 3,129 | | | | 2,970 | | | | 3,176 | |
Total Noninterest Expense | | | 28,901 | | | | 43,434 | | | | 30,323 | | | | 30,477 | | | | 28,286 | |
Income (Loss) Before Income Taxes | | | 7,482 | | | | (6,113 | ) | | | 4,271 | | | | 6,524 | | | | 8,888 | |
| Income taxes | | | 2,160 | | | | 1,762 | | | | 803 | | | | 1,812 | | | | 2,819 | |
Net Income (Loss) | | | 5,322 | | | | (7,875 | ) | | | 3,468 | | | | 4,712 | | | | 6,069 | |
Net income available to noncontrolling interest, net of tax | | | 25 | | | | 41 | | | | 44 | | | | 44 | | | | 59 | |
Net Income (Loss) Attributable to Heartland | | | 5,347 | | | | (7,834 | ) | | | 3,512 | | | | 4,756 | | | | 6,128 | |
Preferred dividends and discount | | | (1,336 | ) | | | (1,336 | ) | | | (1,336 | ) | | | (1,336 | ) | | | (1,336 | ) |
Net Income (Loss) Available to Common Stockholders | | $ | 4,011 | | | $ | (9,170 | ) | | $ | 2,176 | | | $ | 3,420 | | | $ | 4,792 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings (loss) per common share-diluted | | $ | 0.24 | | | $ | (0.56 | ) | | $ | 0.13 | | | $ | 0.21 | | | $ | 0.29 | |
| Weighted average shares outstanding-diluted | | | 16,435,844 | | | | 16,345,095 | | | | 16,340,092 | | | | 16,323,724 | | | | 16,296,839 | |
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | | As Of |
| | | | 3/31/2010 | | | | 12/31/2009 | | | | 9/30/2009 | | | | 6/30/2009 | | | | 3/31/2009 | |
| Assets | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 78,010 | | | $ | 182,410 | | | $ | 82,508 | | | $ | 39,961 | | | $ | 87,261 | |
| Securities | | | 1,234,339 | | | | 1,175,217 | | | | 1,105,744 | | | | 1,061,211 | | | | 1,006,172 | |
| Loans held for sale | | | 16,002 | | | | 17,310 | | | | 19,923 | | | | 24,339 | | | | 18,263 | |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | |
| Held to maturity | | | 2,369,233 | | | | 2,331,142 | | | | 2,367,871 | | | | 2,375,027 | | | | 2,356,391 | |
| Loans covered by loss share agreements | | | 27,968 | | | | 31,860 | | | | 36,175 | | | | - | | | | - | |
| Allowance for loan and lease losses | | | (46,350 | ) | | | (41,848 | ) | | | (42,260 | ) | | | (37,234 | ) | | | (37,277 | ) |
| Loans and leases, net | | | 2,350,851 | | | | 2,321,154 | | | | 2,361,786 | | | | 2,337,793 | | | | 2,319,114 | |
| Premises, furniture and equipment, net | | | 121,033 | | | | 118,835 | | | | 117,140 | | | | 117,914 | | | | 119,569 | |
| Goodwill | | | 27,548 | | | | 27,548 | | | | 40,207 | | | | 40,207 | | | | 40,207 | |
| Other intangible assets, net | | | 12,320 | | | | 12,380 | | | | 12,101 | | | | 11,591 | | | | 9,606 | |
| Cash surrender value on life insurance | | | 61,525 | | | | 55,516 | | | | 55,141 | | | | 54,817 | | | | 54,581 | |
| Other real estate, net | | | 28,652 | | | | 30,568 | | | | 33,342 | | | | 29,311 | | | | 29,317 | |
| FDIC indemnification asset | | | 2,357 | | | | 5,532 | | | | 4,393 | | | | - | | | | - | |
| Other assets | | | 65,604 | | | | 66,521 | | | | 47,328 | | | | 49,587 | | | | 46,010 | |
| Total Assets | | $ | 3,998,241 | | | $ | 4,012,991 | | | $ | 3,879,613 | | | $ | 3,766,731 | | | $ | 3,730,100 | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Equity | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Demand | | $ | 489,807 | | | $ | 460,645 | | | $ | 451,645 | | | $ | 436,985 | | | $ | 409,921 | |
