United States securities and exchange commission logo
December 28, 2023
Bryan R. McKeag
Chief Financial Officer
Heartland Financial USA, Inc.
1800 Larimer Street
Suite 1800
Denver, Colorado 80202
Re: Heartland Financial
USA, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2022
File No. 001-15393
Dear Bryan R. McKeag:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Lending Activities
1. We note the tabular
disclosure detailing the composition of your gross loan portfolio,
which includes owner
occupied and non-owner occupied commercial real estate ( CRE ).
Given the significance
of CRE in your total loan portfolio, please revise your disclosures,
in future filings, to
further disaggregate the composition of your owner occupied and non-
owner occupied CRE loan
portfolio by borrower type (e.g., by office, hotel, multifamily,
etc.), geographic
concentrations and other characteristics (e.g., current weighted average
and/or range of
loan-to-value ratios, occupancy rates, etc.) material to an investor s
understanding of your
CRE loan portfolio. In addition, revise to describe the specific
details of any risk
management policies, procedures or other actions undertaken by
management in response
to the current environment.
Bryan R. McKeag
FirstName LastNameBryan R. McKeag
Heartland Financial USA, Inc.
Comapany28,
December NameHeartland
2023 Financial USA, Inc.
December
Page 2 28, 2023 Page 2
FirstName LastName
Deposits
2. We note your disclosure that the Company had wholesale deposits
totaling $2.06 billion at
December 31, 2022. Please revise your disclosures, in future filings,
for the following.
Clarify whether these represent brokered deposits, or separately
quantify the amount
of brokered deposits held by the Company at each reporting period.
Include a risk factor discussing the related risks and other
pertinent factors
surrounding the use of these deposits, including any regulatory
considerations.
Discuss any related impacts the wholesale, institutional and/or
brokered deposits have
on your funding costs and net interest margin.
To the extent applicable, disclose whether you have policies or
internal limits
regarding concentrations in wholesale, institutional, brokered and
/ or uninsured
deposits, in total or by type of depositor, and whether you have
complied with any
such internal requirements for the periods presented.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
3. We note your disclosures discussing various key assumptions associated
with your net
interest margin sensitivity. These assumptions include the timing and
magnitude of
changes in interest rates, current portfolio rates, existing
maturities, repricing
opportunities and market interest rates, in addition to prepayments
and growth under
different interest rate assumptions. Please revise your disclosures,
in future filings, to fully
describe and define the various identified inputs and assumptions
supporting your market
risk presentations and sensitivity disclosures. In addition, provide a
discussion of how any
assumptions have changed from period to period, including any changes
to the data source
used or significant changes in the actual assumption itself. See Item
305(a)(1)(ii)(B) of
Regulation S-K.
4. Please also expand your disclosures, in future filings, to include a
discussion of your
deposit beta and/or cumulative deposit beta to the extent that it is
monitored and used by
management. In this regard, we note the discussion of deposit beta
trends in your earnings
call presentation slides (e.g., slide 8 of Exhibit 99.2 from the
October 30, 2023 Form 8-K).
In addition, include a discussion of how the metric is used, how it
has changed from
period to period and how it is calculated.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Michael Henderson at 202-551-3364 or Robert Klein at
202-551-3847
with any questions.
Bryan R. McKeag
Heartland Financial USA, Inc.
December 28, 2023
Page 3
FirstName LastNameBryan R. McKeag Sincerely,
Comapany NameHeartland Financial USA, Inc.
Division of Corporation Finance
December 28, 2023 Page 3 Office of Finance
FirstName LastName