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

Quarterly Highlights

  • Net interest margin of 4.08%
  • Growth in loans held to maturity of $107.1 million since September 30, 2011
  • Deposit growth of $36.5 million since September 30, 2011
  • Nonperforming assets decreased $10.3 million since September 30, 2011
  • Expansion of mortgage operations in existing and new markets
  Quarter Ended   Year Ended
December 31, December 31,
2011   2010 2011   2010
Net income (in millions) $ 6.2 $ 6.5 $ 28.0 $ 23.8
Net income available to common stockholders (in millions) 5.2 5.2 20.4 18.6
Diluted earnings per common share 0.31 0.31 1.23 1.13
 
Return on average assets 0.49 % 0.50 % 0.50 % 0.46 %
Return on average common equity 7.77 8.06 7.77 7.51
Net interest margin 4.08 4.05 4.16 4.12
 

"We are very pleased to see net income increase by 18 percent to $28.0 million for the year. Heartland's favorable results continue to be driven by a solid net interest margin of 4.08 percent. This marks ten consecutive quarters with margin exceeding four percent."

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

 

Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income of $6.2 million for the quarter ended December 31, 2011, which was a decrease from the $6.5 million recorded for the fourth quarter of 2010. Net income available to common stockholders was $5.2 million, or $0.31 per diluted common share, for the quarter ended December 31, 2011, compared to $5.2 million, or $0.31 per diluted common share, for the fourth quarter of 2010. Return on average common equity was 7.77 percent and return on average assets was 0.49 percent for the fourth quarter of 2011, compared to 8.06 percent and 0.50 percent, respectively, for the same quarter in 2010.

Earnings for the fourth quarter of 2011 in comparison to the fourth quarter of 2010 were positively affected by increases in net interest income, securities gains and gains on sale of loans, along with a lower provision for loan and lease losses and reduced losses on repossessed assets. The effect of these improvements was mitigated by a significant increase in salaries and employee benefits due to the expansion of mortgage operations in both new and existing markets.

Net income recorded for the year was $28.0 million in 2011, compared to $23.8 million in 2010, an increase of $4.2 million or 18 percent. Net income available to common stockholders was $20.4 million, or $1.23 per diluted common share, in 2011, compared to $18.6 million, or $1.13 per diluted common share, in 2010. Return on average common equity was 7.77 percent and return on average assets was 0.50 percent for 2011, compared to 7.51 percent and 0.46 percent, respectively, for 2010.

On September 15, 2011, Heartland joined the Small Business Lending Fund ("SBLF"). Simultaneous with receipt of the SBLF funds, Heartland redeemed the $81.7 million of preferred stock issued to the U.S. Treasury in December 2008 under the Capital Purchase Program, a part of the Troubled Asset Relief Program ("TARP"). As a result of this redemption, $2.6 million in remaining unamortized discount on preferred stock was recognized during the third quarter of 2011. Exclusive of this one-time event, net income available to common stockholders for the year 2011 would have been $23.0 million or $1.39 per diluted common share.

Annual earnings for 2011 compared to 2010 were positively affected by increased securities gains, gains on sale of loans and net interest income, combined with reductions in net losses on repossessed assets, FDIC insurance assessments and provision for loan and lease losses. The effect of these improvements was partially offset by increases in salaries and employee benefits, professional fees and other noninterest expenses.

Commenting on Heartland's results for 2011, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, "We are very pleased to see net income increase by 18 percent to $28.0 million for the year. Heartland's favorable results continue to be driven by a solid net interest margin of 4.08 percent. This marks ten consecutive quarters with margin exceeding four percent."

Net Interest Margin Remains Above 4.00 Percent

Net interest margin, expressed as a percentage of average earning assets, was 4.08 percent during the fourth quarter of 2011 compared to 4.05 percent for the fourth quarter of 2010. For the twelve months ended December 31, net interest margin was 4.16 percent during 2011 and 4.12 percent during 2010. The continuation of a net interest margin above 4.00 percent has been a direct result of Heartland's price discipline. Also positively affecting net interest margin was improvement in the level of nonaccrual loans not covered under loss share agreements, which had balances of $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, and $90.6 million or 3.87 percent of total loans and leases at December 31, 2010.

Fuller said, "Our net interest margin was excellent throughout 2011, exceeding four percent each quarter. While we are certainly focused on loan growth, we recognize it will be difficult to maintain net interest margin at this level going forward. There is little room to move deposit rates lower, while competition for new loans and reinvestment rates on maturing securities continue to push asset yields lower."

On a tax-equivalent basis, interest income in the fourth quarter of 2011 was $49.3 million compared to $50.0 million in the fourth quarter of 2010, a decrease of $723,000 or 1 percent. The $111.9 million or 3 percent growth in average earning assets during the fourth quarter of 2011 compared to the same period in 2010 was not enough to compensate for the decrease in the average interest rate earned on these assets which was 5.22 percent during the fourth quarter of 2011 compared to 5.46 percent during the fourth quarter of 2010. A majority of the reduction in the average interest rate earned was in the securities portfolio which earned 3.38 percent during the fourth quarter of 2011 compared to 3.85 percent during the fourth quarter of 2010. For the year, interest income on a tax-equivalent basis was $197.7 million in 2011 compared to $203.9 million in 2010, a decrease of $6.2 million or 3 percent. The $44.2 million or 1 percent growth in average earning assets during the year 2011 compared to the year 2010 was offset by the impact of a decrease in the average interest rate earned on these assets which was 5.43 percent during 2011 compared to 5.67 percent during 2010. As in the quarterly comparisons, the decrease in earning asset interest rates was primarily due to the decrease in the average interest rate earned on total securities which was 3.69 percent in 2011 compared to 4.17 percent in 2010.

