Highlights
  • Quarterly net income available to common stockholders of $19.1 million, a 33% increase from the fourth quarter of the prior year
  • Record annual net income available to common stockholders of $80.1 million, a 35% increase from the prior year
  • Diluted earnings per common share of $0.74 for the quarter, a 10% increase from the fourth quarter of the prior year, and $3.22 for the year, a 14% increase from the prior year
  • Net interest margin of 3.96% for the quarter, fully tax-equivalent (non-GAAP)(1) of 4.14%
  • Net interest margin of 3.95% for the year, fully tax-equivalent (non-GAAP)(1) of 4.13%
  • Return on average common equity of 10.48% for the quarter and 11.80% for the year
  • Return on average tangible common equity (non-GAAP)(2) of 13.24% for the quarter and 15.15% for the year
  • Completed offering of 1,379,690 shares of common stock with net proceeds of $49.7 million
  • Announced agreement to acquire Founders Bancorp of San Luis Obispo, CA
  • Declared and paid a special dividend of $0.10 per common share
      Quarter Ended December 31,   Year Ended December 31,
      2016   2015   2016   2015
Net income available to common stockholders (in millions)     $ 19.1     $ 14.4     $ 80.1     $ 59.2  
Diluted earnings per common share     0.74     0.67     3.22     2.83  
                   
Return on average assets     0.92 %   0.79 %   0.98 %   0.88 %
Return on average common equity     10.48     10.69     11.80     11.92  
Return on average tangible common equity (non-GAAP) (2)     13.24     12.79     15.15     13.90  
Net interest margin     3.96     3.82     3.95     3.80  
Net interest margin, fully tax-equivalent (non-GAAP) (1)     4.14     3.99     4.13     3.97  

"Heartland just completed its best year on record with net income available to common stockholders of $80.1 million, a 35 percent increase over 2015, with earnings per share growing by 14 percent." Lynn B. Fuller, chairman and chief executive officer, Heartland Financial USA, Inc.

(1) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table included in this earnings release.(2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table included in this earnings release.

DUBUQUE, Iowa, Jan. 30, 2017 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $19.1 million, or $0.74 per diluted common share, for the quarter ended December 31, 2016, compared to $14.4 million, or $0.67 per diluted common share, for the fourth quarter of 2015. Return on average common equity was 10.48% and return on average assets was 0.92% for the fourth quarter of 2016, compared to 10.69% and 0.79%, respectively, for the same quarter in 2015.

Net income available to common stockholders for the year 2016 was $80.1 million, or $3.22 per diluted common share, compared to $59.2 million, or $2.83 per diluted common share, recorded during the year 2015. Return on average common equity was 11.80% and return on average assets was 0.98% for the year 2016, compared to 11.92% and 0.88%, respectively, for the same period in 2015.

Commenting on Heartland's results for 2016, Lynn B. Fuller, Heartland's chairman and chief executive officer said, "Heartland just completed its best year on record with net income available to common stockholders of $80.1 million, a 35 percent increase over 2015, with earnings per share growing by 14 percent."

On October 29, 2016, Heartland entered into a definitive merger agreement for the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. The transaction is valued at approximately $29.1 million, subject to adjustment. Of the merger consideration, 70% will be in the form of shares of Heartland common stock, and 30% will be in cash. As of September 30, 2016, Founders Community Bank had total assets of $198.5 million, which includes gross loans of $106.6 million and total deposits of $180.5 million. The closing of the acquisition is subject to customary closing conditions, including approvals by the Founders Bancorp shareholders and banking regulators, and is expected to occur in the first quarter of 2017. Simultaneous with the close, Founders Community Bank will be merged into Heartland's Premier Valley Bank subsidiary. Heartland expects the acquisition to be accretive to its earnings per share during 2018.

On November 8, 2016, Heartland closed its sale of 1,379,690 shares of the its common stock pursuant to an underwriting agreement with Raymond James & Associates, Inc. as underwriter, providing for the offer and sale of the shares in a firm commitment underwritten public offering. The net proceeds from this offering were approximately $49.7 million. Heartland is using the net proceeds from this offering for general corporate purposes, which may include, among other things, working capital, debt repayment or financing potential acquisitions.

Net Interest Margin Remains Consistent As a Percentage of Average Earning Assets and Increases In Dollars

Net interest margin, expressed as a percentage of average earning assets, was 3.96% (4.14% on a fully tax-equivalent basis) during the fourth quarter of 2016, compared to 3.97% (4.14% on a fully tax-equivalent basis) during the third quarter of 2016 and 3.82% (3.99% on a fully tax-equivalent basis) during the fourth quarter of 2015.

Fuller said, "Throughout the year, we were pleased to see tax-equivalent net interest margin maintained nicely above the key 4 percent level. Despite continued pressure from a very low interest rate environment, we continue to find opportunities to increase asset yields while reducing our funding costs."

Interest income for the fourth quarter of 2016 was $82.8 million, an increase of $12.6 million or 18%, compared to the $70.2 million recorded in the fourth quarter of 2015. The tax-equivalent adjustment, which accounts for income taxes saved on the interest earned on nontaxable securities and loans, was $3.5 million for the fourth quarter of 2016 and $2.8 million for the fourth quarter of 2015. With these adjustments, interest income on a tax-equivalent basis was $86.3 million for the fourth quarter of 2016, an increase of $13.3 million or 18%, compared to $73.0 million for the fourth quarter of 2015. The increase in interest income in the fourth quarter of 2016, as compared to the fourth quarter of 2015, was primarily due to an increase in average earning assets, which totaled $7.55 billion during the fourth quarter of 2016 compared to $6.51 billion during the fourth quarter of 2015, a $1.04 billion or 16% increase. A majority of this growth was attributable to the acquisition of Premier Valley Bank completed on November 30, 2015, and acquisition of CIC Bancshares, Inc. completed on February 5, 2016.

