Heartland Financial USA, Inc. (NASDAQ: HTLF):

   

Quarter Ended
Dec. 31,

Year Ended
Dec. 31,

2010   2009 2010   2009
Net income (loss) (in millions) $ 6.5 $ (7.9 ) $ 23.8 $ 6.4
Net income, exclusive of goodwill impairment charge (in millions) 6.5 4.8 25.4 19.0
Net income (loss) available to common stockholders (in millions) 5.2 (9.2 ) 18.6 1.2
Net income available to common stockholders, exclusive of goodwill impairment charge (in millions) 5.2 3.5 20.2 13.9
Diluted earnings (loss) per common share 0.31 (0.56 ) 1.13 0.07
Diluted earnings per common share, exclusive of goodwill impairment charge 0.31 0.21 1.23 0.85
 
Return on average assets 0.50 % (0.92 )% 0.46 % 0.03 %
Return on average common equity 8.06 (14.76 ) 7.51 0.51
Net interest margin 4.05 4.04 4.12 3.99
 
?We are pleased with Heartland's earnings of $23.8 million for 2010. This is a significant improvement over the previous year and reflects the concerted efforts of our team in weathering the difficult credit conditions that have significantly impacted the banking industry, including our company.?

Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.

 

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $6.5 million for the quarter ended December 31, 2010, compared to a net loss of $7.9 million for the fourth quarter of 2009. Net income available to common stockholders was $5.2 million, or $0.31 per diluted common share, for the quarter ended December 31, 2010, compared to a net loss of $9.2 million, or $0.56 per diluted common share, for the fourth quarter of 2009. Return on average common equity was 8.06 percent and return on average assets was 0.50 percent for the fourth quarter of 2010, compared to negative 14.76 percent and negative 0.92 percent, respectively, for the same quarter in 2009.

Commenting on Heartland's performance, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, ?We are pleased with Heartland's earnings of $23.8 million for 2010. This is a significant improvement over the previous year and reflects the concerted efforts of our team in weathering the difficult credit conditions that have significantly impacted the banking industry, including our company.?

The fourth quarter 2009 net loss resulted primarily from a $12.7 million goodwill impairment charge recorded during the quarter. This non-cash charge, which had no impact on operations, liquidity or capital, was due to the adverse economic conditions in Heartland's Arizona and Montana markets. Excluding this non-cash goodwill impairment charge, net income for the fourth quarter of 2009 would have been $4.8 million, net income available to common stockholders would have been $3.5 million, or $0.21 per diluted common share, return on average common equity would have been 5.62 percent and return on average assets would have been 0.35 percent.

Net income for the fourth quarter of 2010 compared to the fourth quarter of 2009 was positively affected by increases in net interest income, loan servicing income, gains on sale of loans and a positive valuation adjustment on mortgage servicing rights, along with a reduction in the provision for loan losses. The effect of these improvements was mitigated by increases in salaries and employee benefits, increases in professional fees and additional writedowns on repossessed assets that were recorded during the fourth quarter of 2010.

Net income for the entire year was $23.8 million in 2010, compared to $6.4 million in 2009. Net income available to common stockholders was $18.6 million, or $1.13 per diluted common share, for the year 2010, compared to $1.2 million, or $0.07 per diluted common share, earned during the year 2009. Return on average common equity was 7.51 percent and return on average assets was 0.46 percent for the year 2010, compared to 0.51 percent and 0.03 percent, respectively, for the year 2009. Excluding a goodwill impairment charge of $1.6 million recorded during the third quarter, net income for the year 2010 would have been $25.4 million, net income available to common stockholders would have been $20.2 million, or $1.23 per diluted common share, return on average common equity would have been 8.17 percent and return on average assets would have been 0.50 percent. Excluding the goodwill impairment charge of $12.7 million recorded during the fourth quarter, net income for the year 2009 would have been $19.0 million, net income available to common stockholders would have been $13.9 million, or $0.85 per diluted common share, return on average common equity would have been 5.76 percent and return on average assets would have been 0.36 percent.

Earnings for the year 2010 in comparison to the year 2009 were positively affected by increased net interest income, a reduced provision for loan losses and increases in service charges and fees, trust fees and gains on sale of loans. The effect of these positive factors was offset somewhat by decreases in the income associated with residential mortgage loan activity, decreased gains on sales of securities, increases in salaries and employee benefits, increases in professional fees and higher writedowns on repossessed assets.

Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the U.S., often referred to as GAAP. Heartland has disclosed in this release certain non-GAAP financial measures to provide meaningful supplemental information regarding its operational performance and to enhance readers' overall understanding of its operating financial performance. Management believes that the impact of a goodwill impairment charge to earnings impairs the ability of the reader to evaluate trends in results of operations without information that reports results of operations without the charge. These non-GAAP financial measures are presented for supplemental information purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. The following schedule presents performance ratios in accordance with GAAP and a reconciliation of the non-GAAP financial measurements to the GAAP financial measurements. For the non-GAAP financial measurements, net income, exclusive of goodwill impairment charge is defined as net income (loss) as presented in accordance with GAAP plus any goodwill impairment charge recorded during the period.

   

For the Quarter Ended
December 31,

For the Year Ended
December 31,

(Dollars in thousands, except per share data)     2010       2009       2010       2009  
   
Net income (loss) as reported $ 6,498 $

(7,875

)

$ 23,788 $ 6,374
Goodwill impairment charge ? 12,659 1,639 12,659
Net income, exclusive of goodwill impairment charge $ 6,498 $ 4,784 $ 25,427 $ 19,033
 
Net income (loss) available to common stockholders $ 5,197 $

(9,170

)

$ 18,559 $ 1,218
Goodwill impairment charge ? 12,659 1,639

12,659

Net income available to common stockholders, exclusive of goodwill impairment charge $ 5,197 $ 3,489 $ 20,198 $ 13,877
 
GAAP earnings (loss) per common share-diluted $ 0.31 $

(0.56

)

$ 1.13 $ 0.07
Earnings per common share-diluted, exclusive of goodwill impairment charge $ 0.31 $ 0.21 $ 1.23 $ 0.85
GAAP return on average assets 0.50 %

(0.92

)%

0.46 % 0.03 %
Return on average assets, exclusive of goodwill impairment charge 0.50 % 0.35 % 0.50 % 0.36 %
GAAP return on average equity 8.06 %

(14.76

)%

7.51 % 0.51 %
Return on average equity, exclusive of goodwill impairment charge 8.06 % 5.62 % 8.17 % 5.76 %
GAAP return on average tangible equity 9.06 %

(17.87

)%

8.53 % 0.62 %
Return on average tangible equity, exclusive of goodwill impairment charge 9.06 % 6.80 % 9.29 % 7.02 %
GAAP efficiency ratio 70.09 % 92.19 % 66.79 % 73.07 %
Efficiency ratio, exclusive of goodwill impairment charge 70.09 % 65.32 % 65.95 % 66.09 %
 

Net Interest Margin Remains Above 4.00 Percent; Net Interest Income Grows

Net interest margin, expressed as a percentage of average earning assets, was 4.05 percent during the fourth quarter of 2010 compared to 4.04 percent for the fourth quarter of 2009. For the entire year, net interest margin was 4.12 percent during 2010 compared to 3.99 percent during 2009.

