Finance

Heartland Financial USA, Inc. (“HTLF”) Reports Quarterly Results as of March 31, 2024


Heartland Financial USA, Inc.Heartland Financial USA, Inc.

Heartland Financial USA, Inc.

First Quarter Highlights

Quarterly net income available to common stockholders of $49.7 million or $1.16 per common share

Adjusted earnings available to common stockholders of $52.4 million or $1.22 adjusted diluted earnings per common share, which excludes $1.4 million of acquisition, integration and restructuring costs and $2.0 million of FDIC special assessment expense

Common equity ratio increased to 9.76%; Tangible common equity ratio (non-GAAP) improved 35 basis points to 6.88%

Net interest margin, full tax-equivalent (non-GAAP) increased to 3.57% for the quarter ended March 31, 2024 from 3.52% for the quarter ended December 31, 2024

Annualized loan yield increased to 6.63% for the quarter ended March 31, 2024 from 6.49% for the quarter ended December 31, 2024

Annualized cost of deposits stable at 2.11%

Customer deposit growth of $9.2 million, excluding the impact of Rocky Mountain Bank deposits, while wholesale and institutional deposits decreased $312.4 million

Nonperforming assets decreased $12.5 million or 11% to 0.51% of total assets

 

For the Quarter Ended

 

3/31/2024

 

12/31/2023

 

3/31/2023

Earnings Summary:

 

 

 

 

 

Net income/(loss) available to common stockholders (in millions)

$

49.7

 

 

$

(72.4

)

 

$

50.8

 

Diluted earnings/(loss) per common share

 

1.16

 

 

 

(1.69

)

 

 

1.19

 

Return on average assets

 

1.08

%

 

(1.42

)%

 

 

1.06

%

Return on average common equity

 

10.90

 

 

 

(16.61

)

 

 

12.43

 

Return on average tangible common equity (non-GAAP)(1)

 

16.49

 

 

 

(24.89

)

 

 

20.03

 

Net interest margin

 

3.52

 

 

 

3.47

 

 

 

3.36

 

Net interest margin, fully tax-equivalent (non-GAAP)(1)

 

3.57

 

 

 

3.52

 

 

 

3.40

 

Efficiency ratio

 

62.46

 

 

 

293.86

 

 

 

60.94

 

Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)(1)

 

58.77

 

 

 

59.31

 

 

 

57.16

 

 

 

 

 

 

 

Adjusted Earnings Summary (1):

 

 

 

 

 

Adjusted earnings available to common stockholders (in millions)

$

52.4

 

 

$

45.6

 

 

$

53.7

 

Adjusted diluted earnings per common share

 

1.22

 

 

 

1.06

 

 

 

1.26

 

Adjusted annualized return on average assets

 

1.13

%

 

 

0.96

%

 

 

1.12

%

Adjusted annualized return on average common equity

 

11.50

 

 

 

10.46

 

 

 

13.16

 

Adjusted annualized return on average tangible common equity

 

17.38

 

 

 

16.38

 

 

 

21.17

 

(1) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

“HTLF delivered another solid quarter. We grew customer deposits while continuing to pay down high cost wholesale deposits and our credit quality remains stable. The announced sale of Rocky Mountain Bank in Montana aligns with HTLF 3.0, our connected set of initiatives that will drive efficiency, enhance EPS growth, deliver higher return on assets and more efficient use of capital. We intend to strategically reinvest sales proceeds in talent, technology and our other markets where we have the greatest growth potential.”

Bruce K. Lee, President and Chief Executive Officer, HTLF

DENVER, April 29, 2024 (GLOBE NEWSWIRE) — Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023:

  • Net income available to common stockholders of $49.7 million compared to $50.8 million, a decrease of $1.1 million or 2%.

  • Earnings per diluted common share of $1.16 compared to $1.19, a decrease of $0.03 or 3%.

  • Adjusted earnings available to common stockholders of $52.4 million or $1.22 per diluted common share compared to $53.7 million or $1.26 per diluted common share.

  • Net interest income of $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.

  • Return on average assets was 1.08% compared to 1.06%.

  • Return on average common equity was 10.90% compared to 12.43%.

  • Return on average tangible common equity (non-GAAP) was 16.49% compared to 20.03%.

HTLF 3.0 Highlights

HTLF’s new strategic plan, HTLF 3.0, was announced and initiated in the fourth quarter of 2023. HTLF 3.0’s initiatives include:

  • Investing in growth through banker expansion and talent acquisition in the Central Valley of California, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix.

  • Expanding Treasury Management products and capabilities.

  • Creation of consumer and small business digital platforms.

  • Footprint and facilities optimization, with a focus on efficient return on capital.

In the quarter we took the following actions as part of HTLF 3.0:

  • Reduced wholesale and institutional deposits by $312.4 million.

  • Announced sale of Rocky Mountain Bank division.

  • Completed key hires and promotions in wealth management and commercial and middle market banking.

Rocky Mountain Bank Sale

HTLF Bank has signed definitive agreements to sell all nine Rocky Mountain Bank branches in Montana along with all associated deposits and certain related assets to two purchasers. Per the terms of the agreements, six branches will be sold to Glacier Bank and three branches will be sold to Stockman Bank of Montana. Loans of $352.7 million, deposits of $596.3 million and fixed assets of $13.2 million have been moved to available for sale categories as of March 31, 2024. The transactions are expected to close early in the third quarter of this year with an estimated pre-tax premium of $30-$35 million based upon current deposit balances.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.52% (3.57% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2024 compared to 3.47% (3.52% on a fully tax-equivalent basis, non-GAAP) for the fourth quarter of 2023, and 3.36% (3.40% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2023.

Total interest income and average earning asset changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Total interest income was $251.7 million compared to $217.0 million, an increase of $34.7 million or 16% and primarily attributable to an increase in yields on average earning assets.

  • Total interest income on a tax-equivalent basis (non-GAAP) was $253.7 million, an increase of $34.5 million or 16% from $219.2 million.

  • Average earning assets decreased $795.6 million or 4% to $17.60 billion compared to $18.39 billion.

  • The average rate on earning assets increased 97 basis points to 5.80% from 4.83%, primarily due to recent interest rate increases.

Total interest expense and average interest bearing liability changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Total interest expense was $97.5 million, an increase of $32.7 million from $64.8 million, due to increases in the average interest rate paid and the average balance of interest bearing liabilities.

  • The average interest rate paid on interest bearing liabilities increased 102 basis points to 3.11% from 2.09%.

  • Average interest bearing deposits decreased $395.8 million or 3% to $11.59 billion from $11.99 billion.

  • The average interest rate paid on interest bearing deposits increased 100 basis points to 2.92% from 1.92%.

  • Average borrowings increased $421.3 million or 71% to $1.02 billion from $594.7 million, and the average interest rate paid on borrowings was 5.29% compared to 5.37%.

Net interest income changes for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Net interest income totaled $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.

  • Net interest income on a tax-equivalent basis (non-GAAP) totaled $156.2 million compared to $154.4 million, an increase of $1.8 million or 1%.

Noninterest Income and Noninterest Expense

Total noninterest income was $27.7 million during the first quarter of 2024 compared to $30.0 million during the first quarter of 2023, a decrease of $2.3 million or 8%. Significant changes within the noninterest income category for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Trust fees decreased $614,000 or 11% to $5.0 million from $5.7 million, primarily attributable to reduced retirement plan services income following the sale of the recordkeeping and administrative functions of HTLF Retirement Plan Services in May of 2023.

  • Capital market fees decreased $1.6 million or 64% to $891,000 from $2.4 million due to lower capital markets activity.

  • Net security gains totaled $58,000 compared to net losses of $1.1 million.

  • Net gains on sales of loans held for sale decreased $1.7 million or 94% to $104,000 from $1.8 million, primarily attributable to a decrease in residential mortgage loans sold to the secondary market as HTLF exited mortgage loan originations through PrimeWest.

  • Other noninterest income increased $884,000 or 60% to $2.3 million compared to $1.5 million. HTLF recorded $715,000 of income on assets associated with its deferred compensation plan which was largely offset with additional salaries and benefits expenses.

