| CONTACT: | FOR IMMEDIATE RELEASE |
| John K. Schmidt | July 25, 2011 |
| Chief Operating Officer | |
| Chief Financial Officer | |
| (563) 589-1994 | |
| jschmidt@htlf.com | |
HEARTLAND FINANCIAL USA, INC. REPORTS SECOND QUARTER 2011 RESULTS
Quarterly Highlights
| § | Record net income of $10.2 million |
| § | Net interest margin of 4.23% |
| § | Provision for loan and lease losses decreased $6.1 million or 61% over the same quarter one year ago |
| § | Securities gains of $4.8 million |
| § | Nonperforming assets decreased $18.9 million |
| § | Charter consolidation of First Community Bank with Dubuque Bank and Trust Company completed |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Net income (in millions) | $ | 10.2 | $ | 5.1 | $ | 14.4 | $ | 10.4 | |||||||
| Net income available to common stockholders (in millions) | 8.9 | 3.8 | 11.8 | 7.8 | |||||||||||
| Diluted earnings per common share | 0.54 | 0.23 | 0.71 | 0.47 | |||||||||||
| Return on average assets | 0.89 | % | 0.37 | % | 0.59 | % | 0.39 | % | |||||||
| Return on average common equity | 13.69 | 6.25 | 9.28 | 6.54 | |||||||||||
| Net interest margin | 4.23 | 4.09 | 4.21 | 4.12 | |||||||||||
“For the second quarter of 2011, Heartland reported its best quarter ever with record earnings of $10.2 million. The company's exceptional performance was the result of continued improvement in net interest margin, significant securities gains and a sharp drop in the provision for loan losses.” Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc. | ||||
Dubuque, Iowa, Monday, July 25, 2011-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $10.2 million for the quarter ended June 30, 2011, compared to $5.1 million for the second quarter of 2010. Net income available to common stockholders was $8.9 million, or $0.54 per diluted common share, for the quarter ended June 30, 2011, compared to $3.8 million, or $0.23 per diluted common share, for the second quarter of 2010. Return on average common equity was 13.69 percent and return on average assets was 0.89 percent for the second quarter of 2011, compared to 6.25 percent and 0.37 percent, respectively, for the same quarter in 2010.
The improved earnings during the second quarter of 2011 compared to the second quarter of 2010 were primarily attributable to reduced provision for loan and lease losses and increased securities gains.
Net income recorded for the first six months of 2011 was $14.4 million, compared to $10.4 million recorded during the first six months of 2010. Net income available to common stockholders was $11.8 million, or $0.71 per diluted common share, for the six months ended June 30, 2011, compared to $7.8 million, or $0.47 per diluted common share, earned during the first six months of 2010. Return on average common equity was 9.28 percent and return on average assets was 0.59 percent for the first six months of 2011, compared to 6.54 percent and 0.39 percent, respectively, for the same period in 2010.
Earnings for the first six months of 2011 compared to the first six months of 2010 were positively affected by reduced provision for loan and lease losses, combined with increases in net interest income, gains on sale of loans and securities gains. The effect of these improvements was partially offset by increases in salaries and employee benefits, professional fees and other noninterest expenses.
Commenting on Heartland's second quarter results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer, said, “For the second quarter of 2011, Heartland reported its best quarter ever with record earnings of $10.2 million. The company's exceptional performance was the result of continued improvement in net interest margin, significant securities gains and a sharp drop in the provision for loan losses.”
Net Interest Margin Remains Above 4.00 Percent; Net Interest Income Increases
Net interest margin, expressed as a percentage of average earning assets, was 4.23 percent during the second quarter of 2011 compared to 4.09 percent for the second quarter of 2010. For the six-month periods ended June 30, net interest margin was 4.21 percent during 2011 and 4.12 percent during 2010. The continuation of a net interest margin above 4.00 percent has been a direct result of continued price discipline, the effect of which would have been more significant had it not been for the amount of foregone interest on Heartland's nonaccrual loans not covered by loss share agreements, which had balances of $68.1 million or 2.90 percent of total loans and leases at June 30, 2011, and $84.9 million or 3.56 percent of total loans and leases at June 30, 2010.
Fuller said, “Net interest margin expanded again in the second quarter thanks to improvement on both sides of the balance sheet. Up four basis points over this year's first quarter, net interest margin reached 4.23 percent. We've now maintained our margin above 4 percent for eight consecutive quarters.”
Net interest income on a tax-equivalent basis totaled $38.0 million during the second quarter of 2011, an increase of $900,000 or 2 percent from the $37.1 million recorded during the second quarter of 2010. For the first six months of 2011, net interest income on a tax-equivalent basis was $75.0 million, an increase of $2.1 million or 3 percent from the $72.9 million recorded during the first six months of 2010. These increases reflect Heartland's success in optimizing the composition of its interest bearing liabilities by de-emphasizing higher cost time deposits, which decreased to 36 percent of total average interest bearing deposits during the first half of 2011 from 39 percent during the first half of 2010.
On a tax-equivalent basis, interest income in the second quarter of 2011 was $50.0 million compared to $51.5 million in the second quarter of 2010, a decrease of $1.5 million or 3 percent. Average earning assets decreased $32.0 million or 1 percent during the second quarter of 2011 compared to the second quarter of 2010 and the average interest rate earned on these assets was 5.57 percent during 2011 compared to 5.69 percent during 2010. For the first six months of 2011, interest income on a tax-equivalent basis was $99.2 million compared to $102.3 million during the same period in 2010, a decrease of $3.1 million or 3 percent. The $21.0 million or 1 percent growth in average earning assets during the first six months of 2011 compared to the same period in 2010 was offset by the impact of a decrease in the average interest rate earned on these assets which was 5.57 percent during 2011 compared to 5.78 percent during 2010.
Interest expense for the second quarter of 2011 was $12.0 million, a decrease of $2.5 million or 17 percent from $14.5 million in the second quarter of 2010. On a six-month comparative basis, interest expense decreased $5.2 million or 18 percent. Average interest bearing liabilities decreased $160.9 million or 5 percent for the quarter ended June 30, 2011, as compared to the same quarter in 2010. For the six months ended June 30, 2011, average interest bearing liabilities decreased $156.7 million or 5 percent as compared to the first six months of 2010. These decreases resulted primarily from an outflow of higher cost certificates of deposit and a reduction in other borrowings. The average interest rates paid on Heartland's deposits and borrowings declined 23 basis points to 1.60 percent in the second quarter of 2011 from 1.83 percent in the second quarter of 2010. On a six-month comparative basis, the average interest rate paid on Heartland's deposits and borrowings declined 25 basis points to 1.62 percent in 2011 from 1.87 percent in 2010.
Noninterest Income Increases; Noninterest Expense Increases
Noninterest income was $14.7 million during the second quarter of 2011 compared to $10.8 million during the second quarter of 2010, an increase of $3.9 million or 35 percent, primarily as a result of increased securities gains and gains on trading account securities, which totaled $4.8 million during 2011 compared to $786,000 during 2010. Volatility in the bond market provided opportunities to sell taxable municipal bonds and reinvest in tax-exempt municipals without extending the duration of that portfolio. Additionally, another strategy was initiated in the second quarter of 2011 to shift a portion of the securities portfolio from agencies to treasuries and shorter-term mortgage- backed securities to reduce the effect a flattening yield curve could have on the portfolio. Other categories showing improvement were service charges and fees, trust fees, brokerage and insurance commissions, gains on sale of loans and income on bank owned life insurance. Improvements in these categories were offset by a reduction in loan servicing income and other noninterest income. For the six-month period ended June 30, noninterest income was $27.3 million in 2011 compared to $21.4 million in 2010, an increase of $5.9 million or 27 percent. Securities gains and gain on trading account securities totaled $7.1 million for the first six months of 2011 compared to $2.3 million for the first six months of 2010. Other categories contributing to the increase for the six-month comparative period were service charges and fees, trust fees, brokerage and insurance commissions, gains on sale of loans and income on bank owned life insurance.
