Heartland Financial USA, Inc. Reports Second Quarter 2012 Results

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

Quarterly Highlights
  • Record net income of $14.0 million or $0.77 per diluted common share
  • Net interest margin of 4.05%
  • Gains on sale of loans increased $4.2 million or 49% over the first quarter 2012
  • Growth in loans held to maturity of $97.2 million since March 31, 2012
  • Deposit growth of $59.1 million since March 31, 2012
  • Nonperforming assets not covered under loss share agreements decreased $6.3 million since March 31, 2012
  Quarter Ended   Six Months Ended
June 30, June 30,
2012   2011 2012   2011
Net income (in millions) $ 14.0 $ 10.2 $ 26.8 $ 14.4
Net income available to common stockholders (in millions) 12.9 8.9 24.8 11.8
Diluted earnings per common share 0.77 0.54 1.48 0.71
 
Return on average assets 1.20 % 0.89 % 1.16 % 0.59 %
Return on average common equity 18.28 13.69 17.78 9.28
Net interest margin 4.05 4.23 4.14 4.21
 
 
“Heartland set another earnings record in the second quarter, reporting net income of $14.0 million, a 37 percent increase over last year's second quarter. Year-to-date net income of $26.8 million is nearly double our earnings in the first half of 2011.”
 
Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $14.0 million for the quarter ended June 30, 2012, which was an increase of $3.8 million or 37 percent from the $10.2 million recorded for the second quarter of 2011. Net income available to common stockholders was $12.9 million, or $0.77 per diluted common share, for the quarter ended June 30, 2012, compared to $8.9 million, or $0.54 per diluted common share, for the second quarter of 2011. Return on average common equity was 18.28 percent and return on average assets was 1.20 percent for the second quarter of 2012, compared to 13.69 percent and 0.89 percent, respectively, for the same quarter in 2011.

Earnings for the second quarter of 2012, in comparison to the second quarter of 2011, were most significantly affected by the continued expansion of mortgage operations in both new and existing markets. Solid loan growth also contributed to the maintenance of a net interest margin above 4.00 percent for the 12 th consecutive quarter.

Net income recorded for the first six months of 2012 was $26.8 million, compared to $14.4 million recorded during the first six months of 2011. Net income available to common stockholders was $24.8 million, or $1.48 per diluted common share, for the six months ended June 30, 2012, compared to $11.8 million, or $0.71 per diluted common share, earned during the first six months of 2011. Return on average common equity was 17.78 percent and return on average assets was 1.16 percent for the first six months of 2012, compared to 9.28 percent and 0.59 percent, respectively, for the same period in 2011.

Earnings for the first six months of 2012 compared to the first six months of 2011 were positively affected by reduced provision for loan and lease losses, combined with increases in net interest income, gains on sale of loans and securities gains. 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 second quarter results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, “Heartland set another earnings record in the second quarter, reporting net income of $14.0 million, a 37 percent increase over last year's second quarter. Year-to-date net income of $26.8 million is nearly double our earnings in the first half of 2011.”

Net Interest Margin Remains Above 4.00 Percent

Net interest margin, expressed as a percentage of average earning assets, was 4.05 percent during the second quarter of 2012 compared to 4.23 percent for the second quarter of 2011. For the six-month periods ended June 30, net interest margin was 4.14 percent during 2012 and 4.21 percent during 2011. Positively affecting net interest margin was improvement in the level of nonperforming loans not covered under loss share agreements, which had balances of $44.8 million or 1.71 percent of total loans and leases at June 30, 2012, and $68.1 million or 2.90 percent of total loans and leases at June 30, 2011.

Fuller said, “Heartland's earnings continue to be enhanced by a net interest margin exceeding four percent. The consistency of this key metric over the past three years can be attributed to our pricing discipline.”

On a tax-equivalent basis, interest income in the second quarter of 2012 was $48.8 million compared to $49.9 million in the second quarter of 2011, a decrease of $1.1 million or 2 percent. For the first six months of 2012, interest income on a tax-equivalent basis was $98.7 million compared to $99.2 million during the same period in 2011, a decrease of $511,000 or 1 percent. Even though average earning assets increased $270.3 million or 8 percent during the second quarter of 2012 compared to the second quarter of 2011 and $235.5 million or 7 percent during the first six months of 2012 compared to the same period in 2011, this growth did not cover the decline in interest income due to a decrease in the rates earned on these assets. The average interest rate earned on these assets was 5.07 percent during the second quarter of 2012 compared to 5.57 percent during the second quarter of 2011. For the first six months of the year, the average interest rate earned on these assets was 5.19 percent during 2012 compared to 5.57 percent during 2011. The most significant contributor to these declines was the interest rate earned on the securities portfolio, which decreased 90 basis points during the quarter ended June 30, 2012, compared to the same quarter in 2011 and 63 basis points during the six months ended June 30, 2012, compared to the same six months in 2011.

Interest expense for the second quarter of 2012 was $9.9 million, a decrease of $2.1 million or 18 percent from $12.0 million in the second quarter of 2011. On a six-month comparative basis, interest expense decreased $4.3 million or 18 percent. Even though average interest bearing liabilities increased $135.1 million or 4 percent for the quarter ended June 30, 2012, as compared to the same quarter in 2011, and $102.9 million or 3 percent for the six month period ended on June 30, 2012, as compared to the same six month period in 2011, the average interest rate paid on Heartland's deposits and borrowings declined 34 basis points during the quarterly period under comparison and 33 basis points during the six-month period under comparison. Contributing to this improvement in interest expense was a change in the mix of deposits as average savings balances, the lowest cost interest-bearing deposits, as a percentage of total average interest bearing deposits was 69 percent during both the second quarter and first six month periods of 2012 compared to 64 percent for both the second quarter and first six month periods of 2011. Additionally, the average interest rate paid on savings deposits was 0.40 percent during both the second quarter and first six months of 2012 compared to 0.62 percent during the second quarter and 0.64 percent during the first six months of 2011.