Interest expense for the fourth quarter of 2016 was $7.6 million, an increase of $160,000 or 2% from $7.5 million in the fourth quarter of 2015. Average interest bearing liabilities increased $424.6 million or 9% for the quarter ended December 31, 2016, from $4.78 billion in the same quarter in 2015, while the average interest rate paid on Heartland's interest bearing deposits and borrowings declined 4 basis points from 0.62% in the fourth quarter of 2015 to 0.58% in the fourth quarter of 2016. The average interest rate paid on savings deposits was 0.21% during the fourth quarter of 2016 compared to 0.20% during the fourth quarter of 2015, and the average interest rate paid on time deposits was 0.77% during the fourth quarter of 2016 compared to 0.82% during the fourth quarter of 2015.

Net interest income increased $12.5 million or 20% to $75.2 million in the fourth quarter of 2016 from the $62.7 million recorded in the fourth quarter of 2015. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $78.7 million during the fourth quarter of 2016, an increase of $13.1 million or 20% from the $65.5 million recorded during the fourth quarter of 2015.

Noninterest Income and Noninterest Expenses Increase

Noninterest income totaled $24.5 million during the fourth quarter of 2016 compared to $24.4 million during the fourth quarter of 2015. Service charges and fees totaled $8.1 million during the fourth quarter of 2016 compared to $6.7 million during the fourth quarter of 2015, an increase of $1.5 million or 22%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which is attributable to the acquisitions completed during the last quarter of 2015 and first quarter of 2016. Gains on sale of loans held for sale totaled $5.8 million during the fourth quarter of 2016 compared to $7.1 million during the fourth quarter of 2015, a decrease of $1.2 million or 18%. Net securities gains totaled $1.6 million during the fourth quarter of 2016 compared to $3.9 million during the fourth quarter of 2015, a decrease of $2.3 million or 59%.

For the fourth quarter of 2016, noninterest expenses totaled $69.9 million compared to $66.0 million during the fourth quarter of 2015, an increase of $3.9 million or 6%. The category with the most significant increase was salaries and employee benefits, which increased $5.5 million or 16%. Other categories experiencing increases, primarily attributable to the recent acquisitions, were occupancy, furniture and equipment, professional fees and intangible assets amortization.

Heartland's effective tax rate was 30.38% for the fourth quarter of 2016 compared to 23.03% for the fourth quarter of 2015. Included in Heartland's income taxes for the fourth quarter of 2015 were federal historic rehabilitation tax credits totaling $1.4 million associated with Heartland's ownership interest in a qualifying real estate project. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $304,000 during the fourth quarter of 2016 compared to $145,000 during the fourth quarter of 2015. Heartland's effective tax rate was also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 23.69% during the fourth quarter of 2016 compared to 27.70% during the fourth quarter of 2015.

Loans and Deposits Increase

Total assets were $8.25 billion at December 31, 2016, an increase of $552.3 million or 7% from $7.70 billion at year-end 2015. Included in this growth, at fair value, were $772.6 million of assets acquired in the CIC Bancshares, Inc. transaction. Securities represented 26% of total assets at December 31, 2016, compared to 24% at December 31, 2015.

Total loans held to maturity were $5.35 billion at December 31, 2016, compared to $5.00 billion at year-end 2015, an increase of $350.2 million or 7%. This increase includes $581.5 million of total loans held to maturity, at fair value, acquired in the CIC Bancshares, Inc. transaction. Exclusive of this transaction, total loans held to maturity decreased $87.0 million during the fourth quarter of 2016 and decreased $231.2 million during the year 2016.

Total deposits were $6.85 billion as of December 31, 2016, compared to $6.41 billion at year-end 2015, an increase of $441.6 million or 7%. This increase included $648.1 million of deposits, at fair value, acquired in the CIC Bancshares, Inc. acquisition. Exclusive of this transaction, total deposits decreased $65.3 million during the fourth quarter of 2016 and $206.5 million during the year 2016. Demand deposits totaled $2.20 billion at December 31, 2016, an increase of $287.9 million or 15% from $1.91 billion at year-end 2015, with $164.3 million of the increase attributable to the CIC Bancshares, Inc. transaction. Exclusive of this transaction, demand deposits decreased $36.7 million during the fourth quarter of 2016 and increased $123.6 million during the year 2016.

Fuller said, "Though deposit growth has slowed, we continue to be pleased with the favorable shift in deposit mix as non-time deposits represent 87 percent of total deposits."

Nonperforming Assets Increase; Provision for Loan Losses Remains Constant

Nonperforming assets were $74.8 million or 0.91% of total assets at December 31, 2016, compared to $51.7 million or 0.67% of total assets at December 31, 2015. Exclusive of $3.5 million of nonperforming assets, at fair value, acquired in the CIC Bancshares, Inc. transaction, nonperforming assets increased $19.6 million or 38% since year-end 2015. Nonperforming loans were $64.4 million or 1.20% of total loans at December 31, 2016, compared to $39.7 million or 0.79% of total loans at December 31, 2015. Contributing to the increase in nonperforming loans during 2016 were two  loans totaling $20.7 million at Dubuque Bank and Trust Company, both of which are in the process of collection. Based upon the current valuation of the collateral securing each loan relationship, we anticipate no additional provision for loan losses on either of these credits.

The allowance for loan losses at December 31, 2016, was 1.02% of loans and 84.37% of nonperforming loans, compared to 0.97% of loans and 122.77% of nonperforming loans at December 31, 2015. The provision for loan losses was $2.2 million for both the fourth quarter of 2016 and 2015.

Conference Call DetailsHeartland will host a conference call for investors at 5:00 p.m. EST 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. A replay will be available until January 29, 2018, by logging on to www.htlf.com .

About Heartland Financial USA, Inc.Heartland Financial USA, Inc. is a diversified financial services company with assets exceeding $8 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 108 banking locations serving 85 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com .