Loan servicing income decreased $322,000 or 20 percent for the second quarter of 2011 as compared to the second quarter of 2010 and $200,000 or 7 percent for the first half of 2011 compared to the first half of 2010. Two components of loan servicing income, mortgage servicing rights and amortization of mortgage servicing rights, are dependent upon the level of loans Heartland originates and sells into the secondary market, which in turn is highly influenced by market interest rates for home mortgage loans. Mortgage servicing rights income was $616,000 during the second quarter of 2011 compared to $957,000 during the second quarter of 2010 and amortization of mortgage servicing rights was $808,000 during the second quarter of 2011 compared to $707,000 during the second quarter of 2010. Loan servicing income also includes the fees collected for the servicing of mortgage loans for others, which is dependent upon the aggregate outstanding balance of these loans, rather than quarterly production and sale of mortgage loans. Fees collected for the servicing of mortgage loans for others were $892,000 during the second quarter of 2011 compared to $743,000 during the second quarter of 2010. The portfolio of mortgage loans serviced for others by Heartland totaled $1.45 billion at June 30, 2011, compared to $1.22 billion at June 30, 2010.
For the second quarter of 2011, noninterest expense totaled $32.3 million, an increase of $2.8 million or 9 percent from the same quarter of 2010. For the six-month period ended June 30, noninterest expense totaled $65.2 million in 2011 compared to $58.5 million in 2010, a $6.7 million or 12 percent increase. Contributing to these increases in noninterest expense were a $1.9 million or 12 percent increase in salaries and employee benefits for the quarter and a $4.7 million or 15 percent increase for the six-month period, a large portion of which resulted from the expansion of residential loan origination via the addition of National Residential Mortgage and increased staffing at Heartland, primarily in the special assets area. Also contributing to the increases in noninterest expense were additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants, and increases in other noninterest expenses, a portion of which was associated with a writedown on land in Phoenix, Arizona, which had originally been purchased for branch expansion but has now been listed for sale.
Heartland's effective tax rate was 29.65 percent for the first half of 2011 compared to 28.74 percent for the first half of 2010. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $399,000 during the first half of 2011 compared to $109,000 during the first half of 2010. 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 24.26 percent
during the first half of 2011 compared to 30.37 percent during the first half of 2010. The tax-equivalent adjustment for this tax-exempt interest income was $2.7 million during the first half of 2011 compared to $2.4 million during the first half of 2010.
Loan Demand Remains Soft; Growth in Demand Deposits Continues
At June 30, 2011, total assets were $4.01 billion, consistent with total assets of $4.00 billion at December 31, 2010. Securities represented 30 percent of total assets at June 30, 2011, compared to 32 percent of total assets at December 31, 2010.
Total loans and leases, exclusive of those covered by loss share agreements, were $2.35 billion at June 30, 2011, compared to $2.34 billion at year-end 2010, an increase of $7.8 million or 1 percent annualized. Commercial and commercial real estate loans, which totaled $1.71 billion at June 30, 2011, decreased $9.0 million or 1 percent annualized since year-end 2010. Residential mortgage loans, which totaled $173.8 million at June 30, 2011, increased $10.1 million or 12 percent annualized since year-end 2010. Agricultural and agricultural real estate loans, which totaled $255.3 million at June 30, 2011, increased $4.3 million or 3 percent annualized since year-end 2010. Consumer loans, which totaled $217.3 million at June 30, 2011, increased $2.7 million or 3 percent annualized since year-end 2010.
Fuller stated, “Overall, loan growth is still difficult, though we are beginning to see pipeline improvement in certain markets. In pursuit of quality loan growth, we are intensifying our calling efforts and reaching out to potential borrowers in every Heartland market.”
Total deposits were $3.08 billion at June 30, 2011, compared to $3.03 billion at year-end 2010, an increase of $46.6 million or 3 percent annualized. The composition of Heartland's deposits continued to shift from higher cost certificates of deposit to no cost demand deposits during the second quarter of 2011, as demand deposits increased $68.9 million or 24 percent annualized since year-end 2010. Time deposits, exclusive of brokered deposits, experienced a decrease of $22.3 million or 5 percent annualized since year-end 2010. At June 30, 2011, brokered time deposits totaled $39.2 million or 1 percent of total deposits compared to $37.3 million or 1 percent of total deposits at December 31, 2010.
“Heartland margin continues to benefit from favorable changes in deposit mix. Total deposits grew by over $46 million since year end, with demand deposits growing by nearly $70 million. At June 30, demand deposits represented 21 percent of total deposits compared with 18 percent a year ago. Comparatively, time deposits represented 28 percent of total deposits compared to 31 percent last year,” Fuller added.
Decrease in Provision for Loan Losses; Improvement in Nonperforming Assets
The allowance for loan and lease losses at June 30, 2011, was 1.73 percent of loans and leases and 59.61 percent of nonperforming loans compared to 1.82 percent of loans and leases and 47.12 percent of nonperforming loans at December 31, 2010, and 2.03 percent of loans and leases and 56.89 percent of nonperforming loans at June 30, 2010. The provision for loan losses was $3.8 million for the second quarter of 2011 compared to $9.9 million for the second quarter of 2010, a $6.1 million or 61 percent decrease, primarily as a result of reductions in the level of nonperforming and substandard loans. For the first six months of 2011, provision for loan losses was $13.9 million compared to $18.8 million for the first six months of 2010. Additions to the allowance for loan and lease losses continued during the first quarter of 2011 primarily as a result of the continuation of depressed economic conditions and the impact those conditions have on the appraised values of collateral. When updated appraisals have been obtained, many reflect a decline in property values due primarily to a lack of recent comparable sales and an extension of absorption periods.
Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $68.1 million or 2.90 percent of total loans and leases at June 30, 2011, compared to $90.6 million or 3.87 percent of total loans and leases at December 31, 2010, and $84.9 million or 3.56 percent of total loans and leases at June 30, 2010. Approximately 56 percent, or $38.1 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 21 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $11.4 million originated by Rocky Mountain Bank, $8.9 million originated by New Mexico Bank & Trust, $5.5 million originated by Wisconsin Community Bank, $4.8 million originated by Summit Bank & Trust, $3.3 million originated by Arizona Bank & Trust, $3.1 million originated by Galena State Bank and Trust Co. and $1.1 million originated by Riverside Community Bank. The portion of
Heartland's nonperforming loans covered by government guarantees was $3.5 million at June 30, 2011. The industry breakdown for nonperforming loans with individual balances exceeding $1.0 million, as identified using the North American Industry Classification System (NAICS), was $9.6 million for lot and land development, $4.8 million to lessors of real estate, $4.4 million for manufacturing, $3.7 million for construction and development, $3.8 million for other activities related to real estate and $2.7 million for personal residential real estate. The remaining $9.1 million was distributed among six other industries.
Delinquencies in each of the loan portfolios continue to be well-managed and no significant adverse trends have been identified. Loans delinquent 30 to 89 days as a percent of total loans were 0.60 percent at June 30, 2011, compared to 0.61 percent at March 31, 2011, 0.67 percent at December 31, 2010, 1.65 percent at September 30, 2010, 0.61 percent at June 30, 2010, and 1.22 percent at March 31, 2010.