Interest expense for the fourth quarter of 2011 was $10.8 million, a decrease of $2.1 million or 17 percent from $12.9 million in the fourth quarter of 2010. On a year-over-year comparative basis, interest expense decreased $9.6 million or 17 percent to $46.3 million during 2011 from $55.9 million during 2010. Average interest bearing liabilities decreased $29.1 million or 1 percent for the quarter ended December 31, 2011, as compared to the same quarter in 2010. For the year, average interest bearing liabilities decreased $106.0 million or 3 percent in 2011 compared to 2010. These decreases resulted primarily from an outflow of higher cost certificates of deposit and a reduction in other borrowings. The average interest rates paid on Heartland's interest bearing deposits and borrowings declined 26 basis points to 1.40 percent in the fourth quarter of 2011 from 1.66 percent in the fourth quarter of 2010. On a year-over-year comparative basis, the average interest rate paid on Heartland's deposits and borrowings declined 26 basis points to 1.53 percent in 2011 from 1.79 percent in 2010.

Net interest income on a tax-equivalent basis totaled $38.5 million during the fourth quarter of 2011, an increase of $1.4 million or 4 percent from the $37.1 million recorded during the fourth quarter of 2010. For the year 2011, net interest income on a tax-equivalent basis was $151.3 million, an increase of $3.3 million or 2 percent from the $148.0 million recorded during 2010.

Noninterest Income and Noninterest Expense Increase

Noninterest income was $19.0 million during the fourth quarter of 2011 compared to $18.3 million during the fourth quarter of 2010, an increase of $745,000 or 4 percent. . The categories contributing most significantly to the improvement in noninterest income were securities gains and gains on sale of loans. The increase in securities gains resulted from strategies described below to shift concentrations in the securities portfolio. The improvement in gains on sale of loans resulted primarily from better pricing received on the sale of these loans into the secondary market. Heartland began selling a majority of its originated 15- and 30- year, fixed rate residential mortgage loans under a bulk delivery method during the second quarter of 2011, instead of under an individual delivery method. At the same time, Heartland implemented a software tool to assist management with the identification of prudent strategies to hedge its locked rate pipeline position. As a consequence of these two initiatives, gains on sale of loans increased despite a decrease in the volume of loans sold, which totaled $208.5 million during the fourth quarter of 2011 in comparison to $259.0 million during the fourth quarter of 2010. The improvement in securities gains and gains on sale of loans was offset by a $19,000 valuation allowance in the fourth quarter of 2011 as opposed to a $1.2 million positive valuation adjustment in the fourth quarter of 2010 on mortgage servicing rights, reduced loan servicing income and a decrease in other noninterest income, primarily attributable to payment to the FDIC for recoveries on loans covered under loss share agreements and the receipt of $502,000 in life insurance proceeds during the fourth quarter of 2010.

For the year, noninterest income was $59.6 million in 2011 compared to $52.3 million in 2010, an increase of $7.3 million or 14 percent. Securities gains totaled $13.1 million for the year 2011 compared to $6.8 million for the year 2010. Volatility in the bond market provided opportunities in 2011 to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. One such strategy was the sale of taxable municipal bonds and the reinvestment into tax-exempt municipal bonds. Another strategy initiated in the second quarter of 2011 shifted a portion of the securities portfolio from agencies to treasuries and shorter-term mortgage-backed securities. Other categories contributing to the increase for the year-over-year comparative period were gains on sale of loans, service charges and fees, trust fees and brokerage and insurance commissions.

Loan servicing income decreased $319,000 or 14 percent for the fourth quarter of 2011 as compared to the fourth quarter of 2010 and $1.3 million or 18 percent for the year 2011 compared to the year 2010. 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 $1.4 million during the fourth quarter of 2011 compared to $2.3 million during the fourth quarter of 2010 and amortization of mortgage servicing rights was $861,000 during the fourth quarter of 2011 compared to $1.5 million during the fourth quarter of 2010. Loan servicing income also includes 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 were $932,000 during the fourth quarter of 2011 compared to $831,000 during the fourth quarter of 2010. The portfolio of mortgage loans serviced for others by Heartland totaled $1.54 billion at December 31, 2011, compared to $1.40 billion at December 31, 2010.

For the fourth quarter of 2011, noninterest expense totaled $40.2 million, an increase of $2.9 million or 8 percent from the same quarter of 2010. The primary contributor to this increase was the $5.2 million or 31 percent increase in salaries and employee benefits, a large portion of which resulted from the expansion of residential loan origination and the addition of personnel in the Heartland Mortgage and National Residential Mortgage unit. Full-time equivalent employees totaled 1,195 on December 31, 2011, compared to 1,065 on December 31, 2010. Also contributing to the increased salaries and employee benefits costs during the fourth quarter of 2011 was a decision to change the discretionary retirement plan contribution percentage to 5.00 percent of employee compensation instead of the 4.25 percent it was for 2010. Other noninterest expenses increased $835,000 or 23 percent primarily as a result of the establishment of a $613,000 repurchase reserve during the fourth quarter of 2011 for the potential buyback of mortgage loans sold into the secondary market. Offsetting, in part, these increases were a $458,000 or 35 percent reduction in FDIC insurance assessments and a $3.1 million or 42 percent reduction in net losses on repossessed assets.

For the year-over-year comparative period, noninterest expense totaled $137.3 million in 2011 compared to $129.2 million in 2010, an $8.1 million or 6 percent increase. Contributing to this increase in noninterest expense was a $12.1 million or 19 percent increase in salaries and employee benefits for the yearly comparative period, primarily attributable to the expansion of residential loan origination. Also contributing to the increase in noninterest expense was additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants, and increases in other noninterest expenses, a portion of which was associated with a writedown on land in Phoenix, Arizona, which had originally been purchased for branch expansion but has now been listed for sale, and establishment of the repurchase reserve for the potential buyback of mortgage loans. The effect of these increases was mitigated by a $1.7 million or 30 percent decrease in FDIC insurance assessments and a $5.5 million or 36 percent decrease in net losses on repossessed assets. Included in noninterest expense during 2010 was a $1.6 million goodwill impairment charge.

Fuller commented, "Our new Heartland Mortgage and National Residential unit has significantly expanded our mortgage origination capability, both within and outside of the Heartland footprint. We are optimistic that growth in the mortgage unit will result in increased net profit for the company."