| Savings | | | 1,571,881 | | | | 1,554,358 | | | | 1,386,059 | | | | 1,259,861 | | | | 1,185,756 | |
| Brokered time deposits | | | 37,285 | | | | 41,791 | | | | 43,473 | | | | 45,322 | | | | 44,631 | |
| Other time deposits | | | 938,438 | | | | 993,595 | | | | 1,063,237 | | | | 1,085,335 | | | | 1,148,413 | |
| Total deposits | | | 3,037,411 | | | | 3,050,389 | | | | 2,944,414 | | | | 2,827,503 | | | | 2,788,721 | |
| Short-term borrowings | | | 190,732 | | | | 162,349 | | | | 111,346 | | | | 132,301 | | | | 117,766 | |
| Other borrowings | | | 426,039 | | | | 451,429 | | | | 457,444 | | | | 457,508 | | | | 477,640 | |
| Accrued expenses and other liabilities | | | 28,226 | | | | 33,767 | | | | 38,044 | | | | 31,459 | | | | 30,496 | |
| Total Liabilities | | | 3,682,408 | | | | 3,697,934 | | | | 3,551,248 | | | | 3,448,771 | | | | 3,414,623 | |
| | | | | | | | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | | | | | | | |
| Preferred equity | | | 77,539 | | | | 77,224 | | | | 76,909 | | | | 76,594 | | | | 76,279 | |
| Common equity | | | 235,543 | | | | 235,057 | | | | 248,583 | | | | 238,449 | | | | 236,237 | |
| Total Heartland Stockholders’ Equity | | | 313,082 | | | | 312,281 | | | | 325,492 | | | | 315,043 | | | | 312,516 | |
| Noncontrolling interest | | | 2,751 | | | | 2,776 | | | | 2,873 | | | | 2,917 | | | | 2,961 | |
| Total Equity | | | 315,833 | | | | 315,057 | | | | 328,365 | | | | 317,960 | | | | 315,477 | |
| Total Liabilities and Equity | | $ | 3,998,241 | | | $ | 4,012,991 | | | $ | 3,879,613 | | | $ | 3,766,731 | | | $ | 3,730,100 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common Share Data | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 14.40 | | | $ | 14.38 | | | $ | 15.23 | | | $ | 14.62 | | | $ | 14.50 | |
| FAS 115 effect on book value per common share | | $ | 0.28 | | | $ | 0.38 | | | $ | 0.62 | | | $ | (0.02 | ) | | $ | 0.10 | |
| Common shares outstanding, net of treasury stock | | | 16,357,874 | | | | 16,346,362 | | | | 16,321,953 | | | | 16,310,825 | | | | 16,294,828 | |
| | | | | | | | | | | | | | | | | | | | | |
Tangible Capital Ratio(1) | | | 5.17 | % | | | 5.14 | % | | | 5.35 | % | | | 5.24 | % | | | 5.23 | % |
(1) Total common 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 Quarter Ended |
| | | | 3/31/2010 | | | | 12/31/2009 | | | | 9/30/2009 | | | | 6/30/2009 | | | | 3/31/2009 | |
| Average Balances | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 3,984,794 | | | $ | 3,975,107 | | | $ | 3,853,658 | | | $ | 3,763,003 | | | $ | 3,659,204 | |
| Loans and leases, net of unearned | | | 2,384,490 | | | | 2,410,459 | | | | 2,430,161 | | | | 2,384,568 | | | | 2,423,605 | |
| Deposits | | | 3,024,827 | | | | 3,013,644 | | | | 2,912,325 | | | | 2,790,322 | | | | 2,674,320 | |
| Earning assets | | | 3,510,015 | | | | 3,525,624 | | | | 3,496,607 | | | | 3,420,233 | | | | 3,309,556 | |
| Interest bearing liabilities | | | 3,163,161 | | | | 3,127,792 | | | | 3,041,502 | | | | 2,984,903 | | | | 2,918,763 | |
| Common stockholders’ equity | | | 238,028 | | | | 246,505 | | | | 243,542 | | | | 238,878 | | | | 235,200 | |
