Heartland Financial USA Inc.

10/29/2024 | Press release | Distributed by Public on 10/29/2024 14:13

HEARTLAND FINANCIAL USA, INC. ('HTLF') REPORTS QUARTERLY RESULTS AS OF SEPTEMBER 30, 2024 Form 8 K

HEARTLAND FINANCIAL USA, INC. ("HTLF") REPORTS QUARTERLY RESULTS AS OF SEPTEMBER 30, 2024

Third Quarter Highlights
§ Quarterly net income available to common stockholders of $62.1 million or $1.44 per common share.
§ Adjusted earnings available to common stockholders of $50.6 million or $1.17 adjusted diluted earnings per common share (non-GAAP), which excludes:
•Gain on sale, net, of $29.7 million due to the sale of Rocky Mountain Bank branches in Montana.
•Loss on security sales of $9.5 million.
•Loss on fixed assets of $2.9 million due to branch closures and write-downs on properties listed for sale.
§ Common equity to total assets increased to 11.11%; while the tangible common equity ratio (non-GAAP) improved 86 basis points to 8.14%.
§ Net interest margin, full tax-equivalent (non-GAAP) increased to 3.78% for the quarter ended September 30, 2024 up from 3.73% for the quarter ended June 30, 2024.
§
Nonperforming loans were $69.9 million or 0.61% of total loans, a decrease of $33.8 million or 33% from the quarter ended June 30, 2024.
•Charge-offs of $32.1 million, of which the majority have been reserved for in prior periods, were recorded for the third quarter.
For the Quarter Ended For the Nine Months Ended
September 30,
9/30/2024 6/30/2024 9/30/2023 2024 2023
Earnings Summary:
Net income/(loss) available to common stockholders (in millions) $ 62.1 $ 37.7 $ 46.1 $ 149.6 $ 144.2
Diluted earnings/(loss) per common share 1.44 0.88 1.08 3.47 3.37
Annualized return on average assets 1.38 % 0.84 % 0.94 % 1.10 % 1.00 %
Annualized return on average common equity 12.60 8.14 10.47 10.59 11.28
Annualized return on average tangible common equity (non-GAAP)(1)
18.32 12.28 16.32 15.77 17.82
Net interest margin 3.73 3.68 3.14 3.65 3.23
Net interest margin, fully tax-equivalent (non-GAAP)(1)
3.78 3.73 3.18 3.69 3.27
Efficiency ratio 48.58 65.69 63.77 58.94 61.86
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)(1)
57.98 57.73 59.95 58.16 58.98
Adjusted Earnings Summary (1):
Adjusted earnings available to common stockholders (in millions) $ 50.6 $ 49.6 $ 48.1 $ 152.7 $ 148.3
Adjusted diluted earnings per common share 1.17 1.15 1.12 3.54 3.47
Adjusted annualized return on average assets 1.14 % 1.09 % 0.98 % 1.12 % 1.02 %
Adjusted annualized return on average common equity 10.27 10.71 10.92 10.81 11.60
Adjusted annualized return on average tangible common equity
14.98 16.05 17.02 16.09 18.31
(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 a solid third quarter. Net interest margin increased as we continue to pay down high cost wholesale deposits. Our tangible common equity ratio improved to 8.14%. In July we completed the strategic sale of Rocky Mountain Bank in Montana, resulting in a net gain of $29.7 million. We continue to work closely with our partners at UMB on integration planning for our two companies and we're excited about closing the transaction, expected in Q1 2025."
Bruce K. Lee, President and Chief Executive Officer, HTLF


Denver, Tuesday, October 29, 2024-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023:
•Net income available to common stockholders of $62.1 million compared to $46.1 million, an increase of $16.1 million or 35%.
•Earnings per diluted common share of $1.44 compared to $1.08, an increase of $0.36 or 33%.
•Adjusted earnings available to common stockholders(1) of $50.6 million or $1.17 per diluted common share compared to $48.1 million or $1.12 per diluted common share, which excludes:
◦Gain on sale, net, of $29.7 million due to the sale of Rocky Mountain Bank branches in Montana.
◦Loss on security sales of $9.5 million.
◦Loss on fixed assets of $2.9 million due to branch closures and write-downs on properties listed for sale.
•Net interest income of $157.9 million compared to $145.8 million, an increase of $12.1 million or 8%.
•Annualized return on average assets of 1.38% compared to 0.94%. Adjusted annualized return on average assets(1) of 1.14% compared to 0.98%.
•Annualized return on average common equity of 12.60% compared to 10.47%. Adjusted annualized return on average common equity(1) of 10.27% compared to 10.92%.
•Annualized return on average tangible common equity(1) of 18.32% compared to 16.32%. Adjusted annualized return on average tangible common equity(1) of 14.98% compared to 17.02%.

Rocky Mountain Bank Sale

HTLF Bank closed on the sale of the Rocky Mountain Bank branches in Montana in mid-July to two purchasers, which included loans of $343.8 million, deposits of $531.9 million and fixed assets of $13.8 million. The gain on sale, net, of $29.7 million was realized in the third quarter of 2024.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.73% (3.78% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2024 compared to 3.68% (3.73% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2024, and 3.14% (3.18% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2023.

Total interest income and average earning asset changes for the third quarter of 2024 compared to the third quarter of 2023 were:
•Total interest income was $253.8 million compared to $245.4 million, an increase of $8.4 million or 3%, primarily attributable to an increase in yields on average earning assets. During the third quarter of 2024, HTLF recorded $5.3 million in additional interest income for a security that paid off.
•Total interest income on a tax-equivalent basis (non-GAAP) was $255.8 million, an increase of $8.2 million or 3%, from $247.6 million. Subsequent to September 30, 2024, the fair value hedges were terminated in favorable market conditions in early October. HTLF recorded $10.3 million of interest income associated with the fair value hedges in the third quarter of 2024 in comparison to $5.6 million in the third quarter of 2023. As a result of the fair value hedge terminations, no additional interest income will be recorded.
•Average earning assets decreased $1.60 billion or 9% to $16.84 billion compared to $18.44 billion, primarily due to the sale of $865.4 million of securities during the fourth quarter of 2023, $108.4 million of securities sold during the second quarter of 2024, and $40.3 million of securities sold during the third quarter of 2024. The proceeds were utilized to pay down high-cost wholesale deposits and borrowings.
•The average rate on earning assets increased 71 basis points to 6.04% from 5.33%, primarily due to recent interest rate increases on earning assets.

Total interest expense and average interest-bearing liability changes for the third quarter of 2024 compared to the third quarter of 2023 were:
•Total interest expense was $95.9 million, a decrease of $3.8 million from $99.7 million, primarily due to a decrease in average interest-bearing liabilities.
•The average interest rate paid on interest-bearing liabilities increased 17 basis points to 3.18% from 3.01%.
•Average interest-bearing deposits decreased $1.65 billion or 13% to $11.03 billion from $12.68 billion.


•The average interest rate paid on interest-bearing deposits decreased 4 basis points to 2.86% from 2.90%.
•Average borrowings and term debt increased $478.2 million to $953.9 million from $475.7 million, and the average interest rate paid on borrowings decreased 40 basis points to 5.39% from 5.78%.

Net interest income changes for the third quarter of 2024 compared to the third quarter of 2023 were:
•Net interest income totaled $157.9 million compared to $145.8 million, an increase of $12.1 million or 8%.
•Net interest income on a tax-equivalent basis (non-GAAP) totaled $159.9 million compared to $147.9 million, an increase of $12.0 million or 8%.

