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TMCNet:  Heartland Financial USA, Inc. Reports Fourth Quarter 2012 Results

[January 28, 2013]

Heartland Financial USA, Inc. Reports Fourth Quarter 2012 Results

DUBUQUE, Iowa --(Business Wire)--

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



     

Quarter Ended
December 31,

Twelve Months Ended
December 31,

2012     2011 2012     2011
Net income (in millions) $ 8.9 $ 6.2 $ 49.3 $ 28.0
Net income available to common stockholders (in millions) 8.4 5.2 45.8 20.4
Diluted earnings per common share 0.50 0.31 2.73 1.23
 
Return on average assets 0.71 % 0.49 % 1.03 % 0.50 %
Return on average common equity 10.59 7.77 15.59 7.77
Net interest margin 3.81 4.08 3.98 4.16
 
 

"We are delighted to report that 2012 was an extraordinary year for Heartland by nearly every measure. Net income increased by 76 percent over 2011, with earnings per share growing by 122 percent."

 

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

 

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $8.9 million for the quarter ended December 31, 2012, an increase of $2.7 million or 43 percent from the $6.2 million recorded for the fourth quarter of 2011. Net income available to common stockholders was $8.4 million, or $0.50 per diluted common share, for the quarter ended December 31, 2012, compared to $5.2 million, or $0.31 per diluted common share, for the fourth quarter of 2011. Return on average common equity was 10.59 percent and return on average assets was 0.71 percent for the fourth quarter of 2012, compared to 7.77 percent and 0.49 percent, respectively, for the same quarter in 2011.

Net income recorded for 2012 was a record $49.3 million, compared to $28.0 million recorded during 2011, an increase of $21.3 million or 76 percent. Net income available to common stockholders was $45.8 million, or $2.73 per diluted common share, for 2012, compared to $20.4 million, or $1.23 per diluted common share, earned during 2011. Return on average common equity was 15.59 percent and return on average assets was 1.03 percent for 2012, compared to 7.77 percent and 0.50 percent, respectively, for 2011.

The factors contributing most significantly to the increased earnings on both a quarterly and annual basis in 2012 compared to 2011 were the continued expansion of mortgage operations, coupled with reduced provision for loan and lease losses and increased net interest income.

On November 16, 2012, Heartland completed the purchase of First Shares, Inc. headquartered in Platteville, Wisconsin. Simultaneous with closing of the transaction, First National Bank of Platteville was merged into Heartland's Wisconsin Bank & Trust subsidiary. The merger expanded the number of Wisconsin Bank & Trust locations from seven to ten and added three communities in southwestern Wisconsin to the bank's service area. The transaction included, at fair value, assets of $128.0 million, loans of $84.9 million and deposits of $114.2 million.

On December 7, 2012, Heartland completed the purchase of Heritage Bank, N.A. located in Phoenix, Arizona. Heritage Bank, N.A. will operate as a separate charter until late in the first quarter of 2013 when Heartland expects to combine it with our Arizona Bank & Trust subsidiary. The transaction included, at fair value, assets of $109.1 million, loans of $63.4 million and deposits of $83.3 million.

Commenting on Heartland's results for 2012, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, "We are delighted to report that 2012 was an extraordinary year for Heartland by nearly every measure. Net income increased by 76 percent over 2011, with earnings per share growing by 122 percent."

Net Interest Margin Percentage Remains Stable; Increases in Dollars

Net interest margin, expressed as a percentage of average earning assets, was 3.81 percent during the fourth quarter of 2012 compared to 3.84 percent for the third quarter of 2012 and 4.08 percent for the fourth quarter of 2011. On an annual basis, net interest margin was 3.98 percent during 2012 and 4.16 percent during 2011. These declines are a result of the sustained low interest rate environment where yields on the securities and loan portfolios are declining at a greater pace than rates paid on deposits and other borrowings.

