HTLF - Earnings call transcript Q3 2021 | Heartland Financial USA Inc

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Operator

00:06 Greetings, and welcome to the HTLF Third Quarter twenty twenty one Conference Call. This afternoon, HTLF distributed its third quarter press release and hopefully, you've had a chance to review the results. If there is anyone on this call who did not receive a copy, you may access it at HTLF’s website at htlf.com. 00:31 With us today from management are Lynn Fuller, Executive Operating Chairman; Bruce Lee, President and CEO; Bryan McKeag, Executive Vice President and Chief Financial Officer. Management will provide a brief summary of the quarter, and then we will open the call to your questions. of the of would be Exchange the falls the begin everyone to providing Commission. we defined under some as that information guidelines Before presentation, Securities like I remind today by XX:XX the statements and forward-looking management will

during from expectations from to statements, As is made time, materially and the could projected. this the XX-K obtained are guidelines, forward-looking Lynn Please HTLF. Mr. predictions SEC's which sir. the to information factors any on included XX-Q these the actual on be differ concerning of over must point At of XX:XX presentation part I time that Fuller company's XX:XX at Additional company's will time in may and results ahead, out or website. go and those now I statements this the hopes, beliefs, the turn these website company's call future filings, the

Lynn Fuller

quarter to Towanda, you, today discuss Thank XX:XX for everyone the joining of twenty company's We the as one. third and one us we twenty performance afternoon. Welcome earnings call. quarter appreciate third HTLF’s twenty good twenty

to third two an quarter nine percent point date, one last three zero percent. dollars date. margin year. five quarter point that's eight common return the respectively. next compared be forty Officer, had seven point solid four to four for few the I'll two to Now, highlights fifty million was touch available million to point point point one three will per common three pleased quarter also average today earnings dollars XX:XX is in three percent McKeag, fully of tangible three percent return us and per of Bryan over for Net ten for the Annualized an turn dollars who percent common point point quarter two tax Annualized financial on results. to on on equity is minutes, zero of the two the and to quarter. equivalent for to nine percent third quarter. of was Nathan one. regarding joining who point was XX:XX the the XX:XX over provide dollars, and an point will point one and share the percent. of three was And the eighteen twenty year, the around EVP twenty respectively. or Chief average average assets date, color to CEO, five And point highlights one HTLF’s is XX:XX twenty, or business five fifty quarter point year CFO sixteen one the Credit earnings one for third HTLF’s report date one that increase additional point answer percent three point and common to ten of on shareholders call Bruce third one compared a Jones, I'm four credit. four share was point percent dollars three we which available four Year questions another last and Then million increase performance. I'll quarter for to basis year year percent four eight then for nine quarter equity and two percent. fifteen President three Lee, or the cover five to For income Net eight will increase twenty on our EVP nine interest Diluted and

quarter twenty third at five two of point twenty one HTLF’s increase company's performance to now per stockholders in strong an prior ago. to point percent turn thirty year dollars XX:XX of dollars the tangible Tangible of share percent on a eight to of a goal twenty thirty four regulatory point seven This of eight three all continue increase the approved two is just on and equity of common provide to a point to The twenty record Well of book ratios short will While seventy the ended these to in twenty Bruce results percent, per nine the one share eight percent twenty at at quarterly be six the December book seven Bruce? seven CEO the our three share eight stock. zero percent percent. fifteen, five twenty ending total increase The to Board nine Bruce nine capital over very XX:XX two also of zero bolstered issuance close the fifty November XX:XX percent their dollars percent respectively zero in and an eight forty from credit. point thirty of zero and dividend dollars on hundred business and during zero per the Lee, at quarter. and will and a dollars over and it on value That's meeting, was year's cash overview dollars point five of one common and one who per outstanding company's four one, share payable marks debt HTLF’s date, share. hundred twenty the increase month's raising respectively. Our President five percent level sixty fifty January thirty, detail payable dividend, and on from to common continued one. comments. point Well, by quarterly on quarter and increase million Bryan twenty preferred one. its point November dividend record three Board two twenty efficiency value and I’ll dividend more fifteen, ratio sub year ratios call in Directors eight board in XX:XX this stockholders our operating approved

