DUBUQUE, Iowa, Oct. 31, 2017 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) issued a press release on October 30, 2017, announcing its 2017 third quarter results. Heartland seeks to clarify that the diluted earnings per common share for the nine-month period ended September 30, 2017, was $2.21, and the weighted average shares outstanding-diluted for the nine-month period ended September 30, 2017, totaled 27,833,924. The information in the body of the October 30, 2017, release, revised to reflect the correct information, is repeated below:

Heartland Financial USA, Inc. Reports 2017 Third Quarter Results

Highlights
  • Quarterly net income available to common stockholders of $21.6 million in comparison with $20.2 million for the third quarter of the prior year
  • Diluted earnings per common share of $0.72 in comparison with $0.81 for the third quarter of the prior year
  • Net interest margin of 4.08%, fully tax-equivalent (non-GAAP) (1) of 4.26%
  • Organic loan growth of $62.9 million and organic non-time deposit growth of $89.3 million during the third quarter of 2017
  • Return on average common equity of 8.99% and return on average tangible common equity (non-GAAP) (2) of 12.41%
  • Tangible common equity ratio (non-GAAP) (3) of 7.46%
  • Purchased Citywide Banks of Colorado, Inc., on July 7, 2017 and completed related systems conversions on October 13, 2017
  Quarter Ended September 30,   Nine Months Ended September 30,
  2017   2016   2017   2016
Net income (in millions) $ 21.6     $ 20.2     $ 61.6     $ 61.2  
Net income available to common stockholders (in millions) 21.6     20.2     61.6     61.0  
Diluted earnings per common share 0.72     0.81     2.21     2.48  
               
Return on average assets 0.89 %   0.98 %   0.94 %   1.00 %
Return on average common equity 8.99     11.64     9.88     12.28  
Return on average tangible common equity (non-GAAP) (2) 12.41     14.93     12.90     15.87  
Net interest margin 4.08     3.97     4.00     3.98  
Net interest margin, fully tax-equivalent (non-GAAP) (1) 4.26     4.14     4.19     4.15  

"Heartland reported a very good quarter with net income available to common stockholders of $21.6 million, a seven percent increase over the same quarter last year. We had several accomplishments during the quarter including completion of our largest acquisition to date. We achieved net organic growth in loans and deposits while making improvements in net interest margin."
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 Tangible Common Equity (non-GAAP)" table included in this earnings release.(3) Refer to the "Reconciliation of Tangible Common Equity Ratio (non-GAAP)" table included in this earnings release.

Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $21.6 million, or $0.72 per diluted common share, for the quarter ended September 30, 2017, compared to $20.2 million, or $0.81 per diluted common share, for the third quarter of 2016. Return on average common equity was 8.99% and return on average assets was 0.89% for the third quarter of 2017, compared to 11.64% and 0.98%, respectively, for the same quarter in 2016.

Net income available to common stockholders for the nine months ended September 30, 2017, was $61.6 million or $2.21 per diluted common share, compared to $61.0 million or $2.48 per diluted common share for the nine months ended September 30, 2016. Return on average common equity was 9.88%, and return on average assets was 0.94% for the first nine months of 2017, compared to 12.28% and 1.00%, respectively, for the same period in 2016.

Commenting on Heartland's third quarter results, Lynn B. Fuller, Heartland's chairman and chief executive officer said, "Heartland reported a very good quarter with net income available to common stockholders of $21.6 million, a seven percent increase over the same quarter last year. We had several accomplishments during the quarter including completion of our largest acquisition to date. We achieved net organic growth in loans and deposits while making improvements in net interest margin."

On February 28, 2017, Heartland completed the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. Based on Heartland's closing common stock price of $49.55 per share as of February 28, 2017, the aggregate consideration was $31.0 million, with 30% of the consideration paid in cash and 70% by delivery of Heartland common stock. Simultaneous with the closing of the transaction, Founders Community Bank merged into Heartland's Premier Valley Bank subsidiary. As of the close date, Founders Community Bank had, at fair value, total assets of $213.3 million, total loans of $96.4 million and total deposits of $181.5 million. The systems conversion for this transaction occurred two weeks after the closing.

On July 7, 2017, Heartland completed the acquisition of Citywide Banks of Colorado, Inc., parent company of Citywide Banks, headquartered in Aurora, Colorado. Simultaneous with the close, Citywide Banks merged into Heartland's Centennial Bank and Trust subsidiary. The aggregate consideration was approximately $211.2 million, of which $58.6 million was cash, and the remainder was settled by delivery of 3,216,161 shares of Heartland common stock. The combined entity operates as Citywide Banks. As of the close date, Citywide Banks of Colorado, Inc., had, at fair value, total assets of $1.49 billion, including $985.4 million in net loans outstanding, and $1.21 billion of deposits. The systems conversion for this transaction occurred on October 13, 2017.

During the third quarter, Heartland sold substantially all of its Government National Mortgage Association ("GNMA") loan servicing portfolio, which contained loans with an unpaid principal balance of approximately $773.9 million. The sale reduced the book value of Heartland's servicing rights by approximately $6.9 million. The transaction did not have a significant impact on Heartland's results of operations.

Fully Tax-Equivalent Net Interest Margin Increases

Net interest margin, expressed as a percentage of average earning assets, was 4.08% (4.26% on a fully tax-equivalent basis) during the third quarter of 2017, compared to 3.94% (4.14% on a fully tax-equivalent basis) during the second quarter of 2017 and 3.97% (4.14% on a fully tax-equivalent basis) during the third quarter of 2016.

Fuller said, "We were very pleased to see a solid increase in net interest margin on a fully tax-equivalent basis, which increased by 12 basis points to 4.26 percent from the previous quarter and stands at 4.19 percent year-to-date. The strong margin reflects improved yields on earning assets."

Interest income for the third quarter of 2017 was $99.0 million compared to $81.7 million recorded in the third quarter of 2016. The taxable equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $3.9 million for the third quarter of 2017 and $3.2 million for the third quarter of 2016. With these adjustments, interest income on a tax-equivalent basis was $102.9 million for the third quarter of 2017, an increase of $18.0 million or 21%, compared to $84.9 million for the third quarter of 2016. The increase in interest income on a fully tax-equivalent basis in the third quarter of 2017, as compared to the third quarter of 2016, was primarily due to the acquisitions completed in 2017. Average earning assets acquired in the Founders Bancorp transaction totaled $147.6 million, and the Citywide Banks of Colorado, Inc. transaction added $1.20 billion of average earning assets. Exclusive of these transactions, average earning assets increased $140.2 million or 2% from the third quarter of 2016.  The average rate on earning assets increased 10 basis points to 4.68% for the third quarter of 2017 compared to 4.58% for the same quarter in 2016.