Net interest income on a tax-equivalent basis totaled $39.0 million during the second quarter of 2012, an increase of $980,000 or 3 percent from the $38.0 million recorded during the second quarter of 2011. For the first six months of 2012, net interest income on a tax-equivalent basis was $78.8 million, an increase of $3.8 million or 5 percent from the $75.0 million recorded during the first six months of 2011.

Higher Noninterest Income; Noninterest Expense Increases

Noninterest income was $28.3 million during the second quarter of 2012 compared to $14.7 million during the second quarter of 2011, an increase of $13.6 million or 93 percent. For the six-month period ended June 30, noninterest income was $51.7 million in 2012 compared to $27.3 million in 2011, an increase of $24.4 million or 89 percent. The categories contributing most significantly to the improvement in noninterest income during both periods were loan servicing income and gains on sale of loans. Gains on sale of loans totaled $12.7 million during the second quarter of 2012 compared to $1.3 million during the second quarter of 2011. For the six-month period ended June 30, gains on sale of loans totaled $21.2 million during 2012 compared to $2.7 million during 2011. The volume of loans sold totaled $360.7 million during the second quarter of 2012, more than five times the $65.8 million sold during the second quarter of 2011. For the six months ended June 30, the volume of loans sold totaled $604.6 million during 2012 compared to $146.8 million during 2011. Pricing received on the sale of fixed rate residential mortgage loans into the secondary market improved through a bulk delivery method that was implemented during the second quarter of 2011, instead of an individual delivery method that had been used previously. At the same time, secondary market pricing began to be matched with origination pricing through the use of a software tool that assists in hedging the locked rate pipeline position. Other major contributors to the increase in noninterest income for the six-month comparative period were securities gains and other noninterest income. Securities gains totaled $8.9 million during the first six months of 2012 compared to $6.8 million during the first six months of 2011, as volatility in the bond market continued to provide opportunities to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. Offsetting, in part, the securities gains was an impairment loss on securities totaling $981,000 recorded during the first quarter of 2012. Other noninterest income totaled $2.7 million during the first six months of 2012 compared to $45,000 during the first six months of 2011. Included in other noninterest income during the first quarter of 2012 was $2.0 million in equity earnings which resulted from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member.

Loan servicing income increased $1.8 million or 135 percent for the second quarter of 2012 as compared to the second quarter of 2011 and $2.0 million or 69 percent for the first half of 2012 compared to the first half of 2011. 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 $2.6 million during the second quarter of 2012 compared to $616,000 during the second quarter of 2011 and amortization of mortgage servicing rights was $1.1 million during the second quarter of 2012 compared to $808,000 during the second quarter of 2011. 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 $1.0 million during the second quarter of 2012 compared to $892,000 during the second quarter of 2011. The portfolio of mortgage loans serviced for others by Heartland totaled $1.78 billion at June 30, 2012, compared to $1.45 billion at June 30, 2011.

The following table summarizes Heartland's residential mortgage loan activity during the most recent five quarters:
  As Of and For the Quarter Ended
(Dollars in thousands) 06/30/2012   03/31/2012   12/31/2011   09/30/2011   06/30/2011
Mortgage Servicing Fees $ 1,037 $ 967 $ 932 $ 908 $ 892
Mortgage Servicing Rights Income 2,614 1,986 1,380 743 616
Mortgage Servicing Rights Amortization (1,112 ) (1,718 ) (862 ) (1,103 ) (808 )
Total Residential Mortgage Loan Servicing Income $ 2,539   $ 1,235   $ 1,450   $ 548   $ 700  
Valuation Adjustment on Mortgage Servicing Rights $ (194 ) $ 13 $ (19 ) $ $
Gains On Sale of Loans $ 12,689 $ 8,502 $ 5,473 $ 3,183 $ 1,308
Residential Mortgage Loans Originated $ 374,743 $ 293,724 $ 253,468 $ 143,317 $ 111,575
Residential Mortgage Loans Sold $ 360,743 $ 243,836 $ 208,494 $ 97,591 $ 65,812
Residential Mortgage Loan Servicing Portfolio $ 1,776,912 $ 1,626,129 $ 1,541,417 $ 1,467,127 $ 1,446,527
 

For the second quarter of 2012, noninterest expense totaled $41.5 million, an increase of $9.1 million or 28 percent from the same quarter of 2011. For the six-month period ended June 30, noninterest expense totaled $81.6 million in 2012 compared to $65.2 million in 2011, a $16.4 million or 25 percent increase. Contributing to these increases in noninterest expense were a $7.9 million or 45 percent increase in salaries and employee benefits for the quarter and a $13.7 million or 38 percent increase for the six-month period, 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 1,321 on June 30, 2012, compared to 1,078 on June 30, 2011. Also contributing to the increases in noninterest expense were additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants.

Fuller commented, “The timely expansion of our Heartland Mortgage and National Residential Mortgage unit is producing growth in noninterest income. In the first six months of this year, we have originated $668 million in mortgages and expect this number to grow as we methodically add new loan production teams.”

Heartland's effective tax rate was 33.19 percent for the first six months of 2012 compared to 29.65 percent for the first six months of 2011. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $399,000 during the first six months of both 2012 and 2011. 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 15.86 percent during the first six months of 2012 compared to 24.26 percent during the first six months of 2011. The tax-equivalent adjustment for this tax-exempt interest income was $3.4 million during the first six months of 2012 compared to $2.7 million during the first six months of 2011.

Loan Growth Accelerates; Deposit Growth Continues

Total assets were $4.43 billion at June 30, 2012, an increase of $122.6 million since December 31, 2011, with $114.8 million of this growth occurring in the second quarter. Securities represented 30 percent of total assets at June 30, 2012, compared to 31 percent at year-end 2011.

