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
(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.
| § | 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 | |||||
|
"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. |