Heartland Financial USA, Inc.:
      Quarter Ended

June 30,
      Six Months Ended

June 30,
2013     2012   2013     2012
Net income (in millions) $ 9.6 $ 14.0 $ 22.1 $ 26.8
Net income available to common stockholders (in millions) 9.4 12.9 21.4 24.8
Diluted earnings per common share 0.54 0.77 1.25 1.48
 
Return on average assets 0.76 % 1.20 % 0.88 % 1.16 %
Return on average common equity 11.28 18.28 13.19 17.78
Net interest margin 3.71 4.05 3.74 4.14
 
“Heartland reported a good second quarter of 2013 with earnings of $9.6 million. We were pleased to see new loan demand in the quarter and our net interest margin held up reasonably well. While mortgage loan originations increased over the same period of 2012, the recent rise in long-term interest rates negatively impacted the gains on sale of residential mortgage loans.”

 

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

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $9.6 million for the quarter ended June 30, 2013, which was a decrease from the $14.0 million recorded for the second quarter of 2012. Net income available to common stockholders was $9.4 million, or $0.54 per diluted common share, for the quarter ended June 30, 2013, compared to $12.9 million, or $0.77 per diluted common share, for the second quarter of 2012. Return on average common equity was 11.28% and return on average assets was 0.76% for the second quarter of 2013, compared to 18.28% and 1.20%, respectively, for the same quarter in 2012.

Earnings for the second quarter of 2013 were below Heartland's quarterly earnings record set in the second quarter of 2012, primarily as a result of a $3.6 million decrease in gains on sale of loans and a $2.9 million decrease in securities gains, coupled with a $4.1 million increase in salaries and employee benefits. Positively affecting earnings for the second quarter of 2013, in comparison to the second quarter of 2012, were an increase in net interest income, a reduction in provision for loan and lease losses and an increase in loan servicing income. Loan growth picked up during the second quarter of 2013.

Commenting on Heartland's second quarter results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, “Heartland reported a good second quarter of 2013 with earnings of $9.6 million. We were pleased to see new loan demand in the quarter and our net interest margin held up reasonably well. While mortgage loan originations increased over the same period of 2012, the recent rise in long-term interest rates negatively impacted the gains on sale of residential mortgage loans."

Net income recorded for the first six months of 2013 was $22.1 million, compared to $26.8 million recorded during the first six months of 2012. Net income available to common stockholders was $21.4 million, or $1.25 per diluted common share, for the six months ended June 30, 2013, compared to $24.8 million, or $1.48 per diluted common share, earned during the first six months of 2012. Return on average common equity was 13.19% and return on average assets was 0.88% for the first six months of 2013, compared to 17.78% and 1.16%, respectively, for the same period in 2012.

Earnings for the first six months of 2013, in comparison to the first six months of 2012, were positively affected by an increase in net interest income, a lower provision for loan and lease losses and an increase in loan servicing income. The first quarter of 2012 noninterest income included $2.0 million in equity earnings from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member. In addition to the absence of comparable other noninterest income during the first half of 2013, reduced securities gains and significant increases in salaries and employee benefits, occupancy and furniture and equipment expenses offset the improvements discussed above.

Net Interest Margin Percentage Remains Stable; Increases in Dollars

Net interest margin, expressed as a percentage of average earning assets, was 3.71% during the second quarter of 2013 compared to 3.77% during the first quarter of 2013 and 4.05% for the second quarter of 2012. For the six-month periods ended June 30, net interest margin was 3.74% during 2013 and 4.14% during 2012.

Fuller said, “We are pleased to see net interest margin hold relatively steady at 3.71% in the second quarter compared to the previous quarter. Going forward, we expect margin to stay in its current range as some opportunity remains in reducing deposit cost while an increase in loan volume will benefit interest income.”

On a tax-equivalent basis, interest income in the second quarter of 2013 was $50.2 million compared to $48.8 million in the second quarter of 2012, an increase of $1.4 million or 3%. For the first six months of 2013, interest income on a tax-equivalent basis was $100.2 million compared to $98.7 million during the same period in 2012, an increase of $1.5 million or 1%. Average earning assets increased $591.6 million or 15% during the second quarter of 2013 compared to the second quarter of 2012 and $605.6 million or 16% during the first six months of 2013 compared to the same period in 2012, with approximately $225.0 million of the growth in both periods attributable to the three acquisitions completed during the second half of 2012. The average interest rate earned on total average earning assets was 4.51% during the second quarter of 2013 compared to 5.07% during the second quarter of 2012. For the first six months of the year, the average interest rate earned on these assets was 4.56% during 2013 compared to 5.19% during 2012.

Interest expense for the second quarter of 2013 was $8.9 million, a decrease of $1.0 million or 10% from $9.9 million in the second quarter of 2012. On a six-month comparative basis, interest expense decreased $2.0 million or 10%. Even though average interest bearing liabilities increased $293.6 million or 9% for the quarter ended June 30, 2013, as compared to the same quarter in 2012, and $312.5 million or 10% for the six-month period ended on June 30, 2013, as compared to the same six-month period in 2012, the average interest rate paid on Heartland's deposits and borrowings declined 22 basis points during the quarterly period under comparison and 24 basis points during the six-month period under comparison. Contributing to this improvement in interest expense was a continued change in the mix of deposits. Average savings balances, the lowest cost interest bearing deposits, as a percentage of total average interest bearing deposits, were 70% during both the second quarter and first six-month periods of 2013 compared to 69% for both the second quarter and first six-month periods of 2012. Additionally, the average interest rate paid on savings deposits was 0.30% during the second quarter and 0.32% during the first six months of 2013 compared to 0.40% during both the second quarter and first six months of 2012.

Net interest income on a tax-equivalent basis totaled $41.3 million during the second quarter of 2013, an increase of $2.3 million or 6% from the $39.0 million recorded during the second quarter of 2012. For the first six months of 2013, net interest income on a tax-equivalent basis was $82.3 million, an increase of $3.5 million or 4% from the $78.8 million recorded during the first six months of 2012.