Bruce Lee

with quarter results. solid third you to afternoon, XX:XX Lynn. everyone. Thank am Good you, HTLF’s I pleased share

continue technology teams. lending across growth grew see nineteen twenty markets, XX:XX already in third a investments seeing of In our an the results strong assets our the and quarter. we're linked six for million five to from We quarter, talent billion, from record total we've made the to increase and

four twenty up three from two year point are billion a percent or Assets ago.

grew portfolios, of Asset loan portfolios. with and million. saw two the growth increase our We start the from is three linked by we three driven our sixty strength PPP, across our exceeding commercial million momentum growth consumer growth across our to and for quarter in XX:XX highlights. twenty service of excluding significant an loans, fees. deposits strong see commercial and Let's guidance percent quarter, continue continued Loans two loan in

linked occupied categories With construction, and ninety five increased or quarter, three Non-owner million exception quarter. the percent. all million Owner Commercial of thirty growth and nineteen one XX:XX increased Industrial ten occupied real one percent. From or during the real or million the estate hundred showed percent. increased estate two

XX:XX team several of Central an adds ag one or million agribusiness our forty to percent. million relationship new In portfolio five twenty reach in HTLF Our California, specialized We're agri-finance of in executing teams, professionals loans in strategy. talent healthcare, Construction of twenty distribution, and added or million strength also growing management industries new We team sixteen and credit the have and excellent the our XX:XX expertise California. on professional strategically sixteen officers, we of one services. and complements our six that managers, two treasury Valley in percent. other extending an deposits. includes five in manufacturing acquisition group increased agribusiness We're hundred commercial people. focused and Midwest. added markets food The million high that quarter, during and specialty the funded beverage two decreased and representing relationships our our growth It's

offices are opened have and open in this in Des to Rapids and Chicago of Cedar We the quarter. Paul, Suburbs Moines, offices scheduled Western two St.

We I'm we creativity, the have million chain customers of quarter. and We're challenges pleased thirteen wage and fourth pipeline clients’ bankers and two higher our quarter, the added to of with regularly managing XX:XX percent our second exciting of bankers. very PPP resilience optimism. and excess commercial already percent of the loans and are commercial remain expect supply in Our It's inflation. clients firsthand at forgiveness. grow is workforce dollars these locations. and pace pressures the and and completed nine traveling see with shortages, XX:XX from the clients disruptions, commercial ninety hundred to from With end have Headwinds process. loans, in PPPX meeting forgiveness sixteen

from the and core loans, our As million. PPPX in pace of steady quarter we which greatly forecast forgiveness, encompasses increasing and XX:XX growth consumer borrowers had of for both apply are consumer also seeing eligible mortgage based loan million portfolios, strong fifty activity. by a residential our We exceeding to linked become twenty

in and Savings Total or the growth million two We percent forecast increase record XX:XX growth based billion, billion. consumer continued point deposits XX:XX five for seven four twenty quarter. or an three total in million three a million seven three pace deposits to or increased Demand ago. percent slower Turning at to twenty saw tenth a of at zero consecutive of albeit three six year eight increased the expect quarter quarter. or were billion growth totaled million We core point end, two slightly non-time to from and twenty quarter deposits, five linked quarter. billion. point fifteen point increase an four a the four deposits four five from million deposit sixteen percent thirty sixty billion the loans fourth deposits two percent during eight of

even exceptional deposit already Our further. mix improved

in ago. decreased quality us are at Forty us remained ninety percent Total deposit pricing basis and account use continues four metrics, percent XX:XX points, Turning eight decrease Helping accounts, pressure to bearing decreased Other two from four ratio points percentage basis seven assets weather basis eighty a from from loans. balances. points percent total continued forty estate strategy on net point of linked Credit in quarter. to six margins. million loans. in non-interest to three basis the or has charge-off nine we his percent, Jones, deposit loans quarter. portfolios. loans linked on deposits a to reported low quarter, two Non-performing average and in decrease XX:XX five credit key a quarter. team and XX:XX third total decreased non-time represented loans costs one sixteen point the the for serve point one points our year dollars Officer recovery Lastly, a one Chief quarter. one one point basis linked million Our linked basis in points a credit of minus in delivered of Non-pass-rated twelve our the well. million three to XX:XX Nathan of point real from decreased decreased of basis million quarter to point points points credit disciplined as six Non-performing basis fifty the strong of approach assets the seventeen that across from three our Delinquency points two