Total noninterest expense was $113.6 million during the first quarter of 2024 compared to $111.0 million during the first quarter of 2023, which was an increase of $2.6 million or 2%. Significant changes within the noninterest expense category for the first quarter of 2024 compared to the first quarter of 2023 were:

  • Salaries and employee benefits totaled $64.0 million compared to $62.1 million, an increase of $1.8 million or 3%. The increase was attributable to higher benefit costs including incentive compensation and retirement plans partially offset by a reduction of full-time equivalent employees. Full-time equivalent employees totaled 1,888 compared to 1,991, a decrease of 103 or 5%.

  • Other professional fees totaled $15.5 million compared to $12.8 million, an increase of $2.7 million or 21% which was primarily driven by increases in consulting and legal expenses.

  • FDIC insurance assessments totaled $5.0 million compared to $3.3 million, an increase of $1.7 million due to a special assessment expense of $2.0 million. This special assessment is in addition to the $8.1 million HTLF recorded in the fourth quarter of 2023 based upon additional FDIC expected losses.

  • Other noninterest expenses totaled $14.1 million compared to $15.4 million, a decrease of $1.3 million or 9% in conjunction with HTLF’s 3.0 efficiency efforts.

The effective tax rate was 23.17% for the first quarter of 2024 compared to 22.50% for first quarter of 2023. The following items impacted the first quarter 2024 and 2023 tax calculations:

  • Various tax credits of $935,000 compared to $969,000.

  • Tax expense of $1.3 million compared to $929,000 resulting from the disallowed interest expense related to tax-exempt loans and securities, aligning with increases in total interest expense.

  • Tax-exempt interest income as a percentage of pre-tax income of 11.08% compared to 12.20%.

Total Assets, Total Loans and Total Deposits

Total assets were $19.13 billion at March 31, 2024, a decrease of $278.9 million or 1% from $19.41 billion at year-end 2023. Securities represented 28% and 29% of total assets at March 31, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.64 billion at March 31, 2024, compared to $12.07 billion at December 31, 2023, which was a decrease of $424.0 million or 4%. Excluding the impact of the transfer of $352.7 million of loans to held for sale related to the planned sale of Rocky Mountain Bank, loans held to maturity decreased $71.3 million or 1%.

Significant changes by loan category at March 31, 2024 compared to December 31, 2023 included:

  • Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $200.7 million or 3% to $6.09 billion compared to $6.29 billion. Excluding the decrease related to Rocky Mountain Bank, commercial and business lending decreased $41.0 million or 1%.

  • Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $28.8 million or 1% to $3.54 billion compared to $3.57 billion. Excluding the decrease related to Rocky Mountain Bank, commercial real estate lending increased $35.7 million or 1%.

  • Agricultural and agricultural real estate loans decreased $109.3 million or 12% to $809.9 million compared to $919.2 million. Excluding the decrease related to Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $46.5 million or 5%.

  • Residential mortgage loans decreased $41.8 million or 5% to $756.0 million compared to $797.8 million. Excluding the decrease related to Rocky Mountain Bank, residential mortgage loans decreased $9.9 million or 1%.

Total deposits were $15.30 billion as of March 31, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $899.5 million or 6%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, deposits decreased $303.2 million or 2%.

Total customer deposits were $14.27 billion as of March 31, 2024 compared to $14.86 billion at December 31, 2023, which was a decrease of $587.1 million or 4%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, customer deposits increased $9.2 million. Significant customer deposit changes by category at March 31, 2024, compared to December 31, 2023, included:

  • Customer demand deposits decreased $235.9 million or 5% to $4.26 billion compared to $4.50 billion. Excluding the decrease related to Rocky Mountain Bank, customer demand deposits decreased $91.9 million or 2%.

  • Customer savings deposits decreased $141.3 million or 2% to $8.27 billion compared to $8.41 billion. Excluding the decrease related to Rocky Mountain Bank, customer savings deposits increased $189.0 million or 2%.

  • Customer time deposits decreased $209.9 million or 11% to $1.73 billion compared to $1.94 billion. Excluding the decrease related to Rocky Mountain Bank, customer time deposits decreased $87.9 million or 5%.

Total wholesale and institutional deposits were $1.03 billion as of March 31, 2024, which was a decrease of $312.4 million or 23% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at March 31, 2024 compared to December 31, 2023 included:

  • Wholesale and institutional savings deposits increased $4.9 million or 1% to $399.3 million compared to $394.4 million.

  • Wholesale time deposits decreased $317.3 million or 33% to $633.6 million compared to $950.9 million.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the first quarter of 2024 was $3.7 million, an increase of $1.5 million from $2.2 million recorded in the first quarter of 2023.

The allowance for credit losses for loans totaled $123.9 million at March 31, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at March 31, 2024:

  • Provision expense for the three months ended March 31, 2024, totaled $3.7 million. The provision expense reflected a benefit of $2.0 million for the impact of the Rocky Mountain Bank loans transferred to the available for sale category.

  • Net charge-offs of $2.3 million were recorded for the first three months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $2.7 million or 16% to $13.8 million at March 31, 2024, from $16.5 million at December 31, 2023, largely due to a reduction of $105.7 million in unfunded commitments for construction loans, which carry the highest loss rate. Total unfunded commitments decreased $88.1 million or 2% to $4.54 billion at March 31, 2024 compared to $4.63 billion at December 31, 2023.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $986,000 for the first quarter of 2024 compared to $3.1 million for the first quarter of 2023. The total allowance for lending related credit losses was $137.7 million or 1.18% of total loans at March 31, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets decreased $12.5 million or 11% to $98.0 million or 0.51% of total assets at March 31, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming loans were $95.4 million or 0.82% of total loans at March 31, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At March 31, 2024, loans delinquent 30-89 days were 0.31% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was primarily associated with a single $19.9 million construction loan that is currently in process of being sold by owners. Other real estate owned, net, decreased $10.0 million or 79% to $2.6 million at March 31, 2024 from $12.5 million at December 31, 2023. HTLF added one property with a book value of $11.3 million to other real estate during the third quarter of 2023 which was sold in the first quarter of 2024.

Non-GAAP Financial Measures

This earnings release contains references to financial measures which are not defined by generally accepted accounting principles (“GAAP”). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company’s financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. Additionally, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP measures in this earnings release with other companies’ non-GAAP measures. Reconciliations of each non-GAAP measure to the most directly comparable GAAP measure may be found in the financial tables in this earnings release.

Below are the non-GAAP measures included in this earnings release, management’s reason for including each measure and the method of calculating each measure:

  • Adjusted earnings available to common stockholders, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability net income available to common stockholders as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.

  • Adjusted annualized return on average assets, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.

  • Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.

  • Adjusted efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this earnings release.

  • Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. Net interest margin, fully tax equivalent, is net interest income adjusted for the tax-favored status of certain loans and securities divided by average earning assets.

  • Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.

  • Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.

  • Adjusted annualized return on average common equity, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.

  • Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.

  • Adjusted annualized return on average tangible common equity, adjusts net income available to common stockholders for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.

  • Annualized ratio of core expenses to average assets adjusts noninterest expenses to exclude specific items noted in the reconciliation. Management includes this measure as it is considered to be a critical metric to analyze and evaluate controllable expenses related to primary business operations.

Change in Conference Call

As a result of today’s announcement that HTLF has entered into a merger agreement with UMB Financial Corporation (“UMB”) and a wholly-owned subsidiary of UMB, HTLF has cancelled the previously announced HTLF conference call scheduled for 5:00 p.m. EDT on Wednesday, May 1, 2024, to discuss the Company’s performance for the first quarter of 2024.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $19.13 billion as of March 31, 2024. HTLF’s banks serve communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, wealth management, investments and residential mortgage. Additional information is available at www.htlf.com.

Safe Harbor Statement

This release (including any information incorporated herein by reference), and future oral and written statements of the company and its management, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, financial condition, results of operations, plans, objectives and future performance of HTLF.

Any statements about the company’s expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of the company’s operations or performance. These forward-looking statements are generally identified by the use of the words such as “believe”, “expect”, “intent”, “anticipate”, “plan”, “intend”, “estimate”, “project”, “may”, “will”, “would”, “could”, “should”, “may”, “view”, “opportunity”, “potential”, or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of the company and its management. Although the company may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of the company to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, 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 the company currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF’s reports filed with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” section under Item 1A of Part I of the company’s Annual Report on Form 10-K for the year ended December 31, 2023, include, among others:

  • Economic and Market Conditions Risks, including risks related to the deterioration of the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, pandemics and governmental measures addressing them, climate change and climate-related regulations, persistent inflation, higher interest rates, supply chain issues, labor shortages, terrorist threats or acts of war;

  • Credit Risks, including risks of increasing credit losses due to deterioration in the financial condition of HTLF’s borrowers, changes in asset and collateral values due to climate and other borrower industry risks, which may impact the provision for credit losses and net charge-offs;

  • Liquidity and Interest Rate Risks, including the impact of capital market conditions, rising interest rates and changes in monetary policy on our borrowings and net interest income;

  • Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;

  • Strategic and External Risks, including economic, political, and competitive forces impacting our business;

  • Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and

  • Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.