Interest expense for the third quarter of 2017 was $9.1 million, an increase of $1.1 million or 14% from $8.0 million in the third quarter of 2016. Average interest bearing deposits increased $520.3 million or 11% to $5.19 billion for the quarter ended September 30, 2017, from $4.67 billion in the same quarter in 2016. Average interest bearing deposits acquired with the Founders Bancorp transaction and the Citywide Banks of Colorado, Inc., transaction totaled $713.3 million. Exclusive of these transactions, average interest bearing deposits decreased $193.0 million or 3%. The average interest rate paid on Heartland's interest bearing deposits increased 5 basis points to 0.39% for the third quarter of 2017 compared to 0.34% for the same quarter in 2016. Average borrowings acquired in the Citywide Banks of Colorado, Inc., transaction totaled $51.8 million, and exclusive of this transaction, average borrowings declined $98.6 million or 18% during the third quarter of 2017 compared to the same quarter in 2016. The average interest rate paid on Heartland's borrowings was 3.16% for the third quarter of 2017 compared to 2.86% in the third quarter of 2016.

Net interest income was $89.8 million during the third quarter of 2017 compared to $73.7 million during the third quarter of 2016, an increase of $16.2 million or 22%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $93.8 million during the third quarter of 2017 compared to $76.9 million during the third quarter of 2016, an increase of $16.9 million or 22%.

Noninterest Income Decreases and Noninterest Expenses Increase From Third Quarter 2016

Noninterest income totaled $25.0 million during the third quarter of 2017 compared to $28.5 million during the third quarter of 2016, a decrease of $3.6 million or 12%. Service charges and fees totaled $10.1 million during the third quarter of 2017 compared to $8.3 million during the third quarter of 2016, an increase of $1.9 million or 22%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which was the result of the Founders Bancorp acquisition completed in the first quarter of 2017, and the recent Citywide Banks of Colorado, Inc., transaction and increased interchange revenue from commercial card activity. Net gains on sale of loans held for sale totaled $5.0 million during the third quarter of 2017 compared to $11.5 million during the third quarter of 2016, a decrease of $6.5 million or 56%, due to lower mortgage loan activity.

For the third quarter of 2017, noninterest expenses totaled $78.8 million compared to $68.4 million during the third quarter of 2016, an increase of $10.3 million or 15%. Salaries and employee benefits increased $4.5 million or 11% to $45.2 million for the third quarter of 2017 compared to $40.7 million for the same quarter in 2016. At September 30, 2017, Heartland had 2,024 full time equivalent employees compared to 1,846 full time equivalent employees at September 30, 2016. Professional fees increased $2.5 million or 41% to $8.5 million for the third quarter of 2017 from $6.0 million in the third quarter of 2016. The noninterest expenses in the third quarter of 2017 included $2.8 million of expenses for staff retention, deconversion, professional fees and write-downs of fixed assets related to the acquisition of Citywide Banks of Colorado, Inc.

"We are also gratified to note significant progress toward lowering Heartland's efficiency ratio, which has improved over the past two quarters and was 64.5 percent for the third quarter," Fuller stated.

Heartland's effective tax rate was 28.74% for the third quarter of 2017 compared to 29.02% for the third quarter of 2016. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $307,000 during the third quarter of 2017 compared to $304,000 for the third quarter of 2016. 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 24.01% during the third quarter of 2017 compared to 21.01% during the third quarter of 2016.

Loans and Deposits Increase Since December 31, 2016

Total assets were $9.76 billion at September 30, 2017, an increase of $1.51 billion or 18% from $8.25 billion at year-end 2016. Excluding $213.9 million of assets acquired at fair value in the Founders Bancorp transaction and $1.49 billion of assets acquired at fair value in the Citywide Banks of Colorado, Inc., transaction, total assets decreased $199.1 million or 2% since December 31, 2016. Securities represented 24% and 26% of total assets at September 30, 2017, and December 31, 2016, respectively.

Total loans held to maturity were $6.37 billion at September 30, 2017, compared to $5.35 billion at year-end 2016, an increase of $1.02 billion or 19%. This change includes $96.4 million of total loans held to maturity acquired at fair value in the Founders Bancorp transaction and $985.4 million of total loans held to maturity acquired at fair value in the Citywide Banks of Colorado, Inc., transaction. Exclusive of these transactions, total loans held to maturity decreased $60.2 million or 1% since December 31, 2016. Excluding loans acquired in the Citywide Banks of Colorado, Inc., transaction, total loans held to maturity increased $62.9 million during the third quarter of 2017.

Total deposits were $8.23 billion as of September 30, 2017, compared to $6.85 billion at year-end 2016, an increase of $1.38 billion or 20%. This increase included $181.5 million of deposits, at fair value, acquired in the Founders Bancorp transaction and $1.21 billion of deposits, at fair value, acquired in the Citywide Banks of Colorado, Inc., transaction. Exclusive of these transactions, total deposits decreased $7.1 million or less than 1% since December 31, 2016. Demand deposits increased $807.9 million or 37% to $3.01 billion at September 30, 2017 compared to $2.20 billion at December 31, 2016. Excluding $626.7 million of demand deposits attributable to the Founders Bancorp and Citywide Banks of Colorado, Inc., transactions, demand deposits increased $181.2 million or 8% since year-end 2016. Savings deposits increased $439.3 million or 12% to $4.23 billion at September 30, 2017 from $3.79 billion at December 31, 2016. Excluding savings deposits of $619.0 million acquired in the Founders Bancorp and Citywide Banks of Colorado, Inc., transactions, savings deposits decreased $179.7 million or 5% since year-end 2016. Excluding $1.21 billion of deposits acquired in the Citywide Banks of Colorado, Inc., transaction, total deposits increased $91.6 million during the third quarter.

Fuller said, "We are very pleased with organic deposit growth of 5.2 percent annualized for the third quarter and continued improvement in deposit mix. The result of our continued emphasis on non-time deposits is an enviable mix of nearly 37 percent demand deposits and 51 percent savings and money market deposits."