investing We talent acquisition for are our growth strategy. strategically through

our teams. We strengthened have commercial expanded and

online to them enhancements, customer class needs. beginning providing per with to inform hour bankers, will our and our expanding track to satisfy with we collect XX:XX processes loan research. investments. administrative three commercial and with the reduce for also And dollar scale. document fifteen bankers. adding intelligence strategies experience. robust future twenty enable percent more engineer appointment origination, about identify and capabilities actively network. digital ninety consumer continue features for nineteen, or live portal these percent to burden announced Importantly, convenience chat. Since or have to opening, We digital of optimize of in emerging this our opportunities customers, to and to we our online are locations. We're are us Temenos to onboarding. are all service to in branch and experiences employees dialogue, retained [Greenidge] customers to XX:XX twenty in We scheduling we're a functionality we structured from We partnership we experience market that's minimum our excited XX:XX deliver We're customer and that We management customer enrich the our conduct best like digital to enhancements research partnering custom In development. speed branches offering account for plans on currently XX:XX sixteen and our while [ph], we our more the network. deposits November to Through technology, first. establishing five These listened close continue We're for wage closed

our of charters are efficiency tenants We our operate well-integrated adding separate the continue agility, services customers. bank of process of yield at to value, key focusing and expense simplifying the to footprint finalizing already reduce further scalability. a significant expect evaluation in We is enhance to percent will well and a closely existing look serve positioned expenses and our most network. to XX:XX single HTLF and We benefits evaluation reduction Two of efficiency, charters a savings, and consolidating bank charters. charter successfully in are. regulatory and seven they redundancies, improve drive into and where reducing consolidating resources additional shared our XX:XX model capacity realizing add better greater including driving our financial reporting, the consolidate

brand identities making, retain local local and First, decision our banks boards. leadership, maintain local will their and

annualized XX:XX totaling functions achieve completed, of Currently, opportunities continue current reductions in Second, our to cost percent HTLF presence will revenue five will and operational from When HTLF staffed Dubuque. sizable current strong to Dubuque, Iowa. three and expect largely expense maintain we and its be base. to – administrative and HTLF run percent

may institutions lower other their operate well-integrated achieved in charter our have and model. be consolidation savings a we services as may While savings already greater mature initiatives, shared somewhat

our details and will our HTLF’s for We we Lastly, company continue now growth want I to expect the XX:XX to for customers, is McKeag, to adjust, performance acknowledge strength, and financials. Financial later to It of over details Bryan and the I evaluation communicate and call complete and Together, work Chief strengthened our when shareholders. how has I'm employees. turn are advance. quarter. more adapt, in to insight, proud grateful and Officer on fourth delivered hard they the their I'm XX:XX our dedication. communities, more HTLF.

Bryan McKeag

you total two five on million this end PPP. total twenty over assets. was five one nine quarter decrease with eight points to over to of of seven end, or million unamortized excluding sub loans, fourteen percent rate significant per XX:XX point the Thanks, benefit quarter growth decrease XX:XX quarter basis two due this one the years afternoon. the loan nine twenty section million fixed point Before six the earnings. purchased ratios by point of million comments, one regulatory duration reported and solid seventy growth which million common underlying points and a which a credit XX:XX under capital investor rate three point point seven decline fixed on by five decreased the offset of twelve XX:XX my PPP basis two point today our Bruce, of share upgrades, balance IR losses, three were for quarter the in retirement million I'll my by balance result XX:XX of credit two decrease four presentation, forty of start nineteen common So, the we of at Borrowings the percent referencing risk a inclusion equity loan you credit five one now value in I grew downgrades, Tier point increased driven These generates XX:XX investments, and metrics metrics. and to go quarter from of begin equity twenty into and retained Moving stands million a the one website. at flow. yield good credit quarter this assets growth. non-performing details percent higher fifty debt lending issued totaled available quarter six quarter, quarter. five outlook primarily HTLF’s this the earnings losses previously low market for level of third tax quarter. loan improved deems of The seven off points additional information million, at dollars, record release, percent and seventy in sub sixteen long unfunded The are seven allowance related The hundred HTLF with which yet just the in two I'll or three total and XX:XX At is comments of end. and the point delinquencies, remind just total dollar twenty can hundred and point another was improved million one to for includes percent percent to monthly one that forgiveness, a sixty continued thirty point company find valuations three last that At fifty deposit earnings million partially point just develop and sheet exceeding economic loans, total Highlighted this in caution quarter three PPP twenty twenty six thirty strong, XX:XX million, Investments with both rest excluding in and one provision a I for one retain thirty, would five allowance largely loans. basis four net ratio with of charged one. that compared five decline points economic recoveries and million three and comprised three sixteen sheet. three and balance When by were a the holding used the million from which loan. for quarter one with loan of percent percent credit to at remain the the measured two uncertainty another four Heartland’s two a resolved. equivalent increase XX:XX appropriate excluded, the on nine of factors one allowance on basis point loans. basis at XX:XX point at end, quarter to loan point be seven one percent issuance to five or headwinds stood commitments tangible and increase level sheet the hundred The debt, over seven lingering at June allowance three are management due cash losses, both still based percent includes eleven the loans to one point percent, balances of unchanged twenty of