There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF’s business, financial condition and results of operations. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to or correct or update any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events or to otherwise update any statement in light of new information or future events. Further information concerning HTLF and its business, including additional factors that could materially affect HTLF’s financial results, is included in HTLF’s filings with the SEC.

-FINANCIAL TABLES FOLLOW-

CONTACT:

 

Kevin L. Thompson

 

Executive Vice President

 

Chief Financial Officer

 

(563) 589-1994

 

[email protected] 

 

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

For the Three Months Ended
March 31,

 

 

2024

 

 

 

2023

 

Interest Income

 

 

 

Interest and fees on loans

$

195,661

 

 

$

153,843

 

Interest on securities:

 

 

 

Taxable

 

47,014

 

 

 

55,976

 

Nontaxable

 

6,041

 

 

 

6,028

 

Interest on federal funds sold

 

 

 

 

 

Interest on deposits with other banks and short-term investments

 

3,006

 

 

 

1,131

 

Total Interest Income

 

251,722

 

 

 

216,978

 

Interest Expense

 

 

 

Interest on deposits

 

84,134

 

 

 

56,898

 

Interest on borrowings

 

7,524

 

 

 

2,422

 

Interest on term debt

 

5,849

 

 

 

5,446

 

Total Interest Expense

 

97,507

 

 

 

64,766

 

Net Interest Income

 

154,215

 

 

 

152,212

 

Provision for credit losses

 

986

 

 

 

3,074

 

Net Interest Income After Provision for Credit Losses

 

153,229

 

 

 

149,138

 

Noninterest Income

 

 

 

Service charges and fees

 

17,063

 

 

 

17,136

 

Loan servicing income

 

131

 

 

 

714

 

Trust fees

 

5,043

 

 

 

5,657

 

Brokerage and insurance commissions

 

754

 

 

 

696

 

Capital markets fees

 

891

 

 

 

2,449

 

Securities gains (losses), net

 

58

 

 

 

(1,104

)

Unrealized gain/(loss) on equity securities, net

 

95

 

 

 

193

 

Net gains on sale of loans held for sale

 

104

 

 

 

1,831

 

Income on bank owned life insurance

 

1,177

 

 

 

964

 

Other noninterest income

 

2,347

 

 

 

1,463

 

Total Noninterest Income

 

27,663

 

 

 

29,999

 

Noninterest Expense

 

 

 

Salaries and employee benefits

 

63,955

 

 

 

62,149

 

Occupancy

 

7,263

 

 

 

7,209

 

Furniture and equipment

 

2,337

 

 

 

2,915

 

Professional fees

 

15,531

 

 

 

12,797

 

FDIC insurance assessments

 

4,969

 

 

 

3,279

 

Advertising

 

1,358

 

 

 

1,985

 

Core deposit intangibles amortization

 

1,492

 

 

 

1,788

 

Other real estate and loan collection expenses, net

 

512

 

 

 

155

 

(Gain) loss on sales/valuations of assets, net

 

214

 

 

 

1,115

 

Acquisition, integration and restructuring costs

 

1,375

 

 

 

1,673

 

Partnership investment in tax credit projects

 

494

 

 

 

538

 

Other noninterest expenses

 

14,095

 

 

 

15,440

 

Total Noninterest Expense

 

113,595

 

 

 

111,043

 

Income Before Income Taxes

 

67,297

 

 

 

68,094

 

Income taxes

 

15,590

 

 

 

15,318

 

Net Income/(Loss)

 

51,707

 

 

 

52,776

 

Preferred dividends

 

(2,013

)

 

 

(2,013

)

Net Income/(Loss) Available to Common Stockholders

$

49,694

 

 

$

50,763

 

Earnings/(loss) per common share-diluted

$

1.16

 

 

$

1.19

 

Weighted average shares outstanding-diluted

 

42,915,768

 

 

 

42,742,878

 

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

For the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Interest Income

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

195,661

 

 

$

192,861

 

 

$

182,394

 

 

$

168,899

 

 

$

153,843

 

Interest on securities:

 

 

 

 

 

 

 

 

 

Taxable

 

47,014

 

 

 

54,573

 

 

 

54,800

 

 

 

58,172

 

 

 

55,976

 

Nontaxable

 

6,041

 

 

 

6,278

 

 

 

6,584

 

 

 

6,378

 

 

 

6,028

 

Interest on federal funds sold

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

Interest on deposits with other banks and short-term investments

 

3,006

 

 

 

2,174

 

 

 

1,651

 

 

 

2,051

 

 

 

1,131

 

Total Interest Income

 

251,722

 

 

 

255,886

 

 

 

245,432

 

 

 

235,500

 

 

 

216,978

 

Interest Expense

 

 

 

 

 

 

 

 

 

Interest on deposits

 

84,134

 

 

 

88,071

 

 

 

92,744

 

 

 

81,975

 

 

 

56,898

 

Interest on borrowings

 

7,524

 

 

 

5,874

 

 

 

1,167

 

 

 

848

 

 

 

2,422

 

Interest on term debt

 

5,849

 

 

 

5,804

 

 

 

5,765

 

 

 

5,545

 

 

 

5,446

 

Total Interest Expense

 

97,507

 

 

 

99,749

 

 

 

99,676

 

 

 

88,368

 

 

 

64,766

 

Net Interest Income

 

154,215

 

 

 

156,137

 

 

 

145,756

 

 

 

147,132

 

 

 

152,212

 

Provision for credit losses

 

986

 

 

 

11,738

 

 

 

1,516

 

 

 

5,379

 

 

 

3,074

 

Net Interest Income After Provision for Credit Losses

 

153,229

 

 

 

144,399

 

 

 

144,240

 

 

 

141,753

 

 

 

149,138

 

Noninterest Income

 

 

 

 

 

 

 

 

 

Service charges and fees

 

17,063

 

 

 

18,708

 

 

 

18,553

 

 

 

19,627

 

 

 

17,136

 

Loan servicing income

 

131

 

 

 

158

 

 

 

278

 

 

 

411

 

 

 

714

 

Trust fees

 

5,043

 

 

 

4,905

 

 

 

4,734

 

 

 

5,419

 

 

 

5,657

 

Brokerage and insurance commissions

 

754

 

 

 

729

 

 

 

692

 

 

 

677

 

 

 

696

 

Capital markets fees

 

891

 

 

 

1,676

 

 

 

1,845

 

 

 

4,037

 

 

 

2,449

 

Securities gains (losses), net

 

58

 

 

 

(140,007

)

 

 

(114

)

 

 

(314

)

 

 

(1,104

)

Unrealized gain/(loss) on equity securities, net

 

95

 

 

 

75

 

 

 

13

 

 

 

(41

)

 

 

193

 

Net gains on sale of loans held for sale

 

104

 

 

 

94

 

 

 

905

 

 

 

1,050

 

 

 

1,831

 

Income on bank owned life insurance

 

1,177

 

 

 

729

 

 

 

858

 

 

 

1,220

 

 

 

964

 

Other noninterest income

 

2,347

 

 

 

1,132

 

 

 

619

 

 

 

407

 

 

 

1,463

 

Total Noninterest Income

 

27,663

 

 

 

(111,801

)

 

 

28,383

 

 

 

32,493

 

 

 

29,999

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

63,955

 

 

 

64,766

 

 

 

62,262

 

 

 

62,099

 

 

 

62,149

 

Occupancy

 

7,263

 

 

 

6,509

 

 

 

6,438

 

 

 

6,691

 

 

 

7,209

 

Furniture and equipment

 

2,337

 

 

 

2,901

 

 

 

2,720

 

 

 

3,063

 

 

 

2,915

 

Professional fees

 

15,531

 

 

 

17,060

 

 

 

13,616

 

 

 

15,194

 

 

 

12,797

 

FDIC insurance assessments

 

4,969

 

 

 

10,313

 

 

 

3,313

 

 

 

3,035

 

 

 