| Total stockholders’ equity | | | 318,027 | | | | 326,254 | | | | 323,040 | | | | 318,077 | | | | 313,968 | |
| Tangible common stockholders’ equity | | | 207,695 | | | | 203,573 | | | | 200,370 | | | | 195,483 | | | | 191,577 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings Performance Ratios | | | | | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.41 | % | | | (0.92 | )% | | | 0.22 | % | | | 0.36 | % | | | 0.53 | % |
| Annualized return on average common equity | | | 6.83 | | | | (14.76 | ) | | | 3.54 | | | | 5.74 | | | | 8.26 | |
| Annualized return on average common tangible equity | | | 7.83 | | | | (17.87 | ) | | | 4.31 | | | | 7.02 | | | | 10.14 | |
Annualized net interest margin(1) | | | 4.14 | | | | 4.04 | | | | 4.06 | | | | 3.92 | | | | 3.94 | |
Efficiency ratio(2) | | | 64.27 | | | | 92.19 | | | | 65.55 | | | | 66.40 | | | | 67.48 | |
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains
| HEARTLAND FINANCIAL USA, INC. |
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) |
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA |
| | As of and For | As of and For | As of and For | As of and For | As of and For |
| | the Qtr. Ended | the Qtr. Ended | the Qtr. Ended | the Qtr. Ended | the Qtr. Ended |
| | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 |
| Loan and Lease Data | | | | | | | | | | | | | | | | | | | | |
| Loans held to maturity: | | | | | | | | | | | | | | | | | | | | |
| Commercial and commercial real estate | | $ | 1,710,669 | | | $ | 1,670,108 | | | $ | 1,694,589 | | | $ | 1,701,933 | | | $ | 1,673,882 | |
| Residential mortgage | | | 175,065 | | | | 175,059 | | | | 184,292 | | | | 187,016 | | | | 190,179 | |
| Agricultural and agricultural real estate | | | 258,239 | | | | 256,780 | | | | 257,738 | | | | 255,340 | | | | 259,320 | |
| Consumer | | | 228,311 | | | | 231,709 | | | | 233,259 | | | | 231,986 | | | | 232,507 | |
| Direct financing leases, net | | | 1,951 | | | | 2,326 | | | | 2,882 | | | | 3,615 | | | | 4,989 | |
| Unearned discount and deferred loan fees | | | (5,002 | ) | | | (4,840 | ) | | | (4,889 | ) | | | (4,863 | ) | | | (4,486 | ) |
| Total loans and leases held to maturity | | $ | 2,369,233 | | | $ | 2,331,142 | | | $ | 2,367,871 | | | $ | 2,375,027 | | | $ | 2,356,391 | |
| Loans covered under loss share agreements: | | | | | | | | | | | | | | | | | | | | |
| Commercial and commercial real estate | | $ | 13,241 | | | $ | 15,068 | | | $ | 17,109 | | | $ | - | | | $ | - | |
| Residential mortgage | | | 8,064 | | | | 8,984 | | | | 10,201 | | | | - | | | | - | |
| Agricultural and agricultural real estate | | | 2,806 | | | | 3,626 | | | | 4,117 | | | | - | | | | - | |
| Consumer | | | 3,857 | | | | 4,182 | | | | 4,748 | | | | - | | | | - | |
| Total loans and leases covered underloss share agreements | | $ | 27,968 | | | $ | 31,860 | | | $ | 36,175 | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Asset Quality | | | | | | | | | | | | | | | | | | | | |
| Not covered under loss share agreements: | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 78,239 | | | $ | 78,118 | | | $ | 78,940 | | | $ | 71,116 | | | $ | 67,140 | |
| Loans and leases past due ninety days or more as to interest or principal payments | | | 47 | | | | 17 | | | | 5,063 | | | | 54 | | | | - | |