Fuller said, "Compared to the previous quarter, we are pleased to see net interest margin hold relatively steady at 3.81 percent in the fourth quarter. Going forward, we view margin as a key challenge in this low rate environment. Deposit rates have little room for further reductions while competition for new loans and lower reinvestment rates on maturing securities continues to push asset yields lower."

On a tax-equivalent basis, interest income in the fourth quarter of 2012 was $49.5 million compared to $49.3 million in the fourth quarter of 2011. On an annual basis, interest income on a tax-equivalent basis was $196.7 million in 2012 compared to $197.7 million in 2011. The small increase in interest income in the fourth quarter of 2012, as compared to the fourth quarter of 2011, was due to an increase in average earning assets, as the interest rate earned on those assets continued to decline throughout 2012 due to the sustained low interest rate environment. The average interest rate earned on total earning assets was 4.72 percent during the fourth quarter of 2012 compared to 5.22 percent during the fourth quarter of 2011. For the year, the average interest rate earned on total earning assets was 4.97 percent during 2012 compared to 5.43 percent during 2011. The most significant contributor to these declines was the overall yield earned on the securities portfolio, which decreased 67 basis points during the quarter ended December 31, 2012, compared to the same quarter in 2011 and 72 basis points during the year 2012, compared to the year 2011. Average earning assets increased $421.9 million or 11 percent during the fourth quarter of 2012 compared to the fourth quarter of 2011, with approximately $135.0 million attributable to acquisitions. For the year, average earning assets grew $322.3 million or 9 percent, with approximately $45.0 million attributable to acquisitions.

Interest expense for the fourth quarter of 2012 was $9.5 million, a decrease of $1.3 million or 12 percent from $10.8 million in the fourth quarter of 2011. On an annual basis, interest expense decreased $7.2 million or 15 percent. Even though average interest bearing liabilities increased $263.6 million or 9 percent for the quarter ended December 31, 2012, as compared to the same quarter in 2011, and $175.8 million or 6 percent for the annual period ended on December 31, 2012, as compared to 2011, the average interest rate paid on Heartland's deposits and borrowings declined 26 basis points during the quarterly periods under comparison and 30 basis points during the annual periods under comparison. Contributing to this improvement in interest expense was a change in the mix of deposits. Average savings balances, the lowest cost interest-bearing deposits, as a percentage of total average interest bearing deposits was 69 percent during both the fourth quarter and year in 2012, compared to 67 percent for the fourth quarter of 2011 and 65 percent for the year of 2011. Additionally, the average interest rate paid on savings deposits was 0.35 percent during the fourth quarter of 2012 and 0.38 percent during the full year of 2012 compared to 0.47 percent during the fourth quarter of 2011 and 0.57 percent during the full year of 2011.

Net interest income on a tax-equivalent basis totaled $40.0 million during the fourth quarter of 2012, an increase of $1.5 million or 4 percent from the $38.5 million recorded during the fourth quarter of 2011. For the year, net interest income on a tax-equivalent basis was $157.5 million during 2012, an increase of $6.2 million or 4 percent from the $151.3 million recorded during 2011.

Noninterest Income and Noninterest Expense Increase

Noninterest income during the fourth quarter of 2012 was $27.2 million, an increase of $8.2 million or 43 percent over the $19.0 million recorded during the fourth quarter of 2011. For the year, noninterest income was $108.7 million in 2012 compared to $59.6 million in 2011, an increase of $49.1 million or 82 percent. The categories contributing most significantly to the improvement in noninterest income during both comparative periods were gains on sale of loans, which increased $8.8 million or 160 percent for the quarterly comparative period and $37.8 million or 333 percent for the annual comparative period, and loan servicing income, which increased $1.5 million or 73 percent, for the quarterly comparative period and $5.4 million or 90 percent for the annual comparative period. For the quarterly comparative period, a portion of these increases was offset by a decrease in securities gains, which were $4.2 million in the fourth quarter of 2011 compared to a loss of $108,000 during the fourth quarter of 2012.