Nonperforming Assets Increase Since December 31, 2016

Nonperforming assets were $79.8 million or 0.82% of total assets at September 30, 2017, compared to $74.8 million or 0.91% of total assets at December 31, 2016. Nonperforming loans were $65.8 million or 1.03% of total loans at September 30, 2017, compared to $64.4 million or 1.20% of total loans at December 31, 2016.

The allowance for loan losses at September 30, 2017, was 0.86% of loans and 83.41% of nonperforming loans, compared to 1.02% of loans and 84.37% of nonperforming loans at December 31, 2016. At September 30, 2017, there were $1.70 billion of acquired loans, which are net of $42.8 million of valuation reserves that are not subject to the allowance. At December 31, 2016, there were $930.7 million of acquired loans, net of $25.3 million of valuation reserves that are not subject to the allowance. Excluding those loans covered by the valuation reserves, the ratio of the allowance for loan losses to outstanding loans was 1.17% at September 30, 2017, and 1.22% at December 31, 2016.

The provision for loan losses was $5.7 million for the third quarter of 2017 compared to $5.3 million for the third quarter of 2016. Provision for loan losses recorded for the third quarter of 2017 included a $2.2 million allowance for impairment recorded on an agribusiness relationship at Dubuque Bank and Trust associated with updated collateral values. Total charge-offs for the third quarter of 2017 were $5.8 million compared to $3.3 million for the third quarter of 2016, and the increase is primarily attributable to $3.0 million of charge-offs related to two commercial and industrial loan relationships at Dubuque Bank and Trust and Arizona Bank & Trust.

Summarizing the quarter and year-to-date, Fuller concluded, "In short, Heartland is demonstrating consistent improvement in its financial performance, while capitalizing on opportunities for profitable growth."

Conference Call DetailsHeartland 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. A replay will be available until October 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 of $9.8 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 117 banking locations serving 88 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 in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, contained, 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 and Heartland's ability to successfully integrate acquired banks; (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 September 30,   For the Nine Months Ended September 30,
  2017   2016   2017   2016
Interest Income              
Interest and fees on loans $ 82,906     $ 70,046     $ 217,898     $ 208,280  
Interest on securities:              
Taxable 10,394     7,917     27,246     24,604  
Nontaxable 5,086     3,717     15,297     10,793  
Interest on federal funds sold 34     1     37     12  
Interest bearing deposits with the Federal Reserve Bank and otherbanks and other short-term investments 558     6     1,112     13  
Total Interest Income 98,978     81,687     261,590     243,702  
Interest Expense              
Interest on deposits 5,073     4,001     12,966     12,195  
Interest on short-term borrowings 271     235     498     1,083  
Interest on other borrowings 3,790     3,770     10,674     10,918  
Total Interest Expense 9,134     8,006     24,138     24,196  
Net Interest Income 89,844     73,681     237,452     219,506  
Provision for loan losses 5,705     5,328     10,235     9,513  
Net Interest Income After Provision for Loan Losses 84,139     68,353     227,217     209,993  
Noninterest Income              
Service charges and fees 10,138     8,278     29,291     23,462  
Loan servicing income 1,161     873     4,236     3,433  
Trust fees 3,872     3,689     11,482     11,127  
Brokerage and insurance commissions 950     1,006     2,962     2,914  
Securities gains, net 1,679     1,584     5,553     9,732  
Net gains on sale of loans held for sale 4,997     11,459     17,961     33,794  
Valuation adjustment on commercial servicing rights 5     5     29     (41 )
Income on bank owned life insurance 766     620     2,039     1,733  
Other noninterest income 1,409     1,028     2,941     2,992  
Total Noninterest Income 24,977     28,542     76,494     89,146  
Noninterest Expense              
Salaries and employee benefits 45,225     40,733     128,118     124,432  
Occupancy 6,223     5,099     16,352     15,322  
Furniture and equipment 2,826     2,746     7,913     7,301  
Professional fees 8,450     5,985     24,342     20,481  
FDIC insurance assessments 894     1,180     2,610     3,468  
Advertising 1,358     1,339     5,141     4,174  
Core deposit intangibles and customer relationship intangiblesamortization 1,863     1,291     4,252     4,483  
Other real estate and loan collection expenses 581     640     1,774     1,871  
(Gain)/loss on sales/valuations of assets, net 1,342     794     1,642     1,064  
Other noninterest expenses 9,997     8,620     27,653     27,160  
Total Noninterest Expense 78,759     68,427     219,797     209,756  
Income Before Income Taxes 30,357     28,468     83,914     89,383  
Income taxes 8,725     8,260     22,314     28,196  
Net Income 21,632     20,208     61,600     61,187  
Preferred dividends (13 )   (53 )   (45 )   (273 )
Interest expense on convertible preferred debt 3     17     12     48  
Net Income Available to Common Stockholders $ 21,622     $ 20,172     $ 61,567     $ 60,962  
Earnings per common share-diluted $ 0.72     $ 0.81     $ 2.21     $ 2.48  
Weighted average shares outstanding-diluted 29,910,437     24,922,946     27,833,924     24,580,897  