Safe Harbor StatementThis 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 (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 December 31,   For the Year Ended December 31,
    2016   2015   2016   2015
Interest Income                
Interest and fees on loans   $ 69,848     $ 59,905     $ 278,128     $ 227,106  
Interest on securities:                
Taxable   8,480     6,917     32,858     26,646  
Nontaxable   4,292     3,311     15,085     12,178  
Interest on federal funds sold       21     12     24  
Interest on deposits in other financial institutions   157     3     396     14  
Total Interest Income   82,777     70,157     326,479     265,968  
Interest Expense                
Interest on deposits   3,744     3,772     15,939     15,530  
Interest on short-term borrowings   119     200     1,202     838  
Interest on other borrowings   3,754     3,485     14,672     15,602  
Total Interest Expense   7,617     7,457     31,813     31,970  
Net Interest Income   75,160     62,700     294,666     233,998  
Provision for loan losses   2,181     2,171     11,694     12,697  
Net Interest Income After Provision for Loan Losses   72,979     60,529     282,972     221,301  
Noninterest Income                
Service charges and fees   8,128     6,654     31,590     24,308  
Loan servicing income   1,068     1,704     4,501     5,276  
Trust fees   3,718     3,230     14,845     14,281  
Brokerage and insurance commissions   955     917     3,869     3,789  
Securities gains, net   1,608     3,913     11,340     13,143  
Impairment loss on securities       (769 )       (769 )
Gains on sale of loans held for sale   5,840     7,085     39,634     45,249  
Valuation adjustment on commercial servicing rights   8         (33 )    
Income on bank owned life insurance   542     644     2,275     1,999  
Other noninterest income   2,588     1,003     5,580     3,409  
Total Noninterest Income   24,455     24,381     113,601     110,685  
Noninterest Expense                
Salaries and employee benefits   39,115     33,583     163,547     144,105  
Occupancy   5,076     4,334     20,398     16,928  
Furniture and equipment   2,944     2,344     10,245     8,747  
Professional fees   7,195     6,503     27,676     23,047  
FDIC insurance assessments   717     886     4,185     3,759  
Advertising   2,274     1,624     6,448     5,465  
Core deposit intangible amortization   1,147     898     5,630     2,978  
Other real estate and loan collection expenses   572     723     2,443     2,437  
(Gain)/loss on sales/valuations of assets, net   414     4,238     1,478     6,821  
Other noninterest expenses   10,458     10,821     37,618     36,759  
Total Noninterest Expense   69,912     65,954     279,668     251,046  
Income Before Income Taxes   27,522     18,956     116,905     80,940  
Income taxes   8,360     4,365     36,556     20,898  
Net Income   19,162     14,591     80,349     60,042  
Preferred dividends and discount   (19 )   (204 )   (292 )   (817 )
Interest expense on convertible preferred debt   3         51      
Net Income Available to Common Stockholders   $ 19,146     $ 14,387     $ 80,108     $ 59,225  
Earnings per common share-diluted   $ 0.74     $ 0.67     $ 3.22     $ 2.83  
Weighted average shares outstanding-diluted   25,800,472     21,491,699     24,873,430     20,929,385  

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
  12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Interest Income                  
Interest and fees on loans $ 69,848     $ 70,046     $ 69,809     $ 68,425     $ 59,905  
Interest on securities:                  
Taxable 8,480     7,831     7,903     8,644     6,917  
Nontaxable 4,292     3,717     3,566     3,510     3,311  
Interest on federal funds sold     1     1     10     21  
Interest on deposits in other financial institutions 157     92     52     95     3  
Total Interest Income 82,777     81,687     81,331     80,684     70,157  
Interest Expense                  
Interest on deposits 3,744     4,001     4,021     4,173     3,772  
Interest on short-term borrowings 119     235     519     329     200  
Interest on other borrowings 3,754     3,770     3,673     3,475     3,485  
Total Interest Expense 7,617     8,006     8,213     7,977     7,457  
Net Interest Income 75,160     73,681     73,118     72,707     62,700  
Provision for loan losses 2,181     5,328     2,118     2,067     2,171  
Net Interest Income After Provision for Loan Losses 72,979     68,353     71,000     70,640     60,529  
Noninterest Income                  
Service charges and fees 8,128     8,278     8,022     7,162     6,654  
Loan servicing income 1,068     873     1,292     1,268     1,704  
Trust fees 3,718     3,689     3,625     3,813     3,230  
Brokerage and insurance commissions 955     1,006     886     1,022     917  
Securities gains, net 1,608     1,584     4,622     3,526     3,913  
Impairment loss on securities                 (769 )
Gains on sale of loans held for sale 5,840     11,459     11,270     11,065     7,085  
Valuation adjustment on commercial servicing rights 8     5     (46 )        
Income on bank owned life insurance 542     620     591     522     644  
Other noninterest income 2,588     1,028     764     1,200     1,003  
Total Noninterest Income 24,455     28,542     31,026     29,578     24,381  
Noninterest Expense                  
Salaries and employee benefits 39,115     40,733     41,985     41,714     33,583  
Occupancy 5,076     5,099     5,220     5,003     4,334  
Furniture and equipment 2,944     2,746     2,442     2,113     2,344  
Professional fees 7,195     5,985     7,486     7,010     6,503  
FDIC insurance assessments 717     1,180     1,120     1,168     886  
Advertising 2,274     1,339     1,551     1,284     1,624  
Core deposit intangible amortization 1,147     1,291     1,297     1,895     898  
Other real estate and loan collection expenses 572     640     659     572     723  
(Gain)/loss on sales/valuations of assets, net 414     794     (43 )   313     4,238  
Other noninterest expenses 10,458     8,620     9,303     9,237     10,821  
Total Noninterest Expense 69,912     68,427     71,020     70,309     65,954  
Income Before Income Taxes 27,522     28,468     31,006     29,909     18,956  
Income taxes 8,360     8,260     10,036     9,900     4,365  
Net Income 19,162     20,208     20,970     20,009     14,591  
Preferred dividends and discount (19 )   (53 )   (52 )   (168 )   (204 )
Interest expense on convertible preferred debt 3     17     31          
Net Income Available to Common Stockholders $ 19,146     $ 20,172     $ 20,949     $ 19,841     $ 14,387  
Earnings per common share-diluted $ 0.74     $ 0.81     $ 0.84     $ 0.82     $ 0.67  
Weighted average shares outstanding-diluted 25,800,472     24,922,946     24,974,995     24,117,384     21,491,699  