Total loans and leases held to maturity were $2.63 billion at June 30, 2012, compared to $2.48 billion at year-end 2011, an increase of $148.3 million or 12 percent annualized, with $97.2 million or 66 percent of this growth occurring during the second quarter. Commercial and commercial real estate loans, which totaled $1.90 billion at June 30, 2012, increased $94.5 million or 10 percent annualized since year-end 2011, with $61.4 million or 65 percent of this growth occurring in the second quarter. Residential mortgage loans, which totaled $220.1 million at June 30, 2012, increased $25.6 million or 26 percent annualized since year-end 2011, with $17.2 million of this growth occurring in the second quarter. Agricultural and agricultural real estate loans, which totaled $279.3 million at June 30, 2012, increased $16.3 million or 12 percent annualized since year-end 2011, with $8.6 million of this growth occurring in the second quarter. Consumer loans, which totaled $230.6 million at June 30, 2012, increased $10.5 million or 10 percent annualized since year-end 2011, with $8.2 million of the growth occurring during the second quarter.

Fuller stated, “An important contributor to Heartland's exceptional performance is solid loan growth of nearly $100 million in the second quarter. Our emphasis on outbound calling, combined with improving economies in our Midwest markets, is generating opportunities with new and existing borrowers.”

Total deposits were $3.33 billion at June 30, 2012, compared to $3.21 billion at year-end 2011, an increase of $124.8 million or 8 percent annualized, with $59.1 million or 47 percent of the growth occurring during the second quarter. The composition of Heartland's deposits continues to improve as no cost demand deposits as a percentage of total deposits was 24 percent at June 30, 2012, compared to 23 percent at year-end 2011. Demand deposits increased $62.2 million or 17 percent annualized since year-end 2011, with $28.1 or 45 percent of this growth occurring during the second quarter. Savings deposits increased $56.0 million or 7 percent annualized since December 31, 2011, with $2.8 million or 5 percent of this growth occurring during the second quarter. Certificates of deposit, exclusive of brokered deposits, decreased $3.8 million or 1 percent annualized since year-end 2011, although, during the second quarter of 2012, certificates of deposit increased $18.2 million, due primarily to additional deposits from a few public entities in the Dubuque, Iowa market. As a percentage of total deposits, certificates of deposit remained below 25 percent at June 30, 2012.

“We continue to see growth in no-cost demand and low-cost savings and money market deposits. The favorable shift in deposit mix continues with these non-time categories now representing 76 percent of total deposits,” Fuller added.

Provision for Loan Losses Continues at Lower Levels; Nonperforming Assets Decline

The allowance for loan and lease losses at June 30, 2012, was 1.58 percent of loans and leases and 92.40 percent of nonperforming loans compared to 1.48 percent of loans and leases and 64.09 percent of nonperforming loans at December 31, 2011, and 1.73 percent of loans and leases and 59.61 percent of nonperforming loans at June 30, 2011. The provision for loan losses was $3.0 million for the second quarter of 2012 compared to $3.8 million for the second quarter of 2011, an $845,000 or 22 percent decrease, primarily as a result of reduced charge-offs and reductions in the level of nonperforming and substandard loans. For the first six months of 2012, provision for loan losses was $5.4 million compared to $13.9 million for the first six months of 2011, an $8.5 million or 61 percent reduction.

Nonperforming loans, exclusive of those covered under loss sharing agreements, were $44.8 million or 1.71 percent of total loans and leases at June 30, 2012, compared to $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, and $68.1 million or 2.90 percent of total loans and leases at June 30, 2011. Approximately 42 percent, or $18.7 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 9 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $6.8 million originated by Arizona Bank & Trust, $3.4 million originated by Rocky Mountain Bank, $4.2 million originated by Wisconsin Bank & Trust (formerly known as Wisconsin Community Bank), $2.5 million originated by New Mexico Bank & Trust and $1.8 million originated by Galena State Bank and Trust Company. The portion of Heartland's nonperforming loans covered by government guarantees was $2.0 million at June 30, 2012. As identified using the North American Industry Classification System (NAICS), $8.4 million of nonperforming loans with individual balances exceeding $1.0 million were for lot and land development and the remaining $10.3 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 the second quarter of 2012. Loans delinquent 30 to 89 days were 0.46 percent of total loans at June 30, 2012, compared to 0.55 percent at March 31, 2012, 0.23 percent at December 31, 2011, 0.54 percent at September 30, 2011, and 0.60 percent at June 30, 2011.

Other real estate owned was $37.9 million at June 30, 2012, compared to $38.9 million at March 31, 2012, and $44.4 million at December 31, 2011. 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 2012, $5.9 million of other real estate owned was sold during the second quarter and $18.3 million during the first six months.

The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the second quarter of 2012 and the first six months of 2012:

      Other   Total
Nonperforming Other Real Repossessed Nonperforming
(Dollars in thousands) Loans Estate Owned Assets Assets
March 31, 2012 $ 53,129 $ 38,934 $ 710 $ 92,773
Loan foreclosures (5,853 ) 5,840 13
Net loan charge offs (923 ) (923 )
New nonperforming loans 5,600 5,600
Reduction of nonperforming loans(1) (4,246 ) (4,246 )
OREO/Repossessed sales proceeds (6,175 ) (279 ) (6,454 )
OREO/Repossessed assets writedowns, net (658 ) (104 ) (762 )
Net activity at Citizens Finance Co.     125   125  
June 30, 2012 $ 47,707   $ 37,941   $ 465   $ 86,113  
 
(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, 2011 $ 60,780 $ 44,387 $ 648 $ 105,815
Loan foreclosures (14,639 ) 14,562 77
Net loan charge offs (723 ) (723 )
New nonperforming loans 8,955 8,955
Reduction of nonperforming loans(1) (6,666 ) (6,666 )
OREO/Repossessed sales proceeds (18,241 ) (344 ) (18,585 )
OREO/Repossessed assets writedowns, net (2,767 ) (112 ) (2,879 )
Net activity at Citizens Finance Co.     196   196  
June 30, 2012 $ 47,707   $ 37,941   $ 465   $ 86,113  
 
(1) Includes principal reductions and transfers to performing status.
 