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Interest Income                  
Interest and fees on loans $ 82,906     $ 68,094     $ 66,898     $ 69,848     $ 70,046  
Interest on securities:                  
Taxable 10,394     8,599     8,253     8,480     7,831  
Nontaxable 5,086     5,020     5,191     4,292     3,717  
Interest on federal funds sold 34     3             1  
Interest bearing deposits with the Federal Reserve Bank and otherbanks and other short-term investments 558     345     209     157     92  
Total Interest Income 98,978     82,061     80,551     82,777     81,687  
Interest Expense                  
Interest on deposits 5,073     4,163     3,730     3,744     4,001  
Interest on short-term borrowings 271     90     137     119     235  
Interest on other borrowings 3,790     3,228     3,656     3,754     3,770  
Total Interest Expense 9,134     7,481     7,523     7,617     8,006  
Net Interest Income 89,844     74,580     73,028     75,160     73,681  
Provision for loan losses 5,705     889     3,641     2,181     5,328  
Net Interest Income After Provision for Loan Losses 84,139     73,691     69,387     72,979     68,353  
Noninterest Income                  
Service charges and fees 10,138     9,696     9,457     8,128     8,278  
Loan servicing income 1,161     1,351     1,724     1,068     873  
Trust fees 3,872     3,979     3,631     3,718     3,689  
Brokerage and insurance commissions 950     976     1,036     955     1,006  
Securities gains, net 1,679     1,392     2,482     1,608     1,584  
Net gains on sale of loans held for sale 4,997     6,817     6,147     5,840     11,459  
Valuation adjustment on commercial servicing rights 5     19     5     8     5  
Income on bank owned life insurance 766     656     617     542     620  
Other noninterest income 1,409     738     794     2,588     1,028  
Total Noninterest Income 24,977     25,624     25,893     24,455     28,542  
Noninterest Expense                  
Salaries and employee benefits 45,225     41,126     41,767     39,115     40,733  
Occupancy 6,223     5,056     5,073     5,076     5,099  
Furniture and equipment 2,826     2,586     2,501     2,944     2,746  
Professional fees 8,450     7,583     8,309     7,195     5,985  
FDIC insurance assessments 894     909     807     717     1,180  
Advertising 1,358     1,359     2,424     2,274     1,339  
Core deposit intangibles and customer relationship intangiblesamortization 1,863     1,218     1,171     1,147     1,291  
Other real estate and loan collection expenses 581     365     828     572     640  
(Gain)/loss on sales/valuations of assets, net 1,342     (112 )   412     414     794  
Other noninterest expenses 9,997     9,208     8,448     10,458     8,620  
Total Noninterest Expense 78,759     69,298     71,740     69,912     68,427  
Income Before Income Taxes 30,357     30,017     23,540     27,522     28,468  
Income taxes 8,725     8,059     5,530     8,360     8,260  
Net Income 21,632     21,958     18,010     19,162     20,208  
Preferred dividends (13 )   (13 )   (19 )   (19 )   (53 )
Interest expense on convertible preferred debt 3     4     5     3     17  
Net Income Available to Common Stockholders $ 21,622     $ 21,949     $ 17,996     $ 19,146     $ 20,172  
Earnings per common share-diluted $ 0.72     $ 0.81     $ 0.68     $ 0.74     $ 0.81  
Weighted average shares outstanding-diluted 29,910,437     26,972,580     26,627,830     25,800,472     24,922,946  

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As Of
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Assets                  
Cash and due from banks $ 180,751     $ 141,100     $ 129,386     $ 151,290     $ 196,234  
Interest bearing deposits with the Federal Reserve Bank and otherbanks and other short-term investments 70,985     40,676     43,765     7,434     5,855  
Cash and cash equivalents 251,736     181,776     173,151     158,724     202,089  
Time deposits in other financial institutions 19,793     30,241     41,539     2,105     2,105  
Securities:                  
Available for sale, at fair value 2,093,385     1,789,441     1,893,528     1,845,864     1,655,696  
Held to maturity, at cost 256,355     259,586     260,616     263,662     265,302  
Other investments, at cost 23,176     21,094     21,557     21,560     22,082  
Loans held for sale 35,795     48,848     49,009     61,261     78,317  
Loans:                  
Held to maturity 6,373,415     5,325,082     5,361,604     5,351,719     5,438,715  
 Allowance for loan losses (54,885 )   (54,051 )   (54,999 )   (54,324 )   (54,653 )
Loans, net 6,318,530     5,271,031     5,306,605     5,297,395     5,384,062  
Premises, furniture and equipment, net 178,961     163,003     165,425     164,028     165,841  
Goodwill 236,615     141,461     141,461     127,699     127,699  
Core deposit intangibles and customer relationship intangibles, net 37,028     22,850     24,068     22,775     23,922  
Servicing rights, net 26,599     34,736     35,441     35,778     35,906  
Cash surrender value on life insurance 142,073     120,281     117,613     112,615     112,060  
Other real estate, net 13,226     9,269     11,188     9,744     10,740  
Other assets 122,355     111,104     120,644     123,869     116,394  
Total Assets $ 9,755,627     $ 8,204,721     $ 8,361,845     $ 8,247,079     $ 8,202,215  
Liabilities and Equity                  
Liabilities                  
Deposits:                  
 Demand $ 3,009,940     $ 2,355,410     $ 2,319,256     $ 2,202,036     $ 2,238,736  
 Savings 4,227,340     3,704,579     3,940,146     3,788,089     3,753,300  
 Time 994,604     870,180     830,459     857,286     920,657  
Total deposits 8,231,884     6,930,169     7,089,861     6,847,411     6,912,693  
Short-term borrowings 171,871     139,130     155,025     306,459     214,105  
Other borrowings 301,473     281,096     282,051     288,534     294,493  
Accrued expenses and other liabilities 68,715     48,356     53,596     63,759     76,536  
Total Liabilities 8,773,943     7,398,751     7,580,533     7,506,163     7,497,827  
Stockholders' Equity                  
Preferred equity 938     938     938     1,357     1,357  
Common stock 29,946     26,701     26,674     26,120     24,683  
Capital surplus 503,262     352,500     351,423     328,376     279,316  
Retained earnings 468,556     450,228     431,219     416,109     402,179  
Accumulated other comprehensive loss (21,018 )   (24,397 )   (28,942 )   (31,046 )   (3,079 )
Treasury stock at cost                 (68 )
Total Equity 981,684     805,970     781,312     740,916     704,388  
Total Liabilities and Equity $ 9,755,627     $ 8,204,721     $ 8,361,845     $ 8,247,079     $ 8,202,215  

HEARTLAND FINANCIAL USA, INC.              
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)              
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA              
  For the Quarter Ended September 30,   For the Nine Months Ended September 30,
  2017   2016   2017   2016
Average Balances              
Assets $ 9,639,844     $ 8,172,683     $ 8,740,703     $ 8,136,492  
Loans, net of unearned 6,286,264     5,538,088     5,679,620     5,493,187  
Deposits 8,100,028     6,839,334     7,353,399     6,775,103  
Earning assets 8,726,228     7,382,860     7,942,810     7,368,856  
Interest bearing liabilities 5,697,713     5,224,172     5,346,826     5,286,708  
Common stockholders' equity 954,511     689,637     833,150     663,050  
Total stockholders' equity 955,449     692,404     834,203     687,312  
Tangible common stockholders' equity (1) 691,464     537,375     638,149     513,031  
               