| Other real estate owned | | | 28,290 | | | | 30,205 | | | | 32,643 | | | | 29,311 | | | | 29,317 | |
| Other repossessed assets | | | 528 | | | | 501 | | | | 565 | | | | 1,477 | | | | 1,501 | |
| Total nonperforming assets not covered under loss share agreements | | $ | 107,104 | | | $ | 108,841 | | | $ | 117,211 | | | $ | 101,958 | | | $ | 97,958 | |
| | | | | | | | | | | | | | | | | | | | | |
| Covered under loss share agreements: | | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 4,621 | | | $ | 4,170 | | | $ | 4,102 | | | $ | - | | | $ | - | |
| Loans and leases past due ninety days or more as to interest or principal payments | | | - | | | | - | | | | - | | | | - | | | | - | |
| Other real estate owned | | | 362 | | | | 363 | | | | 599 | | | | - | | | | - | |
| Other repossessed assets | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total nonperforming assets covered under loss share agreements | | $ | 4,983 | | | $ | 4,533 | | | $ | 4,701 | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Allowance for Loan and Lease Losses | | | | | | | | | | | | | | | | | | | | |
| Balance, beginning of period | | $ | 41,848 | | | $ | 42,260 | | | $ | 37,234 | | | $ | 37,277 | | | $ | 35,651 | |
| Provision for loan and lease losses | | | 8,894 | | | | 10,775 | | | | 11,896 | | | | 10,041 | | | | 6,665 | |
| Charge offs on loans not covered by loss share agreements | | | (4,505 | ) | | | (10,115 | ) | | | (7,465) | | | | (10,406 | ) | | | (5,635) | |
| Charge offs on loans covered by loss share agreements | | | (264 | ) | | | (1,344 | ) | | | - | | | | - | | | | - | |
| Recoveries | | | 377 | | | | 272 | | | | 595 | | | | 322 | | | | 596 | |
| Balance, end of period | | $ | 46,350 | | | $ | 41,848 | | | $ | 42,260 | | | $ | 37,234 | | | $ | 37,277 | |
| | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements | | | | | | | | | | | | | | | | | | | | |
| Ratio of nonperforming loans and leases to total loans and leases | | | 3.30 | % | | | 3.35 | % | | | 3.55 | % | | | 3.00 | % | | | 2.85 | % |
| Ratio of nonperforming assets to total assets | | | 2.68 | % | | | 2.71 | % | | | 3.02 | % | | | 2.71 | % | | | 2.63 | % |
| Annualized ratio of net loan charge-offs to average loans and leases | | | 0.75 | % | | | 1.84 | % | | | 1.12 | % | | | 1.70 | % | | | 0.84 | % |
| Allowance for loan and lease losses as a percent of loans and leases | | | 1.96 | % | | | 1.80 | % | | | 1.78 | % | | | 1.57 | % | | | 1.58 | % |
| Allowance for loan and lease losses as a percent of nonperforming loans and leases | | | 59.21 | % | | | 53.56 | % | | | 50.31 | % | | | 52.32 | % | | | 55.52 | % |
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS |
| | | | For the Quarter Ended | |
| | | | March 31, 2010 | | | | March 31, 2009 | |
| | | | Average | | | | | | | | | | | Average | | | | | | | | |
| | | | Balance | | | | Interest | | | Rate | | | | Balance | | | | Interest | | | Rate | |
| Earning Assets | | | | | | | | | | | | | | | | | | | | | | |
| Securities: | | | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 926,161 | | | $ | 9,455 | | | 4.14 | % | | $ | 759,985 | | | $ | 8,421 | | | 4.49 | % |