Net charge-offs on loans during the second quarter of 2012 were $923,000 compared to $6.5 million during the second quarter of 2011.

Fuller added, “Steady improvement in credit quality is a significant driver of Heartland's record-setting performance. Over the last twelve months we've reduced nonperforming assets by nearly $26 million, a 23 percent reduction.”

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 480-629-9835 or 877-941-0844 at least five minutes before start time. To listen, log on to www.htlf.com at least 15 minutes before start time. If you are unable to participate on the call, a replay will be available until July 29, 2013, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.

Heartland Financial USA, Inc. is a $4.4 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 64 banking locations in 43 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.

-FINANCIAL TABLES FOLLOW-

HEARTLAND FINANCIAL USA, INC.        
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA                
For the Quarter Ended For the Six Months Ended
June 30, June 30,
    2012   2011   2012   2011
Interest Income
Interest and fees on loans and leases $ 39,382 $ 37,480 $ 77,781 $ 74,446
Interest on securities:
Taxable 5,026 9,305 12,598 18,526
Nontaxable 2,619 1,796 4,890 3,550
Interest on federal funds sold 1 - 1 1
Interest on deposits in other financial institutions   2     1     2     1  
Total Interest Income   47,030     48,582     95,272     96,524  
Interest Expense
Interest on deposits 5,604 7,675 11,379 15,701
Interest on short-term borrowings 224 225 437 484
Interest on other borrowings   4,025     4,081     8,086     8,017  
Total Interest Expense   9,853     11,981     19,902     24,202  
Net Interest Income 37,177 36,601 75,370 72,322
Provision for loan and lease losses   3,000     3,845     5,354     13,854  
Net Interest Income After Provision for Loan and Lease Losses   34,177     32,756     70,016     58,468  
Noninterest Income
Service charges and fees 3,712 3,599 7,296 6,960
Loan servicing income 3,056 1,298 4,816 2,847
Trust fees 2,660 2,656 5,273 5,135
Brokerage and insurance commissions 939 856 1,849 1,704
Securities gains, net 4,951 4,756 8,894 6,845
Gain on trading account securities 49 81 46 297
Impairment loss on securities - - (981 ) -
Gains on sale of loans 12,689 1,308 21,191 2,710
Valuation adjustment on mortgage servicing rights (194 ) - (181 ) -
Income on bank owned life insurance 267 331 749 734
Other noninterest income   149     (216 )   2,714     45  
Total Noninterest Income   28,278     14,669     51,666     27,277  
Noninterest Expense
Salaries and employee benefits 25,384 17,480 49,380 35,666
Occupancy 2,534 2,213 5,016 4,599
Furniture and equipment 1,517 1,360 2,963 2,769
Professional fees 3,961 3,053 6,721 6,072
FDIC insurance assessments 807 786 1,671 2,131
Advertising 1,304 1,113 2,375 1,963
Intangible assets amortization 122 144 253 290
Net loss on repossessed assets 1,307 2,511 4,211 4,143
Other noninterest expenses   4,523     3,683     9,009     7,597  
Total Noninterest Expense   41,459     32,343     81,599     65,230  
Income Before Income Taxes 20,996 15,082 40,083 20,515
Income taxes   7,032     4,870     13,304     6,082  
Net Income 13,964 10,212 26,779 14,433
Net (income) loss attributable to noncontrolling interest, net of tax   (7 )   9     19     25  
Net Income Attributable to Heartland 13,957 10,221 26,798 14,458
Preferred dividends and discount   (1,021 )   (1,336 )   (2,042 )   (2,672 )
Net Income Available to Common Stockholders $ 12,936   $ 8,885   $ 24,756   $ 11,786  
Earnings per common share-diluted $ 0.77 $ 0.54 $ 1.48 $ 0.71
Weighted average shares outstanding-diluted 16,717,846 16,568,701 16,722,005 16,561,212
 