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As Of
  12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Assets                  
Cash and due from banks $ 153,379     $ 196,234     $ 222,718     $ 124,060     $ 237,841  
Federal funds sold and other short-term investments 5,345     5,855     7,232     9,168     20,958  
Cash and cash equivalents 158,724     202,089     229,950     133,228     258,799  
Time deposits in other financial institutions 2,105     2,105     2,105     2,355     2,355  
Securities:                  
Available for sale, at fair value 1,845,864     1,655,696     1,566,592     1,690,516     1,578,434  
Held to maturity, at cost 263,662     265,302     270,423     271,300     279,117  
Other investments, at cost 21,560     22,082     22,680     22,325     21,443  
Loans held for sale 61,261     78,317     82,538     76,565     74,783  
Loans:                  
Held to maturity 5,351,719     5,438,715     5,482,258     5,503,005     5,001,486  
Allowance for loan losses (54,324 )   (54,653 )   (51,756 )   (49,738 )   (48,685 )
Loans, net 5,297,395     5,384,062     5,430,502     5,453,267     4,952,801  
Premises, furniture and equipment, net 164,028     165,841     168,701     164,788     150,148  
Goodwill 127,699     127,699     127,699     127,699     97,852  
Core deposit intangibles, net 22,775     23,922     25,213     26,510     22,019  
Servicing rights, net 35,778     35,906     35,654     34,910     34,926  
Cash surrender value on life insurance 112,615     112,060     111,425     110,834     110,297  
Other real estate, net 9,744     10,740     11,003     11,338     11,524  
Other assets 123,869     116,394     119,916     128,144     100,256  
Total Assets $ 8,247,079     $ 8,202,215     $ 8,204,401     $ 8,253,779     $ 7,694,754  
Liabilities and Equity                  
Liabilities                  
Deposits:                  
Demand $ 2,202,036     $ 2,238,736     $ 2,149,911     $ 2,079,521     $ 1,914,141  
Savings 3,788,089     3,753,300     3,691,791     3,702,431     3,367,479  
Time 857,286     920,657     995,870     1,142,368     1,124,203  
Total deposits 6,847,411     6,912,693     6,837,572     6,924,320     6,405,823  
Short-term borrowings 306,459     214,105     303,707     325,741     293,898  
Other borrowings 288,534     294,493     296,895     265,760     263,214  
Accrued expenses and other liabilities 63,759     76,536     78,264     68,415     68,646  
Total Liabilities 7,506,163     7,497,827     7,516,438     7,584,236     7,031,581  
Stockholders' Equity                  
Preferred equity 1,357     1,357     3,777     3,777     81,698  
Common stock 26,120     24,683     24,544     24,520     22,436  
Capital surplus 328,376     279,316     274,682     273,310     216,436  
Retained earnings 416,109     402,179     384,479     366,014     348,630  
Accumulated other comprehensive income (loss) (31,046 )   (3,079 )   513     1,924     (6,027 )
Treasury stock at cost     (68 )   (32 )   (2 )    
Total Equity 740,916     704,388     687,963     669,543     663,173  
Total Liabilities and Equity $ 8,247,079     $ 8,202,215     $ 8,204,401     $ 8,253,779     $ 7,694,754  

HEARTLAND FINANCIAL USA, INC
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended December 31,   For the Year Ended December 31,
  2016   2015   2016   2015
Average Balances              
Assets $ 8,280,042     $ 7,241,104     $ 8,172,576     $ 6,763,901  
Loans, net of unearned 5,473,001     4,827,844     5,488,112     4,551,008  
Deposits 6,928,978     5,938,905     6,813,781     5,458,623  
Earning assets 7,551,997     6,512,565     7,455,217     6,152,090  
Interest bearing liabilities 5,206,393     4,781,797     5,266,519     4,531,510  
Common stockholders' equity 726,455     533,845     678,989     496,877  
Total stockholders' equity 727,812     615,543     697,493     578,575  
Tangible common stockholders' equity (non-GAAP) (1) 575,412     446,370     528,712     425,992  
               
Key Performance Ratios              
Annualized return on average assets 0.92 %   0.79 %   0.98 %   0.88 %
Annualized return on average common equity (GAAP) 10.48 %   10.69 %   11.80 %   11.92 %
Annualized return on average common tangible equity (non-GAAP) (2) 13.24 %   12.79 %   15.15 %   13.90 %
Annualized ratio of net charge-offs to average loans 0.18 %   0.05 %   0.11 %   0.12 %
Annualized net interest margin (GAAP) 3.96 %   3.82 %   3.95 %   3.80 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) (3) 4.14 %   3.99 %   4.13 %   3.97 %
Efficiency ratio, fully tax-equivalent (4) 66.29 %   68.53 %   66.25 %   69.16 %
 
Reconciliation of Return on Average Common Tangible Equity (non-GAAP) (5)              
Net income available to common shareholders (GAAP) $ 19,146     $ 14,387     $ 80,108     $ 59,225  
               
Average common stockholders' equity (GAAP) $ 726,455     $ 533,845     $ 678,989     $ 496,877  
Less average goodwill 127,699     70,222     125,724     56,781  
Less average core deposit intangibles, net 23,344     17,253     24,553     14,153  
Average common tangible equity (non-GAAP) $ 575,412     $ 446,370     $ 528,712     $ 425,943  
Annualized return on average common equity (GAAP) 10.48 %   10.69 %   11.80 %   11.92 %
Annualized return on average common tangible equity (non-GAAP) 13.24 %   12.79 %   15.15 %   13.90 %
               