Nontaxable(1) | | | 239,587 | | | | 3,807 | | | 6.44 | % | | | 160,147 | | | | 2,720 | | | 6.89 | % |
Total securities | | | 1,165,748 | | | | 13,262 | | | 4.61 | % | | | 920,132 | | | | 11,141 | | | 4.91 | % |
| Interest bearing deposits | | | 2,848 | | | | 5 | | | 0.71 | % | | | 634 | | | | 1 | | | 0.64 | % |
| Federal funds sold | | | 617 | | | | - | | | - | % | | | 785 | | | | 1 | | | 0.52 | % |
| Loans and leases: | | | | | | | | | | | | | | | | | | | | | | |
Commercial and commercial real estate(1) | | | 1,695,161 | | | | 24,821 | | | 5.94 | % | | | 1,693,796 | | | | 26,142 | | | 6.26 | % |
Residential mortgage | | | 196,770 | | | | 2,720 | | | 5.61 | % | | | 236,878 | | | | 3,449 | | | 5.90 | % |
Agricultural and agricultural real estate(1) | | | 258,770 | | | | 3,984 | | | 6.24 | % | | | 256,059 | | | | 4,092 | | | 6.48 | % |
Consumer | | | 231,660 | | | | 4,974 | | | 8.71 | % | | | 231,328 | | | | 4,973 | | | 8.72 | % |
Direct financing leases, net | | | 2,129 | | | | 32 | | | 6.10 | % | | | 5,544 | | | | 68 | | | 4.97 | % |
Fees on loans | | | - | | | | 986 | | | - | | | | - | | | | 966 | | | - | |
Less: allowance for loan and lease losses | | | (43,688 | ) | | | - | | | - | | | | (35,600 | ) | | | - | | | - | |
Net loans and leases | | | 2,340,802 | | | | 37,517 | | | 6.50 | % | | | 2,388,005 | | | | 39,690 | | | 6.74 | % |
Total earning assets | | | 3,510,015 | | | | 50,784 | | | 5.87 | % | | | 3,309,556 | | | | 50,833 | | | 6.23 | % |
| Nonearning Assets | | | 474,779 | | | | - | | | | | | | 349,648 | | | | - | | | | |
| Total Assets | | $ | 3,984,794 | | | $ | 50,784 | | | | | | $ | 3,659,204 | | | $ | 50,833 | | | | |
| Interest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Interest bearing deposits | | | | | | | | | | | | | | | | | | | | | | |
Savings | | $ | 1,549,140 | | | $ | 4,136 | | | 1.08 | % | | $ | 1,116,314 | | | $ | 4,524 | | | 1.64 | % |
Time, $100,000 and over | | | 324,888 | | | | 2,070 | | | 2.58 | % | | | 394,948 | | | | 3,238 | | | 3.32 | % |
Other time deposits | | | 683,859 | | | | 4,554 | | | 2.70 | % | | | 769,443 | | | | 6,360 | | | 3.35 | % |
| Short-term borrowings | | | 169,237 | | | | 234 | | | 0.56 | % | | | 170,826 | | | | 212 | | | 0.50 | % |
| Other borrowings | | | 436,037 | | | | 3,959 | | | 3.68 | % | | | 467,232 | | | | 4,378 | | | 3.80 | % |
Total interest bearing liabilities | | | 3,163,161 | | | | 14,953 | | | 1.92 | % | | | 2,918,763 | | | | 18,712 | | | 2.60 | % |
| Noninterest Bearing Liabilities | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest bearing deposits | | | 466,940 | | | | | | | | | | | 393,615 | | | | | | | | |
| Accrued interest and other liabilities | | | 36,666 | | | | | | | | | | | 32,858 | | | | | | | | |
Total noninterest bearing liabilities | | | 503,606 | | | | | | | | | | | 426,473 | | | | | | | | |
| Stockholders’ Equity | | | 318,027 | | | | | | | | | | | 313,968 | | | | | | | | |
| Total Liabilities and Stockholders’ Equity | | $ | 3,984,794 | | | | | | | | | | $ | 3,959,204 | | | | | | | | |
Net interest income(1) | | | | | | $ | 35,831 | | | | | | | | | | $ | 32,121 | | | | |
Net interest spread(1) | | | | | | | | | | 3.95 | % | | | | | | | | | | 3.63 | % |