Key Performance Ratios              
Annualized return on average assets 0.89 %   0.98 %   0.94 %   1.00 %
Annualized return on average common equity (GAAP) 8.99 %   11.64 %   9.88 %   12.28 %
Annualized return on average tangible common equity (non-GAAP) (2) 12.41 %   14.93 %   12.90 %   15.87 %
Annualized ratio of net charge-offs to average loans 0.31 %   0.17 %   0.23 %   0.09 %
Annualized net interest margin (GAAP) 4.08 %   3.97 %   4.00 %   3.98 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) (3) 4.26 %   4.14 %   4.19 %   4.15 %
Efficiency ratio, fully tax-equivalent (4) 64.54 %   63.88 %   66.58 %   66.23 %
               
Reconciliation of Return on Average Tangible Common Equity (non-GAAP) (5)              
Net income available to common shareholders (GAAP) $ 21,622     $ 20,172     $ 61,567     $ 60,962  
               
Average common stockholders' equity (GAAP) $ 954,511     $ 689,637     $ 833,150     $ 663,050  
Less average goodwill 226,097     127,699     167,009     125,061  
Less average core deposit intangibles and customer relationshipintangibles,  net 36,950     24,563     27,992     24,958  
Average tangible common equity (non-GAAP) $ 691,464     $ 537,375     $ 638,149     $ 513,031  
Annualized return on average common equity (GAAP) 8.99 %   11.64 %   9.88 %   12.28 %
Annualized return on average tangible common equity (non-GAAP) 12.41 %   14.93 %   12.90 %   15.87 %
               
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) (6)              
Net Interest Income (GAAP) $ 89,844     $ 73,681     $ 237,452     $ 219,506  
Plus tax-equivalent adjustment (7) 3,925     3,221     11,581     9,408  
Net interest income, tax-equivalent (non-GAAP) $ 93,769     $ 76,902     $ 249,033     $ 228,914  
               
Average earning assets $ 8,726,228     $ 7,382,860     $ 7,942,810     $ 7,368,856  
               
Annualized net interest margin (GAAP) 4.08 %   3.97 %   4.00 %   3.98 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.26 %   4.14 %   4.19 %   4.15 %
               
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Tangible Common 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 tangible common equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles and customer 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
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Average Balances                  
Assets $ 9,639,844     $ 8,333,301     $ 8,233,510     $ 8,280,042     $ 8,172,683  
Loans, net of unearned 6,286,264     5,376,826     5,365,654     5,473,001     5,538,088  
Deposits 8,100,028     7,050,126     6,896,821     6,928,978     6,839,334  
Earning assets 8,726,228     7,586,256     7,502,496     7,551,997     7,382,860  
Interest bearing liabilities 5,697,713     5,146,243     5,190,955     5,206,393     5,224,172  
Common stockholders' equity 954,511     791,039     751,671     726,455     689,637  
Total stockholders' equity 955,449     791,977     752,958     727,812     692,404  
Tangible common stockholders' equity (1) 691,464     625,929     596,006     575,412     537,375  
                   
Key Performance Ratios                  
Annualized return on average assets 0.89 %   1.06 %   0.89 %   0.92 %   0.98 %
Annualized return on average common equity (GAAP) 8.99 %   11.13 %   9.71 %   10.48 %   11.64 %
Annualized return on average tangible common equity (non-GAAP) (2) 12.41 %   14.07 %   12.25 %   13.24 %   14.93 %
Annualized ratio of net charge-offs to average loans 0.31 %   0.14 %   0.22 %   0.18 %   0.17 %
Annualized net interest margin (GAAP) 4.08 %   3.94 %   3.95 %   3.96 %   3.97 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) (3) 4.26 %   4.14 %   4.16 %   4.14 %   4.14 %
Efficiency ratio, fully tax-equivalent (4) 64.54 %   65.61 %   69.95 %   66.29 %   63.88 %
                   
Reconciliation of Return on Average Tangible Common Equity (non-GAAP) (5)                  
Net income available to common shareholders (GAAP) $ 21,622     $ 21,949     $ 17,996     $ 19,146     $ 20,172  
                   
Average common stockholders' equity (GAAP) $ 954,511     $ 791,039     $ 751,671     $ 726,455     $ 689,637  
   Less average goodwill 226,097     141,461     132,440     127,699     127,699  
Less average core deposit intangibles and customer relationship intangibles, net 36,950     23,649     23,225     23,344     24,563  
Average tangible common equity (non-GAAP) $ 691,464     $ 625,929     $ 596,006     $ 575,412     $ 537,375  
Annualized return on average common equity (GAAP) 8.99 %   11.13 %   9.71 %   10.48 %   11.64 %
Annualized return on average tangible common equity (non-GAAP) 12.41 %   14.07 %   12.25 %   13.24 %   14.93 %
                   
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP) (6)                  
Net Interest Income (GAAP) $ 89,844     $ 74,580     $ 73,028     $ 75,160     $ 73,681  
   Plus tax-equivalent adjustment (7) 3,925     3,796     3,860     3,511     3,221  
Net interest income, fully tax-equivalent (non-GAAP) $ 93,769     $ 78,376     $ 76,888     $ 78,671     $ 76,902  
                   
Average earning assets $ 8,726,228     $ 7,586,256     $ 7,502,496     $ 7,551,997     $ 7,382,860  
                   
Annualized net interest margin (GAAP) 4.08 %   3.94 %   3.95 %   3.96 %   3.97 %
Annualized net interest margin, fully tax-equivalent (non-GAAP) 4.26 %   4.14 %   4.16 %   4.14 %   4.14 %
 
(1) Calculated as common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net.
(2) Refer to the "Reconciliation of Return on Average Tangible Common 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 and customer relationship 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 September 30,   For the Nine Months Ended September 30,
Reconciliation of Non-GAAP Measure-Efficiency Ratio (1) 2017   2016   2017   2016
Net interest income $ 89,844     $ 73,681     $ 237,452     $ 219,506  
Tax-equivalent adjustment (2) 3,925     3,221     11,581     9,408  
Fully tax-equivalent net interest income 93,769     76,902     249,033     228,914  
Noninterest income 24,977     28,542     76,494     89,146  
Securities gains, net (1,679 )   (1,584 )   (5,553 )   (9,732 )
Adjusted income $ 117,067     $ 103,860     $ 319,974     $ 308,328  
               
Total noninterest expenses $ 78,759     $ 68,427     $ 219,797     $ 209,756  
Less:              
Core deposit intangibles and customer relationship intangibles amortization 1,863     1,291     4,252     4,483  
Partnership investment in tax credit projects         876      
(Gain)/loss on sales/valuations of assets, net 1,342     794     1,642     1,064  
Adjusted noninterest expenses $ 75,554     $ 66,342     $ 213,027     $ 204,209  
               