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) (6)              
Net Interest Income (GAAP) $ 75,160     $ 62,700     $ 294,666     $ 233,998  
Plus tax-equivalent adjustment (7) 3,511     2,827     12,919     10,216  
Net interest income - tax-equivalent (non-GAAP) $ 78,671     $ 65,527     $ 307,585     $ 244,214  
               
Average earning assets $ 7,551,997     $ 6,512,565     $ 7,455,217     $ 6,152,090  
               
Annualized net interest margin (GAAP) 3.96 %   3.82 %   3.95 %   3.80 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.14 %   3.99 %   4.13 %   3.97 %
 
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table.
(3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table.
(4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure.
(5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(7) Computed on a tax-equivalent basis using an effective tax rate of 35%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
  12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Average Balances                  
Assets $ 8,280,042     $ 8,172,683     $ 8,211,326     $ 8,025,070     $ 7,241,104  
Loans, net of unearned 5,473,001     5,538,088     5,582,878     5,358,102     4,827,844  
Deposits 6,928,978     6,839,334     6,806,259     6,679,010     5,938,905  
Earning assets 7,551,997     7,382,860     7,446,849     7,276,703     6,512,565  
Interest bearing liabilities 5,206,393     5,224,172     5,363,477     5,273,164     4,781,797  
Common stockholders' equity 726,455     689,637     669,930     629,294     533,845  
Total stockholders' equity 727,812     692,404     673,707     695,771     615,543  
Tangible common stockholders' equity (1) 575,412     537,375     516,347     485,108     446,370  
                   
Key Performance Ratios                  
Annualized return on average assets 0.92 %   0.98 %   1.03 %   0.99 %   0.79 %
Annualized return on average common equity (GAAP) 10.48 %   11.64 %   12.58 %   12.68 %   10.69 %
Annualized return on average common tangible equity (non-GAAP) (2) 13.24 %   14.93 %   16.32 %   16.45 %   12.79 %
Annualized ratio of net charge-offs to average loans 0.18 %   0.17 %   0.01 %   0.08 %   0.05 %
Annualized net interest margin (GAAP) 3.96 %   3.97 %   3.95 %   4.02 %   3.82 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) (3) 4.14 %   4.14 %   4.12 %   4.19 %   3.99 %
Efficiency ratio, fully tax-equivalent (4) 66.29 %   63.88 %   67.95 %   66.90 %   68.53 %
                   
Reconciliation of Return on Average Common Tangible Equity (non-GAAP) (5)                  
Net income available to common shareholders (GAAP) $ 19,146     $ 20,172     $ 20,949     $ 19,841     $ 14,387  
                   
Average common stockholders' equity (GAAP) $ 726,455     $ 689,637     $ 669,930     $ 629,294     $ 533,845  
Less average goodwill 127,699     127,699     127,699     119,750     70,222  
Less average core deposit intangibles, net 23,344     24,563     25,884     24,436     17,253  
Average common tangible equity (non-GAAP) $ 575,412     $ 537,375     $ 516,347     $ 485,108     $ 446,370  
Annualized return on average common equity (GAAP) 10.48 %   11.64 %   12.58 %   12.68 %   10.69 %
Annualized return on average common tangible equity (non-GAAP) 13.24 %   14.93 %   16.32 %   16.45 %   12.79 %
                   
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) (6)                  
Net Interest Income (GAAP) $ 75,160     $ 73,681     $ 73,118     $ 72,707     $ 62,700  
Plus tax-equivalent adjustment (7) 3,511     3,221     3,146     3,041     2,827  
Net interest income, fully tax-equivalent (non-GAAP) $ 78,671     $ 76,902     $ 76,264     $ 75,748     $ 65,527  
                   
Average earning assets $ 7,551,997     $ 7,382,860     $ 7,446,849     $ 7,276,703     $ 6,512,565  
                   
Annualized net interest margin (GAAP) 3.96 %   3.97 %   3.95 %   4.02 %   3.82 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.14 %   4.14 %   4.12 %   4.19 %   3.99 %
                   
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table.
(3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table.
(4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure.
(5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(7) Computed on a tax-equivalent basis using an effective tax rate of 35%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended December 31,   For the Year Ended December 31,
Reconciliation of Non-GAAP Measure-Efficiency Ratio (1) 2016   2015   2016   2015
Net interest income $ 75,160     $ 62,700     $ 294,666     $ 233,998  
Tax-equivalent adjustment (1) 3,511     2,827     12,919     10,216  
Fully tax-equivalent net interest income 78,671     65,527     307,585     244,214  
Noninterest income 24,455     24,381     113,601     110,685  
Securities gains, net (1,608 )   (3,913 )   (11,340 )   (13,143 )
Impairment loss on securities     769         769  
Adjusted income $ 101,518     $ 86,764     $ 409,846     $ 342,525  
               
Total noninterest expenses $ 69,912     $ 65,954     $ 279,668     $ 251,046  
Less:              
Core deposit intangible amortization 1,147     898     5,630     2,978  
Partnership investment in historic rehabilitation tax credits 1,051     1,362     1,051     4,357  
(Gain)/loss on sales/valuations of assets, net 414     4,238     1,478     6,821  
Adjusted noninterest expenses $ 67,300     $ 59,456     $ 271,509     $ 236,890  
               
Efficiency ratio, fully tax-equivalent (non-GAAP) 66.29 %   68.53 %   66.25 %   69.16 %
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Reconciliation of Non-GAAP Measure-Efficiency Ratio (1) For the Quarter Ended
12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Net interest income $ 75,160     $ 73,681     $ 73,118     $ 72,707     $ 62,700  
Tax-equivalent adjustment (2) 3,511     3,221     3,146     3,041     2,827  
Fully tax-equivalent net interest income 78,671     76,902     76,264     75,748     65,527  
Noninterest income 24,455     28,542     31,026     29,578     24,381  
Securities gains, net (1,608 )   (1,584 )   (4,622 )   (3,526 )   (3,913 )
Impairment loss on securities                 769  
Adjusted income $ 101,518     $ 103,860     $ 102,668     $ 101,800     $ 86,764  
                   