Net interest income to total earning assets(1) | | | | | | | | | | 4.14 | % | | | | | | | | | | 3.94 | % |
| Interest bearing liabilities to earning assets | | | 90.12 | % | | | | | | | | | | 88.19 | % | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(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 | | | As of and | | | As of and | | | As of and | | | As of and | |
| | | | For the | | | For the | | | For the | | | For the | | | For the | |
| | | | Qtr. Ended | | | Qtr. Ended | | | Qtr. Ended | | | Qtr. Ended | | | Qtr. Ended | |
| | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | 3/31/2009 | |
| Total Assets | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 1,160,474 | | $ | 1,249,124 | | $ | 1,104,217 | | $ | 1,097,161 | | $ | 1,107,204 | |
| New Mexico Bank & Trust | | | 849,428 | | | 868,295 | | | 785,146 | | | 791,019 | | | 762,980 | |
| Wisconsin Community Bank | | | 456,510 | | | 448,106 | | | 433,900 | | | 434,362 | | | 427,734 | |
| Rocky Mountain Bank | | | 454,558 | | | 469,723 | | | 468,695 | | | 470,220 | | | 481,577 | |
| Galena State Bank & Trust Co. | | | 287,495 | | | 291,412 | | | 288,501 | | | 231,655 | | | 228,711 | |
| Riverside Community Bank | | | 283,195 | | | 283,258 | | | 277,639 | | | 270,354 | | | 254,965 | |
| Arizona Bank & Trust | | | 267,453 | | | 258,280 | | | 268,600 | | | 251,562 | | | 227,840 | |
| First Community Bank | | | 119,962 | | | 121,492 | | | 121,938 | | | 125,069 | | | 123,785 | |
| Summit Bank & Trust | | | 95,442 | | | 97,025 | | | 99,724 | | | 91,211 | | | 78,892 | |
| Minnesota Bank & Trust | | | 54,318 | | | 49,330 | | | 39,283 | | | 34,547 | | | 30,625 | |
| Total Deposits | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 806,574 | | $ | 864,133 | | $ | 815,553 | | $ | 798,927 | | $ | 806,425 | |
| New Mexico Bank & Trust | | | 608,030 | | | 589,468 | | | 563,414 | | | 552,650 | | | 535,753 | |
| Wisconsin Community Bank | | | 355,880 | | | 358,994 | | | 338,328 | | | 330,327 | | | 336,670 | |
| Rocky Mountain Bank | | | 363,842 | | | 376,487 | | | 364,570 | | | 364,159 | | | 375,708 | |
| Galena State Bank & Trust Co. | | | 250,621 | | | 253,073 | | | 244,389 | | | 196,035 | | | 193,697 | |
| Riverside Community Bank | | | 233,440 | | | 232,459 | | | 226,791 | | | 220,097 | | | 209,176 | |
| Arizona Bank & Trust | | | 230,699 | | | 202,730 | | | 215,092 | | | 198,310 | | | 176,393 | |
| First Community Bank | | | 98,691 | | | 100,328 | | | 99,351 | | | 99,772 | | | 100,441 | |
| Summit Bank & Trust | | | 81,414 | | | 85,131 | | | 89,130 | | | 79,991 | | | 66,259 | |
| Minnesota Bank & Trust | | | 39,912 | | | 34,616 | | | 24,364 | | | 18,477 | | | 15,598 | |
| Net Income (Loss) | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 4,921 | | $ | 3,751 | | $ | 3,863 | | $ | 4,144 | | $ | 3,787 | |
| New Mexico Bank & Trust | | | 2,341 | | | 1,640 | | | 1,955 | | | 1,434 | | | 3,257 | |
| Wisconsin Community Bank | | | 1,367 | | | 770 | | | 1,198 | | | 1,464 | | | 1,011 | |
| Rocky Mountain Bank | | | (596 | ) | | (6,399 | ) | | (463 | ) | | 204 | | | 724 | |
| Galena State Bank & Trust Co. | | | 1,046 | | | 663 | | | 962 | | | 513 | | | 905 | |
| Riverside Community Bank | | | 640 | | | (55 | ) | | 283 | | | (326 | ) | | 502 | |