Noninterest Income and Noninterest Expense

Total noninterest income was $19.0 million during the third quarter of 2024 compared to $28.4 million during the third quarter of 2023, a decrease of $9.4 million or 33%. Significant changes within the noninterest income category for the third quarter of 2024 compared to the third quarter of 2023 were:
•Service charges and fees decreased $1.5 million or 8% to $17.1 million from $18.6 million, primarily attributable to a decrease in consumer NSF and overdraft fees. In the fourth quarter of 2023, HTLF instituted a new fee policy across our single charter customer base in response to industry changes related to consumer overdraft fees.
•Net security losses increased $9.4 million to $9.5 million compared to net security losses of $114,000.
•Net gains on sales of loans held for sale decreased to $0 from $905,000, due to HTLF ceasing originations of residential mortgage loans to be sold to the secondary market.
•Other noninterest income increased $957,000 to $1.6 million from $619,000, primarily due to an increase in deferred compensation income of $1.0 million to $1.5 million from $433,000.
Total noninterest expense was $85.9 million during the third quarter of 2024 compared to $111.1 million during the third quarter of 2023, a decrease of $25.1 million or 23%. Significant changes within the noninterest expense category for the third quarter of 2024 compared to the third quarter of 2023 were:
•Salaries and employee benefits totaled $62.7 million compared to $62.3 million, an increase of $480,000 or 1%. The increase was attributable to higher benefit costs including incentive compensation and benefit expenses partially offset by a reduction of full-time equivalent employees. Full-time equivalent employees totaled 1,725 compared to 1,965, a decrease of 240 or 12%.
•Professional fees totaled $17.4 million compared to $13.6 million, an increase of $3.8 million or 28%, primarily due to an increase legal expenses, including those associated with special asset loans.
•Gain on sale of assets, net, totaled $26.4 million compared to a loss on sale of assets of $108,000. As discussed earlier, Rocky Mountain Bank, a division of HTLF Bank, was sold during the third quarter of 2024 which generated a gain on sale, net, of $29.7 million.

The effective tax rate was 24.25% for the third quarter of 2024 compared to 21.89% for third quarter of 2023. The following items impacted the third quarter 2024 and 2023 tax calculations:
•Various tax credits of $629,000 compared to $1.6 million.
•Tax-exempt interest income as a percentage of pre-tax income of 8.92% compared to 13.14%.
•Tax benefit of $140,000 compared to a tax expense of $41,000 resulting from the vesting of restricted stock units.
•Tax expense of $1.1 million compared to $1.6 million resulting from the disallowed interest expense related to tax-exempt loans and securities.

Total Assets, Total Loans and Total Deposits

Total assets were $18.27 billion at September 30, 2024, compared to $18.81 billion at June 30, 2024, and $19.41 billion at December 31, 2023. Total assets decreased $540.1 million or 3% during the third quarter of 2024 and $1.14 billion or 6% since year-end 2023. Securities represented 27% and 29% of total assets at September 30, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.44 billion at September 30, 2024, compared to $11.61 billion at June 30, 2024, and $12.07 billion at December 31, 2023. Loans decreased $167.4 million or 1% during the third quarter of 2024 and $627.7 million or 5% since year-end 2023. Excluding the impact of Rocky Mountain Bank, loans held to maturity decreased $172.4 million or 1% during the third quarter of 2024 and decreased $284.0 million or 2% since year-end 2023.



Significant changes by loan category at September 30, 2024 compared to June 30, 2024 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $262.7 million or 4% to $5.99 billion compared to $6.26 billion. Excluding the impact of Rocky Mountain Bank, commercial and business lending decreased $119.4 million or 2%.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $3.3 million, or less than 1%, to $3.58 billion compared to $3.58 billion. Excluding the impact of Rocky Mountain Bank, commercial real estate lending increased $67.0 million or 2%.
•Agricultural and agricultural real estate loans decreased $167.2 million or 19% to $701.2 million compared to $868.4 million. Excluding the impact of Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $99.9 million or 12%.
•Residential mortgage loans decreased $56.7 million or 7% to $708.0 million compared to $764.7 million. Excluding the impact of Rocky Mountain Bank, residential mortgage loans decreased $25.7 million or 3%.

Significant changes by loan category at September 30, 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 $298.6 million or 5% to $5.99 billion compared to $6.29 billion. Excluding the Rocky Mountain Bank loans sold of $143.3 million, commercial and business lending decreased $155.3 million or 2%.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $9.9 million or less than 1% to $3.58 billion compared to $3.57 billion. Excluding the Rocky Mountain Bank loans sold of $70.3 million, commercial real estate lending increased $80.2 million or 2%.
•Agricultural and agricultural real estate loans decreased $218.0 million or 24% to $701.2 million compared to $919.2 million. Excluding the Rocky Mountain Bank loans sold of $67.3 million, agricultural and agricultural real estate loans decreased $150.7 million or 16%.
•Residential mortgage loans decreased $89.8 million or 11% to $708.0 million compared to $797.8 million. Excluding the Rocky Mountain Bank loans sold of $31.0 million, residential mortgage loans decreased $58.9 million or 7%.

Total deposits were $14.95 billion as of September 30, 2024, compared to $14.96 billion as of June 30, 2024, a decrease of $3.4 million or less than 1%. Total deposits were $14.95 billion as of September 30, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $1.25 billion or 8%. Excluding the impact of Rocky Mountain Bank, deposits decreased $9.8 million or less than 1% during the third quarter of 2024 and decreased $716.6 million or 4% since year-end 2023.

Total customer deposits were $14.35 billion as of September 30, 2024, compared to $14.13 billion at June 30, 2024, an increase of $217.6 million or 2%. Excluding the impact of Rocky Mountain Bank, customer deposits increased $211.2 million or 1%. Significant customer deposit changes by category at September 30, 2024, compared to June 30, 2024, included:
•Customer demand deposits decreased $367.6 million or 8% to $4.01 billion compared to $4.38 billion. Excluding the impact of Rocky Mountain Bank, customer demand deposits decreased $235.9 million or 6%.
•Customer savings deposits increased $270.0 million or 3% to $8.71 billion compared to $8.44 billion. Excluding the impact of Rocky Mountain Bank, customer savings deposits increased $554.4 million or 7%.
•Customer time deposits decreased $223.1 million or 12% to $1.63 billion compared to $1.85 billion. Excluding the impact of Rocky Mountain Bank, customer time deposits decreased $107.3 million or 6%.

Total customer deposits were $14.35 billion as of September 30, 2024, compared to $14.86 billion at December 31, 2023, a decrease of $505.1 million or 3%. Excluding the Rocky Mountain Bank customer deposits sold of $531.9 million, customer deposits increased $26.7 million. Significant customer deposit changes by category at September 30, 2024, compared to December 31, 2023, included:
•Customer demand deposits decreased $491.1 million or 11% to $4.01 billion compared to $4.50 billion. Excluding the Rocky Mountain Bank customer demand deposits sold of $131.7 million, customer demand deposits decreased $359.3 million or 8%.
•Customer savings deposits increased $302.0 million or 4% to $8.71 billion compared to $8.41 billion. Excluding the Rocky Mountain Bank customer savings deposits sold of $284.3 million, customer savings deposits increased $586.3 million or 7%.


•Customer time deposits decreased $316.0 million or 16% to $1.63 billion compared to $1.94 billion. Excluding the Rocky Mountain Bank customer time deposits sold of $115.8 million, customer time deposits decreased $200.2 million or 10%.