Decrease in Noninterest Income; Increase in Noninterest Expenses

Noninterest income was $24.9 million during the second quarter of 2013 compared to $28.3 million during the second quarter of 2012, a decrease of $3.4 million or 12%. For the six-month period ended June 30, noninterest income was $51.3 million in 2013 compared to $51.7 million in 2012, a decrease of $340,000 or 1%. Although noninterest income was negatively affected by decreased securities gains and gains on sale of loans in both the quarterly and six-month comparative periods, these decreases were partially offset by increases in loan servicing income and other fee income categories. Gains on sale of loans totaled $9.1 million during the second quarter of 2013 compared to $12.7 million during the second quarter of 2012, a decrease of $3.6 million or 28%. During the first six months of 2013, gains on sale of loans totaled $19.0 million compared to $21.2 million during the first six months of 2012, a $2.2 million or 10% decrease. Gains on sale of loans result primarily from the gain or loss on sales of mortgage loans into the secondary market, related fees and fair value marks on the associated derivatives. The volume of residential mortgage loans sold totaled $445.5 million during the second quarter of 2013 compared to $360.7 million during the second quarter of 2012, and totaled $870.4 million during the first six months of 2013 compared to $604.6 million during the first six months of 2012. Securities gains totaled $2.1 million during the second quarter of 2013 compared to $5.0 million during the second quarter of 2012, and totaled $5.5 million during the first six months of 2013 compared to $8.9 million during the first six months of 2012. Offsetting, in part, the securities gains during the first six months of 2012 was an impairment loss on securities totaling $981,000 recorded during the first quarter of 2012. Other noninterest income totaled $1.4 million during the first six months of 2013 compared to $2.7 million during the first six months of 2012. 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 $1.0 million or 34% for the second quarter of 2013 as compared to the second quarter of 2012 as mortgage servicing rights income, which is influenced by market interest rates for home mortgage loans and the level of residential loans Heartland originates and sells into the secondary market, increased significantly. For the first six months of 2013 compared to the first six months of 2012, loan servicing income increased $2.7 million or 55%. 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 $1.6 million during the second quarter of 2013 compared to $1.0 million during the second quarter of 2012, and $3.0 million during the first six months of 2013 compared to $2.0 million during the first six months of 2012. The portfolio of mortgage loans serviced for others by Heartland totaled $2.70 billion at June 30, 2013, compared to $1.78 billion at June 30, 2012.

As reflected in the table below, on a sequential quarterly basis, residential mortgage loan originations and the gains on sale of residential mortgage loans and the mortgage servicing rights income they create, decreased in the first two quarters of 2013 as compared to the last two quarters of 2012. These decreases resulted primarily from the seasonality typically experienced in mortgage loan activity during the first quarter of the year, coupled with an increase in residential mortgage loan interest rates. Heartland believes long term success in the mortgage banking business depends on its ability to shift toward the origination of loans for the purchase of new homes versus the refinance of mortgages on existing homes. For the second quarter of 2013, refinancing activity represented 50% of total mortgage loan originations compared to 70% during the first quarter of 2013, 71% during the fourth quarter of 2012, 64% during the third quarter of 2012 and 58% during the second quarter of 2012.

The following table summarizes Heartland's residential mortgage loan activity during the most recent five quarters, in thousands:

      As Of and For the Quarter Ended
6/30/2013       3/31/2013       12/31/2012       9/30/2012       6/30/2012
Mortgage Servicing Fees $ 1,613 $ 1,430 $ 1,304 $ 1,123 $ 1,037
Mortgage Servicing Rights Income 3,965 3,245 3,535 3,316 2,614
Mortgage Servicing Rights Amortization (1,976 ) (1,761 ) (1,871 ) (1,896 ) (1,112 )
Total Residential Mortgage Loan Servicing Income $ 3,602   $ 2,914   $ 2,968   $ 2,543   $ 2,539  
Valuation Adjustment on Mortgage Servicing Rights $ $ 496 $ 197 $ (493 ) $ (194 )
Gains On Sale of Residential Mortgage Loans $ 9,005 $ 9,641 $ 13,966 $ 13,750 $ 12,689
Total Residential Mortgage Loan Applications $ 653,461 $ 556,890 $ 645,603 $ 672,382 $ 638,595
Residential Mortgage Loans Originated $ 470,813 $ 432,974 $ 490,525 $ 488,658 $ 374,743
Residential Mortgage Loans Sold $ 445,452 $ 424,931 $ 478,280 $ 448,704 $ 360,743
Residential Mortgage Loan Servicing Portfolio $ 2,695,484 $ 2,349,596 $ 2,199,486 $ 1,963,567 $ 1,776,912
 

For the second quarter of 2013, noninterest expense totaled $48.8 million, an increase of $7.3 million or 18% from the same quarter of 2012. For the six-month period ended June 30, noninterest expense totaled $95.5 million in 2013 compared to $81.6 million in 2012, a $13.9 million or 17% increase. Contributing to these increases in noninterest expense were a $4.1 million or 16% increase in salaries and employee benefits for the quarter and a $9.9 million or 20% increase for the six-month period, a large portion of which resulted from the expansion of Heartland's residential loan origination operations, with a smaller portion attributable to the additional employees joining Heartland through the acquisitions completed during the last two quarters of 2012. Full-time equivalent employees totaled 1,550 on June 30, 2013, compared to 1,321 on June 30, 2012. Also contributing to the increases in noninterest expense were additional occupancy, furniture and equipment, professional fees and other noninterest expenses.

Fuller commented, “Our Heartland Mortgage unit continues to produce solid revenue for our banks, though at a somewhat slower pace than last year. Our mortgage origination focus is shifting toward a stronger purchase market as the refinancing wave begins to slow. As a result, we are seeing a positive shift in loan servicing income.”

Heartland's effective tax rate was 28.46% for the first six months of 2013 compared to 33.19% for the first six months of 2012. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $399,000 during the first six months of both 2013 and 2012. 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 28.02% during the first six months of 2013 compared to 15.87% during the first six months of 2012. The tax-equivalent adjustment for this tax-exempt interest income was $4.7 million during the first six months of 2013 compared to $3.4 million during the first six months of 2012.