Loan servicing income increased $1.5 million or 73 percent for the fourth quarter of 2012 as compared to the fourth quarter of 2011 and $5.4 million or 90 percent for 2012 compared to 2011. Two components of loan servicing income, mortgage servicing rights and amortization of mortgage servicing rights, are dependent upon the level of loans Heartland originates and sells into the secondary market, which in turn is highly influenced by market interest rates for home mortgage loans. Mortgage servicing rights income was $3.5 million during the fourth quarter of 2012 compared to $1.4 million during the fourth quarter of 2011 and amortization of mortgage servicing rights was $1.9 million during the fourth quarter of 2012 compared to $862,000 during the fourth quarter of 2011. For the year, mortgage servicing rights income was $11.5 million during 2012 compared to $3.7 million during 2011 and amortization of mortgage servicing rights was $6.6 million during 2012 compared to $3.6 million during 2011. Loan servicing income also includes the fees collected for the servicing of mortgage loans for others, which is dependent upon the aggregate outstanding balance of these loans, rather than quarterly production and sale of mortgage loans. Fees collected for the servicing of mortgage loans for others were $1.3 million during the fourth quarter of 2012 compared to $932,000 during the fourth quarter of 2011. For the year, fees collected for the servicing of mortgage loans for others were $4.4 million during 2012 compared to $3.6 million during 2011. The portfolio of mortgage loans serviced for others by Heartland totaled $2.20 billion at December 31, 2012, compared to $1.54 billion at December 31, 2011. Heartland believes long term success in the mortgage banking business will depend on its ability to shift toward originations of loans for the purchase of homes, which will drive revenue when the refinance boom comes to an end. For the fourth quarter of 2012, refinancing activity represented 71 percent of total mortgage originations compared to 64 percent during the third quarter and 58 percent during the second quarter of 2012.

Gains on sale of loans totaled $14.3 million during the fourth quarter of 2012 compared to $5.5 million during the fourth quarter of 2011 and $13.8 million during the third quarter of 2012. For the year, gains on sale of loans totaled $49.2 million during 2012 compared to $11.4 million during 2011. The volume of loans sold totaled $478.3 million during the fourth quarter of 2012, more than double the $208.5 million sold during the fourth quarter of 2011. For the year, the volume of loans sold totaled $1.53 billion during 2012 compared to $452.9 million during 2011. Pricing received on the sale of fixed rate residential mortgage loans into the secondary market improved through a bulk delivery method that was implemented during the second quarter of 2011, instead of an individual delivery method that had been used previously. At the same time, secondary market pricing began to be matched with origination pricing through the use of a software tool that assists in hedging the locked rate pipeline position. Beginning in the fourth quarter of 2012, Heartland began the pooling of certain newly originated mortgage loans into mortgage-backed securities prior to delivery into the secondary market.

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

   
As Of and For the Quarter Ended
(Dollars in thousands) 12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Mortgage Servicing Fees $ 1,304 $ 1,123 $ 1,037 $ 967 $ 932
Mortgage Servicing Rights Income 3,535 3,316 2,614 1,986 1,380
Mortgage Servicing Rights Amortization   (1,871 )   (1,896 )   (1,112 )   (1,718 )   (862 )
Total Residential Mortgage Loan Servicing Income $ 2,968   $ 2,543   $ 2,539   $ 1,235   $ 1,450  
Valuation Adjustment on Mortgage Servicing Rights $ 197 $ (493 ) $ (194 ) $ 13 $ (19 )
Gains On Sale of Loans $ 14,257 $ 13,750 $ 12,689 $ 8,502 $ 5,473
Total Residential Mortgage Loan Applications $ 645,603 $ 672,382 $ 638,595 $ 549,315 $ 301,551
Residential Mortgage Loans Originated $ 490,525 $ 488,658 $ 374,743 $ 293,724 $ 253,468
Residential Mortgage Loans Sold $ 478,280 $ 448,704 $ 360,743 $ 243,836 $ 208,494
Residential Mortgage Loan Servicing Portfolio $ 2,199,486 $ 1,963,567 $ 1,776,912 $ 1,626,129 $ 1,541,417
 