HEARTLAND FINANCIAL USA, INC.          
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA                    
For the Quarter Ended
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Interest Income
Interest and fees on loans and leases $ 39,382 $ 38,399 $ 37,764 $ 37,393 $ 37,480
Interest on securities:
Taxable 5,026 7,572 7,518 8,051 9,305
Nontaxable 2,619 2,271 2,340 2,145 1,796
Interest on federal funds sold 1 - - 2 1
Interest on deposits in other financial institutions   2     -     -     -     -  
Total Interest Income   47,030     48,242     47,622     47,591     48,582  
Interest Expense
Interest on deposits 5,604 5,775 6,495 7,028 7,675
Interest on short-term borrowings 224 213 204 205 225
Interest on other borrowings   4,025     4,061     4,086     4,123     4,081  
Total Interest Expense 9,853 10,049 10,785 11,356 11,981
Net Interest Income 37,177 38,193 36,837 36,235 36,601
Provision for loan and lease losses   3,000     2,354     7,784     7,727     3,845  
Net Interest Income After Provision for Loan and Lease Losses   34,177     35,839     29,053     28,508     32,756  
Noninterest Income
Service charges and fees 3,712 3,584 3,686 3,657 3,599
Loan servicing income 3,056 1,760 2,004 1,081 1,298
Trust fees 2,660 2,613 2,337 2,384 2,656
Brokerage and insurance commissions 939 910 889 918 856
Securities gains, net 4,951 3,943 4,174 2,085 4,756
Gain (loss) on trading account securities 49 (3 ) (125 ) (83 ) 81
Impairment loss on securities - (981 ) - - -
Gains on sale of loans 12,689 8,502 5,473 3,183 1,308
Valuation adjustment on mortgage servicing rights (194 ) 13 (19 ) - -
Income on bank owned life insurance 267 482 407 208 331
Other noninterest income   149     2,565     212     (171 )   (216 )
Total Noninterest Income   28,278     23,388     19,038     13,262     14,669  
Noninterest Expense
Salaries and employee benefits 25,384 23,996 22,135 17,736 17,480
Occupancy 2,534 2,482 2,368 2,396 2,213
Furniture and equipment 1,517 1,446 1,475 1,392 1,360
Professional fees 3,961 2,760 3,385 3,110 3,053
FDIC insurance assessments 807 864 848 798 786
Advertising 1,304 1,071 1,138 1,191 1,113
Intangible assets amortization 122 131 141 141 144
Net loss on repossessed assets 1,307 2,904 4,255 1,409 2,511
Other noninterest expenses   4,523     4,486     4,458     3,690     3,683  
Total Noninterest Expense   41,459     40,140     40,203     31,863     32,343  
Income Before Income Taxes 20,996 19,087 7,888 9,907 15,082
Income taxes   7,032     6,272     1,671     2,549     4,870  
Net Income 13,964 12,815 6,217 7,358 10,212
Net (income) loss attributable to noncontrolling interest, net of tax   (7 )   26     31     (20 )   9  
Net Income Attributable to Heartland 13,957 12,841 6,248 7,338 10,221
Preferred dividends and discount   (1,021 )   (1,021 )   (1,021 )   (3,947 )   (1,336 )
Net Income Available to Common Stockholders $ 12,936   $ 11,820   $ 5,227   $ 3,391   $ 8,885  
Earnings per common share-diluted $ 0.77 $ 0.71 $ 0.31 $ 0.20 $ 0.54
Weighted average shares outstanding-diluted 16,717,846 16,729,925 16,599,741 16,585,021 16,568,701
 
HEARTLAND FINANCIAL USA, INC.        
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA                
  As Of
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Assets
Cash and cash equivalents $ 82,831 $ 150,122 $ 129,834 $ 81,605 $ 148,388
Securities 1,331,088 1,221,909 1,326,592 1,323,464 1,193,480
Loans held for sale 73,284 103,460 53,528 36,529 15,770
Loans and leases:
Held to maturity 2,629,597 2,532,419 2,481,284 2,374,186 2,351,785
Loans covered by loss share agreements 9,567 11,360 13,347 14,766 16,190
Allowance for loan and lease losses   (41,439 )   (39,362 )   (36,808 )   (44,195 )   (40,602 )
Loans and leases, net 2,597,725 2,504,417 2,457,823 2,344,757 2,327,373
Premises, furniture and equipment, net 114,823 111,946 110,206 110,127 118,828
Goodwill 25,909 25,909 25,909 25,909 25,909
Other intangible assets, net 14,295 13,109 12,960 12,601 13,103
Cash surrender value on life insurance 72,448 72,159 67,084 66,654 66,425
Other real estate, net 37,941 38,934 44,387 39,188 39,075
FDIC indemnification asset 1,148 1,270 1,343 992 1,035
Other assets   76,192     69,616     75,392     70,853     61,231  
Total Assets $ 4,427,684   $ 4,312,851   $ 4,305,058   $ 4,112,679   $ 4,010,617  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 799,548 $ 771,421 $ 737,323 $ 692,893 $ 649,523
Savings 1,734,155 1,731,399 1,678,154 1,654,417 1,557,053
Brokered time deposits 51,575 41,475 41,225 44,225 39,225
Other time deposits   749,629     731,464     753,411     782,079     834,884  
Total deposits 3,334,907 3,275,759 3,210,113 3,173,614 3,080,685
Short-term borrowings 249,485 229,533 270,081 173,199 168,021
Other borrowings 377,543 377,362 372,820 375,976 379,718
Accrued expenses and other liabilities   90,755     64,154     99,151     36,667     36,643  
Total Liabilities 4,052,690 3,946,808 3,952,165 3,759,456 3,665,067
Equity
Preferred equity 81,698 81,698 81,698 81,698 79,113
Common equity   290,640     281,696     268,520     268,819     263,769  
Total Heartland Stockholders' Equity 372,338 363,394 350,218 350,517 342,882
Noncontrolling interest   2,656     2,649     2,675     2,706     2,668  
Total Equity   374,994     366,043     352,893     353,223     345,550  
Total Liabilities and Equity $ 4,427,684   $ 4,312,851   $ 4,305,058   $ 4,112,679   $ 4,010,617  
Common Share Data
Book value per common share $ 17.65 $ 17.09 $ 16.29 $ 16.33 $ 16.04
ASC 320 effect on book value per common share $ 0.98 $ 1.09 $ 0.97 $ 1.22 $ 0.86
Common shares outstanding, net of treasury stock 16,467,889 16,486,539 16,484,790 16,459,338 16,442,437
Tangible Capital Ratio(1) 5.98 % 5.93 % 5.63 % 5.90 % 5.92 %
 

(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 Six Months Ended
        6/30/2012   6/30/2011   6/30/2012   6/30/2011
Average Balances
Assets

$
4,350,916

$
4,014,290

$
4,289,341

$
4,012,077
Loans and leases, net of unearned 2,675,694 2,388,088 2,626,562 2,393,872
Deposits 3,291,293 3,059,360 3,246,183 3,064,057
Earning assets 3,870,359 3,600,095 3,827,534 3,591,989
Interest bearing liabilities 3,140,063 3,004,928 3,110,702 3,007,779
Common stockholders' equity 284,610 260,334 279,943 256,084
Total stockholders' equity 368,960 341,797 364,302 337,407
Tangible common stockholders' equity 257,212 232,381 252,477 228,059
 