Slight Increase in Loans; Slight Decrease in Deposits, With Improved Mix

Total assets were $4.96 billion at June 30, 2013, a decrease of $30.8 million since December 31, 2012. Securities represented 32% of total assets at June 30, 2013, compared to 31% at year-end 2012.

Total loans and leases held to maturity were $2.83 billion at June 30, 2013, compared to $2.82 billion at year-end 2012, an increase of $10.8 million or 1% annualized. Loan demand picked up during the second quarter of 2013, resulting in growth of $42.5 million or 6% annualized. Commercial and commercial real estate loans, which totaled $2.00 billion at June 30, 2013, increased $3.4 million or less than 1% annualized since year-end 2012, with $14.1 million occurring during the second quarter. Residential mortgage loans, which totaled $248.6 million at June 30, 2013, decreased $1.1 million or 1% annualized since year-end 2012, with growth of $8.2 million occurring during the second quarter. Agricultural and agricultural real estate loans, which totaled $327.5 million at June 30, 2013, decreased $821,000 or 1% annualized since year-end 2012, with growth of $12.9 million occurring during the second quarter. Consumer loans, which totaled $254.8 million at June 30, 2013, increased $9.1 million or 7% annualized since year-end 2012, with $7.8 million occurring during the second quarter.

“After a slow first quarter, loan demand resumed in the second quarter, resulting in year-to-date net growth of $11 million. We continue to focus on loan growth as our primary strategy to achieve increased earnings.” added Fuller.

Fuller also noted, “Our participation in the Small Business Lending Fund provides added incentive for the Heartland member banks to originate small business loans. As a result of our success in growing qualifying loans, the cost on our $81.7 million of SBLF preferred stock is now 1%. Consistent with our business purpose, the SBLF allows Heartland to provide affordable credit to small commercial and agricultural clients, which in turn helps to increase employment and assist the economic recovery in the communities we serve.”

Total deposits were $3.84 billion at June 30, 2013, compared to $3.85 billion at year-end 2012, a decrease of $4.5 million or less than 1% annualized. Demand deposits totaled $1.03 billion at June 30, 2013, an increase of $55.6 million or 11% annualized since year-end 2012. Savings deposits decreased $25.5 million or 3% annualized since year-end 2012 and certificates of deposit decreased $34.6 million or 8% annualized. The composition of Heartland's deposits continued its positive trend as no-cost demand deposits as a percentage of total deposits was 27% at June 30, 2013, compared to 25% at both March 31, 2013, and December 31, 2012, while higher-cost certificates of deposit as a percentage of total deposits was 22% at both June 30, 2013, and March 31, 2013, compared to 23% at December 31, 2012.

Fuller said, “While deposit growth has slowed this year, we continue to see a very favorable shift in our deposit mix through the growth of demand deposits which now represent 27% of our deposits.”

Common stockholders' equity was $313.4 million at June 30, 2013, compared to $320.1 million at year-end 2012. Book value per common share was $18.51 at June 30, 2013, compared to $19.02 at year-end 2012. Changes in common stockholders' equity and book value per common share are the result of earnings, dividends paid, stock transactions and mark-to-market adjustment for unrealized gains and losses on securities available for sale. As a result of increases in market interest rates on many debt securities during the second quarter of 2013, Heartland's unrealized gains and losses on securities available for sale, net of applicable taxes, were at an unrealized loss of $7.5 million at June 30, 2013, compared to an unrealized gain of $17.4 million at March 31, 2013, and $20.5 million at December 31, 2012.

Decrease in Provision for Loan Losses; Increase in Nonperforming Loans During the Quarter

The allowance for loan and lease losses at June 30, 2013, was 1.33% of loans and leases and 91.74% of nonperforming loans compared to 1.37% of loans and leases and 89.71% of nonperforming loans at December 31, 2012, and 1.58% of loans and leases and 92.40% of nonperforming loans at June 30, 2012. The provision for loan losses was $1.9 million for the second quarter of 2013 compared to $3.0 million for the second quarter of 2012, a decrease of $1.1 million or 38%, primarily as a result of reduced charge-offs and reductions in the level of nonperforming and substandard loans. For the first six months of 2013, provision for loan losses was $2.5 million compared to $5.4 million for the first six months of 2012, a $2.9 million or 53% reduction. As historic losses have continued to trend downward and overall economic conditions have improved, the required allowance for loan and lease losses has continued to decrease resulting in the related provision expense being reduced.

Nonperforming loans, exclusive of those covered under loss sharing agreements, were $41.0 million or 1.45% of total loans and leases at June 30, 2013, compared to $32.8 million or 1.18% of total loans and leases at March 31, 2013, $43.2 million or 1.53% of total loans and leases at December 31, 2012, and $44.8 million or 1.71% of total loans and leases at June 30, 2012. Approximately 58%, or $23.7 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 6 borrowers, are evenly distributed between the Western and Midwestern states, with $7.1 million originated by Wisconsin Bank & Trust, $4.7 million originated by Dubuque Bank and Trust Company, $4.4 million originated by New Mexico Bank & Trust, $4.0 million originated by Rocky Mountain Bank and $3.4 million originated by Summit Bank & Trust. The portion of Heartland's nonperforming loans covered by government guarantees was $414,000 at June 30, 2013. The industry breakdown for nonperforming loans with individual balances exceeding $1.0 million, as identified using the North American Industry Classification System (NAICS), was $8.4 million for lot and land development and $7.1 million for grain/cattle operation. The remaining $8.2 million was distributed among two 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 2013. Loans delinquent 30 to 89 days as a percent of total loans were 0.29% at June 30, 2013, compared to 0.48% at March 31, 2013, 0.32% at December 31, 2012, 0.53% at September 30, 2012, and 0.46% at June 30, 2012.