Fuller said, ?At 4.05 percent for the quarter, net interest margin is a continuing bright spot for us. Much of Heartland's earnings success this year is the direct result of careful management of our margin which has exceeded four percent for six consecutive quarters. As deposit interest rates are approaching an effective floor and market loan rates continue to fall, we see the possibility of our margin dropping below 4.00 percent in 2011.?

Net interest income on a tax-equivalent basis totaled $37.1 million during the fourth quarter of 2010, an increase of $1.2 million or 3 percent from the $35.9 million recorded during the fourth quarter of 2009. For the entire year, net interest income on a tax-equivalent basis was $148.0 million during 2010, an increase of $10.7 million or 8 percent from the $137.3 million recorded during 2009. These increases reflect Heartland's success in optimizing the composition of its interest bearing liabilities by de-emphasizing higher cost time deposits, which decreased to 37 percent of total average interest bearing deposits during the fourth quarter of 2010 from 42 percent during the fourth quarter of 2009. During the entire year, time deposits were 38 percent of total average interest bearing deposits during 2010 compared to 47 percent during 2009.

On a tax-equivalent basis, interest income in the fourth quarter of 2010 was $50.1 million compared to $52.4 million in the fourth quarter of 2009, a decrease of $2.3 million or 4 percent. For the entire year, interest income on a tax-equivalent basis was $203.9 million during 2010 compared to $207.8 million during 2009, a decrease of $3.9 million or 2 percent. The $112.1 million or 3 percent growth in average earning assets during the fourth quarter of 2010 and the $157.7 million or 5 percent growth in average earning assets during the year ended December 31, 2010, compared to the same periods in 2009, was offset by the impact of a decrease in the average interest rate earned on these assets. The composition of average earning assets continued to change as the percentage of loans, which are typically the highest yielding asset, to total average earning assets was 66 percent during the year 2010 compared to 69 percent during the year 2009.

Interest expense for the fourth quarter of 2010 was $12.9 million, a decrease of $3.5 million or 21 percent from $16.4 million in the fourth quarter of 2009. On an annual comparative basis, interest expense decreased $14.6 million or 21 percent from $70.5 million during 2009 to $55.9 million during 2010. Average interest bearing liabilities decreased $32.0 million or 1 percent for the quarter ended December 31, 2010, as compared to the same quarter in 2009, and the average interest rates paid on Heartland's deposits and borrowings declined 43 basis points to 1.66 percent in 2010 from 2.09 percent in 2009. For the annual comparative period, average interest bearing liabilities increased $109.1 million or 4 percent while the average interest rate paid on these liabilities was 1.79 percent in 2010 compared to 2.34 percent in 2009, a 55 basis point decrease.

Noninterest Income Increases; Noninterest Expense Increases

Noninterest income was $18.3 million during the fourth quarter of 2010 compared to $13.4 million during the fourth quarter of 2009, an increase of $4.9 million or 37 percent. Contributing to this increase was growth of $510,000 or 28 percent in loan servicing income and $2.6 million or 226 percent in gains on sale of loans. The fourth quarter 2010 noninterest income also included a $1.2 million positive adjustment on mortgage servicing rights.

Fuller stated, ?Noninterest income grew significantly in the fourth quarter of 2010 as record low interest rates fueled another wave of residential mortgage loan refinancing activity. We were also pleased that service charge income held its own compared to previous quarters despite implementation of new regulations requiring debit card and ATM users to "opt-in" for overdraft protection. Also showing nice improvement were revenues in our Wealth Management Group and Investment Services divisions.?

For the entire year, noninterest income was $52.3 million during 2010 compared to $52.7 million during 2009, a decrease of $375,000 or 1 percent. Positively affecting noninterest income during the year 2010 were increases of $1.4 million or 11 percent in service charges and fees, $1.4 million or 18 percent in trust fees, $2.0 million or 33 percent in gains on sale of loans and $464,000 or 46 percent in income on bank owned life insurance. A portion of these increases were offset by a $2.4 million or 25 percent decrease in loan servicing income and a $1.8 million or 21 percent decrease in securities gains. Also affecting noninterest income during the year 2009 was a $1.3 million gain on acquisition.

Loan servicing income increased $510,000 or 28 percent for the quarter and decreased $2.4 million or 25 percent for the annual period ended on December 31, 2010, as compared to the comparable periods in 2009. Two components of loan servicing income, mortgage servicing rights and amortization of mortgage servicing rights, are dependent upon the level of loans Heartland originates and sells into the secondary market, which in turn is highly influenced by market interest rates for home mortgage loans. Mortgage servicing rights income was $2.3 million during the fourth quarter of 2010 compared to $1.2 million during the fourth quarter of 2009 and amortization of mortgage servicing rights was $1.5 million during the fourth quarter of 2010 compared to $682,000 during the fourth quarter of 2009. Long-term mortgage loan rates fell to all-time lows during the third and fourth quarters of 2010 and resulted in increased residential mortgage loan refinancing activity. For the entire year, mortgage servicing rights income was $5.8 million in 2010 compared to $8.6 million in 2009 and amortization of mortgage servicing rights was $4.1 million in 2010 compared to $3.6 million in 2009. Although the low mortgage rates during the last two quarters of 2010 positively impacted mortgage servicing rights income and amortization of mortgage servicing rights, the prolonged low interest rate environment during the first two quarters of 2009, compared to more normalized rates in the first two quarters of 2010, more heavily influenced the full year results for loan servicing income. Also included in loan servicing income are the fees collected for the servicing of mortgage loans for others, which is dependent upon the aggregate outstanding balance of these loans, rather than quarterly production and sale of mortgage loans. Fees collected for the servicing of mortgage loans for others was $831,000 during the fourth quarter of 2010 compared to $696,000 during the fourth quarter of 2009. For the entire year, the fees collected for the servicing of mortgage loans for others was $3.1 million in 2010 compared to $2.4 million in 2009. The portfolio of mortgage loans serviced for others by Heartland totaled $1.40 billion at December 31, 2010, compared to $1.15 billion at December 31, 2009.