Other real estate owned was $39.1 million at June 30, 2011, compared to $32.0 million at December 31, 2010, and $32.9 million at June 30, 2010. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues with its 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. During the first half of 2011, $10.2 million of other real estate owned was sold, $4.9 million during the second quarter and $5.3 million during the first quarter.
The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the second quarter of 2011 and the first six months of 2011:
| (Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
| March 31, 2011 | $ | 95,572 | $ | 35,007 | $ | 223 | $ | 130,802 | |||||||
| Loan foreclosures | (10,967 | ) | 10,937 | 30 | — | ||||||||||
| Net loan charge offs | (6,514 | ) | — | — | (6,514 | ) | |||||||||
| New nonperforming loans | 8,661 | — | — | 8,661 | |||||||||||
Reduction of nonperforming loans(1) | (14,162 | ) | — | — | (14,162 | ) | |||||||||
| OREO/Repossessed sales proceeds | — | (4,808 | ) | (50 | ) | (4,858 | ) | ||||||||
| OREO/Repossessed assets writedowns, net | — | (2,061 | ) | — | (2,061 | ) | |||||||||
| Net activity at Citizens Finance Co. | — | — | (15 | ) | (15 | ) | |||||||||
| June 30, 2011 | $ | 72,590 | $ | 39,075 | $ | 188 | $ | 111,853 | |||||||
| (1) Includes principal reductions and transfers to performing status. | |||||||||||||||
| (Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
| December 31, 2010 | $ | 95,498 | $ | 32,002 | $ | 302 | $ | 127,802 | |||||||
| Loan foreclosures | (19,940 | ) | 19,874 | 66 | — | ||||||||||
| Net loan charge offs | (15,945 | ) | — | — | (15,945 | ) | |||||||||
| New nonperforming loans | 34,920 | — | — | 34,920 | |||||||||||
Reduction of nonperforming loans(1) | (21,943 | ) | — | — | (21,943 | ) | |||||||||
| OREO/Repossessed sales proceeds | — | (9,630 | ) | (145 | ) | (9,775 | ) | ||||||||
| OREO/Repossessed assets writedowns, net | — | (3,171 | ) | — | (3,171 | ) | |||||||||
| Net activity at Citizens Finance Co. | — | — | (35 | ) | (35 | ) | |||||||||
| June 30, 2011 | $ | 72,590 | $ | 39,075 | $ | 188 | $ | 111,853 | |||||||
| (1) Includes principal reductions and transfers to performing status. | |||||||||||||||
Net charge-offs on loans during the second quarter of 2011 were $6.5 million compared to $8.0 million during the second quarter of 2010. A large portion of the net charge-offs in both years was related to nonfarm nonresidential real estate and construction, land development and other land loans.
Fuller concluded, “The reduction of nonperforming assets has been our number one priority for several quarters. In the second quarter, we saw marked improvement in this measure as nonperformers dropped by 15 percent compared to the linked quarter.”
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-941-9205 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 23, 2012, 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 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. 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 light 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 June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Interest Income | |||||||||||||||
| Interest and fees on loans and leases | $ | 37,480 | $ | 38,270 | $ | 74,446 | $ | 75,598 | |||||||
| Interest on securities and other: | |||||||||||||||
| Taxable | 7,583 | 8,938 | 14,994 | 18,393 | |||||||||||
| Nontaxable | 3,518 | 3,047 | 7,082 | 5,896 | |||||||||||
| Interest on federal funds sold | 1 | 1 | 1 | 1 | |||||||||||
| Interest on deposits in other financial institutions | — | 7 | 1 | 12 | |||||||||||
| Total Interest Income | 48,582 | 50,263 | 96,524 | 99,900 | |||||||||||
| Interest Expense | |||||||||||||||
| Interest on deposits | 7,675 | 9,955 | 15,701 | 20,715 | |||||||||||
| Interest on short-term borrowings | 225 | 291 | 484 | 525 | |||||||||||
| Interest on other borrowings | 4,081 | 4,208 | 8,017 | 8,167 | |||||||||||
| Total Interest Expense | 11,981 | 14,454 | 24,202 | 29,407 | |||||||||||
| Net Interest Income | 36,601 | 35,809 | 72,322 | 70,493 | |||||||||||
| Provision for loan and lease losses | 3,845 | 9,955 | 13,854 | 18,849 | |||||||||||
| Net Interest Income After Provision for Loan and Lease Losses | 32,756 | 25,854 | 58,468 | 51,644 | |||||||||||
| Noninterest Income | |||||||||||||||
| Service charges and fees | 3,599 | 3,494 | 6,960 | 6,698 | |||||||||||
| Loan servicing income | 1,298 | 1,620 | 2,847 | 3,047 | |||||||||||
| Trust fees | 2,656 | 2,330 | 5,135 | 4,511 | |||||||||||
| Brokerage and insurance commissions | 856 | 785 | 1,704 | 1,497 | |||||||||||
| Securities gains, net | 4,756 | 1,050 | 6,845 | 2,506 | |||||||||||
| Gain (loss) on trading account securities | 81 | (264 | ) | 297 | (216 | ) | |||||||||
| Gains on sale of loans | 1,308 | 1,083 | 2,710 | 1,881 | |||||||||||
| Income on bank owned life insurance | 331 | 293 | 734 | 607 | |||||||||||
| Other noninterest income | (216 | ) | 443 | 45 | 896 | ||||||||||
| Total Noninterest Income | 14,669 | 10,834 | 27,277 | 21,427 | |||||||||||
| Noninterest Expense | |||||||||||||||
| Salaries and employee benefits | 17,480 | 15,574 | 35,666 | 30,997 | |||||||||||
| Occupancy | 2,213 | 2,201 | 4,599 | 4,495 | |||||||||||
| Furniture and equipment | 1,360 | 1,599 | 2,769 | 3,046 | |||||||||||
| Professional fees | 3,053 | 2,549 | 6,072 | 4,760 | |||||||||||
| FDIC insurance assessments | 786 | 1,384 | 2,131 | 2,804 | |||||||||||
| Advertising | 1,113 | 1,052 | 1,963 | 1,866 | |||||||||||
| Intangible assets amortization | 144 | 145 | 290 | 296 | |||||||||||
| Net loss on repossessed assets | 2,511 | 1,636 | 4,143 | 3,700 | |||||||||||
| Other noninterest expenses | 3,683 | 3,435 | 7,597 | 6,512 | |||||||||||
| Total Noninterest Expense | 32,343 | 29,575 | 65,230 | 58,476 | |||||||||||