Earnings Performance Ratios
Annualized return on average assets 1.20 % 0.89 % 1.16 % 0.59 %
Annualized return on average common equity 18.28 % 13.69 % 17.78 % 9.28 %
Annualized return on average common tangible equity 20.23 % 15.34 % 19.72 % 10.42 %
Annualized net interest margin(1) 4.05 % 4.23 % 4.14 % 4.21 %
Efficiency ratio(2) 66.56 % 67.53 % 67.12 % 68.35 %
 
(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
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Average Balances
Assets $ 4,350,916 $ 4,225,815 $ 4,197,916 $ 4,063,330 $ 4,014,290
Loans and leases, net of unearned 2,675,694 2,577,429 2,487,778 2,399,047 2,388,088
Deposits 3,291,293 3,201,073 3,215,793 3,110,978 3,059,360
Earning assets 3,870,359 3,784,709 3,749,612 3,624,559 3,600,095
Interest bearing liabilities 3,140,063 3,081,340 3,066,704 3,002,868 3,004,928
Common stockholders' equity 284,610 275,275 267,025 270,696 260,334
Total stockholders' equity 368,960 359,644 351,538 353,003 341,797
Tangible common stockholders' equity 257,212 247,744 239,384 242,886 232,381
 
Earnings Performance Ratios
Annualized return on average assets 1.20 % 1.12 % 0.49 % 0.33 % 0.89 %
Annualized return on average common equity 18.28 % 17.27 % 7.77 % 4.97 % 13.69 %
Annualized return on average common tangible equity 20.23 % 19.19 % 8.66 % 5.54 % 15.34 %
Annualized net interest margin(1) 4.05 % 4.23 % 4.08 % 4.14 % 4.23 %
Efficiency ratio(2) 66.56 % 67.71 % 75.29 % 65.07 % 67.53 %
 
(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
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Loan and Lease Data
Loans held to maturity:
Commercial and commercial real estate $ 1,903,996 $ 1,842,566 $ 1,809,450 $ 1,725,586 $ 1,709,955
Residential mortgage 220,084 202,883 194,436 179,628 173,808
Agricultural and agricultural real estate 279,285 270,687 262,975 256,857 255,257
Consumer 230,594 222,387 220,099 217,007 217,263
Direct financing leases, net 290 323 450 604 667
Unearned discount and deferred loan fees   (4,652 )   (6,427 )   (6,126 )   (5,496 )   (5,165 )
Total loans and leases held to maturity $ 2,629,597   $ 2,532,419   $ 2,481,284   $ 2,374,186   $ 2,351,785  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 4,497 $ 5,730 $ 6,380 $ 6,788 $ 7,315
Residential mortgage 3,309 3,734 4,158 4,410 4,747
Agricultural and agricultural real estate 858 934 1,659 2,139 2,298
Consumer   903     962     1,150     1,429     1,830  
Total loans and leases covered under loss share agreements $ 9,567   $ 11,360   $ 13,347   $ 14,766   $ 16,190  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 44,845 $ 49,940 $ 57,435 $ 72,629 $ 68,110
Loans and leases past due ninety days or more as to interest or principal payments - - - - -
Other real estate owned 37,709 38,693 43,506 38,640 38,642
Other repossessed assets   465     710     648     398     188  
Total nonperforming assets not covered under loss share agreements $ 83,019   $ 89,343   $ 101,589   $ 111,667   $ 106,940  
Performing troubled debt restructured loans 24,715 21,379 25,704 24,853 31,246
Covered under loss share agreements:
Nonaccrual loans $ 2,862 $ 3,189 $ 3,345 $ 3,886 $ 4,480
Other real estate owned   232     241     881     548     433  
Total nonperforming assets covered under loss share agreements $ 3,094   $ 3,430   $ 4,226   $ 4,434   $ 4,913  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 39,362 $ 36,808 $ 44,195 $ 40,602 $ 43,271
Provision for loan and lease losses 3,000 2,354 7,784 7,727 3,845
Charge-offs on loans not covered by loss share agreements (2,219 ) (1,608 ) (15,616 ) (5,985 ) (8,076 )
Charge-offs on loans covered by loss share agreements (35 ) - (5 ) (168 ) (107 )
Recoveries   1,331     1,808     450     2,019     1,669  
Balance, end of period $ 41,439   $ 39,362   $ 36,808   $ 44,195   $ 40,602  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 1.71 % 1.97 % 2.31 % 3.06 % 2.90 %
Ratio of nonperforming assets to total assets 1.87 % 2.07 % 2.39 % 2.72 % 2.67 %
Annualized ratio of net loan charge-offs to average loans and leases 0.14 % (0.03 )% 2.42 % 0.66 % 1.08 %
Allowance for loan and lease losses as a percent of loans and leases 1.58 % 1.55 % 1.48 % 1.86 % 1.73 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 92.40 % 78.82 % 64.09 % 60.85 % 59.61 %
 
HEARTLAND FINANCIAL USA, INC.            
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS                        
For the Quarter Ended
June 30, 2012 June 30, 2011
Average Average
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 954,684 $ 5,026 2.12 % $ 1,081,753 $ 9,305 3.45 %
Nontaxable(1)   272,561     4,029 5.95