Fuller commented, ?Heartland intends to continue to emphasize residential mortgage loan origination and expanded this line of business with the addition of National Residential Mortgage during the fourth quarter of 2010. We view recent legislative changes as favorable for local banking companies and believe it opens the door to new opportunities in mortgage lending. As non-bank competitors in this space are beginning to disappear, we see significant opportunity for the future by expanding residential loan origination as a gateway retail product and a strategic line of business.?

For the fourth quarter of 2010, noninterest expense totaled $37.3 million, a decrease of $6.1 million or 14 percent from the same quarter of 2009. Included in the fourth quarter of 2009 noninterest expense were goodwill impairment charges totaling $12.7 million. Exclusive of these goodwill impairment charges, noninterest expense for the fourth quarter of 2010 increased $6.5 million or 21 percent when compared to the same quarter of 2009. Contributing to this growth in noninterest expense was a $2.5 million or 17 percent increase in salaries and employee benefits, which was higher during the fourth quarter of 2010 as a result of increased commissions paid to mortgage loan officers, the expansion of residential loan origination via the addition of National Residential Mortgage and increased staffing at Heartland, primarily in the special assets area. Also contributing to the increase in noninterest expense was a $3.3 million or 83 percent increase in net losses on repossessed assets, which totaled $7.3 million during the fourth quarter of 2010 compared to $4.0 million during the fourth quarter of 2009 and a $965,000 or 46 percent increase in professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants.

For the entire year, noninterest expense decreased $3.3 million or 2 percent in 2010 compared to 2009. Goodwill impairment charges totaled $1.6 million during 2010 and $12.7 million during 2009. Exclusive of these goodwill impairment charges, noninterest expense increased $7.7 million or 6 percent in 2010. The primary contributors to this increase were a $2.9 million or 5 percent increase in salaries and employee benefits, $1.3 million or 14 percent increase in professional fees and a $4.4 million or 41 percent increase in net losses on repossessed assets. The effect of these increases was mitigated by a $1.1 million or 17 percent decrease in FDIC insurance assessments. Full-time equivalent employees totaled 1,066 on December 31, 2010, compared to 1,001 at December 31, 2009. The addition of National Residential Mortgage accounted for twenty-six of the full-time equivalent employees at December 31, 2010.

Heartland's effective tax rate was 29.27 percent for the year 2010 compared to 53.03 percent for the year 2009. Excluding the non-deductible goodwill impairment charges, Heartland's effective tax rate was 27.91 percent for the year 2010 and 27.44 percent for the year 2009. Heartland's effective tax rate is affected by the level of tax-exempt interest income which, as a percentage of pre-tax income exclusive of the non-deductible goodwill impairment charges, was 26.03 percent during 2010 compared to 32.08 percent during 2009. The tax-equivalent adjustment for this tax-exempt interest income was $4.9 million during the year 2010 compared to $4.5 million during the year 2009.

Loan Demand Remains Soft; Growth in Demand Deposits

At December 31, 2010, total assets experienced a slight decrease of $13.5 million or less than 1 percent since year-end 2009. Securities represented 32 percent of total assets at December 31, 2010, compared to 29 percent of total assets at December 31, 2009.

Total loans and leases, exclusive of those covered by loss share agreements, were $2.34 billion at December 31, 2010, compared to $2.33 billion at year-end 2009, an increase of $12.8 million or 1 percent. Total loans and leases, exclusive of those covered by loss share agreements, decreased $17.6 million during the fourth quarter of 2010 compared to a decrease of $24.2 million during the third quarter of 2010, an increase of $16.5 million during the second quarter of 2010 and an increase of $38.1 million during the first quarter of 2010. The loan category experiencing the majority of the growth during the year 2010 was commercial and commercial real estate loans, which totaled $1.72 billion at December 31, 2010, an increase of $48.9 million or 3 percent since year-end 2009. This growth occurred at Dubuque Bank and Trust Company, Wisconsin Community Bank, New Mexico Bank & Trust and Minnesota Bank & Trust.

Total deposits were $3.03 billion at December 31, 2010, compared to $3.05 billion at year-end 2009, a decrease of $16.3 million or 1 percent. Total deposits decreased $39.6 million during the fourth quarter of 2010, increased $57.5 million during the third quarter of 2010, decreased $21.2 million during the second quarter of 2010 and decreased $13.0 million during the first quarter of 2010. The composition of Heartland's deposits improved during the year 2010, as demand deposits increased $119.9 million or 26 percent. Other than during the fourth quarter of 2010, in which these deposits experienced a $1.4 million decrease, the annual growth in these deposits was distributed throughout the year at $44.5 million during the third quarter, $47.6 million during the second quarter and $29.2 million during the first quarter. Savings deposits grew $4.6 million or less than 1 percent since year-end 2009. For 2010, savings deposits decreased $13.9 million during the fourth quarter, increased $20.3 million during the third quarter, decreased $19.3 million during the second quarter and increased $17.5 million during the first quarter. Contributing to the decrease in demand and savings deposits during the fourth quarter of 2010 was the completion of a private placement debt offering in the amount of $24.5 which was nearly all funded by balances on deposit at Dubuque Bank and Trust Company. Time deposits, exclusive of brokered deposits, experienced a decrease of $136.4 million or 14 percent during 2010, distributed throughout the year at $24.3 million during the fourth quarter, $7.3 million during the third quarter, $49.6 million during the second quarter and $55.2 million during the first quarter. At December 31, 2010, brokered time deposits totaled $37.3 million or 1 percent of total deposits compared to $41.8 million or 1 percent of total deposits at year-end 2009.

Fuller added, ?While deposit growth has leveled off, our deposit mix has continued to improve. At year-end, demand and savings represented over seventy percent of total deposits.?

Allowance for Loan Losses Decreases; Nonperforming Assets Increase

The allowance for loan and lease losses at December 31, 2010, was 1.82 percent of loans and leases and 47.12 percent of nonperforming loans compared to 1.80 percent of loans and leases and 53.56 percent of nonperforming loans at December 31, 2009. The provision for loan losses was $8.9 million for the fourth quarter of 2010 compared to $10.8 million for the fourth quarter of 2009. For the entire year, the provision for loan losses totaled $32.5 million for the 2010 compared to $39.4 million for 2009. Additions to the allowance for loan and lease losses continued during 2010 due to a variety of factors including the continuation of depressed economic conditions, primarily in Heartland's Western markets of Arizona and Montana, that have resulted in increased delinquencies, reductions in the appraised values of collateral and downgrades in internal risk ratings of loans, including particularly the loans in those geographies.

Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $90.5 million or 3.87 percent of total loans and leases at December 31, 2010, compared to $78.1 million or 3.35 percent of total loans and leases at December 31, 2009. Approximately 62 percent, or $56.0 million, of Heartland's nonperforming loans are to 25 borrowers, with $17.9 million originated by Rocky Mountain Bank, $11.8 million originated by Summit Bank & Trust, $8.9 million originated by Wisconsin Community Bank, $8.8 million originated by New Mexico Bank & Trust, $5.2 million originated by Arizona Bank & Trust, $1.8 million originated by Galena State Bank and Trust Company and $1.6 million originated by Riverside Community Bank. The portion of Heartland's nonperforming loans covered by government guarantees was $3.7 million at December 31, 2010. The industry breakdown for these nonperforming loans as identified using the North American Industry Classification System (NAICS) was $13.1 million to lessors of real estate, $11.6 million for lot and land development, $6.6 million for other activities related to real estate and $3.8 million for construction and development. The remaining $20.9 million was distributed among 9 other industries.

Delinquencies in each of the loan portfolios continues to be well managed and no significant adverse trends have been identified. Loans delinquent between 30 and 90 days as a percent of total loans were 0.67 percent at December 31, 2010, compared to 1.65 percent at September 30, 2010, 0.61 percent at June 30, 2010, 1.22 percent at March 31, 2010, and 1.22 percent at December 31, 2009. The increase in the third quarter of 2010 was attributed to six credits, of which half returned to current status during the fourth quarter.

Other real estate owned, exclusive of assets covered under loss sharing agreements, was $31.7 million at December 31, 2010, compared to $30.2 million at December 31, 2009. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues with its plans to market these properties through an orderly liquidation process instead of a quick liquidation process that would likely result in discounts greater than the projected carrying costs.

Net charge-offs on loans not covered by loss share agreements during the fourth quarter of 2010 were $10.7 million compared to $9.8 million during the fourth quarter of 2009. For the entire year, net charge-offs not covered by loss share agreements were $31.2 million in 2010 compared to $31.8 million in 2009. A large portion of the net charge-offs in both years was related to commercial real estate development loans and residential lot loans.

The schedule below summarizes the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the fourth quarter of 2010:

(Dollars in thousands)  

Nonperforming
Loans

 

Other Real
Estate Owned

 

Other
Repossessed
Assets

 

Total
Nonperforming
Assets

September 30, 2010 $90,520 $32,408 $492 $123,420
Loan foreclosures (8,746 ) 8,717 29 ?
Net loan charge offs (10,899 ) ? ? (10,899 )
New nonperforming loans 27,318 ? ? 27,318
Reduction of nonperforming loans(1) (2,695 ) ? ? (2,695 )
OREO/Repossessed sales proceeds ? (2,950 ) (61 ) (3,011 )
OREO/Repossessed assets writedowns, net ? (6,173 ) ? (6,173 )
Net activity at Citizens Finance Co. ?   ?   (158 ) (158 )
December 31, 2010 $95,498   $32,002   $302   $127,802  
 
(1) Includes principal reductions and transfers to performing status
 

?While most aspects of our business are clicking on all cylinders, we continue to be hindered by nonperforming assets, which ticked up again in the fourth quarter. Nonperformers to total loans ended the year at 3.87%. Though still under four percent, and better than similarly-sized peers, decreasing our nonperforming assets still remains our number one priority,? Fuller said.

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 800-762-8795 at least five minutes before start time, or log onto www.htlf.com. If you are unable to participate on the call, a replay will be available until January 24, 2012, by logging onto www.htlf.com.

About Heartland Financial USA, Inc.

Heartland Financial USA, Inc. is a $4.0 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 61 banking locations in 42 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.

Safe Harbor Statement

This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, 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 are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war, (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.