| Income Before Income Taxes | 15,082 | 7,113 | 20,515 | 14,595 | |||||||||||
| Income taxes | 4,870 | 2,035 | 6,082 | 4,195 | |||||||||||
| Net Income | 10,212 | 5,078 | 14,433 | 10,400 | |||||||||||
| Net income attributable to noncontrolling interest, net of tax | 9 | 25 | 25 | 50 | |||||||||||
| Net Income Attributable to Heartland | 10,221 | 5,103 | 14,458 | 10,450 | |||||||||||
| Preferred dividends and discount | (1,336 | ) | (1,336 | ) | (2,672 | ) | (2,672 | ) | |||||||
| Net Income Available to Common Stockholders | $ | 8,885 | $ | 3,767 | $ | 11,786 | $ | 7,778 | |||||||
| Earnings per common share-diluted | $ | 0.54 | $ | 0.23 | $ | 0.71 | $ | 0.47 | |||||||
| Weighted average shares outstanding-diluted | 16,568,701 | 16,459,978 | 16,561,212 | 16,448,002 | |||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Interest and fees on loans and leases | $ | 37,480 | $ | 36,966 | $ | 37,440 | $ | 38,756 | $ | 38,270 | |||||||||
| Interest on securities and other: | |||||||||||||||||||
| Taxable | 7,583 | 7,411 | 7,889 | 8,225 | 8,938 | ||||||||||||||
| Nontaxable | 3,518 | 3,564 | 3,438 | 3,282 | 3,047 | ||||||||||||||
| Interest on federal funds sold | 1 | — | — | — | 1 | ||||||||||||||
| Interest on deposits in other financial institutions | — | 1 | 1 | 1 | 7 | ||||||||||||||
| Total Interest Income | 48,582 | 47,942 | 48,768 | 50,264 | 50,263 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest on deposits | 7,675 | 8,026 | 8,524 | 9,033 | 9,955 | ||||||||||||||
| Interest on short-term borrowings | 225 | 259 | 330 | 305 | 291 | ||||||||||||||
| Interest on other borrowings | 4,081 | 3,936 | 4,068 | 4,213 | 4,208 | ||||||||||||||
| Total Interest Expense | 11,981 | 12,221 | 12,922 | 13,551 | 14,454 | ||||||||||||||
| Net Interest Income | 36,601 | 35,721 | 35,846 | 36,713 | 35,809 | ||||||||||||||
| Provision for loan and lease losses | 3,845 | 10,009 | 8,860 | 4,799 | 9,955 | ||||||||||||||
| Net Interest Income After Provision for Loan and Lease Losses | 32,756 | 25,712 | 26,986 | 31,914 | 25,854 | ||||||||||||||
| Noninterest Income | |||||||||||||||||||
| Service charges and fees | 3,599 | 3,361 | 3,537 | 3,665 | 3,494 | ||||||||||||||
| Loan servicing income | 1,298 | 1,549 | 2,323 | 1,862 | 1,620 | ||||||||||||||
| Trust fees | 2,656 | 2,479 | 2,428 | 2,267 | 2,330 | ||||||||||||||
| Brokerage and insurance commissions | 856 | 848 | 948 | 739 | 785 | ||||||||||||||
| Securities gains, net | 4,756 | 2,089 | 2,170 | 2,158 | 1,050 | ||||||||||||||
| Gain (loss) on trading account securities | 81 | 216 | 107 | 18 | (264 | ) | |||||||||||||
| Gains on sale of loans | 1,308 | 1,402 | 3,813 | 2,394 | 1,083 | ||||||||||||||
| Valuation adjustment on mortgage servicing rights | — | — | 1,239 | (1,239 | ) | — | |||||||||||||
| Income on bank owned life insurance | 331 | 403 | 463 | 396 | 293 | ||||||||||||||
| Other noninterest income | (216 | ) | 261 | 1,265 | 349 | 443 | |||||||||||||
| Total Noninterest Income | 14,669 | 12,608 | 18,293 | 12,609 | 10,834 | ||||||||||||||
| Noninterest Expense | |||||||||||||||||||
| Salaries and employee benefits | 17,480 | 18,186 | 16,892 | 15,502 | 15,574 | ||||||||||||||
| Occupancy | 2,213 | 2,386 | 2,339 | 2,287 | 2,201 | ||||||||||||||
| Furniture and equipment | 1,360 | 1,409 | 1,543 | 1,515 | 1,599 | ||||||||||||||
| Professional fees | 3,053 | 3,019 | 3,065 | 2,621 | 2,549 | ||||||||||||||
| FDIC insurance assessments | 786 | 1,345 | 1,306 | 1,331 | 1,384 | ||||||||||||||
| Advertising | 1,113 | 850 | 1,058 | 906 | 1,052 | ||||||||||||||
| Goodwill impairment charge | — | — | — | 1,639 | — | ||||||||||||||
| Intangible assets amortization | 144 | 146 | 146 | 149 | 145 | ||||||||||||||
| Net loss on repossessed assets | 2,511 | 1,632 | 7,345 | 4,219 | 1,636 | ||||||||||||||
| Other noninterest expenses | 3,683 | 3,914 | 3,623 | 3,277 | 3,435 | ||||||||||||||
| Total Noninterest Expense | 32,343 | 32,887 | 37,317 | 33,446 | 29,575 | ||||||||||||||
| Income Before Income Taxes | 15,082 | 5,433 | 7,962 | 11,077 | 7,113 | ||||||||||||||
| Income taxes | 4,870 | 1,212 | 1,464 | 4,187 | 2,035 | ||||||||||||||
| Net Income | 10,212 | 4,221 | 6,498 | 6,890 | 5,078 | ||||||||||||||
| Net income available to noncontrolling interest, net of tax | 9 | 16 | 35 | 30 | 25 | ||||||||||||||
| Net Income Attributable to Heartland | 10,221 | 4,237 | 6,533 | 6,920 | 5,103 | ||||||||||||||
| Preferred dividends and discount | (1,336 | ) | (1,336 | ) | (1,336 | ) | (1,336 | ) | (1,336 | ) | |||||||||
| Net Income Available to Common Stockholders | $ | 8,885 | $ | 2,901 | $ | 5,197 | $ | 5,584 | $ | 3,767 | |||||||||
| Earnings per common share-diluted | $ | 0.54 | $ | 0.18 | $ | 0.31 | $ | 0.34 | $ | 0.23 | |||||||||
| Weighted average shares outstanding-diluted | 16,568,701 | 16,557,353 | 16,515,657 | 16,465,650 | 16,459,978 | ||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As Of | |||||||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 148,388 | $ | 86,278 | $ | 62,572 | $ | 141,702 | $ | 75,771 | |||||||||
| Securities | 1,193,480 | 1,244,447 | 1,264,564 | 1,211,297 | 1,213,875 | ||||||||||||||
| Loans held for sale | 15,770 | 8,317 | 23,904 | 41,047 | 25,750 | ||||||||||||||
| Loans and leases: | |||||||||||||||||||
| Held to maturity | 2,351,785 | 2,360,604 | 2,343,987 | 2,361,567 | 2,385,772 | ||||||||||||||
| Loans covered by loss share agreements | 16,190 | 19,201 | 20,800 | 23,557 | 25,420 | ||||||||||||||
| Allowance for loan and lease losses | (40,602 | ) | (43,271 | ) | (42,693 | ) | (44,732 | ) | (48,314 | ) | |||||||||
| Loans and leases, net | 2,327,373 | 2,336,534 | 2,322,094 | 2,340,392 | 2,362,878 | ||||||||||||||
| Premises, furniture and equipment, net | 118,828 | 119,954 | 121,012 | 121,940 | 122,066 | ||||||||||||||