Efficiency ratio, fully tax-equivalent (non-GAAP) 64.54 %   63.88 %   66.58 %   66.23 %

HEARTLAND FINANCIAL USA, INC.  
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)  
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA  
  For the Quarter Ended
Reconciliation of Non-GAAP Measure-Efficiency Ratio (1) 9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Net interest income $ 89,844     $ 74,580     $ 73,028     $ 75,160     $ 73,681  
Tax-equivalent adjustment (2) 3,925     3,796     3,860     3,511     3,221  
Fully tax-equivalent net interest income 93,769     78,376     76,888     78,671     76,902  
Noninterest income 24,977     25,624     25,893     24,455     28,542  
Securities gains, net (1,679 )   (1,392 )   (2,482 )   (1,608 )   (1,584 )
Adjusted income $ 117,067     $ 102,608     $ 100,299     $ 101,518     $ 103,860  
                   
Total noninterest expenses $ 78,759     $ 69,298     $ 71,740     $ 69,912     $ 68,427  
Less:                  
Core deposit intangibles and customer relationship intangibles amortization 1,863     1,218     1,171     1,147     1,291  
Partnership investment in tax credit projects     876         1,051      
(Gain)/loss on sales/valuation of assets, net 1,342     (112 )   412     414     794  
Adjusted noninterest expenses $ 75,554     $ 67,316     $ 70,157     $ 67,300     $ 66,342  
                   
Efficiency ratio, fully tax-equivalent (non-GAAP) 64.54 %   65.61 %   69.95 %   66.29 %   63.88 %
                   
(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 tax credit projects. 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
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Common Share Data                  
Book value per common share $ 32.75     $ 30.15     $ 29.26     $ 28.31     $ 28.48  
Tangible book value per common share (non-GAAP) (1) $ 23.61     $ 24.00     $ 23.05     $ 22.55     $ 22.34  
ASC 320 effect on book value per common share $ (0.67 )   $ (0.87 )   $ (1.06 )   $ (1.15 )   $ 0.03  
Common shares outstanding, net of treasury stock 29,946,069     26,701,226     26,674,121     26,119,929     24,681,380  
Tangible common equity ratio (non-GAAP) (2) 7.46 %   7.97 %   7.50 %   7.28 %   6.85 %
                   
Reconciliation of Tangible Book Value Per Common Share (non-GAAP) (3)                  
Common stockholders' equity (GAAP) $ 980,746     $ 805,032     $ 780,374     $ 739,559     $ 703,031  
Less goodwill 236,615     141,461     141,461     127,699     127,699  
Less core deposit intangibles and customer relationship intangibles, net 37,028     22,850     24,068     22,775     23,922  
Tangible common stockholders' equity (non-GAAP) $ 707,103     $ 640,721     $ 614,845     $ 589,085     $ 551,410  
                   
Common shares outstanding, net of treasury stock 29,946,069     26,701,226     26,674,121     26,119,929     24,681,380  
Common stockholders' equity (book value) per share (GAAP) $ 32.75     $ 30.15     $ 29.26     $ 28.31     $ 28.48  
Tangible book value per common share (non-GAAP) $ 23.61     $ 24.00     $ 23.05     $ 22.55     $ 22.34  
                   
Reconciliation of Tangible Common Equity Ratio (non-GAAP) (4)                  
Total assets (GAAP) $ 9,755,627     $ 8,204,721     $ 8,361,845     $ 8,247,079     $ 8,202,215  
  Less goodwill 236,615     141,461     141,461     127,699     127,699  
  Less core deposit intangibles and customer relationship  intangibles, net 37,028     22,850     24,068     22,775     23,922  
Total tangible assets (non-GAAP) $ 9,481,984     $ 8,040,410     $ 8,196,316     $ 8,096,605     $ 8,050,594  
Tangible common equity ratio (non-GAAP) 7.46 %   7.97 %   7.50 %   7.28 %   6.85 %
                   
Loan Data                  
Loans held to maturity:                  
Commercial and commercial real estate $ 4,777,856     $ 3,803,011     $ 3,849,748     $ 3,825,847     $ 3,900,612  
Residential mortgage 635,611     596,385     604,902     617,924     625,965  
Agricultural and agricultural real estate 511,764     495,243     481,125     489,318     489,387  
Consumer 450,088     431,052     427,962     420,613     425,582  
Unearned discount and deferred loan fees (1,904 )   (609 )   (2,133 )   (1,983 )   (2,831 )
Total loans held to maturity $ 6,373,415     $ 5,325,082     $ 5,361,604     $ 5,351,719     $ 5,438,715  
                   
Other Selected Trend Information                  
Effective tax rate 28.74 %   26.85 %   23.49 %   30.38 %   29.02 %
Full time equivalent employees 2,024     1,862     1,896     1,864     1,846  
Total residential mortgage loan applications $ 271,476     $ 308,113     $ 248,614     $ 304,018     $ 445,107  
Residential mortgage loans originated $ 198,911     $ 216,637     $ 161,851     $ 278,065     $ 324,337  
Residential mortgage loans sold $ 188,501     $ 180,296     $ 172,521     $ 269,333     $ 315,917  
Residential mortgage loan servicing portfolio $ 3,557,866     $ 4,340,243     $ 4,338,311     $ 4,308,580     $ 4,259,459  
                   
(1) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table.
(2) Refer to the "Reconciliation of Tangible Common Equity Ratio (non-GAAP)" table.
(3) Tangible book value per common share is total common stockholders' equity less goodwill and core deposit intangibles and customer relationship 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 common equity ratio is total common stockholders' equity less goodwill and core deposit intangibles and customer relationship intangibles, net, divided by total assets less goodwill and core deposit intangibles and customer relationship 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
  9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Allowance for Loan Losses                  
Balance, beginning of period $ 54,051     $ 54,999     $ 54,324     $ 54,653     $ 51,756  
Provision for loan losses 5,705     889     3,641     2,181     5,328  
Charge-offs (5,759 )   (2,766 )   (3,718 )   (3,555 )   (3,283 )
Recoveries 888     929     752     1,045     852  
Balance, end of period $ 54,885     $ 54,051     $ 54,999     $ 54,324     $ 54,653  
                   