Total wholesale and institutional deposits were $601.9 million as of September 30, 2024, a decrease of $221.0 million or 27% from $822.9 million at June 30, 2024. Significant wholesale and institutional deposit changes by category at September 30, 2024 compared to June 30, 2024 included:
•Wholesale and institutional savings deposits decreased $105.7 million or 33% to $213.0 million compared to $318.6 million.
•Wholesale time deposits decreased $115.3 million or 23% to $389.0 million compared to $504.3 million.

Total wholesale and institutional deposits were $601.9 million as of September 30, 2024, which was a decrease of $743.4 million or 55% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at September 30, 2024 compared to December 31, 2023 included:
•Wholesale and institutional savings deposits decreased $181.4 million or 46% to $213.0 million compared to $394.4 million.
•Wholesale time deposits decreased $562.0 million or 59% to $389.0 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 third quarter of 2024 was $8.9 million, an increase of $6.2 million from $2.7 million recorded in the third quarter of 2023.

The allowance for credit losses for loans totaled $106.8 million at September 30, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at September 30, 2024:
•Provision expense for the nine months ended September 30, 2024, totaled $22.3 million. Provision expense was primarily impacted in the third quarter of 2024 by a nonperforming food manufacturing syndication loan currently in bankruptcy proceedings. HTLF recorded a charge-off of $19.2 million for this credit during the third quarter of 2024, of which $10.0 million was reserved for in a prior period.
•Net charge-offs of $38.0 million, of which the majority have been reserved for in prior periods, were recorded for the first nine months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $6.0 million or 36% to $10.5 million at September 30, 2024, from $16.5 million at December 31, 2023. The following impacted HTLF's allowance for credit losses for unfunded commitments during 2024:
•Provision benefit for the nine months ended September 30, 2024, totaled $6.0 million.
•Reduction of $82.9 million in unfunded commitments for construction loans, which carry the highest loss rate.
•Total unfunded commitments decreased $684.5 million or 15% to $3.94 billion at September 30, 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 $6.3 million for the third quarter of 2024 compared to $1.5 million for the third quarter of 2023. The total allowance for lending related credit losses was $117.3 million or 1.02% of total loans at September 30, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets were $76.8 million or 0.42% of total assets at September 30, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming assets were reduced by charge-offs of $32.1 million and the return to performing status of a $10.4 million owner occupied commercial real estate loan relationship. The reduction was partially offset by the addition of a $10.1 million non-owner commercial real estate loan relationship. Nonperforming loans were $69.9 million or 0.61% of total loans at September 30, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At September 30, 2024, loans delinquent 30-89 days were 0.26% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was due to a single $12.8 million real estate construction loan. Other real estate owned, net, decreased $5.7 million or 46% to


$6.8 million at September 30, 2024 from $12.5 million at December 31, 2023.

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 and adjusted diluted earnings per common share, adjust net income for the gain/loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes these measures enhance 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 gain/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.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $18.27 billion as of September 30, 2024. HTLF's banks serve customers in the West, Southwest and Midwest regions. HTLF is committed to serving the banking needs of privately owned businesses, their owners, executives and employees. Our core commercial business is supported by a strong retail bankingoperation, in addition to a diversified line of financial services including treasury management, wealth management and investments. 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 and updates in HTLF's Forms 10-Q filed thereafter, and 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;
•Risks related to the planned merger with UMB Financial Corporation (the "Merger"), the fluctuation of the market value of the merger consideration, risks related to combining our businesses, including expenses related to the Merger and integration of the combined entity, risks that the Merger may not occur, and the risk of litigation related to the Merger;
•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 Quarter Ended
September 30,
For the Nine Months Ended
September 30,
2024 2023 2024 2023
Interest Income
Interest and fees on loans $ 192,506 $ 182,394 $ 587,328 $ 505,136
Interest on securities:
Taxable 51,116 54,800 145,511 168,948
Nontaxable 5,979 6,584 18,062 18,990
Interest on federal funds sold - 3 - 3
Interest on deposits with other banks and short-term investments 4,193 1,651 10,244 4,833
Total Interest Income 253,794 245,432 761,145 697,910
Interest Expense
Interest on deposits 82,976 92,744 247,609 231,617
Interest on borrowings 7,378 1,167 25,727 4,437
Interest on term debt 5,543 5,765 16,956 16,756
Total Interest Expense 95,897 99,676 290,292 252,810
Net Interest Income 157,897 145,756 470,853 445,100
Provision for credit losses 6,276 1,516 16,270 9,969
Net Interest Income After Provision for Credit Losses 151,621 144,240 454,583 435,131
Noninterest Income
Service charges and fees 17,100 18,553 51,127 55,316
Loan servicing income 111 278 349 1,403
Trust fees 5,272 4,734 15,847 15,810
Brokerage and insurance commissions 853 692 2,501 2,065
Capital markets fees 2,116 1,845 5,003 8,331
Securities gains (losses), net (9,520) (114) (19,573) (1,532)
Unrealized gain on equity securities, net 377 13 605 165
Net gains on sale of loans held for sale - 905 104 3,786
Income on bank owned life insurance 1,107 858 3,610 3,042
Other noninterest income 1,576 619 5,289 2,489
Total Noninterest Income 18,992 28,383 64,862 90,875
Noninterest Expense
Salaries and employee benefits 62,742 62,262 191,817 186,510
Occupancy 6,318 6,438 19,843 20,338
Furniture and equipment 2,062 2,720 6,554 8,698
Professional fees 17,448 13,616 48,351 41,607
FDIC insurance assessments 3,035 3,313 11,344 9,627
Advertising 1,937 1,633 4,663 6,670
Core deposit intangibles amortization 1,345 1,625 4,258 5,128
Other real estate and loan collection expenses, net 395 481 1,422 984
(Gain) loss on sales/valuations of assets, net (26,419) 108 (26,012) (2,149)
Acquisition, integration and restructuring costs 2,026 2,429 9,374 5,994
Partnership investment in tax credit projects 222 1,136 938 1,828
Other noninterest expense 14,816 15,292 43,214 46,307
Total Noninterest Expense 85,927 111,053 315,766 331,542
Income Before Income Taxes 84,686 61,570 203,679 194,464
Income taxes 20,533 13,479 48,077 44,181
Net Income/(Loss) 64,153 48,091 155,602 150,283
Preferred dividends (2,013) (2,013) (6,038) (6,038)
Net Income/(Loss) Available to Common Stockholders $ 62,140 $ 46,078 $ 149,564 $ 144,245
Earnings/(loss) per common share-diluted $ 1.44 $ 1.08 $ 3.47 $ 3.37
Weighted average shares outstanding-diluted 43,195,257 42,812,563 43,080,422 42,769,872