| Goodwill | 25,909 | 25,909 | 25,909 | 25,909 | 27,548 | ||||||||||||||
| Other intangible assets, net | 13,103 | 13,440 | 13,466 | 11,510 | 12,426 | ||||||||||||||
| Cash surrender value on life insurance | 66,425 | 66,073 | 61,981 | 62,038 | 62,113 | ||||||||||||||
| Other real estate, net | 39,075 | 35,007 | 32,002 | 32,408 | 32,882 | ||||||||||||||
| FDIC indemnification asset | 1,035 | 1,396 | 2,294 | 1,939 | 1,952 | ||||||||||||||
| Other assets | 61,231 | 66,019 | 69,657 | 73,002 | 71,168 | ||||||||||||||
| Total Assets | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | $ | 4,063,184 | $ | 4,008,429 | |||||||||
| Liabilities and Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Demand | $ | 649,523 | $ | 637,452 | $ | 580,589 | $ | 581,957 | $ | 537,468 | |||||||||
| Savings | 1,557,053 | 1,569,993 | 1,558,998 | 1,572,891 | 1,552,546 | ||||||||||||||
| Brokered time deposits | 39,225 | 39,225 | 37,285 | 37,285 | 37,285 | ||||||||||||||
| Other time deposits | 834,884 | 835,704 | 857,176 | 881,510 | 888,847 | ||||||||||||||
| Total deposits | 3,080,685 | 3,082,374 | 3,034,048 | 3,073,643 | 3,016,146 | ||||||||||||||
| Short-term borrowings | 168,021 | 194,934 | 235,864 | 196,533 | 200,515 | ||||||||||||||
| Other borrowings | 379,718 | 365,281 | 362,527 | 413,448 | 425,994 | ||||||||||||||
| Accrued expenses and other liabilities | 36,643 | 28,393 | 35,232 | 43,234 | 38,273 | ||||||||||||||
| Total Liabilities | 3,665,067 | 3,670,982 | 3,667,671 | 3,726,858 | 3,680,928 | ||||||||||||||
| Equity | |||||||||||||||||||
| Preferred equity | 79,113 | 78,798 | 78,483 | 78,168 | 77,853 | ||||||||||||||
| Common equity | 263,769 | 250,918 | 250,608 | 255,430 | 246,922 | ||||||||||||||
| Total Heartland Stockholders' Equity | 342,882 | 329,716 | 329,091 | 333,598 | 324,775 | ||||||||||||||
| Noncontrolling interest | 2,668 | 2,676 | 2,693 | 2,728 | 2,726 | ||||||||||||||
| Total Equity | 345,550 | 332,392 | 331,784 | 336,326 | 327,501 | ||||||||||||||
| Total Liabilities and Equity | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | $ | 4,063,184 | $ | 4,008,429 | |||||||||
| Common Share Data | |||||||||||||||||||
| Book value per common share | $ | 16.04 | $ | 15.28 | $ | 15.26 | $ | 15.58 | $ | 15.08 | |||||||||
| ASC 320 effect on book value per common share | $ | 0.86 | $ | 0.49 | $ | 0.60 | $ | 1.25 | $ | 0.93 | |||||||||
| Common shares outstanding, net of treasury stock | 16,442,437 | 16,418,228 | 16,425,055 | 16,392,091 | 16,375,460 | ||||||||||||||
Tangible Capital Ratio (1) | 5.92 | % | 5.61 | % | 5.60 | % | 5.63 | % | 5.45 | % | |||||||||
| (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 | For the Six Months Ended | ||||||||||||||||||
| 6/30/2011 | 6/30/2010 | 6/30/2011 | 6/30/2010 | ||||||||||||||||
| Average Balances | |||||||||||||||||||
| Assets | 4,014,290 | 4,033,350 | 4,012,077 | 4,009,072 | |||||||||||||||
| Loans and leases, net of unearned | 2,388,088 | 2,437,357 | 2,393,872 | 2,410,923 | |||||||||||||||
| Deposits | 3,059,360 | 3,040,763 | 3,064,057 | 3,032,795 | |||||||||||||||
| Earning assets | 3,600,095 | 3,632,056 | 3,591,989 | 3,571,035 | |||||||||||||||
| Interest bearing liabilities | 3,004,928 | 3,165,862 | 3,007,779 | 3,164,512 | |||||||||||||||
| Common stockholders' equity | 260,334 | 241,816 | 256,084 | 239,921 | |||||||||||||||
| Total stockholders' equity | 341,797 | 322,110 | 337,407 | 320,068 | |||||||||||||||
| Tangible common stockholders' equity | 232,381 | 211,640 | 228,059 | 209,666 | |||||||||||||||
| Earnings Performance Ratios | |||||||||||||||||||
| Annualized return on average assets | 0.89 | % | 0.37 | % | 0.59 | % | 0.39 | % | |||||||||||
| Annualized return on average common equity | 13.69 | % | 6.25 | % | 9.28 | % | 6.54 | % | |||||||||||
| Annualized return on average common tangible equity | 15.34 | % | 7.14 | % | 10.42 | % | 7.48 | % | |||||||||||
Annualized net interest margin(1) | 4.23 | % | 4.09 | % | 4.21 | % | 4.12 | % | |||||||||||
Efficiency ratio(2) | 67.53 | % | 63.14 | % | 68.35 | % | 63.69 | % | |||||||||||
| (1) Tax equivalent basis is calculated an effective tax rate of 35% | |||||||||||||||||||
| (2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||||||
| Average Balances | |||||||||||||||||||
| Assets | $ | 4,014,290 | $ | 4,009,863 | $ | 4,091,276 | $ | 4,012,107 | $ | 4,033,350 | |||||||||
| Loans and leases, net of unearned | 2,388,088 | 2,399,656 | 2,414,799 | 2,427,141 | 2,437,357 | ||||||||||||||
| Deposits | 3,059,360 | 3,068,753 | 3,075,193 | 3,018,928 | 3,040,763 | ||||||||||||||
| Earning assets | 3,600,095 | 3,583,883 | 3,637,735 | 3,602,953 | 3,632,056 | ||||||||||||||
| Interest bearing liabilities | 3,004,928 | 3,010,629 | 3,095,791 | 3,084,742 | 3,165,862 | ||||||||||||||
| Common stockholders' equity | 260,334 | 251,833 | 255,940 | 252,781 | 241,816 | ||||||||||||||
| Total stockholders' equity | 341,797 | 333,016 | 336,827 | 333,346 | 322,110 | ||||||||||||||
| Tangible common stockholders' equity | 232,381 | 223,736 | 227,696 | 222,771 | 211,640 | ||||||||||||||
| Earnings Performance Ratios | |||||||||||||||||||
| Annualized return on average assets | 0.89 | % | 0.29 | % | 0.50 | % | 0.55 | % | 0.37 | % | |||||||||
| Annualized return on average common equity | 13.69 | % | 4.67 | % | 8.06 | % | 8.76 | % | 6.25 | % | |||||||||
| Annualized return on average common tangible equity | 15.34 | % | 5.26 | % | 9.06 | % | 9.94 | % | 7.14 | % | |||||||||
Annualized net interest margin (1) | 4.23 | % | 4.19 | % | 4.05 | % | 4.18 | % | 4.09 | % | |||||||||
Efficiency ratio (2) | 67.53 | % | 69.17 | % | 70.09 | % | 69.05 | % | 63.14 | % | |||||||||
| (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 the Quarter Ended | |||||||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||||||
| Loan and Lease Data | |||||||||||||||||||