Asset Quality                  
Nonaccrual loans $ 63,456     $ 65,393     $ 62,868     $ 64,299     $ 57,799  
Loans past due ninety days or more as to interest or principalpayments 2,348     698     872     86     105  
Other real estate owned 13,226     9,269     11,188     9,744     10,740  
Other repossessed assets 773     675     739     663     821  
Total nonperforming assets $ 79,803     $ 76,035     $ 75,667     $ 74,792     $ 69,465  
                   
Performing troubled debt restructured loans $ 10,040     $ 11,157     $ 11,010     $ 10,380     $ 10,281  
                   
Nonperforming Assets Activity                  
Balance, beginning of period $ 76,035     $ 75,667     $ 74,792     $ 69,465     $ 68,620  
Net loan charge offs (4,871 )   (1,837 )   (2,966 )   (2,510 )   (2,431 )
New nonperforming loans 9,117     13,700     14,819     23,035     10,884  
Acquired nonperforming assets 7,991                  
Reduction of nonperforming loans (1) (5,183 )   (7,443 )   (10,037 )   (13,707 )   (6,983 )
OREO/Repossessed assets sales proceeds (3,328 )   (3,734 )   (715 )   (1,037 )   (343 )
OREO/Repossessed assets writedowns, net (56 )   (259 )   (279 )   (274 )   (521 )
Net activity at Citizens Finance Co. 98     (59 )   53     (180 )   239  
Balance, end of period $ 79,803     $ 76,035     $ 75,667     $ 74,792     $ 69,465  
 
Asset Quality Ratios                  
Ratio of nonperforming loans to total loans 1.03 %   1.24 %   1.19 %   1.20 %   1.06 %
Ratio of nonperforming assets to total assets 0.82 %   0.93 %   0.90 %   0.91 %   0.85 %
Annualized ratio of net loan charge-offs to average loans 0.31 %   0.14 %   0.22 %   0.18 %   0.17 %
Allowance for loan losses as a percent of loans 0.86 %   1.02 %   1.03 %   1.02 %   1.00 %
Allowance for loan losses as a percent of nonperforming loans 83.41 %   81.78 %   86.29 %   84.37 %   94.39 %
Loans delinquent 30-89 days as a percent of total loans 0.33 %   0.38 %   0.44 %   0.37 %   0.40 %
                   
(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
  September 30, 2017   September 30, 2016
  Average Balance   Interest   Rate   Average Balance   Interest   Rate
Earning Assets                      
Securities:                      
Taxable $ 1,667,076     $ 10,394     2.47 %   $ 1,415,446     $ 7,917     2.23 %
Nontaxable (1) 643,925     7,825     4.82     473,152     5,719     4.81  
Total securities 2,311,001     18,219     3.13     1,888,598     13,636     2.87  
Interest bearing deposits with the Federal Reserve Bank and otherbanks and other short-term investments 164,809     558     1.34     7,026     6     0.34  
Federal funds sold 18,874     34     0.71     1,409     1     0.28  
Loans: (2)                      
Commercial and commercial real estate (1) 4,647,414     59,121     5.05     3,908,623     48,334     4.92  
Residential mortgage 683,186     7,300     4.24     717,374     7,248     4.02  
Agricultural and agricultural real estate (1) 504,970     6,175     4.85     486,008     5,719     4.68  
Consumer 450,694     9,032     7.95     426,083     8,256     7.71  
Fees on loans     2,464             1,708      
Less: allowance for loan losses (54,720 )           (52,261 )        
Net loans 6,231,544     84,092     5.35     5,485,827     71,265     5.17  
Total earning assets 8,726,228     102,903     4.68 %   7,382,860     84,908     4.58 %
Nonearning Assets 913,616             789,823          
Total Assets $ 9,639,844             $ 8,172,683          
Interest Bearing Liabilities                      
Savings $ 4,205,946     $ 3,162     0.30 %   $ 3,697,426     $ 2,066     0.22 %
Time, $100,000 and over 408,560     787     0.76     399,498     813     0.81  
Other time deposits 573,178     1,124     0.78     570,445     1,122     0.78  
Short-term borrowings 209,795     271     0.51     258,783     235     0.36  
Other borrowings 300,234     3,790     5.01     298,020     3,770     5.03  
Total interest bearing liabilities 5,697,713     9,134     0.64 %   5,224,172     8,006     0.61 %
Noninterest Bearing Liabilities                      
Noninterest bearing deposits 2,912,344             2,171,965          
Accrued interest and other liabilities 74,338             84,142          
Total noninterest bearing liabilities 2,986,682             2,256,107          
Stockholders' Equity 955,449             692,404          
Total Liabilities and Stockholders' Equity $ 9,639,844             $ 8,172,683          
Net interest income, fully tax-equivalent (non-GAAP) (1)     $ 93,769             $ 76,902      
Net interest spread (1)         4.04 %           3.97 %
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets (3)         4.26 %           4.14 %
Interest bearing liabilities to earning assets 65.29 %           70.76 %        
                       
Reconciliation of annualized net interest margin, fully tax-equivalent (non-GAAP) (3)                      
Net interest income, fully tax-equivalent (non-GAAP)     $ 93,769             $ 76,902      
Adjustments for tax-equivalent interest (1)     (3,925 )           (3,221 )    
Net interest income (GAAP)     $ 89,844             $ 73,681      
                       
Average earning assets $ 8,726,228             $ 7,382,860          
Annualized net interest margin (GAAP)     4.08 %           3.97 %    
Annualized net interest margin, fully tax-equivalent (non-GAAP)     4.26 %           4.14 %    
                       