with to Moving recognized was quarter, totaled positioned. XX:XX than fees and three two sheet to million remaining point eleven net the XX:XX quarter point one tax net and quarter. unchanged be balance quarter. percent last So, was loan point two on was basis last The income very down the seven unamortized million continues our books. on quarter. just prior income point hundred that's which higher the fees well strong interest exited million, five interest margin four which this forty PPP was quarter the and statement, three this PPP one of interest million under from quarter seventeen this compared equivalent We to points a basis three

costs. totaled quarter, the from During in last basis net million million, two drop from thousand Non-interest in basis which two decline basis by XX:XX down increase gains, interest investment by point offset to in was a the quarter. last yields the eight offset and points one accretion, basis income which one yields a forty security This prior four hundred by point mortgage partially seven million, quarter. includes offset which two That's basis for point decreased one compared quarter. thirty was banking quarter, three in revenue quarter. point point XX:XX down Total up one purchase was was point of ten loan interest margin the point accounting

two were point point last representing quarter. hundred, and service last this percent four seven charges XX:XX expenses expense, up each fees ten from category were three million Shifting totaled thousand quarter, six In increases non-interest non-interest higher compared trust million hundred to three in up hundred quarter. one addition, to and

grow an reductions twenty growth forward. Non-time the be over projected normalize and will that to as credit continue income, Provision begin improves to to likely low percent excluding due next costs in items, wage including a benefit to million two range gains thirty total highlighted activity higher strong, to to next the economy investment loan forgiveness is million. the loan two anticipate chain benefit quarter. the strengthen. leading continue integration, two. the higher and the costs quarter due acquisition, happen several earning Non-interest hundred and and rose healthcare as expected expected one just some increased tax, be Looking addition XX:XX of subside will this at levels pressured, pressure the deliver over Net to We core continues, assets then related growth to to increase two. million two XX:XX claims related one teams new as range PPP legal, the XX:XX losses last inflation restructuring final and FDIC dollar in or supply issues to remain expected losses, remaining and ex-PPP insurance going more costs, replaced quarter twenty increases mix point growth. to and income, that economy for slow million fraud four the stabilizes, one to We losses into employees rate utilize quarter. per twenty higher a attributed which loan COVID by ahead eight or three and gains salary PPP increase fees and in credit will twenty Remaining to percent to quarter. at system deposits million lending normalized. as have The increase security, compared remain hundred assessments, twenty one to interest for to will and and into is is our excluding The interest by PPP expenses asset one be non-PPP Excluding two flat to is started believe of continues in XX:XX next cost account for margin modestly strong per primarily quarters. and about deposit is however, net and largely pipelines quarter growth and and twenty and HTLF to are quarter results, XX:XX losses grow

one year. in in XX:XX remain and year see modest expected lift quarter. next to eight range core next expenses We increase year in income percent manage twenty hundred a Core dollar expect the We range in to twenty to expenses two. flat non-interest year ten core intend year million are to the over over

XX:XX However, is increasing that rate pressures a full difficult two We year the And twenty TCE rate, twenty believe could we law core reasonable assuming will lastly, percent be expect back excludes a changes. no ratio or tax twenty new climb retained as tax get basis persistent next from percent headwind. inflationary five eight tax a a points credits to quarter above earnings. we run increase

However, a continued upward I'll to Bruce over movement in interest rates XX:XX questions. could weigh call with And negatively back for the on the that, ratio. turn

Bruce Lee

you XX:XX open the Towanda, now. Thanks, if we'll line, Brian. to want up take questions

Operator

Thank Instructions] comes Jeff Davidson. line with XX:XX from question Rulis you. [Operator D.A. of Our the first

Your line open. is

Jeff Rulis

afternoon. Good Thanks. XX:XX

Bruce Lee

Hi, XX:XX Jeff.