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Interest Income
Interest and fees on loans $ 192,506 $ 199,161 $ 195,661 $ 192,861 $ 182,394
Interest on securities:
Taxable 51,116 47,381 47,014 54,573 54,800
Nontaxable 5,979 6,042 6,041 6,278 6,584
Interest on federal funds sold - - - - 3
Interest on deposits with other banks and short-term investments 4,193 3,045 3,006 2,174 1,651
Total Interest Income 253,794 255,629 251,722 255,886 245,432
Interest Expense
Interest on deposits 82,976 80,499 84,134 88,071 92,744
Interest on borrowings 7,378 10,825 7,524 5,874 1,167
Interest on term debt 5,543 5,564 5,849 5,804 5,765
Total Interest Expense 95,897 96,888 97,507 99,749 99,676
Net Interest Income 157,897 158,741 154,215 156,137 145,756
Provision for credit losses 6,276 9,008 986 11,738 1,516
Net Interest Income After Provision for Credit Losses 151,621 149,733 153,229 144,399 144,240
Noninterest Income
Service charges and fees 17,100 16,964 17,063 18,708 18,553
Loan servicing income 111 107 131 158 278
Trust fees 5,272 5,532 5,043 4,905 4,734
Brokerage and insurance commissions 853 894 754 729 692
Capital markets fees 2,116 1,996 891 1,676 1,845
Securities gains (losses), net (9,520) (10,111) 58 (140,007) (114)
Unrealized gain on equity securities, net 377 133 95 75 13
Net gains on sale of loans held for sale - - 104 94 905
Income on bank owned life insurance 1,107 1,326 1,177 729 858
Other noninterest income 1,576 1,366 2,347 1,132 619
Total Noninterest Income 18,992 18,207 27,663 (111,801) 28,383
Noninterest Expense
Salaries and employee benefits 62,742 65,120 63,955 64,766 62,262
Occupancy 6,318 6,262 7,263 6,509 6,438
Furniture and equipment 2,062 2,155 2,337 2,901 2,720
Professional fees 17,448 15,372 15,531 17,060 13,616
FDIC insurance assessments 3,035 3,340 4,969 10,313 3,313
Advertising 1,937 1,368 1,358 1,677 1,633
Core deposit intangibles amortization 1,345 1,421 1,492 1,611 1,625
Other real estate and loan collection expenses, net 395 515 512 505 481
(Gain) loss on sales/valuations of assets, net (26,419) 193 214 2,072 108
Acquisition, integration and restructuring costs 2,026 5,973 1,375 4,365 2,429
Partnership investment in tax credit projects 222 222 494 3,573 1,136
Other noninterest expense 14,816 14,303 14,095 14,933 15,292
Total Noninterest Expense 85,927 116,244 113,595 130,285 111,053
Income Before Income Taxes 84,686 51,696 67,297 (97,687) 61,570
Income taxes 20,533 11,954 15,590 (27,324) 13,479
Net Income/(Loss) 64,153 39,742 51,707 (70,363) 48,091
Preferred dividends (2,013) (2,012) (2,013) (2,012) (2,013)
Net Income/(Loss) Available to Common Stockholders $ 62,140 $ 37,730 $ 49,694 $ (72,375) $ 46,078
Earnings/(loss) per common share-diluted $ 1.44 $ 0.88 $ 1.16 $ (1.69) $ 1.08
Weighted average shares outstanding-diluted 43,195,257 43,060,354 42,915,768 42,838,405 42,812,563



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As of
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Assets
Cash and due from banks $ 228,719 $ 226,735 $ 208,176 $ 275,554 $ 248,756
Interest-bearing deposits with other banks and short-term investments 359,675 147,211 236,190 47,459 99,239
Cash and cash equivalents 588,394 373,946 444,366 323,013 347,995
Time deposits in other financial institutions 1,050 1,340 1,240 1,240 1,490
Securities:
Carried at fair value 4,057,335 4,185,054 4,418,222 4,646,891 5,482,687
Held to maturity, at cost 839,623 842,980 841,055 838,241 835,468
Other investments, at cost 69,511 70,684 68,524 91,277 90,001
Loans held for sale - 348,761 352,744 5,071 6,262
Loans:
Held to maturity 11,440,917 11,608,309 11,644,641 12,068,645 11,872,436
Allowance for credit losses (106,797) (126,861) (123,934) (122,566) (110,208)
Loans, net 11,334,120 11,481,448 11,520,707 11,946,079 11,762,228
Premises, furniture and equipment, net 155,140 175,953 176,582 181,070 187,436
Goodwill 576,005 576,005 576,005 576,005 576,005
Core deposit intangibles, net 14,157 15,501 16,923 18,415 20,026
Cash surrender value on life insurance 199,998 199,036 197,671 197,085 196,694
Other real estate, net 6,805 7,533 2,590 12,548 14,362
Other assets 430,155 534,429 516,198 574,772 609,139
Total Assets $ 18,272,293 $ 18,812,670 $ 19,132,827 $ 19,411,707 $ 20,129,793
Liabilities and Equity
Liabilities
Deposits:
Demand $ 4,009,218 $ 4,244,169 $ 4,264,390 $ 4,500,304 $ 4,792,813
Savings 8,926,192 8,470,416 8,669,221 8,805,597 8,754,911
Time 2,017,806 2,242,005 2,368,555 2,895,813 3,553,269
Total deposits 14,953,216 14,956,590 15,302,166 16,201,714 17,100,993
Deposits held for sale - 538,308 596,328 - -
Borrowings 546,219 694,909 650,033 622,255 392,634
Term debt 373,324 372,988 372,652 372,396 372,059
Accrued expenses and other liabilities 259,161 222,025 232,815 282,225 438,577
Total Liabilities 16,131,920 16,784,820 17,153,994 17,478,590 18,304,263
Stockholders' Equity
Preferred equity 110,705 110,705 110,705 110,705 110,705
Common stock 42,884 42,852 42,784 42,688 42,656
Capital surplus 1,098,837 1,096,619 1,093,207 1,090,740 1,088,267
Retained earnings 1,252,247 1,203,092 1,178,330 1,141,501 1,226,740
Accumulated other comprehensive income/(loss) (364,300) (425,418) (446,193) (452,517) (642,838)
Total Equity 2,140,373 2,027,850 1,978,833 1,933,117 1,825,530
Total Liabilities and Equity $ 18,272,293 $ 18,812,670 $ 19,132,827 $ 19,411,707 $ 20,129,793