(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 Nine Months Ended
  September 30, 2017   September 30, 2016
  Average Balance   Interest   Rate   Average Balance   Interest   Rate
Earning Assets                      
Securities:                      
Taxable $ 1,545,091     $ 27,246     2.36 %   $ 1,464,080     $ 24,604     2.24 %
Nontaxable (1) 638,119     23,534     4.93     440,275     16,605     5.04  
Total securities 2,183,210     50,780     3.11     1,904,355     41,209     2.89  
Interest bearing deposits with the Federal Reserve Bank and otherbanks and other short-term investments 127,870     1,112     1.16     9,785     13     0.18  
Federal funds sold 6,885     37     0.72     12,509     12     0.13  
Loans: (2)                      
Commercial and commercial real estate (1) 4,097,967     151,946     4.96     3,840,060     141,977     4.94  
Residential mortgage 654,488     20,492     4.19     751,694     23,133     4.11  
Agricultural and agricultural real estate (1) 492,170     17,536     4.76     478,564     16,952     4.73  
Consumer 434,995     25,374     7.80     422,869     24,452     7.72  
Fees on loans     5,894             5,362      
Less: allowance for loan losses (54,775 )           (50,980 )        
Net loans 5,624,845     221,242     5.26     5,442,207     211,876     5.20  
Total earning assets 7,942,810     273,171     4.60 %   7,368,856     253,110     4.59 %
Nonearning Assets 797,893             767,636          
Total Assets $ 8,740,703             $ 8,136,492          
Interest Bearing Liabilities                      
Savings $ 3,976,403     $ 7,772     0.26 %   $ 3,651,370     $ 5,988     0.22 %
Time, $100,000 and over 369,595     2,239     0.81     439,609     2,417     0.73  
Other time deposits 512,551     2,955     0.77     599,745     3,790     0.84  
Short-term borrowings 199,503     498     0.33     314,367     1,083     0.46  
Other borrowings 288,774     10,674     4.94     281,617     10,918     5.18  
Total interest bearing liabilities 5,346,826     24,138     0.60 %   5,286,708     24,196     0.61 %
Noninterest Bearing Liabilities                      
Noninterest bearing deposits 2,494,850             2,084,379          
Accrued interest and other liabilities 64,824             78,093          
Total noninterest bearing liabilities 2,559,674             2,162,472          
Stockholders' Equity 834,203             687,312          
Total Liabilities and Stockholders' Equity $ 8,740,703             $ 8,136,492          
Net interest income, fully tax-equivalent (non-GAAP) (1)     $ 249,033             $ 228,914      
Net interest spread (1)         4.00 %           3.98 %
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets (3)         4.19 %           4.15 %
Interest bearing liabilities to earning assets 67.32 %           71.74 %        
                       
Reconciliation of annualized net interest margin, fully tax-equivalent (non-GAAP) (3)                      
Net interest income, fully tax-equivalent (non-GAAP)     $ 249,033             $ 228,914      
Adjustments for tax-equivalent interest (1)     (11,581 )           (9,408 )    
Net interest income (GAAP)     $ 237,452             $ 219,506      
                       
Average earning assets $ 7,942,810             $ 7,368,856          
Annualized net interest margin (GAAP)     4.00 %           3.98 %    
Annualized net interest margin, fully tax-equivalent (non-GAAP)     4.19 %           4.15 %    
                       
(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.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
  As of and For the Quarter Ended
  9/30/2017 6/30/2017 3/31/2017 12/31/2016 9/30/2016
Total Assets          
Citywide Banks (1) $ 2,391,727   $ 817,859   $ 839,505   $ 901,782   $ 892,723  
Dubuque Bank and Trust Company 1,479,647   1,441,655   1,436,038   1,497,775   1,448,796  
New Mexico Bank & Trust 1,425,185   1,407,991   1,382,480   1,374,647   1,318,203  
Wisconsin Bank & Trust 1,030,192   1,035,628   1,033,633   1,065,715   1,068,288  
Premier Valley Bank 886,495   850,956   854,838   640,684   635,620  
Illinois Bank & Trust 761,285   740,153   746,669   742,173   748,801  
Morrill & Janes Bank and Trust Company 719,246   748,286   871,819   863,544   862,767  
Arizona Bank & Trust 566,951   566,339   578,597   582,266   574,561  
Rocky Mountain Bank 486,790   476,829   479,121   477,063   481,346  
Minnesota Bank & Trust 217,246   216,957   213,789   229,114   238,745  
Total Portfolio Loans          
Citywide Banks (1) $ 1,540,016   $ 558,573   $ 572,254   $ 609,760   $ 638,006  
Dubuque Bank and Trust Company 868,370   884,640   903,617   905,242   906,347  
New Mexico Bank & Trust 989,367   934,734   906,477   924,249   917,679  
Wisconsin Bank & Trust 684,530   662,502   644,380   650,254   711,714  
Premier Valley Bank 458,443   447,148   440,406   348,879   354,610  
Illinois Bank & Trust 462,150   447,887   469,105   473,008   469,236  
Morrill & Janes Bank and Trust Company 468,197   515,896   546,123   548,544   538,666  
Arizona Bank & Trust 401,516   377,358   384,028   384,706   385,926  
Rocky Mountain Bank 338,305   335,173   330,921   347,839   357,346  
Minnesota Bank & Trust 142,650   144,112   142,736   144,098   139,581  
Total Deposits          
Citywide Banks (1) $ 1,924,605   $ 682,872   $ 712,377   $ 733,449   $ 767,128  
Dubuque Bank and Trust Company 1,139,512   1,178,368   1,212,899   1,231,016   1,182,947  
New Mexico Bank & Trust 1,221,134   1,190,758   1,184,675   1,091,436   1,101,550  
Wisconsin Bank & Trust 852,489   874,845   868,033   899,676   889,957  
Premier Valley Bank 714,605   681,298   708,226   510,142   520,814  
Illinois Bank & Trust 691,680   669,532   641,750   636,419   671,104  
Morrill & Janes Bank and Trust Company 605,390   627,857   721,075   738,036   676,176  
Arizona Bank & Trust 500,270   493,419   501,111   477,213   493,331  
Rocky Mountain Bank 426,405   416,436   420,067   414,344   420,581  
Minnesota Bank & Trust 189,749   193,365   189,324   194,368   214,651  
Net Income          
Citywide Banks (1) $ 4,541   $ 746   $ 1,366   $ 1,572   $ 925  
Dubuque Bank and Trust Company 703   3,477   2,056   806   5,112  
New Mexico Bank & Trust 4,972   5,855   4,419   4,061   3,824  
Wisconsin Bank & Trust 3,368   3,448   1,968   2,970   3,368  
Premier Valley Bank 2,907   2,573   1,306   2,969   1,804  
Illinois Bank & Trust 2,286   1,984   1,991   1,917   2,179  
Morrill & Janes Bank and Trust Company 1,760   2,210   2,227   2,519   1,707  
Arizona Bank & Trust 1,451   1,073   1,486   1,305   2,034  
Rocky Mountain Bank 1,631   1,732   1,521   1,229   1,456  
Minnesota Bank & Trust 791   563   591   888   675  
           
(1) Formerly known as Centennial Bank and Trust.

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