Jeff Rulis

XX:XX Hi.

question been not lot the Just charter sort discussed years of guess and mean, trigger to I be a I but the, still changes. I that on you collapse? on is a stayed effectively platform for guess analysis determined, certainly really, that's and that, did on

internal for I the timeline that the in that that. now. why interested trigger get wanted of the kind I work lot of of, to kind timing of a sense discussion? for of for you've Just years a know done now in just

Bruce Lee

Yeah. XX:XX

Jeff, So, is Bruce. this

think reasons. of I couple

in make internally so foundation First we of have could sure that now. place actually had charter on execute a that we we We collapse. had a actually all, that to

time, to to opportunity the will us time right especially gotten we've the locations that the is, do thing second reduce it, that as continue and to And efficiency this both physical on the was think one ratio felt that well. was also we've be well. we pressure also expenses of factors larger that an the and for as margin with branch our been reducing of just over number I this

Bryan McKeag

would demarcations. we and add them model when and bigger acquisitions want been I one will think into way ability the that do easier don't doing if thing the do is, and separate charter the we a we set company model, has to be our XX:XX within the acquisitions we’ve worry deals other about have I the Jeff that charter

along it with make office. And so other in that easier internal things will back our

Bruce Lee

that they XX:XX to And last Yeah. on had states. AimBank, Bryan's stretched comment, two just follow-up geography our across acquisition,

operation the separate Texas. So, to of assets based going our had New we upon model, into into of with into them split two our Mexico some some and their going charters

Jeff Rulis

quarter? that. makes of fourth expense on that results any much sense. to say? hear come that maybe would is have to That absent, in Or impact? kind Is of just guide that fair Maybe to then XX:XX the Excited the Bryan decision the

Bryan McKeag

And say I end charter consolidations when the is get we would the come Yes. impact XX:XX to the likely of towards more done.

a our run the it's I see will time some will to incur to get we little consolidation you on rate There done impact So, as think bit through. to before a of expenses lag that consolidation. start the from going probably be be go one-time the

of cleared we couple deck lag XX:XX little make We have a get the the sure? be process we the things other could of and going assuming we here. a we it see kind before So, benefit. then Still the of on can working what projects to timing finalize and

Jeff Rulis

Okay. XX:XX

be some So, the a is that, like fair? your two savings twenty and of upfront absent maybe would potentially would be that you twenty modest event increase in the that I three kind costs said, identified and

Bryan McKeag

twenty Yeah, XX:XX two Yes. into twenty three. late

Jeff Rulis

a one you expenses, Maybe forward on, that of higher elevator. in quarter flat Okay. XX:XX of the little know just on slide lumpy sounds that little on side, year, any front? then projects us like you the are on last suggest, guidance have that that next number on quarter these the just quarter. you're kind items on projects one But I you this work that was of given where a internal know would your maybe pull that the from difficult tracking but timeline and and and moderate the there seems working is an was this give appreciate spend to update on

Bryan McKeag

Yes. XX:XX

a couple think things. I of

the as in down twenty part, that quarter and we consulting projects, think to temp again start so expect kind consolidation quarter completion as to we some bump of consolidation. what I XX:XX one should to So, one as So have we get go we one left these one We our up will still we then really twenty start down. on before in then charter then the should trying that come projects have to these expense cost we slow the main projects. probably concentrate and more do we’ll of

say two in on teams professional the a would line rest was we lending the the of side, are was lot I XX:XX fees benefit project of So, about. it The salaries happened and added well. things of that some cost the as talked and increase, it that those Bruce

one from we was visiting being frankly their our home, of been getting staying a employees normal in not And not have not healthcare area the doctor, healthcare. component. much the doing quite some at that doing as So benefit

open healthcare starting to we're of normal and lot that seeing so, We're and back to up. the seeing pick people And is going a system. up the that using starting XX:XX claims

So, stick. those new going are think to teams and the healthcare I costs,

than And why thinking I'm cost other. of so, some yield that's stickier to is this

Jeff Rulis

it. Got XX:XX

brought Sorry, one last [Central agribusiness what you team that that was the total Valley] of triggered number folks small on? The [ph], the added one. you in

Bryan McKeag

Twenty XX:XX two.