| Loans held to maturity: | |||||||||||||||||||
| Commercial and commercial real estate | $ | 1,709,955 | $ | 1,727,530 | $ | 1,718,993 | $ | 1,714,592 | $ | 1,740,856 | |||||||||
| Residential mortgage | 173,808 | 169,513 | 163,726 | 170,543 | 169,105 | ||||||||||||||
| Agricultural and agricultural real estate | 255,257 | 253,189 | 250,943 | 260,393 | 255,576 | ||||||||||||||
| Consumer | 217,263 | 214,682 | 214,515 | 219,731 | 223,800 | ||||||||||||||
| Direct financing leases, net | 667 | 876 | 981 | 1,233 | 1,420 | ||||||||||||||
| Unearned discount and deferred loan fees | (5,165 | ) | (5,186 | ) | (5,171 | ) | (4,925 | ) | (4,985 | ) | |||||||||
| Total loans and leases held to maturity | $ | 2,351,785 | $ | 2,360,604 | $ | 2,343,987 | $ | 2,361,567 | $ | 2,385,772 | |||||||||
| Loans covered under loss share agreements: | |||||||||||||||||||
| Commercial and commercial real estate | $ | 7,315 | $ | 9,368 | $ | 10,056 | $ | 11,703 | $ | 12,266 | |||||||||
| Residential mortgage | 4,747 | 5,291 | 5,792 | 6,545 | 7,148 | ||||||||||||||
| Agricultural and agricultural real estate | 2,298 | 2,628 | 2,723 | 2,807 | 3,346 | ||||||||||||||
| Consumer | 1,830 | 1,914 | 2,229 | 2,502 | 2,660 | ||||||||||||||
| Total loans and leases covered under loss share agreements | $ | 16,190 | $ | 19,201 | $ | 20,800 | $ | 23,557 | $ | 25,420 | |||||||||
| Asset Quality | |||||||||||||||||||
| Not covered under loss share agreements: | |||||||||||||||||||
| Nonaccrual loans | $ | 68,110 | $ | 87,970 | $ | 90,512 | $ | 85,190 | $ | 84,925 | |||||||||
| Loans and leases past due ninety days or more as to interest or principal payments | — | 3,038 | 85 | — | — | ||||||||||||||
| Other real estate owned | 38,642 | 34,532 | 31,731 | 32,129 | 32,554 | ||||||||||||||
| Other repossessed assets | 188 | 223 | 302 | 492 | 486 | ||||||||||||||
| Total nonperforming assets not covered under loss share agreements | $ | 106,940 | $ | 125,763 | $ | 122,630 | $ | 117,811 | $ | 117,965 | |||||||||
| Covered under loss share agreements: | |||||||||||||||||||
| Nonaccrual loans | $ | 4,480 | $ | 4,564 | $ | 4,901 | $ | 5,330 | $ | 4,949 | |||||||||
| Loans and leases past due ninety days or more as to interest or principal payments | — | — | — | — | — | ||||||||||||||
| Other real estate owned | 433 | 475 | 271 | 279 | 328 | ||||||||||||||
| Other repossessed assets | — | — | — | — | — | ||||||||||||||
| Total nonperforming assets covered under loss share agreements | $ | 4,913 | $ | 5,039 | $ | 5,172 | $ | 5,609 | $ | 5,277 | |||||||||
| Allowance for Loan and Lease Losses | |||||||||||||||||||
| Balance, beginning of period | $ | 43,271 | $ | 42,693 | $ | 44,732 | $ | 48,314 | $ | 46,350 | |||||||||
| Provision for loan and lease losses | 3,845 | 10,009 | 8,860 | 4,799 | 9,955 | ||||||||||||||
| Charge-offs on loans not covered by loss share agreements | (8,076 | ) | (9,785 | ) | (11,133 | ) | (8,735 | ) | (8,879 | ) | |||||||||
| Charge-offs on loans covered by loss share agreements | (107 | ) | (238 | ) | (445 | ) | (43 | ) | (46 | ) | |||||||||
| Recoveries | 1,669 | 592 | 679 | 397 | 934 | ||||||||||||||
| Balance, end of period | $ | 40,602 | $ | 43,271 | $ | 42,693 | $ | 44,732 | $ | 48,314 | |||||||||
| Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements | |||||||||||||||||||
| Ratio of nonperforming loans and leases to total loans and leases | 2.90 | % | 3.86 | % | 3.87 | % | 3.61 | % | 3.56 | % | |||||||||
| Ratio of nonperforming assets to total assets | 2.67 | % | 3.14 | % | 3.07 | % | 2.90 | % | 2.94 | % | |||||||||
| Annualized ratio of net loan charge-offs to average loans and leases | 1.08 | % | 1.59 | % | 1.79 | % | 1.37 | % | 1.32 | % | |||||||||
| Allowance for loan and lease losses as a percent of loans and leases | 1.73 | % | 1.83 | % | 1.82 | % | 1.89 | % | 2.03 | % | |||||||||
| Allowance for loan and lease losses as a percent of nonperforming loans and leases | 59.61 | % | 47.55 | % | 47.12 | % | 52.51 | % | 56.89 | % | |||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||||
| June 30, 2011 | June 30, 2010 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 951,332 | $ | 7,583 | 3.20 | % | $ | 980,894 | $ | 8,914 | 3.65 | % | |||||||||
Nontaxable(1) | 298,051 | 4,485 | 6.04 | 255,226 | 4,022 | 6.32 | |||||||||||||||
| Total securities | 1,249,383 | 12,068 | 3.87 | 1,236,120 | 12,936 | 4.20 | |||||||||||||||
| Interest bearing deposits | 4,402 | — | — | 4,555 | 7 | 0.62 | |||||||||||||||
| Federal funds sold | 1,104 | 1 | 0.36 | 349 | 1 | 1.15 | |||||||||||||||
| Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,728,649 | 25,222 | 5.85 | 1,750,917 | 25,837 | 5.92 | |||||||||||||||
| Residential mortgage | 186,034 | 2,483 | 5.35 | 198,059 | 2,497 | 5.06 | |||||||||||||||
Agricultural and agricultural real estate (1) | 256,962 | 4,059 | 6.34 | 260,301 | 4,098 | 6.31 | |||||||||||||||
| Consumer | 215,723 | 5,004 | 9.30 | 226,344 | 5,029 | 8.91 | |||||||||||||||
| Direct financing leases, net | 720 | 10 | 5.57 | 1,736 | 25 | 5.78 | |||||||||||||||
| Fees on loans | — | 1,116 | — | — | 1,082 | — | |||||||||||||||
| Less: allowance for loan and lease losses | (42,882 | ) | — | — | (46,325 | ) | — | — | |||||||||||||
| Net loans and leases | 2,345,206 | 37,894 | 6.48 | 2,391,032 | 38,568 | 6.47 | |||||||||||||||
| Total earning assets | 3,600,095 | 49,963 | 5.57 | % | 3,632,056 | 51,512 | 5.69 | % | |||||||||||||
| Nonearning Assets | 414,195 | 401,294 | |||||||||||||||||||
| Total Assets | $ | 4,014,290 | $ | 49,963 | $ | 4,033,350 | $ | 51,512 | |||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 1,553,450 | $ | 2,406 | 0.62 | $ | 1,576,820 | $ | 3,753 | 0.95 | |||||||||||
| Time, $100,000 and over | 266,036 | 1,546 | 2.33 | 300,454 | 1,912 | 2.55 | |||||||||||||||
| Other time deposits | 606,384 | 3,723 | 2.46 | 649,680 | 4,290 | 2.65 | |||||||||||||||