| Arizona Bank & Trust | | | (2,900 | ) | | (5,117 | ) | | (1,227 | ) | | (1,151 | ) | | (2,695 | ) |
| First Community Bank | | | 399 | | | (225 | ) | | 101 | | | (209 | ) | | 316 | |
| Summit Bank & Trust | | | (118 | ) | | (490 | ) | | (1,366 | ) | | (1,169 | ) | | (432 | ) |
| Minnesota Bank & Trust | | | (123 | ) | | (203 | ) | | (221 | ) | | (225 | ) | | (291 | ) |
| Return on Average Assets | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | 1.66 | % | | 1.25 | % | | 1.40 | % | | 1.50 | % | | 1.43 | % |
| New Mexico Bank & Trust | | | 1.12 | | | 0.79 | | | 0.99 | | | 0.73 | | | 1.72 | |
| Wisconsin Community Bank | | | 1.23 | | | 0.69 | | | 1.09 | | | 1.35 | | | 0.95 | |
| Rocky Mountain Bank | | | (0.53 | ) | | (5.30 | ) | | (0.39 | ) | | 0.17 | | | 0.61 | |
| Galena State Bank & Trust Co. | | | 1.46 | | | 0.90 | | | 1.34 | | | 0.90 | | | 1.64 | |
| Riverside Community Bank | | | 0.93 | | | (0.08 | ) | | 0.41 | | | (0.50 | ) | | 0.82 | |
| Arizona Bank & Trust | | | (4.62 | ) | | (7.60 | ) | | (1.86 | ) | | (1.88 | ) | | (4.94 | ) |
| First Community Bank | | | 1.35 | | | (0.72 | ) | | 0.32 | | | (0.67 | ) | | 1.05 | |
| Summit Bank & Trust | | | (0.50 | ) | | (1.94 | ) | | (5.62 | ) | | (5.59 | ) | | (2.23 | ) |
| Minnesota Bank & Trust | | | (0.95 | ) | | (1.95 | ) | | (2.42 | ) | | (2.77 | ) | | (4.32 | ) |
| Net Interest Margin as a Percentage of Average Earning Assets | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | 4.05 | % | | 3.98 | % | | 3.98 | % | | 3.72 | % | | 3.59 | % |
| New Mexico Bank & Trust | | | 4.18 | | | 4.23 | | | 4.67 | | | 4.38 | | | 4.70 | |
| Wisconsin Community Bank | | | 3.80 | | | 3.91 | | | 3.76 | | | 4.12 | | | 3.65 | |
| Rocky Mountain Bank | | | 3.90 | | | 3.68 | | | 3.80 | | | 3.82 | | | 4.17 | |
| Galena State Bank & Trust Co. | | | 3.48 | | | 3.46 | | | 3.47 | | | 3.59 | | | 3.43 | |
| Riverside Community Bank | | | 3.95 | | | 4.14 | | | 3.86 | | | 3.38 | | | 2.98 | |
| Arizona Bank & Trust | | | 3.64 | | | 3.58 | | | 3.33 | | | 3.20 | | | 3.88 | |
| First Community Bank | | | 3.79 | | | 4.24 | | | 4.31 | | | 3.60 | | | 3.53 | |
| Summit Bank & Trust | | | 3.29 | | | 3.00 | | | 2.47 | | | 3.17 | | | 3.38 | |
| Minnesota Bank & Trust | | | 3.24 | | | 4.16 | | | 3.86 | | | 3.94 | | | 3.11 | |
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA – SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS |
| | | | As of | | | As of | | | As of | | | As of | | | As of | |
| | | | 3/31/2010 | | | 12/31/2009 | | | 9/30/2009 | | | 6/30/2009 | | | 3/31/2009 | |
| Total Portfolio Loans and Leases | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 681,668 | | $ | 658,274 | | $ | 653,579 | | $ | 669,925 | | $ | 662,047 | |
| New Mexico Bank & Trust | | | 509,696 | | | 502,497 | | | 513,560 | | | 499,597 | | | 480,147 | |
| Wisconsin Community Bank | | | 314,102 | | | 274,487 | | | 289,558 | | | 298,817 | | | 295,852 | |
| Rocky Mountain Bank | | | 281,079 | | | 292,914 | | | 302,494 | | | 314,523 | | | 312,335 | |
| Galena State Bank & Trust Co. | | | 131,539 | | | 134,104 | | | 136,700 | | | 130,011 | | | 130,791 | |
| Riverside Community Bank | | | 157,511 | | | 161,280 | | | 161,025 | | | 159,977 | | | 161,304 | |