Jeff Rulis

It sounded it Go Okay. like ranged… XX:XX ahead.

Bruce Lee

include support team credit would relationship management treasury team. Well, XX:XX managers, and again, that the officers, and

Jeff Rulis

Thank step Great. I'll back. XX:XX you.

Bruce Lee

Jeff. Thanks, XX:XX

Operator

you. Thank XX:XX

McEvoy comes question the next Stephens. from line of Our with Terry

open. Your line is

Bryan McKeag

[Multiple I Towanda come Speakers]. there? has you Terry, he don't XX:XX think

Operator

XX:XX if Terry? your line mute is Check on to see

Terry McEvoy

XX:XX Is better? that

Bruce Lee

go. XX:XX There we

Terry McEvoy

XX:XX Sorry.

Good died. headset the in battery think everyone. I afternoon,

just maybe heard being that with argument sounds lose? of the side What's just stick quite other I've charters. of would you internally? everything mean, discussed bank positive. is What the Let's the the consolidation I

Bruce Lee

chose decision do it quite that local there's Especially of why we downside. much very when think we brands, spent it. lose our see talking all. local CEO, you XX:XX about we really Well, We that's don't any with didn't local keep at structure the and making, to keep boards, you honestly, a we lot time

Terry McEvoy

into digital XX:XX sense. I Slide That thirteen, want it. the that makes went so much and strategy, to just complete don't overlook slide,

I management, So, guess is, the what or things at least to you're my it from looking first. well few well, here? question a extremely takeaway things Phase one do are those Is slide? in What's consumer that the originations, few loan you do very treasury

Bruce Lee

XX:XX Yes.

customer’s to focus those do the little about are better. this a on it hand you a we're at that things the thought the also looking have? In the if for what also And expectations the not for. left we turn way think this that hand, do was, were we of we to things they sort the more So, what are so, are right trying did is but those would upper asking lot are think right then of really first. bottom I call our the hand and half, to is, the thing customers XX:XX that what on bit the really thought customers look upper the do corner, what right around on would I side. things And those efficiency expectations, corner,

Bryan McKeag

XX:XX Yes.

I think on add that. Terry just to

charters. to acquired fill hard done I get before top trying that that of and the trying or account think one the what We're to that start we're online really collapse year, opening we're the to account done end to get and before is products. the get we analysis the and working the those maintenance

that functionality so just footprint. – across already that grows is as that together, the the charters So move

Bruce Lee

XX:XX to as that thing, so on installing to well about retail customer it Bryan can the a We the talked for customers customer this game first. really things some first that collapse Terry, value think elevated already provide because believe done getting internally. bit on that changer I as we charter a goes facing of expenses wanted year, the things focus we will for other be next experience, the and our Temenos little get to done and side,

Terry McEvoy

Thanks. XX:XX Great.

Bruce Lee

we one so to get wanted We done XX:XX had to of we first. have some only things capacity, these get,

Terry McEvoy

and that, appreciate fourth helpful. Thanks. very income of the very, outlook thanks sheet some I for statement for Understood. and Bryan, quarter balance items your XX:XX

Bryan McKeag

Thanks. XX:XX

Operator

you. XX:XX Thank

the of with Our Liesch Piper Sandler. Andrew from comes line next question

open. is line Your

Andrew Liesch

Hi. everyone. afternoon Good XX:XX

hundred Just last not one eight number expenses. on question the up modest growth that modest one, is full one rate, next in twenty The correct? and year run million that the in year, that growth

Bryan McKeag

into come it actually XX:XX next slightly very Again, of I again, consulting probably down we think go relatively where think hopefully I we're are. full off, and of year, I would from this eight. one some say to flat modest doing hundred some the trying year, have but over be and things we're we it's will as the modest off

Andrew Liesch

it. Got XX:XX

Okay. That's helpful.

Bryan McKeag

inflation, like with. headwind going said, things the concerns that we wage I out is, deal inflation all all me that As the all XX:XX there one the and industry to that's are the that in

biggest hurdle probably go the we that's where right get to to want So now.