Heartland's effective tax rate was 26.89 percent for 2011 compared to 29.27 percent for 2010. Excluding a non-deductible goodwill impairment charge recorded in 2010, Heartland's effective tax rate was 27.91 percent for 2010. During the third quarter of 2011, Heartland's income taxes included a $404,000 refund for state taxes attributable to the 2007 and 2008 tax years. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $798,000 during 2011 compared to $554,000 during 2010. Heartland's effective tax rate is also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 28.78 percent during 2011 compared to 27.29 percent during 2010. The tax-equivalent adjustment for this tax-exempt interest income was $5.9 million during 2011 compared to $4.9 million during 2010.

Loan Demand Strengthens; Deposit Growth Continues With Improving Mix

At December 31, 2011, total assets were $4.26 billion, an increase of $259.6 million or 6 percent, over total assets of $4.00 billion at December 31, 2010. Securities represented 30 percent of total assets at year-end 2011 compared to 32 percent at year-end 2010.

Total loans and leases, exclusive of those covered by loss share agreements, were $2.48 billion at December 31, 2011, compared to $2.34 billion at year-end 2010, an increase of $137.3 million or 6 percent. Commercial and commercial real estate loans, which totaled $1.81 billion at December 31, 2011, increased $90.5 million or 5 percent since year-end 2010. Residential mortgage loans, which totaled $194.4 million at December 31, 2011, increased $30.7 million or 19 percent since year-end 2010. Agricultural and agricultural real estate loans, which totaled $263.0 million at December 31, 2011, increased $12.0 million or 5 percent since year-end 2010. Consumer loans, which totaled $220.1 million at December 30, 2011, increased $5.6 million or 3 percent since year-end 2010.

"Loan demand picked up during the second half of the year with very good growth in the fourth quarter. Overall, loans increased 6 percent year-over-year. We believe this is the beginning of a positive trend toward sustained growth in quality loans," added Fuller.

Fuller also noted, "Our participation in the Small Business Lending Fund provides added incentive for the Heartland banks to originate small business loans. Fueled by the potential of lower funding cost, we will provide affordable credit to small commercial and agricultural clients, which will in turn help to increase employment and assist the economic recovery in the communities we serve."

Total deposits were $3.21 billion at December 31, 2011, compared to $3.03 billion at year-end 2010, an increase of $176.1 million or 6 percent. The composition of Heartland's deposits shifted from higher cost certificates of deposit to no cost demand deposits during 2011, as demand deposits increased $156.7 million or 27 percent since year-end 2010. Certificates of deposit, exclusive of brokered deposits, experienced a decrease of $103.8 million or 12 percent since year-end 2010. At December 31, 2011, brokered time deposits totaled $41.2 million or 1 percent of total deposits compared to $37.3 million or 1 percent of total deposits at December 31, 2010.

Fuller said, "Deposit growth also demonstrated steady improvement over the year. We continue to see a very favorable shift in our deposit mix through the growth of non-time deposits. An increase in demand deposits was effectively matched with a corresponding decrease in time deposits."

Decrease in Allowance for Loan Losses; Decrease in Nonperforming Assets

The allowance for loan and lease losses at December 31, 2011, was 1.48 percent of loans and leases and 64.09 percent of nonperforming loans compared to 1.82 percent of loans and leases and 47.12 percent of nonperforming loans at December 31, 2010. The allowance for loan and lease losses as a percentage of loans and leases declined by year-end 2011 as several credit relationships considered impaired, for which specific reserves had been provided, were charged-off or transitioned to other real estate owned. The provision for loan losses was $7.8 million for the fourth quarter of 2011 compared to $8.9 million for the fourth quarter of 2010, a $1.1 million or 12 percent decrease. For the year, provision for loan losses was $29.4 million in 2011 compared to $32.5 million in 2010. Although the aggregate annual provision for loan losses has moderated, additions to the allowance for loan and lease losses continued during 2011 as the lack of significant economic recovery and the long-term affect of adverse economic conditions impacted individual credits and continued to impact the value of collateral when appraisals were obtained.

Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, compared to $90.6 million or 3.87 percent of total loans and leases at December 31, 2010. Approximately 57 percent, or $32.7 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 15 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $8.8 million originated by Arizona Bank & Trust, $8.2 million originated by New Mexico Bank & Trust, $4.5 million originated by Wisconsin Community Bank, $4.5 million originated by Rocky Mountain Bank, $3.9 million originated by Riverside Community Bank and $2.8 million originated by Galena State Bank and Trust Company. The portion of Heartland's nonperforming loans covered by government guarantees was $2.7 million at December 31, 2011. The industry breakdown for nonperforming loans with individual balances exceeding $1.0 million, as identified using the North American Industry Classification System (NAICS), was $14.4 million for lot and land development and $6.7 million for construction and development. The remaining $11.6 million was distributed among seven other industry categories.

Delinquencies in each of the loan portfolios continue to be well-managed and no significant adverse trends were identified during 2011. Loans delinquent 30 to 89 days as a percent of total loans were 0.23 percent at December 31, 2011, compared to 0.54 percent at September 30, 2011, 0.60 percent at June 30, 2011, 0.61 percent at March 31, 2011, and 0.67 percent at December 31, 2010.

Other real estate owned was $44.4 million at December 31, 2011, compared to $32.0 million at December 31, 2010. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues to market these properties through an orderly liquidation process instead of a quick liquidation process in order to avoid discounts greater than the projected carrying costs. During 2011, $21.8 million of other real estate owned was sold, $5.4 million during the fourth quarter, $6.2 million during the third quarter, $4.9 million during the second quarter and $5.3 million during the first quarter.