| Short-term borrowings | 201,246 | 225 | 0.45 | 212,539 | 291 | 0.55 | |||||||||||||||
| Other borrowings | 377,812 | 4,081 | 4.33 | 426,369 | 4,208 | 3.96 | |||||||||||||||
| Total interest bearing liabilities | 3,004,928 | 11,981 | 1.60 | % | 3,165,862 | 14,454 | 1.83 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 633,490 | 513,809 | |||||||||||||||||||
| Accrued interest and other liabilities | 34,075 | 31,569 | |||||||||||||||||||
| Total noninterest bearing liabilities | 667,565 | 545,378 | |||||||||||||||||||
| Stockholders' Equity | 341,797 | 322,110 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 4,014,290 | $ | 4,033,350 | |||||||||||||||||
Net interest income (1) | $ | 37,982 | $ | 37,058 | |||||||||||||||||
Net interest spread (1) | 3.97 | % | 3.86 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.23 | % | 4.09 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 83.47 | % | 87.16 | % | |||||||||||||||||
| (1) Tax equivalent basis is calculated using an effective tax rate of 35% | |||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
| For the Six Months Ended | |||||||||||||||||||||
| June 30, 2011 | June 30, 2010 | ||||||||||||||||||||
| Average | Average | ||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 937,522 | $ | 14,994 | 3.23 | % | $ | 953,528 | $ | 18,369 | 3.88 | % | |||||||||
Nontaxable (1) | 298,361 | 8,994 | 6.08 | 247,406 | 7,829 | 6.38 | |||||||||||||||
| Total securities | 1,235,883 | 23,988 | 3.91 | 1,200,934 | 26,198 | 4.40 | |||||||||||||||
| Interest bearing deposits | 4,392 | 1 | 0.05 | 3,701 | 12 | 0.65 | |||||||||||||||
| Federal funds sold | 718 | 1 | 0.28 | 483 | 1 | 0.42 | |||||||||||||||
| Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,737,703 | 50,179 | 5.82 | 1,723,039 | 50,658 | 5.93 | |||||||||||||||
| Residential mortgage | 185,667 | 4,893 | 5.31 | 197,415 | 5,217 | 5.33 | |||||||||||||||
Agricultural and agricultural real estate (1) | 254,980 | 7,899 | 6.25 | 259,535 | 8,082 | 6.28 | |||||||||||||||
| Consumer | 214,695 | 9,854 | 9.26 | 229,002 | 10,003 | 8.81 | |||||||||||||||
| Direct financing leases, net | 827 | 23 | 5.61 | 1,932 | 57 | 5.95 | |||||||||||||||
| Fees on loans | — | 2,370 | — | — | 2,068 | — | |||||||||||||||
| Less: allowance for loan and lease losses | (42,876 | ) | — | — | (45,006 | ) | — | — | |||||||||||||
| Net loans and leases | 2,350,996 | 75,218 | 6.45 | 2,365,917 | 76,085 | 6.49 | |||||||||||||||
| Total earning assets | 3,591,989 | 99,208 | 5.57 | % | 3,571,035 | 102,296 | 5.78 | % | |||||||||||||
| Nonearning Assets | 420,088 | 438,037 | |||||||||||||||||||
| Total Assets | $ | 4,012,077 | $ | 99,208 | $ | 4,009,072 | $ | 102,296 | |||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 1,553,372 | $ | 4,953 | 0.64 | $ | 1,562,980 | $ | 7,889 | 1.02 | |||||||||||
| Time, $100,000 and over | 268,242 | 3,156 | 2.37 | 312,671 | 3,982 | 2.57 | |||||||||||||||
| Other time deposits | 610,033 | 7,592 | 2.51 | 666,770 | 8,844 | 2.67 | |||||||||||||||
| Short-term borrowings | 205,639 | 484 | 0.47 | 190,888 | 525 | 0.55 | |||||||||||||||
| Other borrowings | 370,493 | 8,017 | 4.36 | 431,203 | 8,167 | 3.82 | |||||||||||||||
| Total interest bearing liabilities | 3,007,779 | 24,202 | 1.62 | % | 3,164,512 | 29,407 | 1.87 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 632,410 | 490,374 | |||||||||||||||||||
| Accrued interest and other liabilities | 34,481 | 34,118 | |||||||||||||||||||
| Total noninterest bearing liabilities | 666,891 | 524,492 | |||||||||||||||||||
| Stockholders' Equity | 337,407 | 320,068 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 4,012,077 | $ | 4,009,072 | |||||||||||||||||
Net interest income (1) | $ | 75,006 | $ | 72,889 | |||||||||||||||||
Net interest spread (1) | 3.95 | % | 3.90 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.21 | % | 4.12 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 83.74 | % | 88.62 | % | |||||||||||||||||
| (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 Quarter Ended | |||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||
| Total Assets | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,294,654 | $ | 1,270,387 | $ | 1,247,297 | $ | 1,316,652 | $ | 1,247,467 | |||||
| New Mexico Bank & Trust | 891,609 | 880,980 | 913,776 | 891,642 | 878,518 | ||||||||||
| Wisconsin Community Bank | 453,427 | 469,305 | 474,366 | 461,822 | 458,468 | ||||||||||
| Rocky Mountain Bank | 419,697 | 417,846 | 417,781 | 438,923 | 439,241 | ||||||||||
| Riverside Community Bank | 322,601 | 302,057 | 290,018 | 297,272 | 295,671 | ||||||||||
| Galena State Bank & Trust Co. | 296,318 | 275,807 | 278,353 | 289,558 | 283,038 | ||||||||||
| Arizona Bank & Trust | 222,148 | 231,020 | 223,574 | 251,245 | 267,959 | ||||||||||
| Summit Bank & Trust | 95,130 | 93,600 | 95,414 | 100,843 | 97,332 | ||||||||||
| Minnesota Bank & Trust | 67,594 | 62,251 | 58,386 | 57,832 | 55,722 | ||||||||||
| Total Deposits | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 892,526 | $ | 935,424 | $ | 902,849 | $ | 918,575 | $ | 882,012 | |||||
| New Mexico Bank & Trust | 674,096 | 659,373 | 646,302 | 655,724 | 624,454 | ||||||||||
| Wisconsin Community Bank | 371,037 | 374,758 | 392,432 | 363,868 | 358,034 | ||||||||||
| Rocky Mountain Bank | 349,299 | 348,723 | 347,924 | 349,853 | 350,636 | ||||||||||
| Riverside Community Bank | 271,553 | 245,639 | 241,184 | 242,717 | 242,964 | ||||||||||
| Galena State Bank & Trust Co. | 257,413 | 239,445 | 236,647 | 250,749 | 243,964 | ||||||||||
| Arizona Bank & Trust | 179,885 | 188,415 | 183,279 | 204,663 | 229,885 | ||||||||||
| Summit Bank & Trust | 80,793 | 80,327 | 81,024 | 79,823 | 82,445 | ||||||||||
| Minnesota Bank & Trust | 50,091 | 46,205 | 44,278 | 41,316 | 41,234 | ||||||||||