3,279

 

Advertising

 

1,358

 

 

 

1,677

 

 

 

1,633

 

 

 

3,052

 

 

 

1,985

 

Core deposit intangibles amortization

 

1,492

 

 

 

1,611

 

 

 

1,625

 

 

 

1,715

 

 

 

1,788

 

Other real estate and loan collection expenses, net

 

512

 

 

 

505

 

 

 

481

 

 

 

348

 

 

 

155

 

(Gain) loss on sales/valuations of assets, net

 

214

 

 

 

2,072

 

 

 

108

 

 

 

(3,372

)

 

 

1,115

 

Acquisition, integration and restructuring costs

 

1,375

 

 

 

4,365

 

 

 

2,429

 

 

 

1,892

 

 

 

1,673

 

Partnership investment in tax credit projects

 

494

 

 

 

3,573

 

 

 

1,136

 

 

 

154

 

 

 

538

 

Other noninterest expenses

 

14,095

 

 

 

14,933

 

 

 

15,292

 

 

 

15,575

 

 

 

15,440

 

Total Noninterest Expense

 

113,595

 

 

 

130,285

 

 

 

111,053

 

 

 

109,446

 

 

 

111,043

 

Income Before Income Taxes

 

67,297

 

 

 

(97,687

)

 

 

61,570

 

 

 

64,800

 

 

 

68,094

 

Income taxes

 

15,590

 

 

 

(27,324

)

 

 

13,479

 

 

 

15,384

 

 

 

15,318

 

Net Income/(Loss)

 

51,707

 

 

 

(70,363

)

 

 

48,091

 

 

 

49,416

 

 

 

52,776

 

Preferred dividends

 

(2,013

)

 

 

(2,012

)

 

 

(2,013

)

 

 

(2,012

)

 

 

(2,013

)

Net Income/(Loss) Available to Common Stockholders

$

49,694

 

 

$

(72,375

)

 

$

46,078

 

 

$

47,404

 

 

$

50,763

 

Earnings/(loss) per common share-diluted

$

1.16

 

 

$

(1.69

)

 

$

1.08

 

 

$

1.11

 

 

$

1.19

 

Weighted average shares outstanding-diluted

 

42,915,768

 

 

 

42,838,405

 

 

 

42,812,563

 

 

 

42,757,603

 

 

 

42,742,878

 

HEARTLAND FINANCIAL U…SA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

As of

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Assets

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

208,176

 

 

$

275,554

 

 

$

248,756

 

 

$

317,303

 

 

$

274,354

 

Interest bearing deposits with other banks and short-term investments

 

236,190

 

 

 

47,459

 

 

 

99,239

 

 

 

82,884

 

 

 

87,757

 

Cash and cash equivalents

 

444,366

 

 

 

323,013

 

 

 

347,995

 

 

 

400,187

 

 

 

362,111

 

Time deposits in other financial institutions

 

1,240

 

 

 

1,240

 

 

 

1,490

 

 

 

1,490

 

 

 

1,740

 

Securities:

 

 

 

 

 

 

 

 

 

Carried at fair value

 

4,418,222

 

 

 

4,646,891

 

 

 

5,482,687

 

 

 

5,798,041

 

 

 

6,096,657

 

Held to maturity, at cost

 

841,055

 

 

 

838,241

 

 

 

835,468

 

 

 

834,673

 

 

 

832,098

 

Other investments, at cost

 

68,524

 

 

 

91,277

 

 

 

90,001

 

 

 

72,291

 

 

 

72,364

 

Loans held for sale

 

352,744

 

 

 

5,071

 

 

 

6,262

 

 

 

14,353

 

 

 

10,425

 

Loans:

 

 

 

 

 

 

 

 

 

Held to maturity

 

11,644,641

 

 

 

12,068,645

 

 

 

11,872,436

 

 

 

11,717,974

 

 

 

11,495,353

 

Allowance for credit losses

 

(123,934

)

 

 

(122,566

)

 

 

(110,208

)

 

 

(111,198

)

 

 

(112,707

)

Loans, net

 

11,520,707

 

 

 

11,946,079

 

 

 

11,762,228

 

 

 

11,606,776

 

 

 

11,382,646

 

Premises, furniture and equipment, net

 

176,582

 

 

 

181,070

 

 

 

187,436

 

 

 

190,420

 

 

 

191,267

 

Goodwill

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

Core deposit intangibles, net

 

16,923

 

 

 

18,415

 

 

 

20,026

 

 

 

21,651

 

 

 

23,366

 

Cash surrender value on life insurance

 

197,671

 

 

 

197,085

 

 

 

196,694

 

 

 

195,793

 

 

 

194,419

 

Other real estate, net

 

2,590

 

 

 

12,548

 

 

 

14,362

 

 

 

2,677

 

 

 

7,438

 

Other assets

 

516,198

 

 

 

574,772

 

 

 

609,139

 

 

 

510,359

 

 

 

432,008

 

Total Assets

$

19,132,827

 

 

$

19,411,707

 

 

$

20,129,793

 

 

$

20,224,716

 

 

$

20,182,544

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Demand

$

4,264,390

 

 

$

4,500,304

 

 

$

4,792,813

 

 

$

4,897,858

 

 

$

5,119,554

 

Savings

 

8,669,221

 

 

 

8,805,597

 

 

 

8,754,911

 

 

 

8,772,596

 

 

 

9,256,609

 

Time

 

2,368,555

 

 

 

2,895,813

 

 

 

3,553,269

 

 

 

3,993,089

 

 

 

3,305,183

 

Total deposits

 

15,302,166

 

 

 

16,201,714

 

 

 

17,100,993

 

 

 

17,663,543

 

 

 

17,681,346

 

Deposits held for sale

 

596,328

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings

 

650,033

 

 

 

622,255

 

 

 

392,634

 

 

 

44,364

 

 

 

92,337

 

Term debt

 

372,652

 

 

 

372,396

 

 

 

372,059

 

 

 

372,403

 

 

 

372,097

 

Accrued expenses and other liabilities

 

232,815

 

 

 

282,225

 

 

 

438,577

 

 

 

285,416

 

 

 

207,359

 

Total Liabilities

 

17,153,994

 

 

 

17,478,590

 

 

 

18,304,263

 

 

 

18,365,726

 

 

 

18,353,139

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Preferred equity

 

110,705

 

 

 

110,705

 

 

 

110,705

 

 

 

110,705

 

 

 

110,705

 

Common stock

 

42,784

 

 

 

42,688

 

 

 

42,656

 

 

 

42,645

 

 

 

42,559

 

Capital surplus

 

1,093,207

 

 

 

1,090,740

 

 

 

1,088,267

 

 

 

1,087,358

 

 

 

1,084,112

 

Retained earnings

 

1,178,330

 

 

 

1,141,501

 

 

 

1,226,740

 

 

 

1,193,522

 

 

 

1,158,948

 

Accumulated other comprehensive income/(loss)

 

(446,193

)

 

 

(452,517

)

 

 

(642,838

)

 

 

(575,240

)

 

 

(566,919

)

Total Equity

 

1,978,833

 

 

 

1,933,117

 

 

 

1,825,530

 

 

 

1,858,990

 

 

 

1,829,405

 

Total Liabilities and Equity

$

19,132,827

 

 

$

19,411,707

 

 

$

20,129,793

 

 

$

20,224,716

 

 

$

20,182,544

 

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

For the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Average Balances

 

 

 

 

 

 

 

 

 

Assets

$

19,296,638

 

 

$

19,667,825

 

 

$

20,207,920

 

 

$

20,221,511

 

 

$

20,118,005

 

Loans, net of unearned

 

12,021,930

 

 

 

11,938,272

 

 

 

11,800,064

 

 

 

11,625,442

 

 

 

11,378,078

 

Deposits

 

16,042,402

 

 

 

16,709,394

 

 

 

17,507,813

 

 

 

17,689,138

 

 

 

17,505,867

 

Customer deposits

 

14,816,652

 

 

 

14,969,948

 

 

 

14,699,235

 

 

 

14,655,535

 

 

 

15,123,181

 

Earning assets

 

17,597,068

 

 

 

17,853,957

 

 

 

18,439,010

 

 

 

18,523,552

 

 

 

18,392,649

 

Interest-bearing liabilities

 

12,607,745

 

 

 

12,721,680

 

 

 

13,158,631

 

 

 

13,209,794

 

 

 

12,582,234

 