 
  167,630     2,763 6.61

 
Total securities   1,227,245     9,055 2.97

 
  1,249,383     12,068 3.87

 
Interest bearing deposits 6,587 1 0.06

 
4,402 - -

 
Federal funds sold   1,433     2 0.56

 
  1,104     1 0.36

 
Loans and leases:
Commercial and commercial real estate(1) 1,881,836 25,199 5.39

 
1,728,649 25,222 5.85

 
Residential mortgage 290,702 3,322 4.60

 
186,034 2,483 5.35

 
Agricultural and agricultural real estate(1) 276,557 3,929 5.71

 
256,962 4,059 6.34

 
Consumer 226,295 5,793 10.30

 
215,723 5,004 9.30

 
Direct financing leases, net 304 4 5.29

 
720 10 5.57

 
Fees on loans - 1,510 -

 
- 1,116 -

 
Less: allowance for loan and lease losses   (40,599 )   - -

 
  (42,882 )   - -

 
Net loans and leases   2,635,095     39,757 6.07

 
  2,345,206     37,894 6.48

 
Total earning assets   3,870,360     48,815 5.07 %   3,600,095     49,963 5.57 %
Nonearning Assets   480,556     414,195  
Total Assets $ 4,350,916   $ 48,815 $ 4,014,290   $ 49,963
Interest Bearing Liabilities
Savings $ 1,726,357 $ 1,718 0.40

 
$ 1,553,450 $ 2,406 0.62

 
Time, $100,000 and over 255,701 1,195 1.88

 
266,036 1,546 2.33

 
Other time deposits 520,140 2,691 2.08

 
606,384 3,723 2.46

 
Short-term borrowings 260,523 224 0.35

 
201,246 225 0.45

 
Other borrowings   377,342     4,025 4.29

 
  377,812     4,081 4.33

 
Total interest bearing liabilities   3,140,063     9,853 1.26 %   3,004,928     11,981 1.60 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 789,095 633,490
Accrued interest and other liabilities   52,798     34,075  
Total noninterest bearing liabilities   841,893     667,565  
Stockholders' Equity   368,960     341,797  
Total Liabilities and Stockholders' Equity $ 4,350,916   $ 4,014,290  
Net interest income(1) $ 38,962 $ 37,982
Net interest spread(1) 3.81 % 3.97 %
Net interest income to total earning assets(1) 4.05 % 4.23 %
Interest bearing liabilities to earning assets 81.13 % 83.47 %

(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 Six Months Ended
June 30, 2012 June 30, 2011
Average Average
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 987,956 $ 12,598 2.56 % $ 1,071,347 $ 18,526 3.49 %
Nontaxable(1)   245,922     7,523 6.15

 
  164,536     5,462 6.69

 
Total securities   1,233,878     20,121 3.28

 
  1,235,883     23,988 3.91

 
Interest bearing deposits 5,205 1 0.04

 
4,392 1 0.05

 
Federal funds sold   790     2 0.51

 
  718     1 0.28

 
Loans and leases:
Commercial and commercial real estate(1) 1,854,595 50,189 5.44

 
1,737,703 50,179 5.82

 
Residential mortgage 277,649 6,438 4.66

 
185,667 4,893 5.31

 
Agricultural and agricultural real estate(1) 271,660 7,862 5.82

 
254,980 7,899 6.25

 
Consumer 222,316 11,170 10.10

 
214,695 9,854 9.26

 
Direct financing leases, net 342 9 5.29

 
827 23 5.61

 
Fees on loans - 2,905 -

 
- 2,370 -

 
Less: allowance for loan and lease losses   (38,901 )   - -

 
  (42,876 )   - -

 
Net loans and leases   2,587,661     78,573 6.11

 
  2,350,996     75,218 6.45

 
Total earning assets   3,827,534     98,697 5.19 %   3,591,989     99,208 5.57 %
Nonearning Assets   461,807  

 
  420,088  
Total Assets $ 4,289,341   $ 98,697 $ 4,012,077   $ 99,208
Interest Bearing Liabilities
Savings $ 1,703,004 $ 3,381 0.40

 
$ 1,553,372 $ 4,953 0.64

 
Time, $100,000 and over 251,548 2,423 1.94

 
268,242 3,156 2.37

 
Other time deposits 526,647 5,575 2.13

 
610,033 7,592 2.51

 
Short-term borrowings 253,807 437 0.35

 
205,639 484 0.47

 
Other borrowings   375,696     8,086 4.33

 
  370,493     8,017 4.36

 
Total interest bearing liabilities   3,110,702     19,902 1.29 %   3,007,779     24,202 1.62 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 764,984 632,410
Accrued interest and other liabilities   49,353     34,481  
Total noninterest bearing liabilities   814,337     666,891  
Stockholders' Equity   364,302     337,407  
Total Liabilities and Stockholders' Equity $ 4,289,341   $ 4,012,077  
Net interest income(1) $ 78,795 $ 75,006
Net interest spread(1) 3.90 % 3.95 %
Net interest income to total earning assets(1) 4.14 % 4.21 %
Interest bearing liabilities to earning assets 81.27 % 83.74 %
 