| Arizona Bank & Trust | | | 131,115 | | | 138,604 | | | 142,387 | | | 135,198 | | | 138,647 | |
| First Community Bank | | | 66,560 | | | 72,113 | | | 73,722 | | | 72,676 | | | 74,120 | |
| Summit Bank & Trust | | | 58,272 | | | 58,108 | | | 58,410 | | | 60,948 | | | 62,157 | |
| Minnesota Bank & Trust | | | 24,997 | | | 24,472 | | | 22,118 | | | 19,977 | | | 14,796 | |
| Allowance For Loan and Lease Losses | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 10,395 | | $ | 10,486 | | $ | 10,318 | | $ | 9,478 | | $ | 9,333 | |
| New Mexico Bank & Trust | | | 7,999 | | | 7,578 | | | 7,641 | | | 7,080 | | | 6,607 | |
| Wisconsin Community Bank | | | 5,328 | | | 5,390 | | | 5,133 | | | 4,386 | | | 4,345 | |
| Rocky Mountain Bank | | | 7,434 | | | 5,897 | | | 6,152 | | | 5,743 | | | 4,938 | |
| Galena State Bank & Trust Co. | | | 1,466 | | | 1,989 | | | 1,897 | | | 1,711 | | | 1,782 | |
| Riverside Community Bank | | | 2,425 | | | 2,395 | | | 2,475 | | | 2,270 | | | 2,215 | |
| Arizona Bank & Trust | | | 7,056 | | | 3,825 | | | 4,380 | | | 2,520 | | | 3,933 | |
| First Community Bank | | | 993 | | | 1,072 | | | 1,122 | | | 989 | | | 1,023 | |
| Summit Bank & Trust | | | 994 | | | 926 | | | 930 | | | 922 | | | 1,075 | |
| Minnesota Bank & Trust | | | 240 | | | 295 | | | 276 | | | 234 | | | 185 | |
| Nonperforming Loans and Leases | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | $ | 6,408 | | $ | 6,102 | | $ | 7,365 | | $ | 6,474 | | $ | 6,180 | |
| New Mexico Bank & Trust | | | 13,995 | | | 14,069 | | | 18,693 | | | 10,283 | | | 10,094 | |
| Wisconsin Community Bank | | | 15,773 | | | 14,396 | | | 13,276 | | | 12,173 | | | 13,075 | |
| Rocky Mountain Bank | | | 21,558 | | | 18,443 | | | 17,286 | | | 18,570 | | | 12,854 | |
| Galena State Bank & Trust Co. | | | 1,372 | | | 1,545 | | | 2,045 | | | 2,425 | | | 3,040 | |
| Riverside Community Bank | | | 5,543 | | | 8,104 | | | 9,493 | | | 8,457 | | | 6,105 | |
| Arizona Bank & Trust | | | 4,922 | | | 5,158 | | | 5,689 | | | 5,806 | | | 5,234 | |
| First Community Bank | | | 2,512 | | | 2,736 | | | 3,866 | | | 2,893 | | | 4,291 | |
| Summit Bank & Trust | | | 5,513 | | | 6,719 | | | 5,528 | | | 3,305 | | | 5,460 | |
| Minnesota Bank & Trust | | | - | | | 19 | | | - | | | - | | | - | |
| Allowance As a Percent of Total Loans and Leases | | | | | | | | | | | | | | | | |
| Dubuque Bank and Trust Company | | | 1.52 | % | | 1.59 | % | | 1.58 | % | | 1.41 | % | | 1.41 | % |
| New Mexico Bank & Trust | | | 1.57 | | | 1.51 | | | 1.49 | | | 1.42 | | | 1.38 | |
| Wisconsin Community Bank | | | 1.70 | | | 1.96 | | | 1.77 | | | 1.47 | | | 1.47 | |
| Rocky Mountain Bank | | | 2.64 | | | 2.01 | | | 2.03 | | | 1.83 | | | 1.58 | |
| Galena State Bank & Trust Co. | | | 1.11 | | | 1.48 | | | 1.39 | | | 1.32 | | | 1.36 | |
| Riverside Community Bank | | | 1.54 | | | 1.48 | | | 1.54 | | | 1.42 | | | 1.37 | |
| Arizona Bank & Trust | | | 5.38 | | | 2.76 | | | 3.08 | | | 1.86 | | | 2.84 | |
| First Community Bank | | | 1.49 | | | 1.49 | | | 1.52 | | | 1.36 | | | 1.38 | |
| Summit Bank & Trust | | | 1.71 | | | 1.59 | | | 1.59 | | | 1.51 | | | 1.73 | |
| Minnesota Bank & Trust | | | 0.96 | | | 1.21 | | | 1.25 | | | 1.17 | | | 1.25 | |