For the fourth quarter of 2012, noninterest expense totaled $49.3 million, an increase of $9.1 million or 23 percent from the same quarter of 2011. For the year, noninterest expense totaled $178.1 million in 2012 compared to $137.3 million in 2011, a $40.8 million or 30 percent increase. Contributing to these increases in noninterest expense were a $7.1 million or 32 percent increase in salaries and employee benefits for the quarter and a $30.2 million or 40 percent increase for the year, a large portion of which resulted from the expansion of residential loan origination and the addition of personnel in the Heartland Mortgage and National Residential Mortgage unit. Commission expense was $5.9 million during the fourth quarter of 2012 compared to $3.5 million during the fourth quarter of 2011. For the yearly comparative period, commission expense totaled $19.8 million during 2012 and $6.8 million during 2011. The increases in commission expense are a direct result of the increased mortgage loan origination activity. Additionally, the accrual for incentive plan compensation payouts was significantly higher in 2012, in direct correlation with the higher period to date earnings and the reinstatement of incentive compensation for Heartland's executive officers after the repayment of TARP (Troubled Asset Relief Program) funds. Full-time equivalent employees totaled 1,498 on December 31, 2012, compared to 1,195 on December 31, 2011.

Fuller commented, "The Heartland Mortgage and National Residential unit contributed significantly to our extraordinary year with loan originations of $1.6 billion. Reflecting this fact, gains on sale of loans increased fourfold over the previous year. We continue to build on the capabilities of this business line with the addition of new sales personnel, new residential loan products and new technologies."

Heartland's effective tax rate was 32.07 percent for 2012 compared to 26.89 percent for 2011. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $798,000 during both 2012 and 2011. Heartland's effective tax rate is also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 18.94 percent during 2012 compared to 28.78 percent during 2011. The tax-equivalent adjustment for this tax-exempt interest income was $7.4 million during 2012 compared to $5.9 million during 2011.

Net Loan Growth Continued at a Slower Pace; Strong Deposit Growth

Total assets were $4.98 billion at December 31, 2012, an increase of $679.5 million or 16 percent since December 31, 2011, with $391.4 million of this growth occurring in the fourth quarter, $165.5 million in the third quarter, $114.8 million in the second quarter and $7.8 million in the first quarter. Included in the asset growth for the fourth quarter of 2012 were the $128.0 million in assets acquired in the First Shares, Inc. transaction and $109.1 million acquired in the Heritage Bank acquisition. The asset growth for the third quarter of 2012 included $53.5 million in assets acquired from Liberty Bank, FSB. Securities represented 31 percent of total assets at both December 31, 2012 and 2011.

Total loans and leases held to maturity were $2.82 billion at December 31, 2012, compared to $2.48 billion at year-end 2011, an increase of $340.3 million or 14 percent, with $173.6 million occurring during the fourth quarter, $18.4 million during the third quarter, $97.2 million during the second quarter and $51.1 million during the first quarter. Included in the loan growth for the fourth quarter of 2012 were $84.9 million in loans acquired in the First Shares, Inc. acquisition and $63.4 million acquired in the Heritage Bank acquisition. Loan growth for the third quarter of 2012 included $9.4 million in loans acquired from Liberty Bank, FSB. Excluding acquisitions, loan growth for the year totaled $182.6 million or 7 percent. Commercial and commercial real estate loans, which totaled $2.00 billion at December 31, 2012, increased $191.9 million or 11 percent since year-end 2011, with $83.7 million attributable to the acquisitions. Residential mortgage loans, which totaled $249.7 million at December 31, 2012, increased $55.3 million or 28 percent since year-end 2011, with $26.3 million attributable to acquisitions. Agricultural and agricultural real estate loans, which totaled $328.3 million at December 31, 2012, increased $65.3 million or 25 percent since year-end 2011, with $37.7 million of this growth attributable to the acquisitions. Consumer loans, which totaled $245.7 million at December 31, 2012, increased $25.6 million or 12 percent since year-end 2011, with $10.1 million of the growth attributable to acquisitions.