 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended

December 31,

  For the Year Ended

December 31,

      2010       2009       2010       2009  
Interest Income    
Interest and fees on loans and leases $ 37,440 $ 38,191 $ 151,794 $ 154,887
Interest on securities and other:
Taxable 7,889 10,513 34,507 39,782
Nontaxable 3,438 2,456 12,616 8,595
Interest on federal funds sold - 1 1 2
Interest on deposits in other financial institutions   1     9     14     27  
Total Interest Income   48,768     51,170     198,932     203,293  
Interest Expense
Interest on deposits 8,524 12,000 38,272 52,744
Interest on short-term borrowings 330 194 1,160 733
Interest on other borrowings   4,068     4,250     16,448     17,053  
Total Interest Expense   12,922     16,444     55,880     70,530  
Net Interest Income 35,846 34,726 143,052 132,763
Provision for loan and lease losses   8,860     10,775     32,508     39,377  
Net Interest Income After Provision for Loan and Lease Losses   26,986     23,951     110,544     93,386  
Noninterest Income
Service charges and fees 3,537 3,257 13,900 12,541
Loan servicing income 2,323 1,813 7,232 9,666
Trust fees 2,428 2,156 9,206 7,773
Brokerage and insurance commissions 948 697 3,184 3,117
Securities gains, net 2,170 2,186 6,834 8,648
Gain (loss) on trading account securities 107 (61 ) (91 ) 211
Impairment loss on securities - (40 ) - (40 )
Gains on sale of loans 3,813 1,168 8,088 6,084
Valuation adjustment on mortgage servicing rights 1,239 - - -
Income on bank owned life insurance 463 362 1,466 1,002
Gain on acquisition - 298 - 1,296
Other noninterest income   1,265     1,534     2,510     2,406  
Total Noninterest Income   18,293     13,370     52,329     52,704  
Noninterest Expense
Salaries and employee benefits 16,892 14,419 63,391 60,465
Occupancy 2,339 2,220 9,121 8,992
Furniture and equipment 1,543 1,638 6,104 6,574
Professional fees 3,065 2,100 10,446 9,127
FDIC insurance assessments 1,306 1,320 5,441 6,578
Advertising 1,058 1,065 3,830 3,337
Intangible assets amortization 146 198 591 866
Goodwill impairment charge - 12,659 1,639 12,659
Net loss on repossessed assets 7,345 4,015 15,264 10,847
Other noninterest expenses   3,623     3,800     13,412     13,075  
Total Noninterest Expense   37,317     43,434     129,239     132,520  
Income (Loss) Before Income Taxes 7,962 (6,113 ) 33,634 13,570
Income taxes   1,464     1,762     9,846     7,196  
Net Income (Loss) 6,498 (7,875 ) 23,788 6,374
Net income attributable to noncontrolling interest, net of tax   35     41     115     188  
Net Income (Loss) Attributable to Heartland 6,533 (7,834 ) 23,903 6,562
Preferred dividends and discount   (1,336 )   (1,336 )   (5,344 )   (5,344 )
Net Income (Loss) Available to Common Stockholders $ 5,197   $ (9,170 ) $ 18,559   $ 1,218  
Earnings (loss) per common share-diluted $ 0.31 $ (0.56 ) $ 1.13 $ 0.07
Weighted average shares outstanding-diluted 16,515,657 16,345,095 16,461,679 16,325,320
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
      12/31/2010       9/30/2010       6/30/2010       3/31/2010       12/31/2009  
Interest Income        
Interest and fees on loans and leases $ 37,440 $ 38,756 $ 38,270 $ 37,328 $ 38,191
Interest on securities and other:
Taxable 7,889 8,225 8,938 9,455 10,513
Nontaxable 3,438 3,282 3,047 2,849 2,456
Interest on federal funds sold - - 1 - 1
Interest on deposits in other financial institutions   1     1     7     5     9  
Total Interest Income   48,768     50,264     50,263     49,637     51,170  
Interest Expense
Interest on deposits 8,524 9,033 9,955 10,760 12,000
Interest on short-term borrowings 330 305 291 234 194
Interest on other borrowings   4,068     4,213     4,208     3,959     4,250  
Total Interest Expense   12,922     13,551     14,454     14,953     16,444  
Net Interest Income 35,846 36,713 35,809 34,684 34,726
Provision for loan and lease losses   8,860     4,799     9,955     8,894     10,775  
Net Interest Income After Provision for Loan and Lease Losses   26,986     31,914     25,854     25,790     23,951  
Noninterest Income
Service charges and fees 3,537 3,665 3,494 3,204 3,257
Loan servicing income 2,323 1,862 1,620 1,427 1,813
Trust fees 2,428 2,267 2,330 2,181 2,156
Brokerage and insurance commissions 948 739 785 712 697
Securities gains, net 2,170 2,158 1,050 1,456 2,186
Gain (loss) on trading account securities 107 18 (264 ) 48 (61 )
Impairment loss on securities - - - - (40 )
Gains on sale of loans 3,813 2,394 1,083 798 1,168
Valuation adjustment on mortgage servicing rights 1,239 (1,239 ) - - -
Income on bank owned life insurance 463 396 293 314 362
Gain on acquisition - - - - 298
Other noninterest income   1,265     349     443     453     1,534  
Total Noninterest Income   18,293     12,609     10,834     10,593     13,370  
Noninterest Expense
Salaries and employee benefits 16,892 15,502 15,574 15,423 14,419
Occupancy 2,339 2,287 2,201 2,294 2,220
Furniture and equipment 1,543 1,515 1,599 1,447 1,638
Professional fees 3,065 2,621 2,549 2,211 2,100
FDIC insurance assessments 1,306 1,331 1,384 1,420 1,320
Advertising 1,058 906 1,052 814 1,065
Goodwill impairment charge - 1,639 - - 12,659
Intangible assets amortization 146 149 145 151 198
Net loss on repossessed assets 7,345 4,219 1,636 2,064 4,015
Other noninterest expenses   3,623     3,277     3,435     3,077     3,800  
Total Noninterest Expense   37,317     33,446     29,575     28,901     43,434  
Income (Loss) Before Income Taxes 7,962 11,077 7,113 7,482 (6,113 )
Income taxes   1,464     4,187     2,035     2,160     1,762  
Net Income (Loss) 6,498 6,890 5,078 5,322 (7,875 )
Net income available to noncontrolling interest, net of tax   35     30     25     25     41  
Net Income (Loss) Attributable to Heartland 6,533 6,920 5,103 5,347 (7,834 )
Preferred dividends and discount   (1,336 )   (1,336 )   (1,336 )   (1,336 )   (1,336 )
Net Income (Loss) Available to Common Stockholders $ 5,197   $ 5,584   $ 3,767   $ 4,011   $ (9,170 )
Earnings (loss) per common share-diluted $ 0.31 $ 0.34 $ 0.23 $ 0.24 $ (0.56 )
Weighted average shares outstanding-diluted 16,515,657 16,465,650 16,459,978 16,435,844 16,345,095
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As Of
      12/31/2010       9/30/2010       6/30/2010       3/31/2010       12/31/2009  
Assets        
Cash and cash equivalents $ 62,572 $ 141,702 $ 75,771 $ 78,010 $ 182,410
Securities 1,264,564 1,211,297 1,213,875 1,234,339 1,175,217
Loans held for sale 23,904 41,047 25,750 16,002 17,310
Loans and leases:
Held to maturity 2,343,987 2,361,567 2,385,772 2,369,233 2,331,142
Loans covered by loss share agreements 20,800 23,557 25,420 27,968 31,860
Allowance for loan and lease losses   (42,693 )   (44,732 )   (48,314 )   (46,350 )   (41,848 )
Loans and leases, net 2,322,094 2,340,392 2,362,878 2,350,851 2,321,154
Premises, furniture and equipment, net 121,012 121,940 122,066 121,033 118,835
Goodwill 25,909 25,909 27,548 27,548 27,548
Other intangible assets, net 13,466 11,510 12,426 12,320 12,380
Cash surrender value on life insurance 61,981 62,038 62,113 61,525 55,516
Other real estate, net 32,002 32,408 32,882 28,652 30,568
FDIC indemnification asset 2,294 1,939 1,952 2,357 5,532
Other assets   69,657     73,002     71,168     65,604     66,521  
Total Assets $ 3,999,455   $ 4,063,184   $ 4,008,429   $ 3,998,241   $ 4,012,991  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 580,589 $ 581,957 $ 537,468 $ 489,807 $ 460,645
Savings 1,558,998 1,572,891 1,552,546 1,571,881 1,554,358
Brokered time deposits 37,285 37,285 37,285 37,285 41,791
Other time deposits   857,176     881,510     888,847     938,438     993,595  
Total deposits 3,034,048 3,073,643 3,016,146 3,037,411 3,050,389
Short-term borrowings 235,864 196,533 200,515 190,732 162,349
Other borrowings 362,527 413,448 425,994 426,039 451,429
Accrued expenses and other liabilities   35,232     43,234     38,273     28,226     33,767  
Total Liabilities 3,667,671 3,726,858 3,680,928 3,682,408 3,697,934
Equity
Preferred equity 78,483 78,168 77,853 77,539 77,224
Common equity   250,608     255,430     246,922     235,543     235,057  
Total Heartland Stockholders' Equity 329,091 333,598 324,775 313,082 312,281
Noncontrolling interest   2,693     2,728     2,726     2,751     2,776  
Total Equity   331,784     336,326     327,501     315,833     315,057  
Total Liabilities and Equity $ 3,999,455   $ 4,063,184   $ 4,008,429   $ 3,998,241   $ 4,012,991  
 
Common Share Data
Book value per common share $ 15.26 $ 15.58 $ 15.08 $ 14.40 $ 14.38
FAS 115 effect on book value per common share $ 0.60 $ 1.25 $ 0.93 $ 0.28 $ 0.38
Common shares outstanding, net of treasury stock 16,425,055 16,392,091 16,375,460 16,357,874 16,346,362
Tangible Capital Ratio (1) 5.60 % 5.63 % 5.45 % 5.17 % 5.14 %
 