Other real estate owned was $34.8 million at June 30, 2013, compared to $36.7 million at March 31, 2013, and $35.8 million at December 31, 2012. 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 2013, $5.3 million of other real estate owned was sold during the second quarter and $8.6 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 2013 and the first six months of 2013, in thousands:
     

Nonperforming

Loans
     

Other

Real Estate

Owned
     

Other

Repossessed

Assets
     

Total

Nonperforming

Assets

March 31, 2013

$

33,446

$

36,704

$

1,059

$

71,209
Loan foreclosures

(5,936

)
5,867 69
Net loan charge offs

(1,767

)

(1,767

)
New nonperforming loans 18,471 18,471
Reduction of nonperforming loans(1)

(2,634

)

(2,634

)
OREO/Repossessed assets sales proceeds

(5,546

)

(407

)

(5,953

)
OREO/Repossessed assets writedowns, net

(2,262

)

(22

)

(2,284

)
Net activity at Citizens Finance Co.  

       

(96

)
 

(96

)

June 30, 2013

$

41,580
 

$

34,763
 

$

603
 

$

76,946
 
 
(1) Includes principal reductions and transfers to performing status.
 

 

Nonperforming

Loans

Other

Real Estate

Owned

Other

Repossessed

Assets

Total

Nonperforming

Assets

December 31, 2012

$

44,415

$

35,822

$

542

$

80,779
Loan foreclosures

(11,266

)
10,71 556
Net loan charge offs

(3,591

)

(3,591

)
New nonperforming loans 21,833 21,833
Reduction of nonperforming loans(1)

(9,811

)

(9,811

)
OREO/Repossessed assets sales proceeds

(8,838

)

(438

)

(9,276

)
OREO/Repossessed assets writedowns, net

(2,931

)

(45

)

(2,976

)
Net activity at Citizens Finance Co.      

 

 
 

(12

)

June 30, 2013

$

41,580
 

$

34,763
 

$

603
 

$

76,946
 
 
(1) Includes principal reductions and transfers to performing status.
 

Net charge-offs on loans during the second quarter of 2013 were $1.8 million compared to $923,000 during the second quarter of 2012.

“Following several quarters of steady improvement, nonperforming assets ticked up slightly from the previous quarter, though still at a lower level than we experienced during the downturn.” Fuller concluded.

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, 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 28, 2014, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.

Heartland Financial USA, Inc., one of Forbes 2013 "Best Banks in America," is a $5.0 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 67 banking locations in 46 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota and loan production offices in California, Nevada, Wyoming, Idaho and North Dakota. 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 potential impact of acquisitions, (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the Company; and (xii) 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