(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
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Total Assets
Dubuque Bank and Trust Company $ 1,385,409 $ 1,407,827 $ 1,382,226 $ 1,275,116 $ 1,294,654
New Mexico Bank & Trust 998,172 929,804 993,182 921,973 891,609
Wisconsin Bank & Trust 497,372 491,741 524,958 486,319 453,427
Rocky Mountain Bank 443,493 432,902 440,805 425,132 419,697
Riverside Community Bank 360,654 343,232 325,388 316,945 322,601
Galena State Bank & Trust Co. 309,516 289,740 290,656 294,299 296,318
Arizona Bank & Trust 268,103 239,434 227,993 221,481 222,148
Summit Bank & Trust 102,875 98,247 100,994 99,528 95,130
Minnesota Bank & Trust     101,704       95,462       81,457       75,021       67,594  
Total Deposits
Dubuque Bank and Trust Company $ 959,273 $ 978,854 $ 938,000 $ 929,854 $ 892,526
New Mexico Bank & Trust 725,537 697,060 690,293 681,413 674,096
Wisconsin Bank & Trust 415,277 409,994 429,062 402,957 371,037
Rocky Mountain Bank 356,046 362,307 365,373 356,353 349,299
Riverside Community Bank 305,120 286,529 264,699 268,432 271,553
Galena State Bank & Trust Co. 257,800 245,780 243,639 255,006 257,413
Arizona Bank & Trust 211,318 183,321 177,457 179,369 179,885
Summit Bank & Trust 83,977 81,290 81,224 85,431 80,793
Minnesota Bank & Trust     77,119       78,338       66,875       57,058       50,091  
Net Income (Loss)
Dubuque Bank and Trust Company $ 8,463 $ 9,604 $ 4,846 $ 5,602 $ 6,132
New Mexico Bank & Trust 1,592 2,216 2,197 1,509 2,505
Wisconsin Bank & Trust 1,547 2,153 2,313 2,443 1,882
Rocky Mountain Bank 2,089 963 493 780 646
Riverside Community Bank 914 369 800 (339 ) 953
Galena State Bank & Trust Co. 1,149 437 1,139 941 1,113
Arizona Bank & Trust 981 (215 ) (1,202 ) (960 ) 546
Summit Bank & Trust (100 ) (123 ) (154 ) (160 ) 116
Minnesota Bank & Trust     35       (129 )     (157 )     102       (45 )
Return on Average Assets
Dubuque Bank and Trust Company 2.39 % 2.88 % 1.44 % 1.74 % 1.92 %
New Mexico Bank & Trust 0.66 0.96 0.93 0.65 1.11
Wisconsin Bank & Trust 1.39 1.69 1.83 2.05 1.63
Rocky Mountain Bank 1.94 0.89 0.45 0.73 0.61
Riverside Community Bank 1.05 0.45 0.98 (0.42 ) 1.24
Galena State Bank & Trust Co. 1.58 0.62 1.54 1.28 1.61
Arizona Bank & Trust 1.56 (0.37 ) (2.13 ) (1.72 ) 0.94
Summit Bank & Trust (0.40 ) (0.50 ) (0.63 ) (0.66 ) 0.49
Minnesota Bank & Trust     0.15       (0.58 )     (0.77 )     0.56       (0.25 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 3.67 % 4.03 % 4.00 % 4.01 % 3.62 %
New Mexico Bank & Trust 3.69 4.02 3.85 4.10 4.33
Wisconsin Bank & Trust 3.99 4.41 4.30 4.33 4.60
Rocky Mountain Bank 4.68 4.33 4.06 4.03 3.85
Riverside Community Bank 3.38 3.63 3.64 3.58 3.90
Galena State Bank and Trust Co. 3.42 3.89 3.69 3.55 3.86
Arizona Bank & Trust 4.19 4.40 4.06 4.10 4.52
Summit Bank & Trust 3.89 4.07 3.41 3.84 3.33
Minnesota Bank & Trust     4.57       4.75       4.56       4.82       4.55  
 
HEARTLAND FINANCIAL USA, INC.          
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS                    
As of
    6/30/2012   3/31/2012   12/31/2011   9/30/2011   6/30/2011
Total Portfolio Loans and Leases
Dubuque Bank and Trust Company $ 824,830 $ 796,789 $ 778,467 $ 731,356 $ 730,802
New Mexico Bank & Trust 500,296 506,424 508,874 507,416 506,810
Wisconsin Bank & Trust 353,152 340,841 333,112 318,906 314,432
Rocky Mountain Bank 280,137 264,964 256,704 250,728 247,718
Riverside Community Bank 158,186 153,174 155,320 155,995 157,901
Galena State Bank and Trust Co. 169,160 167,677 157,398 143,680 138,726
Arizona Bank & Trust 177,953 150,629 146,346 137,356 137,853
Summit Bank & Trust 67,932 63,658 62,422 53,402 52,570
Minnesota Bank & Trust     80,815       73,413       58,058       50,545       43,109  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 9,454 $ 9,584 $ 9,365 $ 10,087 $ 10,148
New Mexico Bank & Trust 8,705 7,110 6,633 10,271 8,405
Wisconsin Bank & Trust 3,695 3,629 3,458 3,288 3,637
Rocky Mountain Bank 4,325 4,204 3,865 3,953 4,074
Riverside Community Bank 3,114 3,206 2,834 4,770 2,702
Galena State Bank & Trust Co. 1,808 1,854 1,835 1,956 2,077
Arizona Bank & Trust 5,390 5,315 4,627 5,590 5,502
Summit Bank & Trust 1,370 1,132 1,012 1,108 1,091
Minnesota Bank & Trust     822       748       588       507       449  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 2,508 $ 3,107 $ 3,634 $ 4,298 $ 4,910
New Mexico Bank & Trust 10,856 13,368 15,161 15,404 16,053
Wisconsin Bank & Trust 7,463 7,482 8,074 11,871 10,359
Rocky Mountain Bank 6,005 7,787 8,662 14,180 16,971
Riverside Community Bank 5,222 5,458 6,729 5,870 5,962
Galena State Bank & Trust Co. 3,778 3,699 3,853 5,309 5,182
Arizona Bank & Trust 5,645 5,755 7,927 10,811 4,054
Summit Bank & Trust 2,691 2,709 2,848 4,159 3,905
Minnesota Bank & Trust     6       6       6       6       110  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.15 % 1.20 % 1.20 % 1.38 % 1.39 %
New Mexico Bank & Trust 1.74 % 1.40 1.30 2.02 1.66
Wisconsin Bank & Trust 1.05 % 1.06 1.04 1.03 1.16
Rocky Mountain Bank 1.54 % 1.59 1.51 1.58 1.64
Riverside Community Bank 1.97 % 2.09 1.82 3.06 1.71
Galena State Bank & Trust Co. 1.07 % 1.11 1.17 1.36 1.50
Arizona Bank & Trust 3.03 % 3.53 3.16 4.07 3.99
Summit Bank & Trust 2.02 % 1.78 1.62 2.07 2.08
Minnesota Bank & Trust     1.02 %     1.02       1.01       1.00       1.04  

Copyright Business Wire 2010

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