Total noninterest expenses $ 69,912     $ 68,427     $ 71,020     $ 70,309     $ 65,954  
Less:                  
Core deposit intangible amortization 1,147     1,291     1,297     1,895     898  
Partnership investment in historic rehabilitation tax credits 1,051                 1,362  
(Gain)/loss on sales/valuation of assets, net 414     794     (43 )   313     4,238  
Adjusted noninterest expenses $ 67,300     $ 66,342     $ 69,766     $ 68,101     $ 59,456  
                   
Efficiency ratio, fully tax-equivalent (non-GAAP) 66.29 %   63.88 %   67.95 %   66.90 %   68.53 %
                   
(1) Efficiency ratio, fully tax-equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis, which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities and historic rehabilitation tax credits. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items, as noted in the table. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(2) Computed on a tax-equivalent basis using an effective tax rate of 35%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA
  As of and for the Quarter Ended
  12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Common Share Data                  
Book value per common share (GAAP) $ 28.31     $ 28.48     $ 27.88     $ 27.15     $ 25.92  
Tangible book value per common share (non-GAAP) (1) $ 22.55     $ 22.34     $ 21.65     $ 20.86     $ 20.57  
ASC 320 effect on book value per common share $ (1.15 )   $ 0.03     $ 0.21     $ 0.23     $ (0.18 )
Common shares outstanding, net of treasury stock 26,119,929     24,681,380     24,543,376     24,519,928     22,435,693  
Tangible capital ratio (non-GAAP) (2) 7.28 %   6.85 %   6.60 %   6.32 %   6.09 %
                   
Reconciliation of Tangible Book Value Per Common Share (non-GAAP) (3)                  
Common stockholders' equity (GAAP) $ 739,559     $ 703,031     $ 684,186     $ 665,766     $ 581,475  
Less goodwill 127,699     127,699     127,699     127,699     97,852  
Less core deposit intangibles, net 22,775     23,922     25,213     26,510     22,019  
Tangible common stockholders' equity (non-GAAP) $ 589,085     $ 551,410     $ 531,274     $ 511,557     $ 461,604  
                   
Common shares outstanding, net of treasury stock 26,119,929     24,681,380     24,543,376     24,519,928     22,435,693  
Book value per common share (GAAP) $ 28.31     $ 28.48     $ 27.88     $ 27.15     $ 25.92  
Tangible book value per common share (non-GAAP) $ 22.55     $ 22.34     $ 21.65     $ 20.86     $ 20.57  
                   
Reconciliation of Tangible Capital Ratio (non-GAAP) (4)                  
Total assets (GAAP) $ 8,247,079     $ 8,202,215     $ 8,204,401     $ 8,253,779     $ 7,694,754  
Less goodwill 127,699     127,699     127,699     127,699     97,852  
Less core deposit intangibles, net 22,775     23,922     25,213     26,510     22,019  
Total tangible assets (non-GAAP) $ 8,096,605     $ 8,050,594     $ 8,051,489     $ 8,099,570     $ 7,574,883  
Tangible capital ratio (non-GAAP) 7.28 %   6.85 %   6.60 %   6.32 %   6.09 %
                   
Loan Data                  
Loans held to maturity:                  
Commercial and commercial real estate $ 3,825,847     $ 3,900,612     $ 3,930,879     $ 3,951,839     $ 3,605,574  
Residential mortgage 617,924     625,965     644,267     666,184     539,555  
Agricultural and agricultural real estate 489,318     489,387     480,883     471,271     471,870  
Consumer 420,613     425,582     428,730     417,114     386,867  
Unearned discount and deferred loan fees (1,983 )   (2,831 )   (2,501 )   (3,403 )   (2,380 )
Total loans held to maturity $ 5,351,719     $ 5,438,715     $ 5,482,258     $ 5,503,005     $ 5,001,486  
                   
Other Selected Trend Information                  
Effective tax rate 30.38 %   29.02 %   32.37 %   33.10 %   23.03 %
Full time equivalent employees 1,864     1,846     1,888     1,907     1,799  
Total Residential Mortgage Loan Applications $ 304,018     $ 445,107     $ 440,907     $ 406,999     $ 307,163  
Residential Mortgage Loans Originated $ 278,065     $ 324,337     $ 324,633     $ 238,266     $ 258,939  
Residential Mortgage Loans Sold $ 269,133     $ 315,917     $ 302,448     $ 220,381     $ 260,189  
Residential Mortgage Loan Servicing Portfolio $ 4,308,580     $ 4,259,459     $ 4,203,429     $ 4,112,519     $ 4,057,861  
                   
(1) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table.
(2) Refer to the "Reconciliation of Tangible Capital Ratio (non-GAAP)" table.
(3) Tangible book value per common share is total common stockholders' equity less goodwill and core deposit intangibles, net divided by common shares outstanding, net of treasury. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.
(4) The tangible capital ratio is total common stockholders' equity less goodwill and core deposit intangibles, net divided by total assets less goodwill and core deposit intangibles, net. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of and for the Quarter Ended
  12/31/2016   9/30/2016   6/30/2016   3/31/2016   12/31/2015
Allowance for Loan Losses                  
Balance, beginning of period $ 54,653     $ 51,756     $ 49,738     $ 48,685     $ 47,105  
Provision for loan losses 2,181     5,328     2,118     2,067     2,171  
Charge-offs (3,555 )   (3,283 )   (2,951 )   (1,605 )   (1,837 )
Recoveries 1,045     852     2,851     591     1,246  
Balance, end of period $ 54,324     $ 54,653     $ 51,756     $ 49,738     $ 48,685  
                   