The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the fourth quarter and year ended December 31, 2011:

      Other   Total
Nonperforming Other Real Repossessed Nonperforming

(Dollars in thousands)

Loans Estate Owned Assets Assets
September 30, 2011 $ 76,515 $ 39,188 $ 398 $ 116,101
Loan foreclosures (14,488 ) 14,072 416 --
Net loan charge offs (15,171 ) -- -- (15,171 )
New nonperforming loans 21,634 -- -- 21,634
Reduction of nonperforming loans(1) (7,710 ) -- -- (7,710 )
OREO/Repossessed sales proceeds -- (5,546 ) (64 ) (5,610 )
OREO/Repossessed assets writedowns, net -- (3,327 ) (20 ) (3,347 )
Net activity at Citizens Finance Co.   --     --     (82 )   (82 )
December 31, 2011 $ 60,780   $ 44,387   $ 648   $ 105,815  
 

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

 
Other Total
Nonperforming Other Real Repossessed Nonperforming
(Dollars in thousands) Loans Estate Owned Assets Assets
December 31, 2010 $ 95,498 $ 32,002 $ 302 $ 127,802
Loan foreclosures (41,933 ) 41,272 661 --
Net loan charge offs (35,250 ) -- -- (35,250 )
New nonperforming loans 75,676 -- -- 75,676
Reduction of nonperforming loans(1) (33,211 ) -- -- (33,211 )
OREO/Repossessed sales proceeds -- (21,635 ) (234 ) (21,869 )
OREO/Repossessed assets writedowns, net -- (7,252 ) (52 ) (7,304 )
Net activity at Citizens Finance Co.   --     --     (29 )   (29 )
December 31, 2011 $ 60,780   $ 44,387   $ 648   $ 105,815  
 
(1) Includes principal reductions and transfers to performing status.
 

Net charge-offs on loans during the fourth quarter of 2011 were $15.2 million compared to $10.9 million during the fourth quarter of 2010. Included in the fourth quarter 2011 net charge-offs was a $6.1 million charge-off on one credit relationship in the Midwest, which had been identified as impaired and fully reserved for in the third quarter of 2011. A large portion of the net charge-offs in both years was related to nonfarm nonresidential real estate and construction, land development and other land loans.

"During the quarter we made substantial headway in reducing nonperforming loans, which has been and continues to be Heartland's number one priority. Nonperforming loans ended the year at 2.3 percent of total loans, a decrease of 37 percent from their peak at year-end 2010. Additionally, delinquencies are at their lowest level in over three years. Compared to the high-water marks set earlier last year, our asset quality measures are moving in a very favorable direction," Fuller concluded.

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-941-9205 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 28, 2013, by logging onto www.htlf.com.

About Heartland Financial USA, Inc.