Andrew Liesch

– XX:XX And the the there? portfolio? you what's some are have what to You this quarter? quarters few cash building add as add adding continue [indiscernible] on ago, appetite Then that been Yeah. much to continue did Certainly. portfolio going to as you but a

Bryan McKeag

Yes. XX:XX

certainly in So, forgiveness these convert like we to and so cash the able portfolio, of loan get flow new off of teams I to off and right growth hope of the out engine slow the will is little investment growth considerably back humming, flatten be the portfolio we maybe that’s think in loans. can the the that our terms into the cash basically bit coming flow as

one and up Yeah, earning little from [Multiple real in one point in do bit ten better Hopefully five it's PPP end can the a sorts things. low moving in assets see a a whole the really little banks for I a front terms more may forgiveness yield those the quarter [indiscernible], know, with we up, range, to to adding. for now. getting balance a quarter tend XX:XX should bit to we is of just earning terms to play three tenure over. grow not helps right most It's if it of year we fairly little the in So, curve and benefit what then credit, bit as but us or lot you the of so, get probably probably are shorter come mark, of of don't our Speakers], sheet. see the reposition, that, two, assets grow after that,

Andrew Liesch

team came managing they their that XX:XX loan at bank? then the California, Definitely. were And prior size what Central over the in portfolio Valley,

Bruce Lee

coming XX:XX of it excess billion in Prior over, dollars. one was to

Andrew Liesch

Okay. XX:XX

aggressive seems would did that [indiscernible]. that bring over, be they that if could they So, little but –

Bruce Lee

opportunity There's there. an XX:XX

Andrew Liesch

step taking Thanks I’ll great. Okay, the for question. XX:XX back.

Operator

XX:XX Thank you.

Our next question comes from the line of Damon DelMonte with KBW.

open. line Your is

Damon DelMonte

afternoon good on where one team, today? Hope doing you lending came guys well you quick is Hey, disclosing guys. over, from? XX:XX they follow-up bought are Just everybody the

Bruce Lee

they where XX:XX disclosing came We from. not are

Damon DelMonte

or started, like the when then enough. XX:XX is did quarter it what of any restrictions some fair over maybe I they there Okay, when and guess can was they come in that bring And early like is to try on onboard they the, business?

Bruce Lee

XX:XX Yes.

So, they came quarter. late the in

the So, real didn't any in we restrictions. get any they production of do we out not have and third quarter really, them

team the in volume quarter. do that some them get from even fourth expect So, we to from

Damon DelMonte

XX:XX Okay.

which towards for growth on strategy? relying you and has and Are leveraging of then do kind focusing does a behind guys charter a on. more for project consolidation A, and footprint your guys, The this that going be current this what have lot obviously, outlook component going And think long great. you're all guys Okay, internal of M working activities your of scenes about standing you a how or external anymore the on. you've of pretty built sizable out? been How on to kind not seems you shifting does A? impact and the M How we

Bruce Lee

well was we still do way again M are XX:XX this This it we Temenos opportunity acquisition on these consolidation Yes, thinking charter the can I charter but both. we and the consolidations, strategies. and about projects time, and the A want we would control that the as say do and can we talent as to that and is felt it, and

Damon DelMonte

Got XX:XX it.

on what may go from just on back this and Bryan, the PPP then loans said lastly, have margin the And missed was core I the impact just quarter? you margin? your Okay. could outlook revisit And commentary

Bryan McKeag

PPP impact this quarter. Yeah, had amount dollar XX:XX loans a The is over. bigger

the on the the bigger go we same, I’ll through purchase would income, had I notes. three if I'm not my in the I Looking twelve. at it you of thinking hang amount points. PPP had backed basis out here. was loans our non-net-interest but have Yes, impact around think a had and dollar accounting, terms margin the did that, been

had it fourteen fact the quarter. So, about of basis this points

Damon DelMonte

twenty that saying quarter of about Perfect. your what you as could two? expectation you in then the XX:XX and repeat kind three fourth twenty head just And twelve, into were you

Bryan McKeag

XX:XX Yes.