"Even though organic loan growth of $183 million was short of our expectations, we continue to seek growth in quality loans rather than quantity." added Fuller.

Fuller also noted, "Our participation in the Small Business Lending Fund provides added incentive for the Heartland member banks to originate small business loans. As a result of our success in growing qualifying loans, we are realizing a lower capital cost of 2 percent on our $81.7 million of SBLF preferred stock. Consistent with our business purpose, the SBLF allows Heartland to provide affordable credit to small commercial and agricultural clients, which in turn helps to increase employment and assist the economic recovery in the communities we serve."

Total deposits were $3.85 billion at December 31, 2012, compared to $3.21 billion at year-end 2011, an increase of $635.5 million or 20 percent, with $342.6 million occurring during the fourth quarter, $168.1 million during the third quarter, $59.2 million during the second quarter and $65.6 million during the first quarter. Included in deposit growth during the fourth quarter of 2012 were $114.2 million in deposits acquired in the First Shares, Inc. acquisition and $83.3 million acquired in the Heritage Bank acquisition. Deposit growth for the third quarter of 2012 included $53.8 million in deposits acquired from Liberty Bank, FSB. Exclusive of these acquisitions, deposit growth during the year was $384.2 million or 12 percent. The composition of Heartland's deposits continues to improve as no-cost demand deposits as a percentage of total deposits was 25 percent at December 31, 2012, compared to 23 percent at year-end 2011. Demand deposits increased $236.9 million or 32 percent since year-end 2011, with $60.7 million of this growth attributable to acquisitions. Savings deposits increased $326.3 million or 19 percent since December 31, 2011, with $84.5 million of this growth attributable to acquisitions. Certificates of deposit increased $72.4 million or 9 percent since year-end 2011, with $106.1 million attributable to acquisitions and the offsetting decrease a result of more emphasis on growing the customer base in non-maturity deposit products instead of higher-cost certificates of deposit. As a percentage of total deposits, certificates of deposit were 23 percent at December 31, 2012.

Fuller said, "We continue to experience excellent deposit growth in most Heartland markets. Excluding acquisitions, deposits increased by $384 million, or 12 percent over year-end 2011. We continue to see a very favorable shift in our deposit mix through the growth of demand deposits which now represent 25 percent of our deposits."

Provision for Loan Losses and Nonperforming Assets Continue at Lower Levels

Exclusive of loans covered under loss sharing agreements, the allowance for loan and lease losses at December 31, 2012, was 1.37 percent of loans and leases and 89.71 percent of nonperforming loans compared to 1.48 percent of loans and leases and 64.09 percent of nonperforming loans at December 31, 2011. The provision for loan losses was $3.4 million for the fourth quarter of 2012 compared to $7.8 million for the fourth quarter of 2011, a $4.4 million or 57 percent decrease. For the year, the provision for loan losses was $8.2 million during 2012 compared to $29.4 million during 2011, a $21.2 million or 72 percent decrease. A reduction in the level of the allowance for loan and lease losses maintained for impaired loans was the primary contributor to the lower provision during 2012. The portion of the allowance for loan and lease losses maintained for impaired loans was $4.6 million at December 31, 2012, leaving the allowance on non-impaired loans, exclusive of acquisitions, relatively stable at 1.32 percent of loans and leases at December 31, 2012, compared to 1.31 percent at December 31, 2011.