Common equity

 

1,832,959

 

 

 

1,729,086

 

 

 

1,746,818

 

 

 

1,727,013

 

 

 

1,655,860

 

Total stockholders’ equity

 

1,943,664

 

 

 

1,839,791

 

 

 

1,857,523

 

 

 

1,837,718

 

 

 

1,766,565

 

Tangible common equity (non-GAAP)(1)

 

1,239,313

 

 

 

1,133,888

 

 

 

1,149,992

 

 

 

1,128,527

 

 

 

1,055,617

 

 

 

 

 

 

 

 

 

 

 

Key Performance Ratios

 

 

 

 

 

 

 

 

 

Annualized return on average assets

 

1.08

%

 

(1.42

)%

 

 

0.94

%

 

 

0.98

%

 

 

1.06

%

Adjusted annualized return on average assets (non-GAAP)(1)

 

1.13

 

 

 

0.96

 

 

 

0.98

 

 

 

0.96

 

 

 

1.12

 

Annualized return on average common equity (GAAP)

 

10.90

 

 

 

(16.61

)

 

 

10.47

 

 

 

11.01

 

 

 

12.43

 

Adjusted annualized return on average common equity (non-GAAP)(1)

 

11.50

 

 

 

10.46

 

 

 

10.92

 

 

 

10.80

 

 

 

13.16

 

Annualized return on average tangible common equity (non-GAAP)(1)

 

16.49

 

 

 

(24.89

)

 

 

16.32

 

 

 

17.31

 

 

 

20.03

 

Adjusted annualized return on average tangible common equity (non-GAAP)(1)

 

17.38

 

 

 

16.38

 

 

 

17.02

 

 

 

17.00

 

 

 

21.17

 

Annualized ratio of net charge-offs/(recoveries) to average loans

 

0.08

 

 

 

0.01

 

 

 

0.12

 

 

 

0.32

 

 

 

(0.04

)

Annualized net interest margin (GAAP)

 

3.52

 

 

 

3.47

 

 

 

3.14

 

 

 

3.19

 

 

 

3.36

 

Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)

 

3.57

 

 

 

3.52

 

 

 

3.18

 

 

 

3.23

 

 

 

3.40

 

Annualized cost of deposits

 

2.11

 

 

 

2.09

 

 

 

2.10

 

 

 

1.86

 

 

 

1.32

 

Efficiency ratio (GAAP)

 

62.46

 

 

 

293.86

 

 

 

63.77

 

 

 

60.93

 

 

 

60.94

 

Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)

 

58.77

 

 

 

59.31

 

 

 

59.95

 

 

 

59.88

 

 

 

57.16

 

Annualized ratio of total noninterest expenses to average assets (GAAP)

 

2.37

 

 

 

2.63

 

 

 

2.18

 

 

 

2.17

 

 

 

2.24

 

Annualized ratio of core expenses to average assets (non-GAAP)(1)

 

2.25

 

 

 

2.23

 

 

 

2.08

 

 

 

2.16

 

 

 

2.14

 

 

 

 

 

 

 

 

 

 

 

(1) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA

 

As of and for the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Common Share Data

 

 

 

 

 

 

 

 

 

Book value per common share

$

43.66

 

 

$

42.69

 

 

$

40.20

 

 

$

41.00

 

 

$

40.38

 

Tangible book value per common share (non-GAAP)(1)

 

29.81

 

 

 

28.77

 

 

 

26.23

 

 

 

26.98

 

 

 

26.30

 

ASC 320 effect on book value per common share

 

(11.18

)

 

 

(11.00

)

 

 

(16.27

)

 

 

(14.04

)

 

 

(13.35

)

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, net of treasury stock

 

42,783,670

 

 

 

42,688,008

 

 

 

42,656,303

 

 

 

42,644,544

 

 

 

42,558,726

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

Common equity ratio

 

9.76

%

 

 

9.39

%

 

 

8.52

%

 

 

8.64

%

 

 

8.52

%

Tangible common equity ratio (non-GAAP)(1)

 

6.88

 

 

 

6.53

 

 

 

5.73

 

 

 

5.86

 

 

 

5.72

 

Tier 1 leverage ratio

 

9.84

 

 

 

9.44

 

 

 

9.59

 

 

 

9.40

 

 

 

9.25

 

Common equity tier 1 ratio(2)

 

11.40

 

 

 

10.97

 

 

 

11.37

 

 

 

11.33

 

 

 

11.28

 

Total risk based capital ratio(2)

 

14.99

 

 

 

14.53

 

 

 

14.90

 

 

 

14.93

 

 

 

14.98

 

 

 

 

 

 

 

 

 

 

 

Other Selected Trend Information

 

 

 

 

 

 

 

 

 

Effective tax rate

 

23.17

%

 

 

27.97

%

 

 

21.89

%

 

 

23.74

%

 

 

22.50

%

Full time equivalent employees

 

1,888

 

 

 

1,970

 

 

 

1,965

 

 

 

1,966

 

 

 

1,991

 

 

 

 

 

 

 

 

 

 

 

Loans Held to Maturity

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

3,545,051

 

 

$

3,652,047

 

 

$

3,591,809

 

 

$

3,590,680

 

 

$

3,498,345

 

Paycheck Protection Program (“PPP”)

 

2,172

 

 

 

2,777

 

 

 

3,750

 

 

 

4,139

 

 

 

8,258

 

Owner occupied commercial real estate

 

2,545,033

 

 

 

2,638,175

 

 

 

2,429,659

 

 

 

2,398,698

 

 

 

2,312,538

 

Commercial and business lending

 

6,092,256

 

 

 

6,292,999

 

 

 

6,025,218

 

 

 

5,993,517

 

 

 

5,819,141

 

Non-owner occupied commercial real estate

 

2,495,068

 

 

 

2,553,711

 

 

 

2,656,358

 

 

 

2,530,736

 

 

 

2,421,341

 

Real estate construction

 

1,041,583

 

 

 

1,011,716

 

 

 

1,029,554

 

 

 

1,013,134

 

 

 

1,102,186

 

Commercial real estate lending

 

3,536,651

 

 

 

3,565,427

 

 

 

3,685,912

 

 

 

3,543,870

 

 

 

3,523,527

 

Total commercial lending

 

9,628,907

 

 

 

9,858,426

 

 

 

9,711,130

 

 

 

9,537,387

 

 

 

9,342,668

 

Agricultural and agricultural real estate

 

809,876

 

 

 

919,184

 

 

 

842,116

 

 

 

839,817

 

 

 

810,183

 

Residential mortgage

 

756,021

 

 

 

797,829

 

 

 

813,803

 

 

 

828,437

 

 

 

841,084

 

Consumer

 

449,837

 

 

 

493,206

 

 

 

505,387

 

 

 

512,333

 

 

 

501,418

 

Total loans held to maturity

$

11,644,641

 

 

$

12,068,645

 

 

$

11,872,436

 

 

$

11,717,974

 

 

$

11,495,353

 

 

 

 

 

 

 

 

 

 

 

Total unfunded loan commitments

$

4,537,718

 

 

$

4,625,768

 

 

$

4,813,798

 

 

$

4,905,147

 

 

$

4,867,925

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Demand-customer

$

4,264,390

 

 

$

4,500,304

 

 

$

4,792,813

 

 

$

4,897,858

 

 

$

5,119,554

 

Savings-customer

 

8,269,956

 

 

 

8,411,240

 

 

 

8,190,430

 

 

 

8,149,596

 

 

 

8,501,337

 

Savings-wholesale and institutional

 

399,265

 

 

 

394,357

 

 

 

564,481

 

 

 

623,000

 

 

 

755,272

 

Total savings

 

8,669,221

 

 

 

8,805,597

 

 

 

8,754,911

 

 

 

8,772,596

 

 

 

9,256,609

 

Time-customer

 

1,734,971

 

 

 

1,944,884

 

 

 

1,814,335

 

 

 

1,597,849

 

 

 

1,071,476

 

Time-wholesale

 

633,584

 

 

 

950,929

 

 

 

1,738,934

 

 

 

2,395,240

 

 

 

2,233,707

 

Total time

 

2,368,555

 

 

 

2,895,813

 

 

 

3,553,269

 

 

 

3,993,089

 

 

 

3,305,183

 

Total deposits

$

15,302,166

 

 

$

16,201,714

 

 

$

17,100,993

 

 

$

17,663,543

 

 

