Exhibit 99.1
INVESTMENT PROFILE
A Quarterly Newsletter of Heartland Financial USA, Inc.
[HEARTLAND FINANCIAL USA, INC. LOGO] [GRAPHIC]
www.htlf.com
1398 Central Ave., P.O. Box 778, Dubuque, Iowa 52004-0778
Volume 11, Issue 1
__________________
First Quarter 2003
INVESTMENT PROFILE
is published quarterly to keep current and potential Heartland
stockholders informed of company activities and to provide an
overview of the Company's current financial performance.
Community Banking
_________________
Dubuque Bank & Trust
Galena State Bank
First Community Bank
Riverside Community Bank
Wisconsin Community Bank
New Mexico Bank & Trust
Consumer Finance
________________
Citizens Finance
Vehicle Leasing and
Fleet Management
___________________
ULTEA
Contact
_______
John K. Schmidt
(563) 589-1994
JSCHMIDT@
dubuquebank.com
HIGHLIGHTS
* Heartland recorded an 18% increase in earnings from
continuing operations for the first quarter of 2003. Net
income from continuing operations increased $703 thousand for
the first quarter of 2003 when compared to the same quarter
in 2002.
* Total net income for the first quarter of 2003 increased $581
thousand or 15% for the quarters under comparison. The Eau
Claire branch of Wisconsin Community Bank was sold effective
December 15, 2002. This discontinued operation contributed
net income of $122 thousand during the first quarter of 2002.
* Growth in net interest income, due primarily to growth in
earning assets, was the major contributor to the improved
earnings during the first quarter of 2003. Noninterest income
remained stable while noninterest expense increased.
Additional income from gains on sale of loans and activities
within the available for sale and trading securities
portfolios was offset by a valuation adjustment on mortgage
servicing rights and an increase in amortization on mortgage
servicing rights. The increase in noninterest expense was
attributable to the implementation of imaging technology
across all the bank subsidiaries and to expansion in the
Santa Fe, New Mexico, and Phoenix, Arizona, markets.
* During its first three months of operation, New Mexico Bank &
Trust's branch in Santa Fe has attracted deposits of nearly
$5 million.
* Heartland has joined with experienced local bankers to form a
de novo bank in Phoenix, Arizona. We hope to begin operation
of Arizona Bank & Trust later this summer.
* Total assets remained stable at March 31, 2003, increasing
$16 million since year-end 2002. Loans and leases increased
$58 million and deposits increased $29 million since year-end
2002. Nearly two-thirds of the growth inthe loan portfolio
was commercial and commercial real estate.
* The allowance for loan and lease losses at March 31, 2003,
was 1.38% of loans and 337% of nonperforming loans, compared
to 1.37% of loans and 359% of nonperforming loans, at year-
end 2002.
INVESTOR INFORMATION
Heartland's common stock is currently traded in the over-the-
counter market under the symbol "HTLF" and is eligible for
quotation on the OTC Bulletin Board. Our common stock has been
approved by The Nasdaq Stock Market, Inc. for quotation on the
Nasdaq National Market System. We expect to be listed on Nasdaq
during the second quarter of 2003 under the same symbol.
Heartland is its own stock transfer agent. Any correspondence may
be directed to Lois K. Pearce, Corporate Secretary. Primary
market makers are:
* Howe Barnes Investments, Inc., 135 S. LaSalle Street,
Chicago, IL 60603-4398, Phone 800-800-4693
* FTN Financial Securities Corporation, 2525 West End Avenue,
Suite 330, Nashville, TN 37203, Phone 888-801-3477
Heartland's trust preferred securities are traded on the American
Stock Exchange under the symbol "HFT.Pr."
Additional information about Heartland is available through our
website at www.htlf.com.
STOCK VALUE PER SHARE
PE Ratio - Basic (3/31/03): 12.418
52-Week Price Range (3/31/03): $13.60-$23.00
Closing Price (3/31/03): $22.85
Book Value (3/31/03): $12.86
Price/Book Value (3/31/03): 177.68%
Current Dividend: $0.40 (annualized)
Yield: 1.75%
Shares Outstanding (3/31/03): 9,927,755
[GRAPH DEPICTING VALUES IN THE FOLLOWING TABLE]
Market Value Book Value
____________ __________
3/31/01 $12.50 $10.33
12/31/01 $12.80 $11.06
3/31/02 $13.65 $11.24
12/31/02 $17.25 $12.60
3/31/03 $22.85 $12.86
###
This newsletter may contain forward-looking statements. Actual
events and results may differ significantly from those described
in such forward-looking statements, due to changes in the
economy, interest rates or other factors. For additional
information about these factors, please review our filings with
the Securities and Exchange Commission. Heartland undertakes no
obligation to update any statement in this newsletter in light of
new information or future events.
FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share
data)
For the Three Months Ended
March 31
2003 2002
---------- ----------
Income Statement Data
Net interest income (tax equivalent) $ 16,122 $ 13,552
Provision for loan losses 1,304 981
Noninterest income 8,475 7,986
Noninterest expense 16,057 14,646
Income tax expense 2,349 1,806
Income from continuing operations 4,524 3,821
Income on discontinued operations - 122
Net income 4,524 3,943
Ratios
Return on average equity 14.56% 14.68%
Return on average assets 1.04 0.98
Net interest margin (tax equivalent) 4.12 3.77
Allowance as a percent of total loans 1.38 1.38
Earnings per share-diluted $ 0.45 $ 0.40
Earnings per share from continuing
operations-diluted(1) 0.45 0.39
Adjusted earnings per share-diluted(2) 0.45 0.40
Adjusted earnings per share from
continuing operations-diluted(3) 0.45 0.39
Dividends per share 0.10 0.10
Book value per share 12.86 11.24
Balance Sheet Data
Total assets $1,802,115 $1,631,437
Total loans and leases, net
of unearned 1,233,536 1,093,805
Total deposits 1,366,991 1,217,199
Stockholders' equity 127,704 110,540
(1) Excludes discontinued operations of our Eau Claire branch.
(2) Excludes goodwill amortization discontinued with the
adoption of FAS Nos. 142 and 147.
(3) Excludes goodwill amortization discontinued with the
adoption of FAS Nos. 142 and 147 and the discontinued
operations of our Eau Claire branch.
For the Years Ended December 31,
2002 2001 2000
---------- ---------- ----------
Income Statement Data
Net interest income
(tax equivalent) $ 59,253 $ 50,080 $ 44,974
Provision for loan losses 3,553 4,258 2,976
Noninterest income 32,757 30,261 26,979
Noninterest expense 62,771 58,333 54,070
Income tax expense 7,523 5,530 4,211
Income from continuing
operations 16,590 11,129 9,579
Income on discontinued
operations 2,277 285 7
Net income 18,867 11,414 9,586
Ratios
Return on average equity 16.44% 11.32% 10.69%
Return on average assets 1.13 0.72 0.70
Net interest margin
(tax equivalent) 4.04 3.67 3.74
Allowance as a percent of
total loans 1.37 1.33 1.30
Earnings per share
-diluted $ 1.91 $ 1.18 $ 0.98
Earnings per share from
continuing operations-
diluted(1) 1.68 1.15 0.98
Adjusted earnings per
share-diluted(2) 1.91 1.28 1.09
Adjusted earnings per share
from continuing operations-
diluted(3) 1.68 1.26 1.09
Dividends per share 0.40 0.37 0.36
Book value per share 12.60 11.06 10.00
Balance Sheet Data
Total assets $1,785,979 $1,644,064 $1,466,387
Total loans and leases,
net of unearned 1,175,236 1,105,205 1,042,096
Total deposits 1,337,985 1,205,159 1,101,313
Stockholders' equity 124,041 107,090 96,146
(1) Excludes discontinued operations of our Eau Claire branch.
(2) Excludes goodwill amortization discontinued with the
adoption of FAS Nos. 142 and 147.
(3) Excludes goodwill amortization discontinued with the
adoption of FAS Nos. 142 and 147 and the discontinued
operations of our Eau Claire branch.
TOTAL ASSETS TOTAL LOANS TOTAL DEPOSITS
(In thousands) (In thousands) (In thousands)
[GRAPHS DEPICTING VALUES IN THE TABLES ABOVE]
EARNINGS PER SHARE ALLOWANCE AS
FROM CONTINUING NET INTEREST MARGIN PERCENT OF
OPERATIONS-DILUTED (tax equivalent) TOTAL LOANS
[GRAPHS DEPICTING VALUES IN THE TABLES ABOVE]