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Average Balances
Assets $ 18,439,910 $ 19,043,362 $ 19,296,638 $ 19,667,825 $ 20,207,920
Loans, net of unearned 11,584,999 12,010,289 12,021,930 11,938,272 11,800,064
Total deposits 15,148,944 15,562,920 16,042,402 16,709,394 17,507,813
Customer deposits 14,347,965 14,768,407 14,816,652 14,969,948 14,699,235
Earning assets 16,838,131 17,331,435 17,597,068 17,853,957 18,439,010
Interest-bearing liabilities 11,986,220 12,461,957 12,607,745 12,721,680 13,158,631
Common equity 1,962,334 1,863,236 1,832,959 1,729,086 1,746,818
Total stockholders' equity 2,073,039 1,973,941 1,943,664 1,839,791 1,857,523
Tangible common equity (non-GAAP)(1)
1,371,515 1,271,046 1,239,313 1,133,888 1,149,992
Key Performance Ratios
Annualized return on average assets 1.38 % 0.84 % 1.08 % (1.42) % 0.94 %
Adjusted annualized return on average assets (non-GAAP)(1)
1.14 1.09 1.13 0.96 0.98
Annualized return on average common equity (GAAP) 12.60 8.14 10.90 (16.61) 10.47
Adjusted annualized return on average common equity (non-GAAP)(1)
10.27 10.71 11.50 10.46 10.92
Annualized return on average tangible common equity (non-GAAP)(1)
18.32 12.28 16.49 (24.89) 16.32
Adjusted annualized return on average tangible common equity (non-GAAP)(1)
14.98 16.05 17.38 16.38 17.02
Annualized ratio of net charge-offs/(recoveries) to average loans 0.99 0.23 0.08 0.01 0.12
Annualized net interest margin (GAAP) 3.73 3.68 3.52 3.47 3.14
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.78 3.73 3.57 3.52 3.18
Annualized cost of deposits 2.18 2.08 2.11 2.09 2.10
Efficiency ratio (GAAP) 48.58 65.69 62.46 293.86 63.77
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)
57.98 57.73 58.77 59.31 59.95
Annualized ratio of total noninterest expenses to average assets (GAAP) 1.85 2.46 2.37 2.63 2.18
Annualized ratio of core expenses to average assets (non-GAAP)(1)
2.35 2.30 2.25 2.23 2.08
For the Quarter Ended
September 30,
For the Nine Months Ended
September 30,
2024 2023 2024 2023
Average Balances
Assets $ 18,439,910 $ 20,207,920 $ 18,924,862 $ 20,182,808
Loans, net of unearned 11,584,999 11,800,064 11,871,358 11,602,741
Total deposits 15,148,944 17,507,813 15,583,165 17,567,614
Customer deposits 14,347,965 14,699,235 14,642,347 14,778,030
Earning assets 16,838,131 18,439,010 17,254,023 18,451,907
Interest-bearing liabilities 11,986,220 13,158,631 12,350,640 12,985,665
Common equity 1,962,334 1,746,818 1,886,454 1,710,230
Total stockholders' equity 2,073,039 1,857,523 1,997,159 1,820,935
Tangible common equity (non-GAAP)(1) 1,371,515 1,149,992 1,294,241 1,111,724
Key Performance Ratios
Annualized return on average assets 1.38 % 0.94 % 1.10 % 1.00 %
Adjusted annualized return on average assets (non-GAAP)(1)
1.14 0.98 1.12 1.02
Annualized return on average common equity (GAAP) 12.60 10.47 10.59 11.28
Adjusted annualized return on average common equity (non-GAAP)(1)
10.27 10.92 10.81 11.60
Annualized return on average tangible common equity (non-GAAP)(1)
18.32 16.32 15.77 17.82
Adjusted annualized return on average tangible common equity (non-GAAP)(1)
14.98 17.02 16.09 18.31
Annualized ratio of net charge-offs/(recoveries) to average loans 0.99 0.12 0.43 0.14
Annualized net interest margin (GAAP) 3.73 3.14 3.65 3.23
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.78 3.18 3.69 3.27
Annualized cost of deposits 2.18 2.10 2.12 1.76
Efficiency ratio (GAAP) 48.58 63.77 58.94 61.86
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)
57.98 59.95 58.16 58.98
Annualized ratio of total noninterest expenses to average assets (GAAP) 1.85 2.18 2.23 2.20
Annualized ratio of core expenses to average assets (non-GAAP)(1)
2.35 2.08 2.30 2.12
(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
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Common Share Data
Book value per common share $ 47.33 $ 44.74 $ 43.66 $ 42.69 $ 40.20
Tangible book value per common share (non-GAAP)(1)
33.57 30.94 29.81 28.77 26.23
ASC 320 effect on book value per common share (8.78) (10.82) (11.18) (11.00) (16.27)
Common shares outstanding, net of treasury stock 42,883,865 42,852,180 42,783,670 42,688,008 42,656,303
Capital Ratios
Common equity to total assets 11.11 % 10.19 % 9.76 % 9.39 % 8.52 %
Tangible common equity ratio (non-GAAP)(1)
8.14 7.28 6.88 6.53 5.73
Tier 1 leverage ratio 10.77 10.13 9.84 9.44 9.59
Common equity tier 1 ratio(2)
12.66 11.68 11.40 10.97 11.37
Total risk based capital ratio(2)
16.34 15.32 14.99 14.53 14.90
Other Selected Trend Information
Effective tax rate 24.25 % 23.12 % 23.17 % 27.97 % 21.89 %
Full time equivalent employees 1,725 1,843 1,888 1,970 1,965
Loans Held to Maturity
Commercial and industrial $ 3,503,093 $ 3,541,239 $ 3,545,051 $ 3,652,047 $ 3,591,809
Paycheck Protection Program ("PPP") 1,582 1,864 2,172 2,777 3,750
Owner occupied commercial real estate 2,489,697 2,555,964 2,545,033 2,638,175 2,429,659
Commercial and business lending 5,994,372 6,099,067 6,092,256 6,292,999 6,025,218
Non-owner occupied commercial real estate 2,455,396 2,434,258 2,495,068 2,553,711 2,656,358
Real estate construction 1,119,922 1,082,726 1,041,583 1,011,716 1,029,554
Commercial real estate lending 3,575,318 3,516,984 3,536,651 3,565,427 3,685,912
Total commercial lending 9,569,690 9,616,051 9,628,907 9,858,426 9,711,130
Agricultural and agricultural real estate 701,211 802,958 809,876 919,184 842,116
Residential mortgage 707,984 733,401 756,021 797,829 813,803
Consumer 462,032 455,899 449,837 493,206 505,387
Total loans held to maturity $ 11,440,917 $ 11,608,309 $ 11,644,641 $ 12,068,645 $ 11,872,436
Total unfunded loan commitments $ 3,941,268 $ 4,381,565 $ 4,537,718 $ 4,625,768 $ 4,813,798
Deposits
Demand-customer $ 4,009,218 $ 4,244,169 $ 4,264,390 $ 4,500,304 $ 4,792,813
Savings-customer 8,713,228 8,151,794 8,269,956 8,411,240 8,190,430
Savings-wholesale and institutional 212,964 318,622 399,265 394,357 564,481
Total savings 8,926,192 8,470,416 8,669,221 8,805,597 8,754,911
Time-customer 1,628,856 1,737,723 1,734,971 1,944,884 1,814,335
Time-wholesale 388,950 504,282 633,584 950,929 1,738,934
Total time 2,017,806 2,242,005 2,368,555 2,895,813 3,553,269
Total deposits $ 14,953,216 $ 14,956,590 $ 15,302,166 $ 16,201,714 $ 17,100,993
Total customer deposits $ 14,351,302 $ 14,133,686 $ 14,269,317 $ 14,856,428 $ 14,797,578
Total wholesale and institutional deposits 601,914 822,904 1,032,849 1,345,286 2,303,415
Total deposits $ 14,953,216 $ 14,956,590 $ 15,302,166 $ 16,201,714 $ 17,100,993
(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) September 30, 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