Heartland Financial USA, Inc. is a $4.26 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 For the Year Ended
December 31, December 31,
    2011   2010   2011   2010
Interest Income    
Interest and fees on loans and leases $ 37,764 $ 37,440 $ 149,603 $ 151,794
Interest on securities and other:
Taxable 6,375 7,889 28,195 34,507
Nontaxable 3,483 3,438 13,935 12,616
Interest on federal funds sold - - 3 1
Interest on deposits in other financial institutions   -     1     1     14  
Total Interest Income   47,622     48,768     191,737     198,932  
Interest Expense
Interest on deposits 6,495 8,524 29,224 38,272
Interest on short-term borrowings 204 330 893 1,160
Interest on other borrowings   4,086     4,068     16,226     16,448  
Total Interest Expense   10,785     12,922     46,343     55,880  
Net Interest Income 36,837 35,846 145,394 143,052
Provision for loan and lease losses   7,784     8,860     29,365     32,508  
Net Interest Income After Provision for Loan and Lease Losses   29,053     26,986     116,029     110,544  
Noninterest Income
Service charges and fees 3,686 3,537 14,303 13,900
Loan servicing income 2,004 2,323 5,932 7,232
Trust fees 2,337 2,428 9,856 9,206
Brokerage and insurance commissions 889 948 3,511 3,184
Securities gains, net 4,174 2,170 13,104 6,834
Gain (loss) on trading account securities (125 ) 107 89 (91 )
Gains on sale of loans 5,473 3,813 11,366 8,088
Valuation adjustment on mortgage servicing rights (19 ) 1,239 (19 ) -
Income on bank owned life insurance 407 463 1,349 1,466
Other noninterest income   212     1,265     86     2,510  
Total Noninterest Income   19,038     18,293     59,577     52,329  
Noninterest Expense
Salaries and employee benefits 22,135 16,892 75,537 63,391
Occupancy 2,368 2,339 9,363 9,121
Furniture and equipment 1,475 1,543 5,636 6,104
Professional fees 3,385 3,065 12,567 10,446
FDIC insurance assessments 848 1,306 3,777 5,441
Advertising 1,138 1,058 4,292 3,830
Intangible assets amortization 141 146 572 591
Goodwill impairment charge - - - 1,639
Net loss on repossessed assets 4,255 7,345 9,807 15,264
Other noninterest expenses   4,458     3,623     15,745     13,412  
Total Noninterest Expense   40,203     37,317     137,296     129,239  
Income Before Income Taxes 7,888 7,962 38,310 33,634
Income taxes   1,671     1,464     10,302     9,846  
Net Income 6,217 6,498 28,008 23,788
Net income attributable to noncontrolling interest, net of tax   31     35     36     115  
Net Income Attributable to Heartland 6,248 6,533 28,044 23,903
Preferred dividends and discount   (1,021 )   (1,336 )   (7,640 )   (5,344 )
Net Income Available to Common Stockholders $ 5,227   $ 5,197   $ 20,404   $ 18,559  
Earnings per common share-diluted $ 0.31 $ 0.31 $ 1.23 $ 1.13
Weighted average shares outstanding-diluted 16,599,741 16,515,657 16,575,506 16,461,679
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Interest Income        
Interest and fees on loans and leases $ 37,764 $ 37,393 $ 37,480 $ 36,966 $ 37,440
Interest on securities and other:
Taxable 6,375 6,826 7,583 7,411 7,889
Nontaxable 3,483 3,370 3,518 3,564 3,438
Interest on federal funds sold - 2 1 - -
Interest on deposits in other financial institutions   -     -     -     1     1  
Total Interest Income   47,622     47,591     48,582     47,942     48,768  
Interest Expense
Interest on deposits 6,495 7,028 7,675 8,026 8,524
Interest on short-term borrowings 204 205 225 259 330
Interest on other borrowings   4,086     4,123     4,081     3,936     4,068  
Total Interest Expense   10,785     11,356     11,981     12,221     12,922  
Net Interest Income 36,837 36,235 36,601 35,721 35,846
Provision for loan and lease losses   7,784     7,727     3,845     10,009     8,860  
Net Interest Income After Provision for Loan and Lease Losses   29,053     28,508     32,756     25,712     26,986  
Noninterest Income
Service charges and fees 3,686 3,657 3,599 3,361 3,537
Loan servicing income 2,004 1,081 1,298 1,549 2,323
Trust fees 2,337 2,384 2,656 2,479 2,428
Brokerage and insurance commissions 889 918 856 848 948
Securities gains, net 4,174 2,085 4,756 2,089 2,170
Gain (loss) on trading account securities (125 ) (83 ) 81 216 107
Gains on sale of loans 5,473 3,183 1,308 1,402 3,813
Valuation adjustment on mortgage servicing rights (19 ) - - - 1,239
Income on bank owned life insurance 407 208 331 403 463
Other noninterest income   212     (171 )   (216 )   261     1,265  
Total Noninterest Income   19,038     13,262     14,669     12,608     18,293  
Noninterest Expense
Salaries and employee benefits 22,135 17,736 17,480 18,186 16,892
Occupancy 2,368 2,396 2,213 2,386 2,339
Furniture and equipment 1,475 1,392 1,360 1,409 1,543
Professional fees 3,385 3,110 3,053 3,019 3,065
FDIC insurance assessments 848 798 786 1,345 1,306
Advertising 1,138 1,191 1,113 850 1,058
Intangible assets amortization 141 141 144 146 146
Goodwill impairment charge - - - - -
Net loss on repossessed assets 4,255 1,409 2,511 1,632 7,345
Other noninterest expenses   4,458     3,690     3,683     3,914     3,623  
Total Noninterest Expense   40,203     31,863     32,343     32,887     37,317  
Income Before Income Taxes 7,888 9,907 15,082 5,433 7,962
Income taxes   1,671     2,549     4,870     1,212     1,464  
Net Income 6,217 7,358 10,212 4,221 6,498
Net income (loss) attributable to noncontrolling interest, net of tax   31     (20 )   9     16     35  
Net Income Attributable to Heartland 6,248 7,338 10,221 4,237 6,533
Preferred dividends and discount   (1,021 )   (3,947 )   (1,336 )   (1,336 )   (1,336 )
Net Income Available to Common Stockholders $ 5,227   $ 3,391   $ 8,885   $ 2,901   $ 5,197  
Earnings per common share-diluted $ 0.31 $ 0.20 $ 0.54 $ 0.18 $ 0.31
Weighted average shares outstanding-diluted 16,599,741 16,585,021 16,568,701 16,557,353 16,515,657
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As Of
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Assets        
Cash and cash equivalents $ 129,834 $ 81,605 $ 148,388 $ 86,278 $ 62,572
Securities 1,280,577 1,323,464 1,193,480 1,244,447 1,264,564
Loans held for sale 53,528 36,529 15,770 8,317 23,904
Loans and leases:
Held to maturity 2,481,284 2,374,186 2,351,785 2,360,604 2,343,987
Loans covered by loss share agreements 13,347 14,766 16,190 19,201 20,800
Allowance for loan and lease losses   (36,808 )   (44,195 )   (40,602 )   (43,271 )   (42,693 )
Loans and leases, net 2,457,823 2,344,757 2,327,373 2,336,534 2,322,094
Premises, furniture and equipment, net 110,206 110,127 118,828 119,954 121,012
Goodwill 25,909 25,909 25,909 25,909 25,909
Other intangible assets, net 12,960 12,601 13,103 13,440 13,466
Cash surrender value on life insurance 67,084 66,654 66,425 66,073 61,981
Other real estate, net 44,387 39,188 39,075 35,007 32,002
FDIC indemnification asset 1,343 992 1,035 1,396 2,294
Other assets   75,392     70,853     61,231     66,019     69,657  
Total Assets $ 4,259,043   $ 4,112,679   $ 4,010,617   $ 4,003,374   $ 3,999,455  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 737,323 $ 692,893 $ 649,523 $ 637,452 $ 580,589
Savings 1,678,154 1,654,417 1,557,053 1,569,993 1,558,998
Brokered time deposits 41,225 44,225 39,225 39,225 37,285
Other time deposits   753,411     782,079     834,884     835,704     857,176  
Total deposits 3,210,113 3,173,614 3,080,685 3,082,374 3,034,048
Short-term borrowings 270,081 173,199 168,021 194,934 235,864
Other borrowings 372,820 375,976 379,718 365,281 362,527
Accrued expenses and other liabilities   53,136     36,667     36,643     28,393     35,232  
Total Liabilities 3,906,150 3,759,456 3,665,067 3,670,982 3,667,671
Equity
Preferred equity 81,698 81,698 79,113 78,798 78,483
Common equity   268,520     268,819     263,769     250,918     250,608  
Total Heartland Stockholders' Equity 350,218 350,517 342,882 329,716 329,091
Noncontrolling interest   2,675     2,706     2,668     2,676     2,693  
Total Equity   352,893     353,223     345,550     332,392     331,784  
Total Liabilities and Equity $ 4,259,043   $ 4,112,679   $ 4,010,617   $ 4,003,374   $ 3,999,455  
Common Share Data
Book value per common share $ 16.30 $ 16.33 $ 16.04 $ 15.28 $ 15.26
ASC 320 effect on book value per common share $ 0.97 $ 1.22 $ 0.86 $ 0.49 $ 0.60
Common shares outstanding, net of treasury stock 16,484,790 16,459,338 16,442,437 16,418,228 16,425,055
Tangible Capital Ratio (1) 5.69 % 5.90 % 5.92 % 5.61 % 5.60 %
 

(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). This is a non-GAAP financial measure.