June 30,
    For the Six Months Ended

June 30,
        2013         2012           2013         2012  
Interest Income        
Interest and fees on loans and leases $ 39,726 $ 39,382 $ 79,553 $ 77,781
Interest on securities:
Taxable 4,712 5,026 9,371 12,598
Nontaxable 3,360 2,619 6,558 4,890
Interest on federal funds sold 1 1
Interest on deposits in other financial institutions   2     2     6     2  
Total Interest Income   47,800     47,030     95,488     95,272  
Interest Expense
Interest on deposits 5,066 5,604 10,142 11,379
Interest on short-term borrowings 108 224 256 437
Interest on other borrowings   3,702     4,025     7,499     8,086  
Total Interest Expense   8,876     9,853     17,897     19,902  
Net Interest Income 38,924 37,177 77,591 75,370
Provision for loan and lease losses   1,862     3,000     2,499     5,354  
Net Interest Income After Provision for Loan and Lease Losses   37,062     34,177     75,092     70,016  
Noninterest Income
Service charges and fees 4,280 3,712 8,288 7,296
Loan servicing income 4,106 3,056 7,477 4,816
Trust fees 2,942 2,660 5,846 5,273
Brokerage and insurance commissions 1,087 939 2,038 1,849
Securities gain (loss), net 2,067 4,951 5,494 8,894
Gain (loss) on trading account securities 262 49 576 46
Impairment loss on securities (981 )
Gains on sale of loans 9,083 12,689 18,995 21,191
Valuation adjustment on mortgage servicing rights (194 ) 496 (181 )
Income on bank owned life insurance 315 267 720 749
Other noninterest income   716     149     1,396     2,714  
Total Noninterest Income   24,858     28,278     51,326     51,666  
Noninterest Expense
Salaries and employee benefits 29,516 25,384 59,256 49,380
Occupancy 3,224 2,534 6,409 5,016
Furniture and equipment 2,065 1,517 4,116 2,963
Professional fees 4,233 3,961 7,776 6,721
FDIC insurance assessments 861 807 1,763 1,671
Advertising 1,248 1,304 2,476 2,375
Intangible assets amortization 198 122 398 253
Net loss on repossessed assets 2,477 1,307 3,817 4,211
Other noninterest expenses   4,944     4,523     9,502     9,009  
Total Noninterest Expense   48,766     41,459     95,513     81,599  
Income Before Income Taxes 13,154 20,996 30,905 40,083
Income taxes   3,598     7,032     8,797     13,304  
Net Income 9,556 13,964 22,108 26,779
Net (income) loss attributable to noncontrolling interest, net of tax       (7 )   (64 )   19  
Net Income Attributable to Heartland 9,556 13,957 22,044 26,798
Preferred dividends and discount   (205 )   (1,021 )   (613 )   (2,042 )
Net Income Available to Common Stockholders $ 9,351   $ 12,936   $ 21,431   $ 24,756  
Earnings per common share-diluted $ 0.54 $ 0.77 $ 1.25 $ 1.48
Weighted average shares outstanding-diluted 17,203,924 16,717,846 17,193,446 16,722,005
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended
        6/30/2013         3/31/2013         12/31/2012         9/30/2012         6/30/2012  
Interest Income                
Interest and fees on loans and leases $ 39,726 $ 39,827 $ 39,510 $ 39,208 $ 39,382
Interest on securities:
Taxable 4,712 4,659 5,079 4,452 5,026
Nontaxable 3,360 3,198 2,912 2,896 2,619
Interest on federal funds sold 3 1
Interest on deposits in other financial institutions   2     4     3     3     2  
Total Interest Income   47,800     47,688     47,507     46,559     47,030  
Interest Expense
Interest on deposits 5,066 5,076 5,347 5,504 5,604
Interest on short-term borrowings 108 148 166 215 224
Interest on other borrowings   3,702     3,797     4,020     4,028     4,025  
Total Interest Expense   8,876     9,021     9,533     9,747     9,853  
Net Interest Income 38,924 38,667 37,974 36,812 37,177
Provision for loan and lease losses   1,862     637     3,350     (502 )   3,000  
Net Interest Income After Provision for Loan and Lease Losses   37,062     38,030     34,624     37,314     34,177  
Noninterest Income
Service charges and fees 4,280 4,008 4,002 3,944 3,712
Loan servicing income 4,106 3,371 3,468 3,016 3,056
Trust fees 2,942 2,904 2,538 2,667 2,660
Brokerage and insurance commissions 1,087 951 945 908 939
Securities gain (loss), net 2,067 3,427 (108 ) 5,212 4,951
Gain (loss) on trading account securities 262 314 164 (163 ) 49
Impairment loss on securities
Gains on sale of loans 9,083 9,912 14,257 13,750 12,689
Valuation adjustment on mortgage servicing rights 496 197 (493 ) (194 )
Income on bank owned life insurance 315 405 311 382 267
Other noninterest income   716     680     1,456     543     149  
Total Noninterest Income   24,858     26,468     27,230     29,766     28,278  
Noninterest Expense
Salaries and employee benefits 29,516 29,740 29,283 27,064 25,384
Occupancy 3,224 3,185 3,017 2,596 2,534
Furniture and equipment 2,065 2,051 1,822 1,541 1,517
Professional fees 4,233 3,543 4,400 4,217 3,961
FDIC insurance assessments 861 902 810 811 807
Advertising 1,248 1,228 1,736 1,183 1,304
Intangible assets amortization 198 200 163 146 122
Net loss on repossessed assets 2,477 1,340 1,983 3,775 1,307
Other noninterest expenses   4,944     4,558     11,409     5,826     4,523  
Total Noninterest Expense   48,766     46,747     54,623     47,159     41,459  
Income Before Income Taxes 13,154 17,751 7,231 19,921 20,996
Income taxes   3,598     5,199     (2,258 )   6,338     7,032  
Net Income 9,556 12,552 9,489 13,583 13,964
Net (income) loss attributable to noncontrolling interest, net of tax       (64 )   (82 )   4     (7 )
Net Income Attributable to Heartland 9,556 12,488 9,407 13,587 13,957
Preferred dividends and discount   (205 )   (408 )   (409 )   (949 )   (1,021 )
Net Income Available to Common Stockholders $ 9,351   $ 12,080   $ 8,998   $ 12,638   $ 12,936  
Earnings per common share-diluted $ 0.54 $ 0.70 $ 0.54 $ 0.75 $ 0.77
Weighted average shares outstanding-diluted 17,203,924 17,187,180 16,812,947 16,745,968 16,717,846
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    As Of
        6/30/2013         3/31/2013         12/31/2012         9/30/2012         6/30/2012  
Assets                
Cash and cash equivalents $ 112,097 $ 74,587 $ 168,054 $ 191,126 $ 82,831
Time deposits in other financial institutions 3,605 3,605
Securities 1,578,573 1,580,719 1,561,957 1,332,082 1,331,088
Loans held for sale 88,541 91,708 96,165 99,429 73,284
Loans and leases:
Held to maturity 2,832,377 2,789,893 2,821,549 2,647,959 2,629,597
Loans covered by loss share agreements 6,275 6,741 7,253 8,511 9,567
Allowance for loan and lease losses   (37,623 )   (37,528 )   (38,715 )   (40,401 )   (41,439 )
Loans and leases, net 2,801,029 2,759,106 2,790,087 2,616,069 2,597,725
Premises, furniture and equipment, net 129,938 128,411 128,294 120,334 114,823
Goodwill 30,627 30,627 30,627 26,590 25,909
Other intangible assets, net 22,056 20,266 18,486 15,612 14,295
Cash surrender value on life insurance 75,992 75,907 75,480 72,853 72,448
Other real estate, net 34,763 36,704 35,822 36,139 37,941
FDIC indemnification asset 282 528 749 1,238 1,148
Other assets   82,253     98,390     84,832     81,725     76,192  
Total Assets $ 4,959,756   $ 4,900,558   $ 4,990,553   $ 4,593,197   $ 4,427,684  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 1,029,784 $ 971,142 $ 974,232 $ 877,790 $ 799,548
Savings 1,978,962 2,022,625 2,004,438 1,809,776 1,734,155
Time   832,388     848,689     866,990     815,470     801,204  
Total deposits 3,841,134 3,842,456 3,845,660 3,503,036 3,334,907
Short-term borrowings 339,181 202,694 224,626 245,308 249,485
Other borrowings 336,332 336,577 389,025 377,536 377,543
Accrued expenses and other liabilities   47,974     104,857     126,703     72,571     90,755  
Total Liabilities 4,564,621 4,486,584 4,586,014 4,198,451 4,052,690
Equity
Preferred equity 81,698 81,698 81,698 81,698 81,698
Common equity   313,437     329,478     320,107     310,396     290,640  
Total Heartland Stockholders' Equity 395,135 411,176 401,805 392,094 372,338
Noncontrolling interest       2,798     2,734     2,652     2,656  
Total Equity   395,135     413,974     404,539     394,746     374,994  
Total Liabilities and Equity $ 4,959,756   $ 4,900,558   $ 4,990,553   $ 4,593,197   $ 4,427,684  
Common Share Data
Book value per common share $ 18.51 $ 19.54 $ 19.02 $ 18.81 $ 17.65
ASC 320 effect on book value per common share $ (0.44 ) $ 1.03 $ 1.21 $ 1.46 $ 0.98
Common shares outstanding, net of treasury stock 16,934,161 16,865,919 16,827,835 16,505,241 16,467,889
Tangible Capital Ratio(1) 5.69 % 6.09 % 5.78 % 6.18 % 5.98 %