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Allowance for Credit Losses-Loans
Balance, beginning of period $ 126,861 $ 123,934 $ 122,566 $ 110,208 $ 111,198
Provision for credit losses 8,871 9,737 3,668 12,750 2,672
Charge-offs (32,137) (7,388) (4,093) (3,886) (3,964)
Recoveries 3,202 578 1,793 3,494 302
Balance, end of period $ 106,797 $ 126,861 $ 123,934 $ 122,566 $ 110,208
Allowance for Unfunded Commitments
Balance, beginning of period $ 13,057 $ 13,786 $ 16,468 $ 17,480 $ 18,636
Provision for credit losses (2,595) (729) (2,682) (1,012) (1,156)
Balance, end of period $ 10,462 $ 13,057 $ 13,786 $ 16,468 $ 17,480
Allowance for lending related credit losses $ 117,259 $ 139,918 $ 137,720 $ 139,034 $ 127,688
Provision for Credit Losses
Provision for credit losses-loans $ 8,871 $ 9,737 $ 3,668 $ 12,750 $ 2,672
Provision for credit losses-unfunded commitments (2,595) (729) (2,682) (1,012) (1,156)
Total provision (benefit) for credit losses $ 6,276 $ 9,008 $ 986 $ 11,738 $ 1,516
Asset Quality
Nonaccrual loans $ 69,115 $ 103,123 $ 94,800 $ 95,426 $ 51,304
Loans past due ninety days or more 832 663 611 2,507 511
Other real estate owned 6,805 7,533 2,590 12,548 14,362
Other repossessed assets - - - - 1
Total nonperforming assets $ 76,752 $ 111,319 $ 98,001 $ 110,481 $ 66,178
Nonperforming Assets Activity
Balance, beginning of period $ 111,319 $ 98,001 $ 110,481 $ 66,178 $ 66,097
Net loan (charge-offs) recoveries (28,935) (6,810) (2,300) (392) (3,662)
New nonperforming loans 25,441 48,346 5,470 61,193 19,295
Reduction of nonperforming loans(1)
(30,240) (28,050) (5,692) (14,278) (14,691)
OREO/Repossessed assets sales proceeds (833) (168) (9,958) (2,220) (861)
Balance, end of period $ 76,752 $ 111,319 $ 98,001 $ 110,481 $ 66,178
Asset Quality Ratios
Ratio of nonperforming loans to total loans 0.61 % 0.89 % 0.82 % 0.81 % 0.44 %
Ratio of nonperforming assets to total assets 0.42 0.59 0.51 0.57 0.33
Annualized ratio of net loan charge-offs (recoveries) to average loans 0.99 0.23 0.08 0.01 0.12
Allowance for loan credit losses as a percent of loans 0.93 1.09 1.06 1.02 0.93
Allowance for lending related credit losses as a percent of loans 1.02 1.21 1.18 1.15 1.08
Allowance for loan credit losses as a percent of nonperforming loans 152.68 122.23 129.89 125.15 212.70
Loans delinquent 30-89 days as a percent of total loans 0.26 0.25 0.31 0.09 0.12
(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
September 30, 2024 June 30, 2024 September 30, 2023
Average
Balance
Interest Rate Average
Balance
Interest Rate Average
Balance
Interest Rate
Earning Assets
Securities:
Taxable $ 4,254,529 $ 51,116 4.78 % $ 4,490,407 $ 47,381 4.24 % $ 5,726,057 $ 54,800 3.80 %
Nontaxable(1)
768,483 7,313 3.79 759,234 7,383 3.91 881,162 8,085 3.64
Total securities 5,023,012 58,429 4.63 5,249,641 54,764 4.20 6,607,219 62,885 3.78
Interest on deposits with other banks and short-term investments 355,394 4,193 4.69 194,824 3,045 6.29 142,301 1,651 4.60
Federal funds sold - - - - - - 152 3 7.83
Loans:(2)
Commercial and industrial(1)
3,531,206 65,972 7.43 3,638,004 69,469 7.68 3,610,677 63,001 6.92
PPP loans 1,759 5 1.13 2,242 7 1.26 3,948 11 1.11
Owner occupied commercial real estate 2,527,006 35,189 5.54 2,615,504 37,028 5.69 2,412,501 30,127 4.95
Non-owner occupied commercial real estate 2,474,036 39,536 6.36 2,519,346 39,272 6.27 2,586,011 38,779 5.95
Real estate construction 1,106,387 22,878 8.23 1,093,399 21,770 8.01 1,027,544 19,448 7.51
Agricultural and agricultural real estate 757,745 11,536 6.06 879,707 13,390 6.12 822,957 12,582 6.07
Residential real estate 725,901 9,110 4.99 776,821 9,454 4.89 827,402 9,482 4.55
Consumer 460,959 8,956 7.73 485,266 9,421 7.81 509,024 9,615 7.49
Less: allowance for credit losses (125,274) - - (123,319) - - (110,726) - -
Net loans 11,459,725 193,182 6.71 11,886,970 199,811 6.76 11,689,338 183,045 6.21
Total earning assets 16,838,131 255,804 6.04 % 17,331,435 257,620 5.98 % 18,439,010 247,584 5.33 %
Nonearning Assets 1,601,779 1,711,927 1,768,910
Total Assets $ 18,439,910 $ 19,043,362 $ 20,207,920
Interest-bearing Liabilities
Savings $ 8,842,494 $ 59,307 2.67 % $ 8,834,746 $ 55,440 2.52 % $ 8,737,581 $ 49,195 2.23 %
Time deposits 2,189,861 23,669 4.30 2,372,653 25,059 4.25 3,945,371 43,549 4.38
Borrowings 580,707 7,378 5.05 881,738 10,825 4.94 103,567 1,167 4.47
Term debt 373,158 5,543 5.91 372,820 5,564 6.00 372,112 5,765 6.15
Total interest-bearing liabilities 11,986,220 95,897 3.18 % 12,461,957 96,888 3.13 % 13,158,631 99,676 3.01 %
Noninterest-bearing Liabilities
Noninterest-bearing deposits 4,116,589 4,355,521 4,824,861
Accrued interest and other liabilities 264,062 251,943 366,905
Total noninterest-bearing liabilities 4,380,651 4,607,464 5,191,766
Stockholders' Equity 2,073,039 1,973,941 1,857,523
Total Liabilities and Stockholders' Equity $ 18,439,910 $ 19,043,362 $ 20,207,920
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$ 159,907 $ 160,732 $ 147,908
Net interest spread(1)
2.86 % 2.85 % 2.32 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.78 % 3.73 % 3.18 %
Interest-bearing liabilities to earning assets 71.18 % 71.90 % 71.36 %
(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
For the Nine Months Ended
September 30, 2024 September 30, 2023
Average
Balance
Interest Rate Average
Balance
Interest Rate
Earning Assets
Securities:
Taxable $ 4,469,258 $ 145,511 4.35 % $ 5,927,026 $ 168,948 3.81 %
Nontaxable(1)
768,782 22,079 3.84 899,613 23,611 3.51
Total securities 5,238,040 167,590 4.27 6,826,639 192,559 3.77
Interest on deposits with other banks and other short-term investments 268,122 10,244 5.10 133,910 4,833 4.83
Federal funds sold - - - 51 3 7.86
Loans:(2)
Commercial and industrial(1)
3,603,668 202,426 7.50 3,547,256 169,552 6.39
PPP loans 2,195 19 1.16 6,718 61 1.21
Owner occupied commercial real estate 2,583,886 107,734 5.57 2,355,545 84,927 4.82
Non-owner occupied commercial real estate 2,514,452 118,657 6.30 2,459,965 105,111 5.71
Real estate construction 1,087,280 65,497 8.05 1,051,298 56,107 7.14
Agricultural and agricultural real estate
838,395 38,682 6.16 835,673 36,191 5.79
Residential mortgage 764,515 28,699 5.01 840,143 28,138 4.48
Consumer 476,967 27,578 7.72 506,143 26,925 7.11
Less: allowance for credit losses-loans (123,497) - - (111,434) - -
Net loans 11,747,861 589,292 6.70 11,491,307 507,012 5.90
Total earning assets 17,254,023 767,126 5.94 % 18,451,907 704,407 5.10 %
Nonearning Assets 1,670,839 1,730,901
Total Assets $ 18,924,862 $ 20,182,808
Interest-bearing Liabilities