 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended   For the Year Ended
        12/31/2011   12/31/2010   12/31/2011   12/31/2010
Average Balances    
Assets 4,197,916 4,091,276 4,071,811 4,030,382
Loans and leases, net of unearned 2,487,778 2,414,799 2,418,864 2,415,947
Deposits 3,215,793 3,075,193 3,114,080 3,039,928
Earning assets 3,749,612 3,637,735 3,639,926 3,595,690
Interest bearing liabilities 3,066,704 3,095,791 3,021,430 3,127,389
Common stockholders' equity 267,025 255,940 262,504 247,141
Total stockholders' equity 351,538 336,827 344,878 327,577
Tangible common stockholders' equity 239,394 227,696 234,630 217,451
 
Earnings Performance Ratios
Annualized return on average assets 0.49 % 0.50 % 0.50 % 0.46 %
Annualized return on average common equity 7.77 % 8.06 % 7.77 % 7.51 %
Annualized return on average common tangible equity 8.66 % 9.06 % 8.70 % 8.53 %
Annualized net interest margin(1) 4.08 % 4.05 % 4.16 % 4.12 %
Efficiency ratio(2) 75.29 % 70.09 % 69.41 % 66.79 %
 
(1) Computed on a tax equivalent basis 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. This is a non-GAAP financial measure.
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Average Balances
Assets $ 4,197,916 $ 4,063,327 $ 4,014,290 $ 4,009,863 $ 4,091,276
Loans and leases, net of unearned 2,487,778 2,399,047 2,388,088 2,399,656 2,414,799
Deposits 3,215,793 3,110,978 3,059,360 3,068,753 3,075,193
Earning assets 3,749,612 3,624,559 3,600,095 3,583,883 3,637,735
Interest bearing liabilities 3,066,704 3,002,868 3,004,928 3,010,629 3,095,791
Common stockholders' equity 267,025 270,696 260,334 251,833 255,940
Total stockholders' equity 351,538 353,003 341,797 333,016 336,827
Tangible common stockholders' equity 239,394 242,886 232,381 223,736 227,696
 
Earnings Performance Ratios
Annualized return on average assets 0.49 % 0.33 % 0.89 % 0.29 % 0.50 %
Annualized return on average common equity 7.77 % 4.97 % 13.69 % 4.67 % 8.06 %
Annualized return on average common tangible equity 8.66 % 5.54 % 15.34 % 5.26 % 9.06 %
Annualized net interest margin(1) 4.08 % 4.14 % 4.23 % 4.19 % 4.05 %
Efficiency ratio(2) 75.29 % 65.07 % 67.53 % 69.17 % 70.09 %
 

(1) Computed on a tax equivalent basis 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. This is a non-GAAP financial measure.
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of and for the Quarter Ended
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Loan and Lease Data        
Loans held to maturity:
Commercial and commercial real estate $ 1,809,450 $ 1,725,586 $ 1,709,955 $ 1,727,530 $ 1,718,993
Residential mortgage 194,436 179,628 173,808 169,513 163,726
Agricultural and agricultural real estate 262,975 256,857 255,257 253,189 250,943
Consumer 220,099 217,007 217,263 214,682 214,515
Direct financing leases, net 450 604 667 876 981
Unearned discount and deferred loan fees   (6,126 )   (5,496 )   (5,165 )   (5,186 )   (5,171 )
Total loans and leases held to maturity $ 2,481,284   $ 2,374,186   $ 2,351,785   $ 2,360,604   $ 2,343,987  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 6,380 $ 6,788 $ 7,315 $ 9,368 $ 10,056
Residential mortgage 4,158 4,410 4,747 5,291 5,792
Agricultural and agricultural real estate 1,659 2,139 2,298 2,628 2,723
Consumer   1,150     1,429     1,830     1,914     2,229  
Total loans and leases covered under loss share agreements $ 13,347   $ 14,766   $ 16,190   $ 19,201   $ 20,800  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 57,435 $ 72,629 $ 68,110 $ 87,970 $ 90,512
Loans and leases past due ninety days or more as to interest or principal payments - - - 3,038 85
Other real estate owned 43,506 38,640 38,642 34,532 31,731
Other repossessed assets   648     398     188     223     302  
Total nonperforming assets not covered under loss share agreements $ 101,589   $ 111,667   $ 106,940   $ 125,763   $ 122,630  
Covered under loss share agreements:
Nonaccrual loans $ 3,345 $ 3,886 $ 4,480 $ 4,564 $ 4,901
Loans and leases past due ninety days or more as to interest or principal payments - - - - -
Other real estate owned 881 548 433 475 271
Other repossessed assets   -     -     -     -     -  
Total nonperforming assets covered under loss share agreements $ 4,226   $ 4,434   $ 4,913   $ 5,039   $ 5,172  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 44,195 $ 40,602 $ 43,271 $ 42,693 $ 44,732
Provision for loan and lease losses 7,784 7,727 3,845 10,009 8,860
Charge-offs on loans not covered by loss share agreements (15,616 ) (5,985 ) (8,076 ) (9,785 ) (11,133 )
Charge-offs on loans covered by loss share agreements (5 ) (168 ) (107 ) (238 ) (445 )
Recoveries   450     2,019     1,669     592     679  
Balance, end of period $ 36,808   $ 44,195   $ 40,602   $ 43,271   $ 42,693  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 2.31 % 3.06 % 2.90 % 3.86 % 3.87 %
Ratio of nonperforming assets to total assets 2.39 % 2.72 % 2.67 % 3.14 % 3.07 %

Annualized ratio of net loan charge-offs to average loans and leases

2.42 % 0.66 % 1.08 % 1.59 % 1.79 %
Allowance for loan and lease losses as a percent of loans and leases 1.48 % 1.86 % 1.73 % 1.83 % 1.82 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 64.09 % 60.85 % 59.61 % 47.55 % 47.12 %
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Quarter Ended
December 31, 2011   December 31, 2010
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 993,038 $ 6,375 2.55 % $ 975,587 $ 7,889 3.21 %
Nontaxable (1)   310,324     4,743 6.06

 

  287,595     4,375 6.04

 

Total securities   1,303,362     11,118 3.38

 

  1,263,182     12,264 3.85

 