Nonperforming loans, exclusive of those covered under loss sharing agreements, were $43.2 million or 1.53 percent of total loans and leases at December 31, 2012, compared to $57.4 million or 2.31 percent of total loans and leases at December 31, 2011. Approximately 53 percent, or $22.9 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 12 borrowers, are comprised of $7.3 originated by New Mexico Bank & Trust, $5.8 million originated by Rocky Mountain Bank, $4.5 million originated by Galena State Bank & Trust Co., $2.7 million originated by Wisconsin Bank & Trust, $1.4 million originated by Riverside Community Bank and $1.2 million originated by Arizona Bank & Trust. The portion of Heartland's nonperforming loans covered by government guarantees was $1.7 million at December 31, 2012. As identified using the North American Industry Classification System (NAICS), $12.4 million of nonperforming loans with individual balances exceeding $1.0 million were for construction/land subdivision and the remaining $10.5 million distributed among seven other industry categories.

Delinquencies in each of the loan portfolios continue to be relatively stable and no significant adverse trends were identified during the fourth quarter of 2012. Loans delinquent 30 to 89 days were 0.32 percent of total loans at December 31, 2012, compared to 0.53 percent at September 30, 2012, 0.46 percent at June 30, 2012, 0.55 percent at March 31, 2012, and 0.23 percent at December 31, 2011.

Other real estate owned was $35.8 million at December 31, 2012, compared to $36.1 million at September 30, 2012, $37.9 million at June 30, 2012, $38.9 million at March 31, 2012, and $44.4 million at December 31, 2011. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues to market these properties through an orderly liquidation process instead of a quick liquidation process in order to avoid discounts greater than the projected carrying costs. During 2012, $7.0 million of other real estate owned was sold during the fourth quarter, $4.2 million during the third quarter, $5.9 million during the second quarter and $12.4 million during the first quarter.

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

               
Other Other Total
Nonperforming Real Estate Repossessed Nonperforming
(Dollars in thousands) Loans Owned Assets Assets
September 30, 2012 $ 42,979 $ 36,139 $ 496 $ 79,614
Loan foreclosures (8,750 ) 8,643 107 -
Net loan charge offs (5,036 ) - - (5,036 )
New nonperforming loans 18,273 - - 18,273
Reduction of nonperforming loans(1) (3,051 ) - - (3,051 )
OREO/Repossessed sales proceeds - (7,827 ) (9 ) (7,836 )
OREO/Repossessed assets writedowns, net - (1,133 ) (1 ) (1,134 )
Net activity at Citizens Finance Co.   -     -     (51 )   (51 )
December 31, 2012 $ 44,415   $ 35,822   $ 542   $ 80,779  
 
(1) Includes principal reductions and transfers to performing status.
 
               
Other Other Total
Nonperforming Real Estate Repossessed Nonperforming
(Dollars in thousands) Loans Owned Assets Assets
December 31, 2011 $ 60,780 $ 44,387 $ 648 $ 105,815
Loan foreclosures (28,942 ) 28,751 191 -
Net loan charge offs (6,295 ) - - (6,295 )
New nonperforming loans 33,439 - - 33,439
Reduction of nonperforming loans(1) (14,567 ) - - (14,567 )
OREO/Repossessed sales proceeds - (30,009 ) (364 ) (30,373 )
OREO/Repossessed assets writedowns, net - (7,307 ) (156 ) (7,463 )
Net activity at Citizens Finance Co.   -     -     223     223  
December 31, 2012 $ 44,415   $ 35,822   $ 542   $ 80,779  
 
(1) Includes principal reductions and transfers to performing status.
 

Net charge-offs on loans during the fourth quarter of 2012 were $5.0 million compared to $15.2 million during the fourth quarter of 2011.

"Over the course of 2012, we made continued progress in the reduction of nonperforming loans. Nonperforming loans ended the year at 1.53 percent of total loans, a decrease of 25 percent from year-end 2011. We continue to keep a watchful eye on loan quality as this measure remains our top priority." Fuller concluded.