$

17,681,346

 

 

 

 

 

 

 

 

 

 

 

Total customer deposits

$

14,269,317

 

 

$

14,856,428

 

 

$

14,797,578

 

 

$

14,645,303

 

 

$

14,692,367

 

Total wholesale and institutional deposits

 

1,032,849

 

 

 

1,345,286

 

 

 

2,303,415

 

 

 

3,018,240

 

 

 

2,988,979

 

Total deposits

$

15,302,166

 

 

$

16,201,714

 

 

$

17,100,993

 

 

$

17,663,543

 

 

$

17,681,346

 

 

 

 

 

 

 

 

 

 

 

(1) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

(2) March 31, 2024 calculation is preliminary.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

As of and for the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Allowance for Credit Losses-Loans

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

122,566

 

 

$

110,208

 

 

$

111,198

 

 

$

112,707

 

 

$

109,483

 

Provision for credit losses

 

3,668

 

 

 

12,750

 

 

 

2,672

 

 

 

7,829

 

 

 

2,184

 

Charge-offs

 

(4,093

)

 

 

(3,886

)

 

 

(3,964

)

 

 

(9,613

)

 

 

(2,151

)

Recoveries

 

1,793

 

 

 

3,494

 

 

 

302

 

 

 

275

 

 

 

3,191

 

Balance, end of period

$

123,934

 

 

$

122,566

 

 

$

110,208

 

 

$

111,198

 

 

$

112,707

 

 

 

 

 

 

 

 

 

 

 

Allowance for Unfunded Commitments

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

16,468

 

 

$

17,480

 

 

$

18,636

 

 

$

21,086

 

 

$

20,196

 

Provision for credit losses

 

(2,682

)

 

 

(1,012

)

 

 

(1,156

)

 

 

(2,450

)

 

 

890

 

Balance, end of period

$

13,786

 

 

$

16,468

 

 

$

17,480

 

 

$

18,636

 

 

$

21,086

 

 

 

 

 

 

 

 

 

 

 

Allowance for lending related credit losses

$

137,720

 

 

$

139,034

 

 

$

127,688

 

 

$

129,834

 

 

$

133,793

 

 

 

 

 

 

 

 

 

 

 

Provision for Credit Losses

 

 

 

 

 

 

 

 

 

Provision for credit losses-loans

$

3,668

 

 

$

12,750

 

 

$

2,672

 

 

$

7,829

 

 

$

2,184

 

Provision (benefit) for credit losses-unfunded commitments

 

(2,682

)

 

 

(1,012

)

 

 

(1,156

)

 

 

(2,450

)

 

 

890

 

Total provision (benefit) for credit losses

$

986

 

 

$

11,738

 

 

$

1,516

 

 

$

5,379

 

 

$

3,074

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

Nonaccrual loans

$

94,800

 

 

$

95,426

 

 

$

51,304

 

 

$

61,956

 

 

$

58,066

 

Loans past due ninety days or more

 

611

 

 

 

2,507

 

 

 

511

 

 

 

1,459

 

 

 

174

 

Other real estate owned

 

2,590

 

 

 

12,548

 

 

 

14,362

 

 

 

2,677

 

 

 

7,438

 

Other repossessed assets

 

 

 

 

 

 

 

1

 

 

 

5

 

 

 

24

 

Total nonperforming assets

$

98,001

 

 

$

110,481

 

 

$

66,178

 

 

$

66,097

 

 

$

65,702

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets Activity

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

110,481

 

 

$

66,178

 

 

$

66,097

 

 

$

65,702

 

 

$

66,931

 

Net loan (charge-offs) recoveries

 

(2,300

)

 

 

(392

)

 

 

(3,662

)

 

 

(9,338

)

 

 

1,040

 

New nonperforming loans

 

5,470

 

 

 

61,193

 

 

 

19,295

 

 

 

19,805

 

 

 

4,626

 

Reduction of nonperforming loans(1)

 

(5,692

)

 

 

(14,278

)

 

 

(14,691

)

 

 

(5,253

)

 

 

(5,711

)

OREO/Repossessed assets sales proceeds

 

(9,958

)

 

 

(2,220

)

 

 

(861

)

 

 

(4,819

)

 

 

(1,184

)

Balance, end of period

$

98,001

 

 

$

110,481

 

 

$

66,178

 

 

$

66,097

 

 

$

65,702

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

Ratio of nonperforming loans to total loans

 

0.82

%

 

 

0.81

%

 

 

0.44

%

 

 

0.54

%

 

 

0.51

%

Ratio of nonperforming assets to total assets

 

0.51

 

 

 

0.57

 

 

 

0.33

 

 

 

0.33

 

 

 

0.33

 

Annualized ratio of net loan charge-offs (recoveries) to average loans

 

0.08

 

 

 

0.01

 

 

 

0.12

 

 

 

0.32

 

 

 

(0.04

)

Allowance for loan credit losses as a percent of loans

 

1.06

 

 

 

1.02

 

 

 

0.93

 

 

 

0.95

 

 

 

0.98

 

Allowance for lending related credit losses as a percent of loans

 

1.18

 

 

 

1.15

 

 

 

1.08

 

 

 

1.11

 

 

 

1.16

 

Allowance for loan credit losses as a percent of nonperforming loans

 

129.89

 

 

 

125.15

 

 

 

212.70

 

 

 

175.35

 

 

 

193.52

 

Loans delinquent 30-89 days as a percent of total loans

 

0.31

 

 

 

0.09

 

 

 

0.12

 

 

 

0.12

 

 

 

0.10

 

 

 

 

 

 

 

 

 

 

 

(1) Includes principal reductions, transfers to performing status and transfers to OREO.

HEARTLAND FINANCIAL USA, INC.

 

 

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS

 

For the Quarter Ended

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

 

Average
Balance

 

Interest

 

Rate

 

Average
Balance

 

Interest

 

Rate

 

Average
Balance

 

Interest

 

Rate

Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

$

4,665,196

 

 

$

47,014

 

4.05

%

 

$

5,119,970

 

 

$

54,573

 

4.23

%

 

$

6,096,888

 

 

$

55,976

 

3.72

%

Nontaxable(1)

 

778,632

 

 

 

7,383

 

3.81

 

 

 

759,464

 

 

 

7,681

 

4.01

 

 

 

922,676

 

 

 

7,630

 

3.35

 

Total securities

 

5,443,828

 

 

 

54,397

 

4.02

 

 

 

5,879,434

 

 

 

62,254

 

4.20

 

 

 

7,019,564

 

 

 

63,606

 

3.67

 

Interest on deposits with other banks and short-term investments

 

253,189

 

 

 

3,006

 

4.78

 

 

 

146,027

 

 

 

2,174

 

5.91

 

 

 

105,400

 

 

 

1,131

 

4.35

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial(1)

 

3,642,588

 

 

 

66,985

 

7.40

 

 

 

3,624,034

 

 

 

66,980

 

7.33

 

 

 

3,459,317

 

 

 

49,907

 

5.85

 

PPP loans

 

2,587

 

 

 

8

 

1.24

 

 

 

3,064

 

 

 

8

 

1.04

 

 

 

9,970

 

 

 

26

 

1.06

 

Owner occupied commercial real estate

 

2,609,773

 

 

 

35,517

 

5.47

 

 

 

2,436,234

 

 

 

31,714

 

5.16

 

 

 

2,289,002

 

 

 

26,769

 

4.74

 

Non-owner occupied commercial real estate

 

2,550,419

 

 

 

39,849

 

6.28

 

 

 

2,688,805

 

 

 

42,417

 

6.26

 

 

 

2,331,318

 

 

 

30,749

 

5.35

 

Real estate construction

 

1,061,843

 

 

 

20,849

 

7.90

 

 

 

1,035,010

 

 

 

20,200

 

7.74

 

 

 

1,099,026

 

 

 

18,131

 

6.69

 

Agricultural and agricultural real estate

 

878,621

 

 

 

13,756

 

6.30

 

 

 

844,353

 

 

 

13,069

 

6.14

 

 

 

835,648

 

 

 

11,353

 

5.51

 

Residential real estate

 

791,248

 

 

 

10,135

 

5.15

 

 

 

810,069

 

 

 

9,531

 

4.67

 

 

 

852,561

 

 

 

9,273

 

4.41

 

Consumer

 

484,851

 

 

 

9,201

 

7.63

 

 

 

496,703

 

 

 