Asset Quality                  
Nonaccrual loans $ 64,299     $ 57,799     $ 57,053     $ 47,750     $ 39,655  
Loans past due ninety days or more as to interest or principal payments 86     105         639      
Other real estate owned 9,744     10,740     11,003     11,338     11,524  
Other repossessed assets 663     821     564     426     485  
Total nonperforming assets $ 74,792     $ 69,465     $ 68,620     $ 60,153     $ 51,664  
                   
Performing troubled debt restructured loans $ 10,380     $ 10,281     $ 9,923     $ 10,711     $ 10,968  
                   
Nonperforming Assets Activity                  
Balance, beginning of period $ 69,465     $ 68,620     $ 60,153     $ 51,664     $ 51,425  
Net loan charge offs (2,510 )   (2,431 )   (100 )   (1,014 )   (591 )
New nonperforming loans 23,035     10,884     19,994     12,171     9,686  
Acquired nonperforming assets             3,516     4,956  
Reduction of nonperforming loans (1) (13,707 )   (6,983 )   (10,313 )   (3,563 )   (6,768 )
OREO/Repossessed assets sales proceeds (1,037 )   (343 )   (918 )   (2,411 )   (2,980 )
OREO/Repossessed assets writedowns, net (274 )   (521 )   (337 )   (182 )   (3,909 )
Net activity at Citizens Finance Co. (180 )   239     141     (28 )   (155 )
Balance, end of period $ 74,792     $ 69,465     $ 68,620     $ 60,153     $ 51,664  
 
Asset Quality Ratios                  
Ratio of nonperforming loans to total loans 1.20 %   1.06 %   1.04 %   0.88 %   0.79 %
Ratio of nonperforming assets to total assets 0.91 %   0.85 %   0.84 %   0.73 %   0.67 %
Annualized ratio of net loan charge-offs to average loans 0.18 %   0.17 %   0.01 %   0.08 %   0.05 %
Allowance for loan losses as a percent of loans 1.02 %   1.00 %   0.94 %   0.90 %   0.97 %
Allowance for loan losses as a percent of nonperforming loans 84.37 %   94.39 %   90.72 %   102.79 %   122.77 %
Loans delinquent  30-89 days as a percent of total loans 0.37 %   0.40 %   0.73 %   0.45 %   0.31 %
                   
(1) Includes principal reductions, transfers to performing status and transfers to OREO.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Quarter Ended
  December 31, 2016   December 31, 2015
  Average Balance   Interest   Rate   Average Balance   Interest   Rate
Earning Assets                      
Securities:                      
Taxable $ 1,471,966     $ 8,480     2.29 %   $ 1,290,462     $ 6,917     2.13 %
Nontaxable (1) 539,347     6,603     4.87     387,015     5,094     5.22  
Total securities 2,011,313     15,083     2.98     1,677,477     12,011     2.84  
Interest bearing deposits 122,727     157     0.51     12,350     3     0.10  
Federal funds sold 398             42,614     21     0.20  
Loans: (2)                      
Commercial and commercial real estate (1) 3,864,826     48,124     4.95     3,395,242     40,588     4.74  
Residential mortgage 699,739     7,035     4.00     580,797     5,836     3.99  
Agricultural and agricultural real estate (1) 485,158     5,624     4.61     470,797     5,663     4.77  
Consumer 423,278     8,184     7.69     381,008     7,460     7.77  
Fees on loans     2,081             1,402      
Less: allowance for loan losses (55,442 )           (47,720 )        
Net loans 5,417,559     71,048     5.22     4,780,124     60,949     5.06  
Total earning assets 7,551,997     86,288     4.55 %   6,512,565     72,984     4.45 %
Nonearning Assets 728,045             728,539          
Total Assets $ 8,280,042             $ 7,241,104          
Interest Bearing Liabilities                      
Savings $ 3,767,398     $ 2,012     0.21 %   $ 3,118,115     $ 1,611     0.20 %
Time, $100,000 and over 380,701     761     0.80     334,254     779     0.92  
Other time deposits 512,874     971     0.75     711,622     1,382     0.77  
Short-term borrowings 252,175     119     0.19     325,613     200     0.24  
Other borrowings 293,245     3,754     5.09     292,193     3,485     4.73  
Total interest bearing liabilities 5,206,393     7,617     0.58 %   4,781,797     7,457     0.62 %
Noninterest Bearing Liabilities                      
Noninterest bearing deposits 2,268,005             1,774,914          
Accrued interest and other liabilities 77,832             68,850          
Total noninterest bearing liabilities 2,345,837             1,843,764          
Stockholders' Equity 727,812             615,543          
Total Liabilities and Stockholders' Equity $ 8,280,042             $ 7,241,104          
Net interest income, fully tax-equivalent (non-GAAP) (1)     $ 78,671             $ 65,527      
Net interest spread (1)         3.97 %           3.83 %
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets (3)         4.14 %           3.99 %
Interest bearing liabilities to earning assets 68.94 %           73.42 %        
                       