(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
June 30, June 30,
          2013           2012           2013           2012  
Average Balances        
Assets $   4,932,852 $   4,350,916 $   4,911,556 $   4,289,341
Loans and leases, net of unearned 2,905,778 2,675,694 2,891,449 2,626,562
Deposits 3,871,945 3,291,293 3,836,731 3,246,183
Earning assets 4,461,923

3,870,360
4,433,182 3,827,534
Interest bearing liabilities 3,433,686 3,140,063 3,423,221 3,110,702
Common stockholders' equity 332,386 284,610 327,629 279,943
Total stockholders' equity 414,976 368,960 411,150 364,302
Tangible common stockholders' equity 299,225 257,212 294,366 252,477
 
Earnings Performance Ratios
Annualized return on average assets 0.76 % 1.20 % 0.88 % 1.16 %
Annualized return on average common equity 11.28 % 18.28 % 13.19 % 17.78 %
Annualized return on average common tangible equity 12.53 % 20.23 % 14.68 % 19.72 %
Annualized net interest margin (1) 3.71 % 4.05 % 3.74 % 4.14 %
Efficiency ratio (2) 76.08 % 66.56 % 74.57 % 67.12 %

(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
          6/30/2013           3/31/2013           12/31/2012           9/30/2012           6/30/2012  
Average Balances                
Assets $   4,932,852 $   4,890,023 $   4,739,887 $   4,532,302 $   4,350,916
Loans and leases, net of unearned 2,905,778 2,876,960 2,803,361 2,727,806 2,675,694
Deposits 3,871,945 3,801,125 3,674,507 3,415,810 3,291,293
Earning assets 4,461,923 4,404,119 4,171,475 4,019,601 3,870,360
Interest bearing liabilities 3,433,686 3,412,641 3,330,270 3,235,440 3,140,063
Common stockholders' equity 332,386 322,820 316,073 299,408 284,610
Total stockholders' equity 414,976 407,282 400,442 383,763 368,960
Tangible common stockholders' equity 299,225 289,453 288,359 272,078 257,212
 
Earnings Performance Ratios
Annualized return on average assets 0.76 % 1.00 % 0.76 % 1.11 % 1.20 %
Annualized return on average common equity 11.28 % 15.18 % 11.33 % 16.79 % 18.28 %
Annualized return on average common tangible equity 12.53 % 16.93 % 12.41 % 18.48 % 20.23 %
Annualized net interest margin(1) 3.71 % 3.77 % 3.81 % 3.84 % 4.05 %
Efficiency ratio(2) 76.08 % 73.06 % 81.13 % 74.47 % 66.56 %

(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
        6/30/2013         3/31/2013         12/31/2012         9/30/2012         6/30/2012  
Loan and Lease Data                
Loans held to maturity:
Commercial and commercial real estate $ 2,004,883 $ 1,990,818 $ 2,001,492 $ 1,902,588 $ 1,904,286
Residential mortgage 248,604 240,453 249,689 228,972 220,084
Agricultural and agricultural real estate 327,490 314,606 328,311 283,697 279,285
Consumer 254,825 246,996 245,678 236,619 230,594
Unearned discount and deferred loan fees   (3,425 )   (2,980 )   (3,621 )   (3,917 )   (4,652 )
Total loans and leases held to maturity $ 2,832,377   $ 2,789,893   $ 2,821,549   $ 2,647,959   $ 2,629,597  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 2,519 $ 2,738 $ 3,074 $ 3,772 $ 4,497
Residential mortgage 2,493 2,722 2,645 3,099 3,309
Agricultural and agricultural real estate 441 453 748 863 858
Consumer   822     828     786     777     903  
Total loans and leases covered under loss share agreements $ 6,275   $ 6,741   $ 7,253   $ 8,511   $ 9,567  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 41,003 $ 32,356 $ 43,156 $ 40,743 $ 44,845
Loans and leases past due ninety days or more as to interest or principal payments 6 454
Other real estate owned 33,709 35,697 35,470 35,994 37,709
Other repossessed assets   603     1,059     542     496     465  
Total nonperforming assets not covered under loss share agreements $ 75,321   $ 69,566   $ 79,168   $ 77,233   $ 83,019  
Performing troubled debt restructured loans $ 32,661 $ 24,473 $ 21,121 $ 22,385 $ 24,715
Covered under loss share agreements:
Nonaccrual loans $ 571 $ 636 $ 1,259 $ 2,236 $ 2,862
Other real estate owned   1,054     1,007     352     145     232  
Total nonperforming assets covered under loss share agreements $ 1,625   $ 1,643   $ 1,611   $ 2,381   $ 3,094  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 37,528 $ 38,715 $ 40,401 $ 41,439 $ 39,362
Provision for loan and lease losses 1,862 637 3,350 (502 ) 3,000
Charge-offs on loans not covered by loss share agreements (2,742 ) (3,041 ) (7,455 ) (2,785 ) (2,219 )
Charge-offs on loans covered by loss share agreements (31 ) (23 ) (137 ) (265 ) (35 )
Recoveries   1,006     1,240     2,556     2,514     1,331  
Balance, end of period $ 37,623   $ 37,528   $ 38,715   $ 40,401   $ 41,439  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 1.45 % 1.18 % 1.53 % 1.54 % 1.71 %
Ratio of nonperforming assets to total assets 1.52 % 1.42 % 1.59 % 1.68 % 1.87 %
Annualized ratio of net loan charge-offs to average loans and leases 0.24 % 0.26 % 0.71 % 0.08 % 0.14 %
Allowance for loan and lease losses as a percent of loans and leases 1.33 % 1.35 % 1.37 % 1.53 % 1.58 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 91.74 % 114.38 % 89.71 % 99.16 % 92.40 %
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
    For the Quarter Ended
June 30, 2013     June 30, 2012
     