9,597

 

7.67

 

 

 

501,236

 

 

 

8,242

 

6.67

 

Less: allowance for credit losses

 

(121,879

)

 

 

 

 

 

 

(109,776

)

 

 

 

 

 

 

(110,393

)

 

 

 

 

Net loans

 

11,900,051

 

 

 

196,300

 

6.63

 

 

 

11,828,496

 

 

 

193,516

 

6.49

 

 

 

11,267,685

 

 

 

154,450

 

5.56

 

Total earning assets

 

17,597,068

 

 

 

253,703

 

5.80

%

 

 

17,853,957

 

 

 

257,944

 

5.73

%

 

 

18,392,649

 

 

 

219,187

 

4.83

%

Nonearning Assets

 

1,699,570

 

 

 

 

 

 

 

1,813,868

 

 

 

 

 

 

 

1,725,356

 

 

 

 

 

Total Assets

$

19,296,638

 

 

 

 

 

 

$

19,667,825

 

 

 

 

 

 

$

20,118,005

 

 

 

 

 

Interest-bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

$

8,809,530

 

 

$

54,667

 

2.50

%

 

$

8,782,197

 

 

$

53,807

 

2.43

%

 

$

9,730,494

 

 

$

37,893

 

1.58

%

Time deposits

 

2,782,195

 

 

 

29,467

 

4.26

 

 

 

3,165,788

 

 

 

34,264

 

4.29

 

 

 

2,257,047

 

 

 

19,005

 

3.41

 

Borrowings

 

643,525

 

 

 

7,524

 

4.70

 

 

 

401,463

 

 

 

5,874

 

5.80

 

 

 

222,772

 

 

 

2,422

 

4.41

 

Term debt

 

372,495

 

 

 

5,849

 

6.32

 

 

 

372,232

 

 

 

5,804

 

6.19

 

 

 

371,921

 

 

 

5,446

 

5.94

 

Total interest-bearing liabilities

 

12,607,745

 

 

 

97,507

 

3.11

%

 

 

12,721,680

 

 

 

99,749

 

3.11

%

 

 

12,582,234

 

 

 

64,766

 

2.09

%

Noninterest-bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

4,450,677

 

 

 

 

 

 

 

4,761,409

 

 

 

 

 

 

 

5,518,326

 

 

 

 

 

Accrued interest and other liabilities

 

294,552

 

 

 

 

 

 

 

344,945

 

 

 

 

 

 

 

250,880

 

 

 

 

 

Total noninterest-bearing liabilities

 

4,745,229

 

 

 

 

 

 

 

5,106,354

 

 

 

 

 

 

 

5,769,206

 

 

 

 

 

Stockholders’ Equity

 

1,943,664

 

 

 

 

 

 

 

1,839,791

 

 

 

 

 

 

 

1,766,565

 

 

 

 

 

Total Liabilities and Equity

$

19,296,638

 

 

 

 

 

 

$

19,667,825

 

 

 

 

 

 

$

20,118,005

 

 

 

 

 

Net interest income, fully tax-equivalent (non-GAAP)(1)(3)

 

 

$

156,196

 

 

 

 

 

$

158,195

 

 

 

 

 

$

154,421

 

 

Net interest spread(1)

 

 

 

 

2.69

%

 

 

 

 

 

2.62

%

 

 

 

 

 

2.74

%

Net interest income, fully tax-equivalent (non-GAAP)(1)(3)to total earning assets

 

 

 

 

3.57

%

 

 

 

 

 

3.52

%

 

 

 

 

 

3.40

%

Interest-bearing liabilities to earning assets

 

71.65

%

 

 

 

 

 

 

71.25

%

 

 

 

 

 

 

68.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

 

 

(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.

(3) Refer to “Non-GAAP Measures” in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA

 

For the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)

 

 

 

 

 

 

 

 

 

Earnings available to common stockholders (GAAP)

$

49,694

 

 

$

(72,375

)

 

$

46,078

 

 

$

47,404

 

 

$

50,763

 

Plus core deposit intangibles amortization, net of tax(2)

 

1,131

 

 

 

1,229

 

 

 

1,240

 

 

 

1,309

 

 

 

1,364

 

Earnings available to common stockholders excluding intangible amortization (non-GAAP)

$

50,825

 

 

$

(71,146

)

 

$

47,318

 

 

$

48,713

 

 

$

52,127

 

 

 

 

 

 

 

 

 

 

 

Average common equity (GAAP)

$

1,832,959

 

 

$

1,729,086

 

 

$

1,746,818

 

 

$

1,727,013

 

 

$

1,655,860

 

Less average goodwill

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

Less average core deposit intangibles, net

 

17,641

 

 

 

19,193

 

 

 

20,821

 

 

 

22,481

 

 

 

24,238

 

Average tangible common equity (non-GAAP)

$

1,239,313

 

 

$

1,133,888

 

 

$

1,149,992

 

 

$

1,128,527

 

 

$

1,055,617

 

Annualized return on average common equity (GAAP)

 

10.90

%

 

(16.61

)%

 

 

10.47

%

 

 

11.01

%

 

 

12.43

%

Annualized return on average tangible common equity (non-GAAP)

 

16.49

%

 

(24.89

)%

 

 

16.32

%

 

 

17.31

%

 

 

20.03

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)

 

 

 

 

 

 

 

 

 

Net Interest Income (GAAP)

$

154,215

 

 

$

156,137

 

 

$

145,756

 

 

$

147,132

 

 

$

152,212

 

Plus tax-equivalent adjustment(1)

 

1,981

 

 

 

2,058

 

 

 

2,152

 

 

 

2,136

 

 

 

2,209

 

Net interest income, fully tax-equivalent (non-GAAP)

$

156,196

 

 

$

158,195

 

 

$

147,908

 

 

$

149,268

 

 

$

154,421

 

 

 

 

 

 

 

 

 

 

 

Average earning assets

$

17,597,068

 

 

$

17,853,957

 

 

$

18,439,010

 

 

$

18,523,552

 

 

$

18,392,649

 

 

 

 

 

 

 

 

 

 

 

Annualized net interest margin (GAAP)

 

3.52

%

 

 

3.47

%

 

 

3.14

%

 

 

3.19

%

 

 

3.36

%

Annualized net interest margin, fully tax-equivalent (non-GAAP)

 

3.57

 

 

 

3.52

 

 

 

3.18

 

 

 

3.23

 

 

 

3.40

 

Net purchase accounting discount amortization on loans included in annualized net interest margin

 

0.02

 

 

 

0.02

 

 

 

0.01

 

 

 

0.03

 

 

 

0.02

 

Reconciliation of Tangible Book Value Per Common Share (non-GAAP)

 

 

 

 

 

 

 

 

 

Common equity (GAAP)

$

1,868,128

 

 

$

1,822,412

 

 

$

1,714,825

 

 

$

1,748,285

 

 

$

1,718,700

 

Less goodwill

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

Less core deposit intangibles, net

 

16,923

 

 

 

18,415

 

 

 

20,026

 

 

 

21,651

 

 

 

23,366

 

Tangible common equity (non-GAAP)

$

1,275,200

 

 

$

1,227,992

 

 

$

1,118,794

 

 

$

1,150,629

 

 

$

1,119,329

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding, net of treasury stock

 

42,783,670

 

 

 

42,688,008

 

 

 

42,656,303

 

 

 

42,644,544

 

 

 

42,558,726

 

Common equity (book value) per share (GAAP)

$

43.66

 

 

$

42.69

 

 

$

40.20

 

 

$

41.00

 

 

$

40.38

 

Tangible book value per common share (non-GAAP)

$

29.81

 

 

$

28.77

 

 

$

26.23

 

 

$

26.98

 

 

$

26.30

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Tangible Common Equity Ratio (non-GAAP)

 

 

 

 

 

 

 

 

 

Tangible common equity (non-GAAP)

$

1,275,200

 

 

$

1,227,992

 

 

$

1,118,794

 

 

$

1,150,629

 

 

$

1,119,329

 

 

 

 

 

 

 

 

 

 

 

Total assets (GAAP)

$

19,132,827

 

 

$

19,411,707

 

 

$

20,129,793

 

 

$

20,224,716

 

 

$

20,182,544

 

Less goodwill

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

 

 

576,005

 

Less core deposit intangibles, net

 

16,923

 

 

 

18,415

 

 

 

20,026

 

 

 

21,651

 

 