(1) Computed on a tax-equivalent basis using an effective tax rate of 35%
(2) Nonaccrual loans are included in the average loans outstanding.
(3) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Year Ended
  December 31, 2016   December 31, 2015
  Average Balance   Interest   Rate   Average Balance   Interest   Rate
Earning Assets                      
Securities:                      
Taxable $ 1,466,062     $ 32,858     2.24 %   $ 1,272,573     $ 26,646     2.09 %
Nontaxable (1) 465,178     23,208     4.99     348,189     18,735     5.38  
Total securities 1,931,240     56,066     2.90     1,620,762     45,381     2.80  
Interest bearing deposits 78,503     396     0.50     10,997     14     0.13  
Federal funds sold 9,464     12     0.13     14,153     24     0.17  
Loans: (2)                      
Commercial and commercial real estate (1) 3,846,285     190,101     4.94     3,199,493     152,931     4.78  
Residential mortgage 738,634     30,168     4.08     542,364     21,982     4.05  
Agricultural and agricultural real estate (1) 480,221     22,576     4.70     444,808     21,498     4.83  
Consumer 422,972     32,636     7.72     364,343     28,936     7.94  
Fees on loans     7,443             5,418      
Less: allowance for loan losses (52,102 )           (44,830 )        
Net loans 5,436,010     282,924     5.20     4,506,178     230,765     5.12  
Total earning assets 7,455,217     339,398     4.55 %   6,152,090     276,184     4.49 %
Nonearning Assets 717,359             611,811          
Total Assets $ 8,172,576             $ 6,763,901          
Interest Bearing Liabilities                      
Savings $ 3,680,535     $ 8,000     0.22 %   $ 2,918,706     $ 6,613     0.23 %
Time, $100,000 and over 424,802     3,178     0.75     341,071     3,152     0.92  
Other time deposits 577,908     4,761     0.82     606,030     5,765     0.95  
Short-term borrowings 298,734     1,202     0.40     339,019     838     0.25  
Other borrowings 284,540     14,672     5.16     326,684     15,602     4.78  
Total interest bearing liabilities 5,266,519     31,813     0.60 %   4,531,510     31,970     0.71 %
Noninterest Bearing Liabilities                      
Noninterest bearing deposits 2,130,536             1,592,816          
Accrued interest and other liabilities 78,028             61,000          
Total noninterest bearing liabilities 2,208,564             1,653,816          
Stockholders' Equity 697,493             578,575          
Total Liabilities and Stockholders' Equity $ 8,172,576             $ 6,763,901          
Net interest income, fully tax-equivalent (non-GAAP) (1)     $ 307,585             $ 244,214      
Net interest spread (1)         3.95 %           3.78 %
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets (3)         4.13 %           3.97 %
Interest bearing liabilities to earning assets 70.64 %           73.66 %        
                       
(1) Computed on a tax-equivalent basis using an effective tax rate of 35%.
(2) Nonaccrual loans are included in the average loans outstanding.
(3) Net interest margin, fully tax-equivalent is a non-GAAP measure, which adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax exempt sources. This measure should not be considered a substitute for operating results determined in accordance with GAAP.

HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
  As of and For the Quarter Ended
  12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Total Assets          
Dubuque Bank and Trust Company $ 1,497,775   $ 1,448,796   $ 1,473,461   $ 1,498,771   $ 1,617,322  
New Mexico Bank & Trust 1,374,647   1,318,203   1,321,113   1,304,886   1,336,004  
Wisconsin Bank & Trust 1,065,715   1,068,288   1,080,224   1,094,872   1,139,337  
Centennial Bank and Trust (1) 901,782   892,723   909,697   927,040   161,806  
Morrill & Janes Bank and Trust Company 863,544   862,767   843,069   872,274   902,918  
Illinois Bank & Trust 742,173   748,801   742,697   718,074   757,478  
Premier Valley Bank 640,684   635,620   629,423   751,137   765,451  
Arizona Bank & Trust 582,266   574,561   577,002   558,369   591,066  
Rocky Mountain Bank 477,063   481,346   473,583   479,010   491,522  
Minnesota Bank & Trust 229,114   238,745   230,004   220,955   214,303  
Total Portfolio Loans          
Dubuque Bank and Trust Company $ 905,242   $ 906,347   $ 928,869   $ 941,683   $ 956,517  
New Mexico Bank & Trust 924,249   917,679   870,109   815,739   794,744  
Wisconsin Bank & Trust 650,254   711,714   732,503   758,789   793,508  
Centennial Bank and Trust (1) 609,760   638,006   668,547   683,085   101,449  
Morrill & Janes Bank and Trust Company 548,544   538,666   522,518   536,738   539,198  
Illinois Bank & Trust 473,008   469,236   466,983   465,783   465,937  
Premier Valley Bank 348,879   354,610   376,275   376,840   383,929  
Arizona Bank & Trust 384,706   385,926   390,078   402,431   444,501  
Rocky Mountain Bank 347,839   357,346   362,475   364,189   370,440  
Minnesota Bank & Trust 144,098   139,581   144,009   137,412   134,137  
Total Deposits          
Dubuque Bank and Trust Company $ 1,231,016   $ 1,182,947   $ 1,159,942   $ 1,144,470   $ 1,209,074  
New Mexico Bank & Trust 1,091,436   1,101,550   1,062,410   1,066,076   1,085,052  
Wisconsin Bank & Trust 899,676   889,957   911,915   921,071   974,001  
Centennial Bank and Trust (1) 733,449   767,128   775,417   779,607   128,759  
Morrill & Janes Bank and Trust Company 738,036   676,176   696,073   698,365   713,589  
Illinois Bank & Trust 636,419   671,104   653,582   629,235   631,010  
Premier Valley Bank 510,142   520,814   514,522   635,188   647,022  
Arizona Bank & Trust 477,213   493,331   497,599   468,312   500,490  
Rocky Mountain Bank 414,344   420,581   405,888   409,787   417,426  
Minnesota Bank & Trust 194,368   214,651   207,228   200,343   194,373  
Net Income          
Dubuque Bank and Trust Company $ 806   $ 5,112   $ 4,475   $ 6,073   $ 3,587  
New Mexico Bank & Trust 4,061   3,824   5,642   4,094   2,576  
Wisconsin Bank & Trust 2,970   3,368   3,399   3,379   2,443  
Centennial Bank and Trust (1) 1,572   925   256   824   62  
Morrill & Janes Bank and Trust Company 2,519   1,707   2,133   2,525   1,096  
Illinois Bank & Trust 1,917   2,179   2,397   2,027   574  
Premier Valley Bank 2,969   1,804   1,695   1,960   1,008  
Arizona Bank & Trust 1,305   2,034   2,121   1,841   968  
Rocky Mountain Bank 1,229   1,456   1,484   1,064   1,506  
Minnesota Bank & Trust 888   675   559   531   166  
           
(1) Formerly known as Summit Bank & Trust.

 
CONTACT:Bryan R. McKeagExecutive Vice PresidentChief Financial Officer(563) 589-1994bmckeag@htlf.com

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