Interest bearing deposits 2,065 - -

 

3,179 1 0.12

 

Federal funds sold   73     - -

 

  742     - -

 

Loans and leases:
Commercial and commercial real estate (1) 1,788,884 24,827 5.51

 

1,730,992 24,867 5.70

 

Residential mortgage 225,701 2,630 4.62

 

210,155 2,669 5.04

 

Agricultural and agricultural real estate (1) 254,555 3,833 5.97

 

255,061 3,862 6.01

 

Consumer 218,117 5,347 9.73

 

217,488 4,998 9.12

 

Direct financing leases, net 521 7 5.33

 

1,103 16 5.76

 

Fees on loans - 1,560 -

 

- 1,368 -

 

Less: allowance for loan and lease losses   (43,666 )   - -

 

  (44,167 )   - -

 

Net loans and leases   2,444,112     38,204 6.20

 

  2,370,632     37,780 6.32

 

Total earning assets   3,749,612     49,322 5.22 %   3,637,735     50,045 5.46 %
Nonearning Assets   448,304     453,541  
Total Assets $ 4,197,916   $ 49,322 $ 4,091,276   $ 50,045
Interest Bearing Liabilities
Savings $ 1,662,065 $ 1,972 0.47

 

$ 1,558,542 $ 2,747 0.70

 

Time, $100,000 and over 257,186 1,336 2.06

 

277,373 1,744 2.49

 

Other time deposits 557,930 3,187 2.27

 

628,511 4,033 2.55

 

Short-term borrowings 215,473 204 0.38

 

224,483 330 0.58

 

Other borrowings   374,050     4,086 4.33

 

  406,882     4,068 3.97

 

Total interest bearing liabilities   3,066,704     10,785 1.40 %   3,095,791     12,922 1.66 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 738,612 610,767
Accrued interest and other liabilities   41,062     47,891  
Total noninterest bearing liabilities   779,674     658,658  
Stockholders' Equity   351,538     336,827  
Total Liabilities and Stockholders' Equity $ 4,197,916   $ 4,091,276  
Net interest income (1) $ 38,537 $ 37,123
Net interest spread (1) 3.82 % 3.80 %
Net interest income to total earning assets (1) 4.08 % 4.05 %
Interest bearing liabilities to earning assets 81.79 % 85.10 %
 

(1) Computed on a tax equivalent basis using an effective tax rate of 35%

 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Year Ended
December 31, 2011   December 31, 2010
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 1,038,172 $ 28,195 2.72 % $ 956,976 $ 34,507 3.61 %
Nontaxable (1)   221,974     18,262 8.23

 

  264,307     16,408 6.21

 

Total securities   1,260,146     46,457 3.69

 

  1,221,283     50,915 4.17

 

Interest bearing deposits 3,179 3 0.09

 

3,541 14 0.40

 

Federal funds sold   430     1 0.23

 

  667     1 0.15

 

Loans and leases:
Commercial and commercial real estate (1) 1,747,968 99,986 5.72

 

1,727,548 101,720 5.89

 

Residential mortgage 198,312 10,172 5.13

 

203,596 10,663 5.24

 

Agricultural and agricultural real estate (1) 255,615 15,553 6.08

 

258,943 15,966 6.17

 

Consumer 216,268 20,526 9.49

 

224,288 20,052 8.94

 

Direct financing leases, net 701 38 5.42

 

1,572 92 5.85

 

Fees on loans - 4,939 -

 

- 4,452 -

 

Less: allowance for loan and lease losses   (42,693 )   - -

 

  (45,748 )   - -

 

Net loans and leases   2,376,171     151,214 6.36

 

  2,370,199     152,945 6.45

 

Total earning assets   3,639,926     197,675 5.43 %   3,595,690     203,875 5.67 %
Nonearning Assets   431,885     434,692  
Total Assets $ 4,071,811   $ 197,675 $ 4,030,382   $ 203,875
Interest Bearing Liabilities
Savings $ 1,589,697 $ 9,090 0.57

 

$ 1,557,658 $ 13,677 0.88

 

Time, $100,000 and over 265,664 5,928 2.23

 

296,325 7,534 2.54

 

Other time deposits 590,767 14,206 2.40

 

649,892 17,061 2.63

 

Short-term borrowings 202,183 893 0.44

 

200,389 1,160 0.58

 

Other borrowings   373,119     16,226 4.35

 

  423,125     16,448 3.89

 

Total interest bearing liabilities   3,021,430     46,343 1.53 %   3,127,389     55,880 1.79 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 667,952 536,053
Accrued interest and other liabilities   37,551     39,363  
Total noninterest bearing liabilities   705,503     575,416  
Stockholders' Equity

 

344,878

 

 

327,577

 

Total Liabilities and Stockholders' Equity

$

4,071,811

 

$

4,030,382

 

Net interest income (1) $ 151,332 $ 147,995
Net interest spread (1) 3.90 % 3.88 %
Net interest income to total earning assets (1) 4.16 % 4.12 %
Interest bearing liabilities to earning assets 83.01 % 86.98 %
 