 

23,366

 

Total tangible assets (non-GAAP)

$

18,539,899

 

 

$

18,817,287

 

 

$

19,533,762

 

 

$

19,627,060

 

 

$

19,583,173

 

Tangible common equity ratio (non-GAAP)

 

6.88

%

 

 

6.53

%

 

 

5.73

%

 

 

5.86

%

 

 

5.72

%

 

 

 

 

 

 

 

 

 

 

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

For the Quarter Ended

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)

 

Net interest income (GAAP)

$

154,215

 

 

$

156,137

 

 

$

145,756

 

 

$

147,132

 

 

$

152,212

 

Tax-equivalent adjustment(1)

 

1,981

 

 

 

2,058

 

 

 

2,152

 

 

 

2,136

 

 

 

2,209

 

Fully tax-equivalent net interest income

 

156,196

 

 

 

158,195

 

 

 

147,908

 

 

 

149,268

 

 

 

154,421

 

Noninterest income

 

27,663

 

 

 

(111,801

)

 

 

28,383

 

 

 

32,493

 

 

 

29,999

 

Securities (gains)/losses, net

 

(58

)

 

 

140,007

 

 

 

114

 

 

 

314

 

 

 

1,104

 

Unrealized (gain) loss on equity securities, net

 

(95

)

 

 

(75

)

 

 

(13

)

 

 

41

 

 

 

(193

)

Valuation adjustment on servicing rights

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenue (non-GAAP)

$

183,706

 

 

$

186,326

 

 

$

176,392

 

 

$

182,116

 

 

$

185,331

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expenses (GAAP)

$

113,595

 

 

$

130,285

 

 

$

111,053

 

 

$

109,446

 

 

$

111,043

 

Less:

 

 

 

 

 

 

 

 

 

Core deposit intangibles amortization

 

1,492

 

 

 

1,611

 

 

 

1,625

 

 

 

1,715

 

 

 

1,788

 

Partnership investment in tax credit projects

 

494

 

 

 

3,573

 

 

 

1,136

 

 

 

154

 

 

 

538

 

(Gain) loss on sales/valuation of assets, net

 

214

 

 

 

2,072

 

 

 

108

 

 

 

(3,372

)

 

 

1,115

 

Acquisition, integration and restructuring costs

 

1,375

 

 

 

4,365

 

 

 

2,429

 

 

 

1,892

 

 

 

1,673

 

FDIC special assessment

 

2,049

 

 

 

8,145

 

 

 

 

 

 

 

 

 

 

Core expenses (non-GAAP)

$

107,971

 

 

$

110,519

 

 

$

105,755

 

 

$

109,057

 

 

$

105,929

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (GAAP)

 

62.46

%

 

 

293.86

%

 

 

63.77

%

 

 

60.93

%

 

 

60.94

%

Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)

 

58.77

%

 

 

59.31

%

 

 

59.95

%

 

 

59.88

%

 

 

57.16

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)

 

 

 

 

 

 

 

 

 

Total noninterest expenses (GAAP)

$

113,595

 

 

$

130,285

 

 

$

111,053

 

 

$

109,446

 

 

$

111,043

 

Core expenses (non-GAAP)

 

107,971

 

 

 

110,519

 

 

 

105,755

 

 

 

109,057

 

 

 

105,929

 

 

 

 

 

 

 

 

 

 

 

Average assets

$

19,296,638

 

 

$

19,667,825

 

 

$

20,207,920

 

 

$

20,221,511

 

 

$

20,118,005

 

Total noninterest expenses to average assets (GAAP)

 

2.37

%

 

 

2.63

%

 

 

2.18

%

 

 

2.17

%

 

 

2.24

%

Core expenses to average assets (non-GAAP)

 

2.25

%

 

 

2.23

%

 

 

2.08

%

 

 

2.16

%

 

 

2.14

%

 

 

 

 

 

 

 

 

 

 

Acquisition, integration and restructuring costs

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

$

168

 

 

$

1,425

 

 

$

94

 

 

$

93

 

 

$

74

 

Occupancy

 

 

 

 

1,092

 

 

 

 

 

 

 

 

 

 

Furniture and equipment

 

 

 

 

19

 

 

 

 

 

 

 

 

 

 

Professional fees

 

931

 

 

 

793

 

 

 

1,617

 

 

 

1,068

 

 

 

934

 

Advertising

 

 

 

 

28

 

 

 

178

 

 

 

222

 

 

 

122

 

Other noninterest expenses

 

276

 

 

 

1,008

 

 

 

540

 

 

 

509

 

 

 

543

 

Total acquisition, integration and restructuring costs

$

1,375

 

 

$

4,365

 

 

$

2,429

 

 

$

1,892

 

 

$

1,673

 

 

 

 

 

 

 

 

 

 

 

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

 

 

HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

 

For the Quarter Ended

 

3/31/2024

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

Reconciliation of Adjusted Earnings

 

 

 

 

 

 

 

 

 

Net income/(loss)

$

51,707

 

 

$

(70,363

)

 

$

48,091

 

 

$

49,416

 

 

$

52,776

 

(Gain) loss from sale of securities

 

(58

)

 

 

140,007

 

 

 

114

 

 

 

314

 

 

 

1,104

 

(Gain) loss on sales/valuation of assets, net

 

214

 

 

 

2,072

 

 

 

108

 

 

 

(3,372

)

 

 

1,115

 

Acquisition, integration and restructuring costs

 

1,375

 

 

 

4,365

 

 

 

2,429

 

 

 

1,892

 

 

 

1,673

 

FDIC special assessment

 

2,049

 

 

 

8,145

 

 

 

 

 

 

 

 

 

 

Total adjustments

 

3,580

 

 

 

154,589

 

 

 

2,651

 

 

 

(1,166

)

 

 

3,892

 

Tax effect of adjustments(2)

 

(866

)

 

 

(36,638

)

 

 

(628

)

 

 

276

 

 

 

(922

)

Adjusted earnings

$

54,421

 

 

$

47,588

 

 

$

50,114

 

 

$

48,526

 

 

$

55,746

 

 

 

 

 

 

 

 

 

 

 

Preferred dividends

 

(2,013

)

 

 

(2,012

)

 

 

(2,013

)

 

 

(2,012

)

 

 

(2,013

)

Adjusted earnings available to common stockholders

$

52,408

 

 

$

45,576

 

 

$

48,101

 

 

$

46,514

 

 

$

53,733

 

 

 

 

 

 

 

 

 

 

 

Plus core deposit intangibles amortization, net of tax(2)

 

1,131

 

 

 

1,229

 

 

 

1,240

 

 

 

1,309

 

 

 

1,364

 

Earnings available to common stockholders excluding intangible amortization (non-GAAP)

$

53,539

 

 

$

46,805

 

 

$

49,341

 

 

$

47,823

 

 

$

55,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Annualized Return on Average Assets

 

Average assets

$

19,296,638

 

 

$

19,667,825

 

 

$

20,207,920

 

 

$

20,221,511

 

 

$

20,118,005

 

Adjusted annualized return on average assets (non-GAAP)

 

1.13

%

 

 

0.96

%

 

 

0.98

%

 

 

0.96

%

 

 

1.12

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Annualized Return on Average Common Equity

 

 

 

 

 

 

 

 

 

Average common stockholders’ equity (GAAP)

$

1,832,959

 

 

$

1,729,086

 

 

$

1,746,818

 

 

$

1,727,013

 

 

$

1,655,860

 

Adjusted annualized average common equity (non-GAAP)

 

11.50

%

 

 

10.46

%

 

 

10.92

%

 

 

10.80

%

 

 

13.16

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

Average tangible common equity (non-GAAP)

$

1,239,313

 

 

$

1,133,888

 

 

$

1,149,992

 

 

$

1,128,527

 

 

$

1,055,617

 

Adjusted annualized average tangible common equity (non-GAAP)

 

17.38

%

 

 

16.38

%

 

 

17.02

%

 

 

17.00

%

 

 

21.17

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of Adjusted Diluted Earnings Per Common Share

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding-diluted

 

42,915,768

 

 

 

42,838,405

 

 

 

42,812,563

 

 

 

42,757,603

 

 

 

42,742,878

 

Adjusted diluted earnings per common share

$

1.22

 

 

$

1.06

 

 

$

1.12

 

 

$

1.09

 

 

$

1.26

 

 

 

 

 

 

 

 

 

 

 

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.



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