Average

Balance
    Interest     Rate    

Average

Balance
    Interest     Rate
Earning Assets                
Securities:
Taxable $ 1,191,838 $ 4,712 1.59 % $ 954,684 $ 5,026 2.12 %
Nontaxable(1)   392,298     5,169 5.28     272,561     4,029 5.95  
Total securities   1,584,136     9,881 2.50     1,227,245     9,055 2.97  
Interest bearing deposits 9,607 2 0.08 6,587 1 0.06
Federal funds sold   160         1,433     2 0.56  
Loans and leases:
Commercial and commercial real estate(1) 1,998,000 25,266 5.07 % 1,882,140 25,203 5.39
Residential mortgage 334,706 3,473 4.16 290,702 3,322 4.60
Agricultural and agricultural real estate(1) 322,438 4,204 5.23 276,557 3,929 5.71
Consumer 250,634 5,926 9.48 226,295 5,793 10.30
Fees on loans 1,436 1,510
Less: allowance for loan and lease losses   (37,758 )       (40,599 )    
Net loans and leases   2,868,020     40,305 5.64     2,635,095     39,757 6.07  
Total earning assets   4,461,923     50,188 4.51 %   3,870,360     48,815 5.07 %
Nonearning Assets   470,929     480,556  
Total Assets $ 4,932,852   $ 50,188 $ 4,350,916     48,815
Interest Bearing Liabilities
Savings $ 2,011,051 $ 1,509 0.30 % $ 1,726,357 $ 1,718 0.40 %
Time, $100,000 and over 313,760 1,169 1.49 255,701 1,195 1.88
Other time deposits 528,775 2,388 1.81 520,140 2,691 2.08
Short-term borrowings 243,665 108 0.18 260,523 224 0.35
Other borrowings   336,435     3,702 4.41     377,342     4,025 4.29  
Total interest bearing liabilities   3,433,686     8,876 1.04 %   3,140,063     9,853 1.26 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 1,018,359 789,095
Accrued interest and other liabilities   65,831     52,798  
Total noninterest bearing liabilities   1,084,190     841,893  
Stockholders' Equity   414,976     368,960  
Total Liabilities and Stockholders' Equity $ 4,932,852   $ 4,350,916  
Net interest income(1) $ 41,312 $ 38,962
Net interest spread(1) 3.47 % 3.81 %
Net interest income to total earning assets(1) 3.71 % 4.05 %
Interest bearing liabilities to earning assets 76.96 % 81.13 %
 
(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, 2013     June 30, 2012

 
       

 
       
     

Average

Balance
    Interest     Rate    

Average

Balance
    Interest     Rate
Earning Assets
Securities:
Taxable $ 1,188,223 $ 9,371 1.59 % $ 987,956 $ 12,598 2.56 %
Nontaxable(1)   381,644     10,089 5.33     245,922     7,523 6.15  
Total securities   1,569,867     19,460 2.50     1,233,878     20,121 3.28  
Interest bearing deposits 9,298 6 0.13 5,205 1 0.04
Federal funds sold   893         790     2 0.51  
Loans and leases:
Commercial and commercial real estate(1) 1,990,270 50,826 5.15 1,854,937 50,198 5.44
Residential mortgage 334,227 6,912 4.17 277,649 6,438 4.66
Agricultural and agricultural real estate(1) 318,827 8,568 5.42 271,660 7,862 5.82
Consumer 248,125 11,750 9.55 222,316 11,170 10.10
Fees on loans 2,630 2,905
Less: allowance for loan and lease losses   (38,325 )       (38,901 )    
Net loans and leases   2,853,124     80,686 5.70     2,587,661     78,573 6.11  
Total earning assets   4,433,182     100,152 4.56 %   3,827,534     98,697 5.19 %
Nonearning Assets   478,374     461,807  
Total Assets $ 4,911,556   $ 100,152 $ 4,289,341   $ 98,697
Interest Bearing Liabilities
Savings 1,986,381 3,142 0.32 % 1,703,004 3,381 0.40 %
Time, $100,000 and over 314,755 2,339 1.50 251,548 2,423 1.94 %
Other time deposits 539,644 4,661 1.74 526,647 5,575 2.13 %
Short-term borrowings 236,747 256 0.22 253,807 437 0.35 %
Other borrowings   345,694     7,499 4.37     375,696     8,086 4.33 %
Total interest bearing liabilities   3,423,221     17,897 1.05 %   3,110,702     19,902 1.29 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 995,951 764,984
Accrued interest and other liabilities   81,234     49,353  
Total noninterest bearing liabilities   1,077,185     814,337  
Stockholders' Equity   411,150     364,302  
Total Liabilities and Stockholders' Equity $ 4,911,556   $ 4,289,341  
Net interest income(1) $ 82,255 $ 78,795
Net interest spread(1) 3.51 % 3.90 %
Net interest income to total earning assets(1) 3.74 % 4.14 %
Interest bearing liabilities to earning assets 77.22 % 81.27 %
 