(1) Computed on a tax equivalent basis 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 Quarter Ended
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Total Assets        
Dubuque Bank and Trust Company $ 1,381,674 $ 1,275,116 $ 1,294,654 $ 1,270,387 $ 1,247,297
New Mexico Bank & Trust 974,943 921,973 891,609 880,980 913,776
Wisconsin Community Bank 519,491 486,319 453,427 469,305 474,366
Rocky Mountain Bank 434,565 425,132 419,697 417,846 417,781
Riverside Community Bank 318,892 316,945 322,601 302,057 290,018
Galena State Bank & Trust Co. 283,821 294,299 296,318 275,807 278,353
Arizona Bank & Trust 225,807 221,481 222,148 231,020 223,574
Summit Bank & Trust 100,994 99,528 95,130 93,600 95,414
Minnesota Bank & Trust     81,457       75,021       67,594       62,251       58,386  
Total Deposits
Dubuque Bank and Trust Company $ 938,000 $ 929,854 $ 892,526 $ 935,424 $ 902,849
New Mexico Bank & Trust 690,293 681,413 674,096 659,373 646,302
Wisconsin Community Bank 429,062 402,957 371,037 374,758 392,432
Rocky Mountain Bank 365,373 356,353 349,299 348,723 347,924
Riverside Community Bank 264,699 268,432 271,553 245,639 241,184
Galena State Bank & Trust Co. 243,639 255,006 257,413 239,445 236,647
Arizona Bank & Trust 177,457 179,369 179,885 188,415 183,279
Summit Bank & Trust 81,224 85,431 80,793 80,327 81,024
Minnesota Bank & Trust     66,875       57,058       50,091       46,205       44,278  
Net Income (Loss)
Dubuque Bank and Trust Company $ 4,846 $ 5,602 $ 6,132 $ 4,958 $ 3,972
New Mexico Bank & Trust 2,197 1,509 2,505 958 3,098
Wisconsin Community Bank 2,313 2,443 1,882 1,466 1,581
Rocky Mountain Bank 493 780 646 (630 ) 1,393
Riverside Community Bank 800 (339 ) 953 (212 ) 190
Galena State Bank & Trust Co. 1,139 941 1,113 579 1,000
Arizona Bank & Trust (1,202 ) (960 ) 546 (1,452 ) (231 )
Summit Bank & Trust (154 ) (160 ) 116 (604 ) (208 )
Minnesota Bank & Trust     (157 )     102       (45 )     (81 )     (178 )
Return on Average Assets
Dubuque Bank and Trust Company 1.44 % 1.74 % 1.92 % 1.60 % 1.18 %
New Mexico Bank & Trust 0.93 0.65 1.11 0.43 1.33
Wisconsin Community Bank 1.83 2.05 1.63 1.26 1.31
Rocky Mountain Bank 0.45 0.73 0.61 (0.61 ) 1.27
Riverside Community Bank 0.98 (0.42 ) 1.24 (0.28 ) 0.25
Galena State Bank & Trust Co. 1.54 1.28 1.61 0.85 1.39
Arizona Bank & Trust (2.13 ) (1.72 ) 0.94 (2.58 ) (0.38 )
Summit Bank & Trust (0.63 ) (0.66 ) 0.49 (2.59 ) (0.84 )
Minnesota Bank & Trust     (0.77 )     0.56       (0.25 )     (0.53 )     (1.23 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 4.00 % 4.01 % 3.62 % 3.59 % 3.83 %
New Mexico Bank & Trust 3.85 4.10 4.33 4.34 4.00
Wisconsin Community Bank 4.30 4.33 4.60 4.57 4.26
Rocky Mountain Bank 4.06 4.03 3.85 3.91 3.76
Riverside Community Bank 3.64 3.58 3.90 4.01 4.38
Galena State Bank and Trust Co. 3.69 3.55 3.86 3.73 3.60
Arizona Bank & Trust 4.06 4.10 4.52 4.25 3.72
Summit Bank & Trust 3.41 3.84 3.33 2.99 2.78
Minnesota Bank & Trust     4.56       4.82       4.55       4.75       4.07  
 
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
  As of
    12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Total Portfolio Loans and Leases        
Dubuque Bank and Trust Company $ 778,467 $ 731,356 $ 730,802 $ 748,354 $ 734,226
New Mexico Bank & Trust 508,874 507,416 506,810 513,568 513,658
Wisconsin Community Bank 333,112 318,906 314,432 320,841 320,711
Rocky Mountain Bank 256,704 250,728 247,718 238,201 246,213
Riverside Community Bank 155,320 155,995 157,901 161,238 162,706
Galena State Bank and Trust Co. 157,398 143,680 138,726 136,210 137,153
Arizona Bank & Trust 146,346 137,356 137,853 134,254 124,388
Summit Bank & Trust 62,422 53,402 52,570 47,024 48,020
Minnesota Bank & Trust     58,058       50,545       43,109       40,197       36,013  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 9,365 $ 10,087 $ 10,148 $ 11,984 $ 12,432
New Mexico Bank & Trust 6,633 10,271 8,405 7,277 7,704
Wisconsin Community Bank 3,458 3,288 3,637 3,369 3,847
Rocky Mountain Bank 3,865 3,953 4,074 4,425 3,779
Riverside Community Bank 2,834 4,770 2,702 3,693 3,524
Galena State Bank & Trust Co. 1,835 1,956 2,077 2,278 1,811
Arizona Bank & Trust 4,627 5,590 5,502 6,018 5,407
Summit Bank & Trust 1,012 1,108 1,091 1,103 1,271
Minnesota Bank & Trust     588       507       449       636       565  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 3,634 $ 4,298 $ 4,910 $ 12,897 $ 7,511
New Mexico Bank & Trust 15,161 15,404 16,053 15,979 20,753
Wisconsin Community Bank 8,074 11,871 10,359 11,776 12,702
Rocky Mountain Bank 8,662 14,180 16,971 18,303 21,406
Riverside Community Bank 6,729 5,870 5,962 11,443 7,611
Galena State Bank & Trust Co. 3,853 5,309 5,182 6,259 5,308
Arizona Bank & Trust 7,927 10,811 4,054 6,959 8,797
Summit Bank & Trust 2,848 4,159 3,905 4,527 5,965
Minnesota Bank & Trust     6       6       110       2,229       8  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.20 % 1.38 % 1.39 % 1.60 % 1.69 %
New Mexico Bank & Trust 1.30

 

2.02 1.66 1.42 1.50
Wisconsin Community Bank 1.04

 

1.03 1.16 1.05 1.20
Rocky Mountain Bank 1.51

 

1.58 1.64 1.86 1.53
Riverside Community Bank 1.82

 

3.06 1.71 2.29 2.17
Galena State Bank & Trust Co. 1.17

 

1.36 1.50 1.67 1.32
Arizona Bank & Trust 3.16

 

4.07 3.99 4.48 4.35
Summit Bank & Trust 1.62

 

2.07 2.08 2.35 2.65
Minnesota Bank & Trust     1.01

 

    1.00       1.04       1.58       1.57  

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