Savings $ 8,828,973 $ 169,414 2.56 % $ 9,130,980 $ 128,372 1.88 %
Time deposits 2,447,293 78,195 4.27 3,344,434 103,245 4.13
Borrowings 701,548 25,727 4.90 138,157 4,437 4.29
Term debt 372,826 16,956 6.08 372,094 16,756 6.02
Total interest-bearing liabilities 12,350,640 290,292 3.14 % 12,985,665 252,810 2.60 %
Noninterest-bearing Liabilities
Noninterest-bearing deposits 4,306,899 5,092,200
Accrued interest and other liabilities 270,164 284,008
Total noninterest-bearing liabilities 4,577,063 5,376,208
Stockholders' Equity 1,997,159 1,820,935
Total Liabilities and Stockholders' Equity $ 18,924,862 $ 20,182,808
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$ 476,834 $ 451,597
Net interest spread(1)
2.80 % 2.50 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.69 % 3.27 %
Interest-bearing liabilities to earning assets 71.58 % 70.38 %
(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
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Earnings available to common stockholders (GAAP) $ 62,140 $ 37,730 $ 49,694 $ (72,375) $ 46,078
Plus core deposit intangibles amortization, net of tax(2)
1,022 1,081 1,131 1,229 1,240
Earnings available to common stockholders excluding intangible amortization (non-GAAP) $ 63,162 $ 38,811 $ 50,825 $ (71,146) $ 47,318
Average common equity (GAAP) $ 1,962,334 $ 1,863,236 $ 1,832,959 $ 1,729,086 $ 1,746,818
Less average goodwill 576,005 576,005 576,005 576,005 576,005
Less average core deposit intangibles, net 14,814 16,185 17,641 19,193 20,821
Average tangible common equity (non-GAAP) $ 1,371,515 $ 1,271,046 $ 1,239,313 $ 1,133,888 $ 1,149,992
Annualized return on average common equity (GAAP) 12.60 % 8.14 % 10.90 % (16.61) % 10.47 %
Annualized return on average tangible common equity (non-GAAP) 18.32 % 12.28 % 16.49 % (24.89) % 16.32 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP) $ 157,897 $ 158,741 $ 154,215 $ 156,137 $ 145,756
Plus tax-equivalent adjustment(1)
2,010 1,991 1,981 2,058 2,152
Net interest income, fully tax-equivalent (non-GAAP) $ 159,907 $ 160,732 $ 156,196 $ 158,195 $ 147,908
Average earning assets $ 16,838,131 $ 17,331,435 $ 17,597,068 $ 17,853,957 $ 18,439,010
Annualized net interest margin (GAAP) 3.73 % 3.68 % 3.52 % 3.47 % 3.14 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 3.78 3.73 3.57 3.52 3.18
Net purchase accounting discount amortization on loans included in annualized net interest margin 0.02 0.01 0.02 0.02 0.01
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP) $ 2,029,668 $ 1,917,145 $ 1,868,128 $ 1,822,412 $ 1,714,825
Less goodwill 576,005 576,005 576,005 576,005 576,005
Less core deposit intangibles, net 14,157 15,501 16,923 18,415 20,026
Tangible common equity (non-GAAP) $ 1,439,506 $ 1,325,639 $ 1,275,200 $ 1,227,992 $ 1,118,794
Common shares outstanding, net of treasury stock 42,883,865 42,852,180 42,783,670 42,688,008 42,656,303
Common equity (book value) per share (GAAP) $ 47.33 $ 44.74 $ 43.66 $ 42.69 $ 40.20
Tangible book value per common share (non-GAAP) $ 33.57 $ 30.94 $ 29.81 $ 28.77 $ 26.23
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP) $ 1,439,506 $ 1,325,639 $ 1,275,200 $ 1,227,992 $ 1,118,794
Total assets (GAAP) $ 18,272,293 $ 18,812,670 $ 19,132,827 $ 19,411,707 $ 20,129,793
Less goodwill 576,005 576,005 576,005 576,005 576,005
Less core deposit intangibles, net 14,157 15,501 16,923 18,415 20,026
Total tangible assets (non-GAAP) $ 17,682,131 $ 18,221,164 $ 18,539,899 $ 18,817,287 $ 19,533,762
Tangible common equity ratio (non-GAAP) 8.14 % 7.28 % 6.88 % 6.53 % 5.73 %
(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
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)
Net interest income (GAAP) $ 157,897 $ 158,741 $ 154,215 $ 156,137 $ 145,756
Tax-equivalent adjustment(1)
2,010 1,991 1,981 2,058 2,152
Fully tax-equivalent net interest income 159,907 160,732 156,196 158,195 147,908
Noninterest income 18,992 18,207 27,663 (111,801) 28,383
Securities (gains)/losses, net 9,520 10,111 (58) 140,007 114
Unrealized gain on equity securities, net (377) (133) (95) (75) (13)
Adjusted revenue (non-GAAP) $ 188,042 $ 188,917 $ 183,706 $ 186,326 $ 176,392
Total noninterest expenses (GAAP) $ 85,927 $ 116,244 $ 113,595 $ 130,285 $ 111,053
Less:
Core deposit intangibles amortization 1,345 1,421 1,492 1,611 1,625
Partnership investment in tax credit projects 222 222 494 3,573 1,136
(Gain) loss on sales/valuation of assets, net (26,419) 193 214 2,072 108
Acquisition, integration and restructuring costs 2,026 5,973 1,375 4,365 2,429
FDIC special assessment (267) (631) 2,049 8,145 -
Core expenses (non-GAAP) $ 109,020 $ 109,066 $ 107,971 $ 110,519 $ 105,755
Efficiency ratio (GAAP) 48.58 % 65.69 % 62.46 % 293.86 % 63.77 %
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP) 57.98 % 57.73 % 58.77 % 59.31 % 59.95 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP) $ 85,927 $ 116,244 $ 113,595 $ 130,285 $ 111,053
Core expenses (non-GAAP) 109,020 109,066 107,971 110,519 105,755
Average assets $ 18,439,910 $ 19,043,362 $ 19,296,638 $ 19,667,825 $ 20,207,920
Total noninterest expenses to average assets (GAAP) 1.85 % 2.46 % 2.37 % 2.63 % 2.18 %
Core expenses to average assets (non-GAAP) 2.35 % 2.30 % 2.25 % 2.23 % 2.08 %
Acquisition, integration and restructuring costs
Salaries and employee benefits $ 58 $ 462 $ 168 $ 1,425 $ 94
Occupancy - - - 1,092 -
Furniture and equipment 52 53 - 19 -
Professional fees 1,674 5,385 931 793 1,617
Advertising - - - 28 178
Other noninterest expenses 242 73 276 1,008 540
Total acquisition, integration and restructuring costs $ 2,026 $ 5,973 $ 1,375 $ 4,365 $ 2,429
(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
9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023
Reconciliation of Adjusted Earnings
Net income/(loss) $ 64,153 $ 39,742 $ 51,707 $ (70,363) $ 48,091
(Gain)/loss from sale of securities 9,520 10,111 (58) 140,007 114
(Gain)/loss on sales/valuation of assets, net (26,419) 193 214 2,072 108
Acquisition, integration and restructuring costs 2,026 5,973 1,375 4,365 2,429
FDIC special assessment (267) (631) 2,049 8,145 -
Total adjustments (15,140) 15,646 3,580 154,589 2,651
Tax effect of adjustments(2)
3,634 (3,739) (866) (36,638) (628)
Adjusted earnings $ 52,647 $ 51,649 $ 54,421 $ 47,588 $ 50,114
Preferred dividends (2,013) (2,012) (2,013) (2,012) (2,013)
Adjusted earnings available to common stockholders $ 50,634 $ 49,637 $ 52,408 $ 45,576 $ 48,101
Plus core deposit intangibles amortization, net of tax(2)
1,022 1,081 1,131 1,229 1,240
Earnings available to common stockholders excluding intangible amortization (non-GAAP) $ 51,656 $ 50,718 $ 53,539 $ 46,805 $ 49,341