(1) Total common stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less intangible assets (excluding mortgage servicing rights).
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended   For the Year Ended
    12/31/2010   12/31/2009   12/31/2010   12/31/2009
Average Balances    
Assets $ 4,091,276 $ 3,975,107 $ 4,030,382 $ 3,812,743
Loans and leases, net of unearned 2,414,799 2,410,459 2,415,947 2,412,199
Deposits 3,075,193 3,013,644 3,039,928 2,847,653
Earning assets 3,637,735 3,525,625 3,595,690 3,438,005
Interest bearing liabilities 3,095,791 3,127,792 3,127,389 3,018,240
Common stockholders' equity 255,940 246,505 247,141 241,032
Total stockholders' equity 336,827 326,254 327,577 320,335
Tangible common stockholders' equity 227,696 203,573 217,451 197,749
 
Earnings Performance Ratios
Annualized return on average assets 0.50 % (0.92 )% 0.46 % 0.03 %
Annualized return on average common equity 8.06 % (14.76 )% 7.51 % 0.51 %
Annualized return on average common tangible equity 9.06 % (17.87 )% 8.53 % 0.62 %
Annualized net interest margin(1) 4.05 % 4.04 % 4.12 % 3.99 %
Efficiency ratio(2) 70.09 % 92.19 % 66.79 % 73.07 %
 
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
      12/31/2010       9/30/2010       6/30/2010       3/31/2010       12/31/2009  
Average Balances        
Assets $ 4,091,276 $ 4,012,107 $ 4,033,350 $ 3,984,794 $ 3,975,107
Loans and leases, net of unearned 2,414,799 2,427,141 2,437,357 2,384,490 2,410,459
Deposits 3,075,193 3,018,928 3,040,763 3,024,827 3,013,644
Earning assets 3,637,735 3,602,953 3,632,056 3,510,015 3,525,625
Interest bearing liabilities 3,095,791 3,084,742 3,165,862 3,163,161 3,127,792
Common stockholders' equity 255,940 252,781 241,816 238,028 246,505
Total stockholders' equity 336,827 333,346 322,110 318,027 326,254
Tangible common stockholders' equity 227,696 222,771 211,640 207,695 203,573
 
Earnings Performance Ratios
Annualized return on average assets 0.50 % 0.55 % 0.37 % 0.41 % (0.92 )%
Annualized return on average common equity 8.06 % 8.76 % 6.25 % 6.83 % (14.76 )%
Annualized return on average common tangible equity 9.06 % 9.94 % 7.14 % 7.83 % (17.87 )%
Annualized net interest margin(1) 4.05 % 4.18 % 4.09 % 4.14 % 4.04 %
Efficiency ratio(2) 70.09 % 69.05 % 63.14 % 64.27 % 92.19 %
 
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
   

As of and For
the Quarter
Ended
12/31/2010

 

As of and For
the Quarter
Ended
9/30/2010

 

As of and For
the Quarter
Ended
6/30/2010

 

As of and For
the Quarter
Ended
3/31/2010

 

As of and For
the Quarter
Ended
12/31/2009

Loan and Lease Data          
Loans held to maturity:
Commercial and commercial real estate $ 1,718,993 $ 1,714,592 $ 1,740,856 $ 1,710,669 $ 1,670,108
Residential mortgage 163,726 170,543 169,105 175,065 175,059
Agricultural and agricultural real estate 250,943 260,393 255,576 258,239 256,780
Consumer 214,515 219,731 223,800 228,311 231,709
Direct financing leases, net 981 1,233 1,420 1,951 2,326
Unearned discount and deferred loan fees   (5,171 )   (4,925 )   (4,985 )   (5,002 )   (4,840 )
Total loans and leases held to maturity $ 2,343,987   $ 2,361,567   $ 2,385,772   $ 2,369,233   $ 2,331,142  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 10,056 $ 11,703 $ 12,266 $ 13,241 $ 15,068
Residential mortgage 5,792 6,545 7,148 8,064 8,984
Agricultural and agricultural real estate 2,723 2,807 3,346 2,806 3,626
Consumer   2,229     2,502     2,660     3,857     4,182  
Total loans and leases covered under loss share agreements $ 20,800   $ 23,557   $ 25,420   $ 27,968   $ 31,860  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 90,512 $ 85,190 $ 84,925 $ 78,239 $ 78,118
Loans and leases past due ninety days or more as to interest or principal payments 85 - - 47 17
Other real estate owned 31,731 32,129 32,554 28,290 30,205
Other repossessed assets   302     492     486     528     501  
Total nonperforming assets not covered under loss share agreements $ 122,630   $ 117,811   $ 117,965   $ 107,104   $ 108,841  
Covered under loss share agreements:
Nonaccrual loans $ 4,901 $ 5,330 $ 4,949 $ 4,621 $ 4,170
Loans and leases past due ninety days or more as to interest or principal payments - - - - -
Other real estate owned 271 279 328 362 363
Other repossessed assets   -     -     -     -     -  
Total nonperforming assets covered under loss share agreements $ 5,172   $ 5,609   $ 5,277   $ 4,983   $ 4,533  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 44,732 $ 48,314 $ 46,350 $ 41,848 $ 42,260
Provision for loan and lease losses 8,860 4,799 9,955 8,894 10,775
Charge offs on loans not covered by loss share agreements (11,133 ) (8,735 ) (8,879 ) (4,505 ) (10,115 )
Charge offs on loans covered by loss share agreements (445 ) (43 ) (46 ) (264 ) (1,344 )
Recoveries   679     397     934     377     272  
Balance, end of period $ 42,693   $ 44,732   $ 48,314   $ 46,350   $ 41,848  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 3.87 % 3.61 % 3.56 % 3.30 % 3.35 %
Ratio of nonperforming assets to total assets 3.07 % 2.90 % 2.94 % 2.68 % 2.71 %
Annualized ratio of net loan charge-offs to average loans and leases 1.79 % 1.37 % 1.32 % 0.74 % 1.84 %
Allowance for loan and lease losses as a percent of loans and leases 1.82 % 1.89 % 2.03 % 1.96 % 1.80 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 47.12 % 52.51 % 56.89 % 59.21 % 53.56 %
HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS

  For the Quarter Ended
December 31, 2010 December 31, 2009
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 975,587 $ 7,889 3.21 % $ 936,525 $ 10,513 4.45 %
Nontaxable(1)   287,595     4,375 6.04 %   213,662     3,462 6.43 %
Total securities   1,263,182     12,264 3.85 %   1,150,187     13,975 4.82 %
Interest bearing deposits 3,179 1 0.12 % 4,568 9 0.78 %
Federal funds sold   742     - - %   2,238     1 0.18 %
Loans and leases:
Commercial and commercial real estate (1) 1,730,992 24,867 5.70 % 1,699,909 25,221 5.89 %
Residential mortgage 210,155 2,669 5.04 % 209,481 2,866 5.43 %
Agricultural and agricultural real estate (1) 255,061 3,862 6.01 % 263,216 4,086 6.16 %
Consumer 217,488 4,998 9.12 % 235,369 5,180 8.73 %
Direct financing leases, net 1,103 16 5.76 % 2,484 37 5.91 %
Fees on loans - 1,368 - % - 1,000 - %
Less: allowance for loan and lease losses   (44,167 )   - - %   (41,827 )   - - %
Net loans and leases   2,370,632     37,780 6.32 %   2,368,632     38,390 6.43 %
Total earning assets   3,637,735     50,045 5.46 %   3,525,625     52,375 5.89 %
Nonearning Assets   453,541     449,482  
Total Assets $ 4,091,276   $ 50,045 $ 3,975,107   $ 52,375
Interest Bearing Liabilities
Interest bearing deposits
Savings $ 1,558,542 $ 2,747 0.70 % $ 1,469,913 $ 4,625 1.25 %
Time, $100,000 and over 277,373 1,744 2.49 % 341,288 2,344 2.72 %
Other time deposits 628,511 4,033 2.55 % 725,580 5,031 2.75 %
Short-term borrowings 224,483 330 0.58 % 133,666 194 0.58 %
Other borrowings   406,882     4,068 3.97 %   457,345     4,250 3.69 %
Total interest bearing liabilities   3,095,791     12,922 1.66 %   3,127,792     16,444 2.09 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 610,767 476,863
Accrued interest and other liabilities   47,891     44,198  
Total noninterest bearing liabilities   658,658     521,061  
Stockholders' Equity   336,827     326,254  
Total Liabilities and Stockholders' Equity $ 4,091,276   $ 3,975,107  
Net interest income (1) $ 37,123 $ 35,931
Net interest spread (1) 3.80 % 3.81 %
Net interest income to total earning assets (1) 4.05 % 4.04 %
Interest bearing liabilities to earning assets 85.10 % 88.72 %
 
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
 
HEARTLAND FINANCIAL USA, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

DOLLARS IN THOUSANDS

  For the Twelve Months Ended
December 31, 2010   December 31, 2009
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 956,976 $ 34,507 3.61 % $ 873,276 $ 39,782 4.56 %
Nontaxable (1)   264,307     16,408 6.21 %   186,716     12,307 6.59 %
Total securities   1,221,283     50,915 4.17 %   1,059,992     52,089 4.91 %
Interest bearing deposits 3,541 14 0.40 % 2,943 27 0.92 %
Federal funds sold   667     1 0.15 %   835     2 0.24 %
Loans and leases:
Commercial and commercial real estate (1) 1,727,548 101,720 5.89 % 1,696,794 101,854 6.00 %
Residential mortgage 203,596 10,663 5.24 % 219,303 12,596 5.74 %
Agricultural and agricultural real estate (1) 258,943 15,966 6.17 % 259,700 16,633 6.40 %
Consumer 224,288 20,052 8.94 % 232,475 20,325 8.74 %
Direct financing leases, net 1,572 92 5.85 % 3,927 213 5.42 %
Fees on loans - 4,452 - % - 4,085 - %
Less: allowance for loan and lease losses   (45,748 )   - - %   (37,964 )   - - %
Net loans and leases   2,370,199     152,945 6.45 %   2,374,235     155,706 6.56 %
Total earning assets   3,595,690     203,875 5.67 %   3,438,005     207,824 6.04 %
Nonearning Assets   434,692     374,738  
Total Assets $ 4,030,382   $ 203,875 $ 3,812,743   $ 207,824
Interest Bearing Liabilities
Interest bearing deposits
Savings $ 1,557,658 $ 13,677 0.88 % $ 1,282,212 $ 18,407 1.44 %
Time, $100,000 and over 296,325 7,534 2.54 % 373,159 11,202 3.00 %
Other time deposits 649,892 17,061 2.63 % 754,814 23,135 3.06 %
Short-term borrowings 200,389 1,160 0.58 % 143,239 733 0.51 %
Other borrowings   423,125     16,448 3.89 %   464,816     17,053 3.67 %
Total interest bearing liabilities   3,127,389     55,880 1.79 %   3,018,240     70,530 2.34 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 536,053 437,468
Accrued interest and other liabilities   39,363     36,700  
Total noninterest bearing liabilities   575,416     474,168  
Stockholders' Equity   327,577     320,335  
Total Liabilities and Stockholders' Equity $ 4,030,382   $ 3,812,743  
Net interest income (1) $ 147,995 $ 137,294
Net interest spread (1) 3.88 % 3.71 %
Net interest income to total earning assets (1) 4.12 % 3.99 %
Interest bearing liabilities to earning assets 86.98 % 87.79 %
 
(1) Tax equivalent basis is calculated using an effective tax rate of 35%
 
HEARTLAND FINANCIAL USA, INC.

SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)

DOLLARS IN THOUSANDS

 

As of and For
the Qtr. Ended

 

As of and For
the Qtr. Ended

 

As of and For
the Qtr. Ended

 

As of and For
the Qtr. Ended

 