| Net Income (Loss) | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 6,132 | $ | 4,958 | $ | 3,972 | $ | 5,353 | $ | 3,323 | |||||
| New Mexico Bank & Trust | 2,505 | 958 | 3,098 | 2,972 | 1,828 | ||||||||||
| Wisconsin Community Bank | 1,882 | 1,466 | 1,581 | 2,157 | 2,271 | ||||||||||
| Rocky Mountain Bank | 646 | (630 | ) | 1,393 | (695 | ) | 1,204 | ||||||||
| Riverside Community Bank | 953 | (212 | ) | 190 | (140 | ) | 290 | ||||||||
| Galena State Bank & Trust Co. | 1,113 | 579 | 1,000 | 877 | 967 | ||||||||||
| Arizona Bank & Trust | 546 | (1,452 | ) | (231 | ) | 42 | (2,004 | ) | |||||||
| Summit Bank & Trust | 116 | (604 | ) | (208 | ) | 201 | 399 | ||||||||
| Minnesota Bank & Trust | (45 | ) | (81 | ) | (178 | ) | (147 | ) | (134 | ) | |||||
| Return on Average Assets | |||||||||||||||
| Dubuque Bank and Trust Company | 1.92 | % | 1.60 | % | 1.18 | % | 1.69 | % | 1.03 | % | |||||
| New Mexico Bank & Trust | 1.11 | 0.43 | 1.33 | 1.34 | 0.83 | ||||||||||
| Wisconsin Community Bank | 1.63 | 1.26 | 1.31 | 1.85 | 1.98 | ||||||||||
| Rocky Mountain Bank | 0.61 | (0.61 | ) | 1.27 | (0.63 | ) | 1.08 | ||||||||
| Riverside Community Bank | 1.24 | (0.28 | ) | 0.25 | (0.19 | ) | 0.40 | ||||||||
| Galena State Bank & Trust Co. | 1.61 | 0.85 | 1.39 | 1.21 | 1.35 | ||||||||||
| Arizona Bank & Trust | 0.94 | (2.58 | ) | (0.38 | ) | (0.06 | ) | (2.95 | ) | ||||||
| Summit Bank & Trust | 0.49 | (2.59 | ) | (0.84 | ) | 0.79 | 1.65 | ||||||||
| Minnesota Bank & Trust | (0.25 | ) | (0.53 | ) | (1.23 | ) | (1.00 | ) | (1.00 | ) | |||||
| Net Interest Margin as a Percentage of Average Earning Assets | |||||||||||||||
| Dubuque Bank and Trust Company | 3.62 | % | 3.59 | % | 3.83 | % | 3.95 | % | 4.00 | % | |||||
| New Mexico Bank & Trust | 4.33 | 4.34 | 4.00 | 4.35 | 3.94 | ||||||||||
| Wisconsin Community Bank | 4.60 | 4.57 | 4.26 | 4.60 | 4.35 | ||||||||||
| Rocky Mountain Bank | 3.85 | 3.91 | 3.76 | 3.81 | 3.79 | ||||||||||
| Riverside Community Bank | 3.90 | 4.01 | 4.38 | 4.30 | 3.84 | ||||||||||
| Galena State Bank and Trust Co. | 3.86 | 3.73 | 3.60 | 3.53 | 3.56 | ||||||||||
| Arizona Bank & Trust | 4.52 | 4.25 | 3.72 | 3.77 | 3.46 | ||||||||||
| Summit Bank & Trust | 3.33 | 2.99 | 2.78 | 3.22 | 3.98 | ||||||||||
| Minnesota Bank & Trust | 4.55 | 4.75 | 4.07 | 3.14 | 3.24 | ||||||||||
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||
| As of | |||||||||||||||||||
| 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | 6/30/2010 | |||||||||||||||
| Total Portfolio Loans and Leases | |||||||||||||||||||
| Dubuque Bank and Trust Company | $ | 730,802 | $ | 748,354 | $ | 734,226 | $ | 736,776 | $ | 763,228 | |||||||||
| New Mexico Bank & Trust | 506,810 | 513,568 | 513,658 | 511,279 | 513,257 | ||||||||||||||
| Wisconsin Community Bank | 314,432 | 320,841 | 320,711 | 325,543 | 323,024 | ||||||||||||||
| Rocky Mountain Bank | 247,718 | 238,201 | 246,213 | 260,832 | 272,035 | ||||||||||||||
| Riverside Community Bank | 157,901 | 161,238 | 162,706 | 165,539 | 159,137 | ||||||||||||||
| Galena State Bank and Trust Co. | 138,726 | 136,210 | 137,153 | 131,955 | 133,666 | ||||||||||||||
| Arizona Bank & Trust | 137,853 | 134,254 | 124,388 | 129,871 | 129,445 | ||||||||||||||
| Summit Bank & Trust | 52,570 | 47,024 | 48,020 | 52,396 | 53,543 | ||||||||||||||
| Minnesota Bank & Trust | 43,109 | 40,197 | 36,013 | 26,868 | 25,058 | ||||||||||||||
| Allowance For Loan and Lease Losses | |||||||||||||||||||
| Dubuque Bank and Trust Company | $ | 10,148 | $ | 11,984 | $ | 12,432 | $ | 11,961 | $ | 13,605 | |||||||||
| New Mexico Bank & Trust | 8,405 | 7,277 | 7,704 | 8,297 | 8,388 | ||||||||||||||
| Wisconsin Community Bank | 3,637 | 3,369 | 3,847 | 4,518 | 4,306 | ||||||||||||||
| Rocky Mountain Bank | 4,074 | 4,425 | 3,779 | 5,181 | 6,465 | ||||||||||||||
| Riverside Community Bank | 2,702 | 3,693 | 3,524 | 3,109 | 2,751 | ||||||||||||||
| Galena State Bank & Trust Co. | 2,077 | 2,278 | 1,811 | 1,743 | 1,543 | ||||||||||||||
| Arizona Bank & Trust | 5,502 | 6,018 | 5,407 | 5,915 | 7,912 | ||||||||||||||
| Summit Bank & Trust | 1,091 | 1,103 | 1,271 | 1,312 | 913 | ||||||||||||||
| Minnesota Bank & Trust | 449 | 636 | 565 | 270 | 242 | ||||||||||||||
| Nonperforming Loans and Leases | |||||||||||||||||||
| Dubuque Bank and Trust Company | $ | 4,910 | $ | 12,897 | $ | 7,511 | $ | 7,730 | $ | 8,092 | |||||||||
| New Mexico Bank & Trust | 16,053 | 15,979 | 20,753 | 14,651 | 15,901 | ||||||||||||||
| Wisconsin Community Bank | 10,359 | 11,776 | 12,702 | 12,070 | 10,159 | ||||||||||||||
| Rocky Mountain Bank | 16,971 | 18,303 | 21,406 | 29,986 | 31,981 | ||||||||||||||
| Riverside Community Bank | 5,962 | 11,443 | 7,611 | 7,662 | 7,722 | ||||||||||||||
| Galena State Bank & Trust Co. | 5,182 | 6,259 | 5,308 | 2,976 | 2,605 | ||||||||||||||
| Arizona Bank & Trust | 4,054 | 6,959 | 8,797 | 5,758 | 5,165 | ||||||||||||||
| Summit Bank & Trust | 3,905 | 4,527 | 5,965 | 3,694 | 2,691 | ||||||||||||||
| Minnesota Bank & Trust | 110 | 2,229 | 8 | — | — | ||||||||||||||
| Allowance As a Percent of Total Loans and Leases | |||||||||||||||||||
| Dubuque Bank and Trust Company | 1.39 | % | 1.60 | % | 1.69 | % | 1.62 | % | 1.78 | % | |||||||||
| New Mexico Bank & Trust | 1.66 | 1.42 | 1.50 | 1.62 | 1.63 | ||||||||||||||
| Wisconsin Community Bank | 1.16 | 1.05 | 1.20 | 1.39 | 1.33 | ||||||||||||||
| Rocky Mountain Bank | 1.64 | 1.86 | 1.53 | 1.99 | 2.38 | ||||||||||||||
| Riverside Community Bank | 1.71 | 2.29 | 2.17 | 1.88 | 1.73 | ||||||||||||||
| Galena State Bank & Trust Co. | 1.50 | 1.67 | 1.32 | 1.32 | 1.15 | ||||||||||||||
| Arizona Bank & Trust | 3.99 | 4.48 | 4.35 | 4.55 | 6.11 | ||||||||||||||
| Summit Bank & Trust | 2.08 | 2.35 | 2.65 | 2.50 | 1.71 | ||||||||||||||
| Minnesota Bank & Trust | 1.04 | 1.58 | 1.57 | 1.00 | 0.97 | ||||||||||||||