Reconciliation of Adjusted Annualized Return on Average Assets
Average assets $ 18,439,910 $ 19,043,362 $ 19,296,638 $ 19,667,825 $ 20,207,920
Adjusted annualized return on average assets (non-GAAP) 1.14 % 1.09 % 1.13 % 0.96 % 0.98 %
Reconciliation of Adjusted Annualized Return on Average Common Equity
Average common stockholders' equity (GAAP) $ 1,962,334 $ 1,863,236 $ 1,832,959 $ 1,729,086 $ 1,746,818
Adjusted annualized average common equity (non-GAAP) 10.27 % 10.71 % 11.50 % 10.46 % 10.92 %
Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity
Average tangible common equity (non-GAAP) $ 1,371,515 $ 1,271,046 $ 1,239,313 $ 1,133,888 $ 1,149,992
Adjusted annualized average tangible common equity (non-GAAP) 14.98 % 16.05 % 17.38 % 16.38 % 17.02 %
Reconciliation of Adjusted Diluted Earnings Per Common Share
Weighted average shares outstanding-diluted 43,195,257 43,060,354 42,915,768 42,838,405 42,812,563
Adjusted diluted earnings per common share $ 1.17 $ 1.15 $ 1.22 $ 1.06 $ 1.12
(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
September 30,
For the Nine Months Ended
September 30,
2024 2023 2024 2023
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Earnings available to common stockholders (GAAP) $ 62,140 $ 46,078 $ 149,564 $ 144,245
Plus core deposit intangibles amortization, net of tax(2)
1,022 1,240 3,236 3,908
Earnings available to common stockholders excluding intangible amortization (non-GAAP) $ 63,162 $ 47,318 $ 152,800 $ 148,153
Average common equity (GAAP) $ 1,962,334 $ 1,746,818 $ 1,886,454 $ 1,710,230
Less average goodwill 576,005 576,005 576,005 576,005
Less average core deposit intangibles, net 14,814 20,821 16,208 22,501
Average tangible common equity (non-GAAP) $ 1,371,515 $ 1,149,992 $ 1,294,241 $ 1,111,724
Annualized return on average common equity (GAAP) 12.60 % 10.47 % 10.59 % 11.28 %
Annualized return on average tangible common equity (non-GAAP) 18.32 % 16.32 % 15.77 % 17.82 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP) $ 157,897 $ 145,756 $ 470,853 $ 445,100
Plus tax-equivalent adjustment(1)
2,010 2,152 5,981 6,497
Net interest income, fully tax-equivalent (non-GAAP) $ 159,907 $ 147,908 $ 476,834 $ 451,597
Average earning assets $ 16,838,131 $ 18,439,010 $ 17,254,023 $ 18,451,907
Annualized net interest margin (GAAP) 3.73 % 3.14 % 3.65 % 3.23 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 3.78 3.18 3.69 3.27
Net purchase accounting discount amortization on loans included in annualized net interest margin 0.02 0.01 0.02 0.02
(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
September 30,
For the Nine Months Ended
September 30,
2024 2023 2024 2023
Reconciliation of Adjusted Efficiency Ratio, Fully Tax-Equivalent (non-GAAP)
Net interest income (GAAP) $ 157,897 $ 145,756 $ 470,853 $ 445,100
Tax-equivalent adjustment(1)
2,010 2,152 5,981 6,497
Fully tax-equivalent net interest income 159,907 147,908 476,834 451,597
Noninterest income (GAAP) 18,992 28,383 64,862 90,875
Securities (gains)/losses, net 9,520 114 19,573 1,532
Unrealized gain on equity securities, net (377) (13) (605) (165)
Adjusted revenue (non-GAAP) $ 188,042 $ 176,392 $ 560,664 $ 543,839
Total noninterest expenses (GAAP) $ 85,927 $ 111,053 $ 315,766 $ 331,542
Less:
Core deposit intangibles amortization 1,345 1,625 4,258 5,128
Partnership investment in tax credit projects 222 1,136 938 1,828
(Gain)/loss on sales/valuation of assets, net (26,419) 108 (26,012) (2,149)
Acquisition, integration and restructuring costs 2,026 2,429 9,374 5,994
FDIC special assessment (267) - 1,151 -
Core expenses (non-GAAP) $ 109,020 $ 105,755 $ 326,057 $ 320,741
Efficiency ratio (GAAP) 48.58 % 63.77 % 58.94 % 61.86 %
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP) 57.98 % 59.95 % 58.16 % 58.98 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP) $ 85,927 $ 111,053 $ 315,766 $ 331,542
Core expenses (non-GAAP) 109,020 105,755 326,057 320,741
Average assets $ 18,439,910 $ 20,207,920 $ 18,924,862 $ 20,182,808
Total noninterest expenses to average assets (GAAP) 1.85 % 2.18 % 2.23 % 2.20 %
Core expenses to average assets (non-GAAP) 2.35 % 2.08 % 2.30 % 2.12 %
Acquisition, integration and restructuring costs
Salaries and employee benefits $ 58 $ 94 $ 689 $ 261
Occupancy - - - -
Furniture and equipment 52 - 105 -
Professional fees 1,674 1,617 7,990 3,619
Advertising - 178 - 522
Other noninterest expenses 242 540 590 1,592
Total acquisition, integration and restructuring costs $ 2,026 $ 2,429 $ 9,374 $ 5,994
(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
September 30,
For the Nine Months Ended
September 30,
2024 2023 2024 2023
Reconciliation of Adjusted Earnings (non-GAAP)
Net income/(loss) $ 64,153 $ 48,091 $ 155,602 $ 150,283
(Gain)/loss from sale of securities 9,520 114 19,573 1,532
(Gain)/loss on sales/valuation of assets, net (26,419) 108 (26,012) (2,149)
Acquisition, integration and restructuring costs 2,026 2,429 9,374 5,994
FDIC special assessment (267) - 1,151 -
Total adjustments (15,140) 2,651 4,086 5,377
Tax effect of adjustments(2)
3,634 (628) (981) (1,280)
Adjusted earnings $ 52,647 $ 50,114 $ 158,707 $ 154,380
Preferred dividends (2,013) (2,013) (6,038) (6,038)
Adjusted earnings available to common stockholders $ 50,634 $ 48,101 $ 152,669 $ 148,342
Plus core deposit intangibles amortization, net of tax(2)
1,022 1,240 3,236 3,908
Earnings available to common stockholders excluding intangible amortization (non-GAAP) $ 51,656 $ 49,341 $ 155,905 $ 152,250
Reconciliation of Adjusted Annualized Return on Average Assets
Average assets $ 18,439,910 $ 20,207,920 $ 18,924,862 $ 20,182,808
Adjusted annualized return on average assets (non-GAAP) 1.14 % 0.98 % 1.12 % 1.02 %
Reconciliation of Adjusted Annualized Return on Average Common Equity
Average common stockholders' equity (GAAP) $ 1,962,334 $ 1,746,818 $ 1,886,454 $ 1,710,230
Adjusted annualized return on average common equity (non-GAAP) 10.27 % 10.92 % 10.81 % 11.60 %
Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity
Average tangible common equity (non-GAAP) $ 1,371,515 $ 1,149,992 $ 1,294,241 $ 1,111,724
Adjusted annualized return on average tangible common equity (non-GAAP) 14.98 % 17.02 % 16.09 % 18.31 %
Reconciliation of Adjusted Diluted Earnings Per Common Share
Weighted average shares outstanding-diluted 43,195,257 42,812,563 43,080,422 42,769,872
Adjusted diluted earnings per common share $ 1.17 $ 1.12 $ 3.54 $ 3.47
(2) Tax effect is calculated based on the respective periods' year-to-date effective tax rate excluding the impact of discrete items.