(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
        6/30/2013         3/31/2013         12/31/2012         9/30/2012         6/30/2012  
Total Assets                
Dubuque Bank and Trust Company $ 1,512,215 $ 1,436,744 $ 1,482,504 $ 1,478,943 $ 1,385,409
New Mexico Bank & Trust 1,029,360 1,010,607 1,026,952 973,177 998,172
Wisconsin Bank & Trust 643,727 651,277 691,715 511,580 497,372
Riverside Community Bank 450,915 422,352 450,863 424,044 360,654
Rocky Mountain Bank 448,855 457,389 465,614 435,283 443,493
Arizona Bank & Trust 393,829 404,518 307,871 275,053 268,103
Galena State Bank & Trust Co. 290,388 294,484 295,226 295,222 309,516
Minnesota Bank & Trust 164,714 127,044 126,421 109,586 101,704
Summit Bank & Trust       118,049         115,649         119,752         104,066         102,875  
Total Deposits
Dubuque Bank and Trust Company $ 1,122,506 $ 1,123,323 $ 1,150,141 $ 1,089,125 $ 959,273
New Mexico Bank & Trust 748,345 716,938 721,445 720,520 725,537
Wisconsin Bank & Trust 527,762 533,956 549,773 424,146 415,277
Riverside Community Bank 334,248 352,189 344,005 335,899 305,120
Rocky Mountain Bank 367,707 380,024 372,135 354,396 356,046
Arizona Bank & Trust 321,813 339,797 243,044 216,851 211,318
Galena State Bank & Trust Co. 245,324 235,000 245,554 247,334 257,800
Minnesota Bank & Trust 145,246 111,886 109,862 91,179 77,119
Summit Bank & Trust       102,891         100,617         93,318         88,540         83,977  
Net Income (Loss)
Dubuque Bank and Trust Company $ 3,694 $ 2,872 $ 5,581 $ 5,485 $ 8,463
New Mexico Bank & Trust 2,520 3,444 1,354 4,395 1,592
Wisconsin Bank & Trust 1,534 2,544 638 1,943 1,547
Riverside Community Bank 240 827 482 607 914
Rocky Mountain Bank 854 1,175 2,029 1,315 2,089
Arizona Bank & Trust 1,568 1,714 1,346 1,534 981
Galena State Bank & Trust Co. 981 1,270 929 938 1,149
Minnesota Bank & Trust 196 320 412 (15 ) 35
Summit Bank & Trust       (242 )       (45 )       (69 )       (1 )       (100 )
Return on Average Assets
Dubuque Bank and Trust Company 1.00 % 0.81 % 1.34 % 1.50 % 2.39 %
New Mexico Bank & Trust 0.99 1.38 0.53 1.78 0.66
Wisconsin Bank & Trust 0.96 1.58 0.44 1.53 1.27
Riverside Community Bank 0.21 0.77 0.46 0.57 1.05
Rocky Mountain Bank 0.75 1.03 1.86 1.21 1.94
Arizona Bank & Trust 1.59 1.69 1.87 2.22 1.56
Galena State Bank & Trust Co. 1.35 1.82 1.25 1.24 1.58
Minnesota Bank & Trust 0.55 1.03 1.41 (0.06 ) 0.15
Summit Bank & Trust       (0.85 )       (0.16 )       (0.25 )               (0.40 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 3.23 % 3.37 % 3.57 % 3.61 % 3.67 %
New Mexico Bank & Trust 3.53 3.56 3.51 3.50 3.69
Wisconsin Bank & Trust 4.25 4.34 4.16 4.04 4.38
Riverside Community Bank 2.89 2.80 3.02 2.44 3.38
Rocky Mountain Bank 3.96 3.82 4.26 4.35 4.68
Arizona Bank & Trust 4.29 4.25 3.89 3.76 4.19
Galena State Bank & Trust Co. 3.48 3.69 3.31 3.50 3.42
Minnesota Bank & Trust 3.30 3.68 4.04 4.47 4.57
Summit Bank & Trust 3.57 3.89 3.62 3.75 3.89
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
    As of
        6/30/2013         3/31/2013         12/31/2012         9/30/2012         6/30/2012  
Total Portfolio Loans and Leases                
Dubuque Bank and Trust Company $ 828,088 $ 803,084 $ 814,400 $ 827,065 $ 824,830
New Mexico Bank & Trust 501,373 490,691 497,837 490,102 500,296
Wisconsin Bank & Trust 442,184 445,869 446,214 355,670 353,152
Riverside Community Bank 174,498 167,776 166,852 155,191 158,186
Rocky Mountain Bank 285,900 272,385 278,252 286,138 280,137
Arizona Bank & Trust 251,416 249,642 189,314 185,186 177,953
Galena State Bank & Trust Co. 169,306 170,500 176,109 172,530 169,160
Minnesota Bank & Trust 89,121 89,876 90,729 85,860 80,815
Summit Bank & Trust       75,869         77,305         77,264         67,909         67,932  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 8,858 $ 8,758 $ 9,217 $ 9,760 $ 9,454
New Mexico Bank & Trust 6,619 6,381 6,837 7,834 8,705
Wisconsin Bank & Trust 4,420 4,248 4,164 3,719 3,695
Riverside Community Bank 2,924 3,174 3,240 3,122 3,114
Rocky Mountain Bank 4,404 4,009 4,072 4,135 4,325
Arizona Bank & Trust 3,573 4,065 4,444 4,723 5,390
Galena State Bank & Trust Co. 1,759 1,856 2,031 1,932 1,808
Minnesota Bank & Trust 944 920 961 915 822
Summit Bank & Trust       1,222         1,339         1,204         1,478         1,370  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 9,612 $ 2,234 $ 2,783 $ 2,378 $ 2,508
New Mexico Bank & Trust 8,606 8,228 10,711 8,455 10,856
Wisconsin Bank & Trust 7,921 3,875 5,433 6,673 7,463
Riverside Community Bank 2,769 3,118 3,473 4,685 5,222
Rocky Mountain Bank 5,997 6,130 8,174 6,167 6,005
Arizona Bank & Trust 2,240 3,378 3,549 5,409 5,645
Galena State Bank & Trust Co. 1,246 3,087 5,080 3,242 3,778
Minnesota Bank & Trust 3 4 5 5 6
Summit Bank & Trust       1,897         2,001         3,159         2,913         2,691  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.07 % 1.09 % 1.13 % 1.18 % 1.15 %
New Mexico Bank & Trust 1.32 1.30 1.37 1.60 1.74
Wisconsin Bank & Trust 1.00 0.95 0.93 1.05 1.05
Riverside Community Bank 1.68 1.89 1.94 2.01 1.97
Rocky Mountain Bank 1.54 1.47 1.46 1.45 1.54
Arizona Bank & Trust 1.42 1.63 2.35 2.55 3.03
Galena State Bank & Trust Co. 1.04 1.09 1.15 1.12 1.07
Minnesota Bank & Trust 1.06 1.02 1.06 1.07 1.02
Summit Bank & Trust 1.61 1.73 1.56 2.18 2.02

Copyright Business Wire 2010