As of and For
the Qtr. Ended

      12/31/2010       9/30/2010       6/30/2010       3/31/2010       12/31/2009  
Total Assets
Dubuque Bank and Trust Company $ 1,131,622 $ 1,201,966 $ 1,128,580 $ 1,160,474 $ 1,249,124
New Mexico Bank & Trust 913,776 891,642 878,518 849,428 868,295
Wisconsin Community Bank 474,366 461,822 458,468 456,510 448,106
Rocky Mountain Bank 417,781 438,923 439,241 454,558 469,723
Riverside Community Bank 290,018 297,272 295,671 283,195 283,258
Galena State Bank & Trust Co. 278,353 289,558 283,038 287,495 291,412
Arizona Bank & Trust 223,574 251,245 267,959 267,453 258,280
First Community Bank 115,675 114,686 118,887 119,962 121,492
Summit Bank & Trust 95,414 100,843 97,332 95,442 97,025
Minnesota Bank & Trust     58,386       57,832       55,722       54,318       49,330  
Total Deposits
Dubuque Bank and Trust Company $ 809,271 $ 825,773 $ 784,955 $ 806,574 $ 864,133
New Mexico Bank & Trust 646,302 655,724 624,454 608,030 589,468
Wisconsin Community Bank 392,432 363,868 358,034 355,880 358,994
Rocky Mountain Bank 347,924 349,853 350,636 363,842 376,487
Riverside Community Bank 241,184 242,717 242,964 233,440 232,459
Galena State Bank & Trust Co. 236,647 250,749 243,964 250,621 253,073
Arizona Bank & Trust 183,279 204,663 229,885 230,699 202,730
First Community Bank 93,578 92,802 97,057 98,691 100,328
Summit Bank & Trust 81,024 79,823 82,445 81,414 85,131
Minnesota Bank & Trust     44,278       41,316       41,234       39,912       34,616  
Net Income (Loss)
Dubuque Bank and Trust Company $ 3,934 $ 5,727 $ 3,304 $ 4,921 $ 3,751
New Mexico Bank & Trust 3,098 2,972 1,828 2,341 1,640
Wisconsin Community Bank 1,581 2,157 2,271 1,367 770
Rocky Mountain Bank 1,393 (695 ) 1,204 (596 ) (6,399 )
Riverside Community Bank 190 (140 ) 290 640 (55 )
Galena State Bank & Trust Co. 1,000 877 967 1,046 663
Arizona Bank & Trust (231 ) 42 (2,004 ) (2,900 ) (5,117 )
First Community Bank 38 (374 ) 19 399 (225 )
Summit Bank & Trust (208 ) 201 399 (118 ) (490 )
Minnesota Bank & Trust     (178 )     (147 )     (134 )     (123 )     (203 )
Return on Average Assets
Dubuque Bank and Trust Company 1.29 % 1.99 % 1.13 % 1.66 % 1.25 %
New Mexico Bank & Trust 1.33 1.34 0.83 1.12 0.79
Wisconsin Community Bank 1.31 1.85 1.98 1.23 0.69
Rocky Mountain Bank 1.27 (0.63 ) 1.08 (0.53 ) (5.30 )
Riverside Community Bank 0.25 (0.19 ) 0.40 0.93 (0.08 )
Galena State Bank & Trust Co. 1.39 1.21 1.35 1.46 0.90
Arizona Bank & Trust (0.38 ) (0.06 ) (2.95 ) (4.62 ) (7.60 )
First Community Bank 0.13 (1.26 ) 0.06 1.35 (0.72 )
Summit Bank & Trust (0.84 ) 0.79 1.65 (0.50 ) (1.94 )
Minnesota Bank & Trust     (1.23 )     (1.00 )     (1.00 )     (0.95 )     (1.95 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 3.92 % 4.01 % 4.04 % 4.05 % 3.98 %
New Mexico Bank & Trust 4.00 4.35 3.94 4.18 4.23
Wisconsin Community Bank 4.26 4.60 4.35 3.80 3.91
Rocky Mountain Bank 3.76 3.81 3.79 3.90 3.68
Riverside Community Bank 4.38 4.30 3.84 3.95 4.14
Galena State Bank & Trust Co. 3.60 3.53 3.56 3.48 3.46
Arizona Bank & Trust 3.72 3.77 3.46 3.64 3.58
First Community Bank 3.02 3.40 3.58 3.79 4.24
Summit Bank & Trust 2.78 3.22 3.98 3.29 3.00
Minnesota Bank & Trust 4.07 3.14 3.24 3.24 4.16
HEARTLAND FINANCIAL USA, INC.

SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)

DOLLARS IN THOUSANDS

  As of   As of   As of   As of   As of
      12/31/2010       9/30/2010       6/30/2010       3/31/2010       12/31/2009  
Total Portfolio Loans and Leases
Dubuque Bank and Trust Company $ 673,399 $ 672,401 $ 698,562 $ 681,668 $ 658,274
New Mexico Bank & Trust 513,658 511,279 513,257 509,696 502,497
Wisconsin Community Bank 320,711 325,543 323,024 314,102 274,487
Rocky Mountain Bank 246,213 260,832 272,035 281,079 292,914
Riverside Community Bank 162,706 165,539 159,137 157,511 161,280
Galena State Bank & Trust Co. 137,153 131,955 133,666 131,539 134,104
Arizona Bank & Trust 124,388 129,871 129,445 131,115 138,604
First Community Bank 60,827 64,375 64,666 66,560 72,113
Summit Bank & Trust 48,020 52,396 53,543 58,272 58,108
Minnesota Bank & Trust     36,013       26,868       25,058       24,997       24,472  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 10,803 $ 9,874 $ 12,343 $ 10,395 $ 10,486
New Mexico Bank & Trust 7,704 8,297 8,388 7,999 7,578
Wisconsin Community Bank 3,847 4,518 4,306 5,328 5,390
Rocky Mountain Bank 3,779 5,181 6,465 7,434 5,897
Riverside Community Bank 3,524 3,109 2,751 2,425 2,395
Galena State Bank & Trust Co. 1,811 1,743 1,543 1,466 1,989
Arizona Bank & Trust 5,407 5,915 7,912 7,056 3,825
First Community Bank 1,629 2,087 1,262 993 1,072
Summit Bank & Trust 1,271 1,312 913 994 926
Minnesota Bank & Trust     565       270       242       240       295  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 5,094 $ 4,880 $ 5,754 $ 6,408 $ 6,102
New Mexico Bank & Trust 20,753 14,651 15,901 13,998 14,069
Wisconsin Community Bank 12,702 12,070 10,159 15,773 14,396
Rocky Mountain Bank 21,406 29,986 31,981 21,558 18,443
Riverside Community Bank 7,611 7,662 7,722 5,543 8,104
Galena State Bank & Trust Co. 5,308 2,976 2,605 1,372 1,545
Arizona Bank & Trust 8,797 5,758 5,165 4,922 5,158
First Community Bank 2,417 2,850 2,338 2,512 2,736
Summit Bank & Trust 5,965 3,694 2,691 5,513 6,719
Minnesota Bank & Trust     8       -       -       -       19  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.60 % 1.47 % 1.77 % 1.52 % 1.59 %
New Mexico Bank & Trust 1.50 1.62 1.63 1.57 1.51
Wisconsin Community Bank 1.20 1.39 1.33 1.70 1.96
Rocky Mountain Bank 1.53 1.99 2.38 2.64 2.01
Riverside Community Bank 2.17 1.88 1.73 1.54 1.48
Galena State Bank & Trust Co. 1.32 1.32 1.15 1.11 1.48
Arizona Bank & Trust 4.35 4.55 6.11 5.38 2.76
First Community Bank 2.68 3.24 1.95 1.49 1.49
Summit Bank & Trust 2.65 2.50 1.71 1.71 1.59
Minnesota Bank & Trust     1.57       1.00       0.97       0.96       1.21  

Heartland Financial USA, Inc.
John K. Schmidt, 563-589-1994
Chief Operating Officer
Chief Financial Officer
jschmidt@htlf.com