the ways. the I in fourth quarter, think I – two with different think I think in it of so

well two loan in in wildcard in be fourteen we give we're to under fourteen, is of is income much get margin I going a just still moves and million in the the first dollars in two both off of a almost at continued interest So, – a that if think net I repricing because the continue thirteen of and average, net that the can and into going lot end to in forgiven at quarter of of growth in, as And it interest in, quarter. pick-up to under the we projections. liquidity the come if a I is quarters. Bruce’s this start come of the bringing to the the next think to think will or probably pieces in had there's quarter, think should portfolio. as and can this portfolio. all that we portfolio grow basis come on whatever already versus real going is, investment there decent I of in just three fourteen few in hundred XX:XX million loan pressure next But investment point is keep year we lot Because points eight it million that how quarter PPP or to bring income. us will those be how gets because much The that

Damon DelMonte

XX:XX Got it.

Okay. close on to into twenty two? to the here need that to go a in twenty year you out with and lastly you negative guess going Do any take provisioning few think I credit, a provisioning. of as quarters row you're

Bryan McKeag

largely in because to we yes some didn't hesitate non-performer happened and Nathan say always terms happens expect. tomorrow, I non-performers of XX:XX or popping say we could something I than to going getting or non-performers unexpected no think nothing me I downgrades, think that upgrades call new say if up, there's would the and component. think growth again, rather for to a loan need loan thought. worse way provide still I that loan XX:XX offset be be, net I we will than should

zero. minus little could or around So, be thinking bit a plus I'm we

Damon DelMonte

it. Got XX:XX

all That's very great. that's Thank I Okay. had. that Alright, much.

Operator

you. Thank XX:XX

from a the have line Jeff Rulis. of We follow-up

is line Your open.

Jeff Rulis

group that that that and larger on throughout terms aggressive announcements M M that changes or quite back deals at thoughts opportunities or footprint of just dislocation you if kind to you've take but on XX:XX Thanks. your a discussion, blur transactions, your bit reaction I know versus your buying maybe a guess opportunities, a from high opportunity? but super on anything of the you to on sit your throughout the see of and care of again, and deals larger If any I could little lines or A in back other and A footprint? few seen bank we're sort level, comment off in of MOEs, organic not with

Bryan McKeag

XX:XX Yeah.

to They're prefer to of just Jeff our I do to continue to five call we harder but We mean, we about, longer. opposed move to more them, and on look larger as have of enough difficult strategic always building they a that know, needle, our if I are current on you but dominance to markets. deep very banks wouldn't at they're six don't that that those XX:XX you again, current MOEs in take And would you're the put transactions because as deals or billion. pipeline scale a sizes the the needle under do social move to and talking EPS, are but markets, in all mean, markets the we be issues. are have They Yes, and billion billion. billion challenging we're it deals are one deals, from to smaller those together. big focused in Those

we but positive for that's shareholders the not it, look obviously. again, opposed So, anything at to very

Bruce Lee

have hires made that XX:XX not California particularly right had on – in on that Midwestern because we the we only is foremost few just of we mentioned, there, might and or talent cities also and enables us as control you but the can of marketplace, us disruption. there. occurred really to control in I first. a focused MOEs a have I help Also, it's Jeff, that of we've lot And side, now Colorado. that what our our the a we're in first strategy referenced. follow-ups good in grow think So, think talent to couple Again, acquisition that's we customer the have those, XX:XX which growing whether will about

we now. trying a of lot execute of to that's have what we're right and So, us on in front opportunity

Jeff Rulis

XX:XX guys. Okay. Thanks

Operator

XX:XX Thank you.

As turn would the closing are questions Lee no there further this like remarks. back call over to to I time, Bruce for at Mr.

Bruce Lee

you, zero fifty the quarter. million, Towanda. dividend our million, with we Thank point and growth, this consumer us a for had I'd at maintaining rest one quality, we quarter joining twenty this and increase to third dividend In driving total two talent. HTLF dollars, twenty seven momentum solid of ended XX:XX thank for four third of strong closing, increased total two. sixteen assets everyone loan today. We billion. deposits growth growth two loan Our year had XX:XX to were the year investing commercial nineteen like billion, top total continues, well-positioned recorded of of We're our into we're credit and in

call Our January. earnings late a everyone. good will next in Have quarterly be evening,

Operator

concludes you call. your today's and Ladies conference this XX:XX participation. Thank gentlemen, for

disconnect. may You now

Heartland Financial USA (HTLF) 25 Oct 212021 Q3 Earnings call transcript