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, log on to www.htlf.com at least 15 minutes before start time. If you are unable to participate on the call, a replay will be available until January 27, 2014, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a $5.0 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 69 banking locations in 47 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota and mortgage loan production offices in California, Nevada, Wyoming, Idaho and North Dakota. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.

Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war, (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions, (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected results of acquisitions; (xi) unexpected outcomes of existing or new litigation involving the Company; and (xii) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.

 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended     For the Twelve Months Ended
December 31, December 31,
      2012     2011     2012     2011
Interest Income        
Interest and fees on loans and leases $ 39,510 $ 37,764 $ 156,499 $ 149,603
Interest on securities:
Taxable 5,079 7,518 22,129 34,095
Nontaxable 2,912 2,340 10,698 8,035
Interest on federal funds sold 3 - 4 3
Interest on deposits in other financial institutions   3     -     8     1  
Total Interest Income   47,507     47,622     189,338     191,737  
Interest Expense
Interest on deposits 5,347 6,495 22,230 29,224
Interest on short-term borrowings 166 204 818 893
Interest on other borrowings   4,020     4,086     16,134     16,226  
Total Interest Expense   9,533     10,785     39,182     46,343  
Net Interest Income 37,974 36,837 150,156 145,394
Provision for loan and lease losses   3,350     7,784     8,202     29,365  
Net Interest Income After Provision for Loan and Lease Losses   34,624     29,053     141,954     116,029  
Noninterest Income
Service charges and fees 4,002 3,686 15,242 14,303
Loan servicing income 3,468 2,004 11,300 5,932
Trust fees 2,538 2,337 10,478 9,856
Brokerage and insurance commissions 945 889 3,702 3,511
Securities gains (losses), net (108 ) 4,174 13,998 13,104
Gain (loss) on trading account securities 164 (125 ) 47 89
Impairment loss on securities - - (981 ) -
Gains on sale of loans 14,257 5,473 49,198 11,366
Valuation adjustment on mortgage servicing rights 197 (19 ) (477 ) (19 )
Income on bank owned life insurance 311 407 1,442 1,349
Other noninterest income   1,456     212     4,713     86  
Total Noninterest Income   27,230     19,038     108,662     59,577  
Noninterest Expense
Salaries and employee benefits 29,283 22,135 105,727 75,537
Occupancy 3,017 2,368 10,629 9,363
Furniture and equipment 1,822 1,475 6,326 5,636
Professional fees 4,400 3,385 15,338 12,567
FDIC insurance assessments 810 848 3,292 3,777
Advertising 1,736 1,138 5,294 4,292
Intangible assets amortization 163 141 562 572
Net loss on repossessed assets 1,983 4,255 9,969 9,807
Other noninterest expenses   6,120     4,458     20,955     15,745  
Total Noninterest Expense   49,334     40,203     178,092     137,296  
Income Before Income Taxes 12,520 7,888 72,524 38,310
Income taxes   3,613     1,671     23,255     10,302  
Net Income 8,907 6,217 49,269 28,008
Net (income) loss attributable to noncontrolling interest, net of tax   (82 )   31     (59 )   36  
Net Income Attributable to Heartland 8,825 6,248 49,210 28,044
Preferred dividends and discount   (409 )   (1,021 )   (3,400 )   (7,640 )
Net Income Available to Common Stockholders $ 8,416   $ 5,227   $ 45,810   $ 20,404  
Earnings per common share-diluted $ 0.50 $ 0.31 $ 2.73 $ 1.23
Weighted average shares outstanding-diluted 16,812,947 16,599,741 16,768,602 16,575,506
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Interest Income                
Interest and fees on loans and leases $ 39,510 $ 39,208 $ 39,382 $ 38,399 $ 37,764
Interest on securities:
Taxable 5,079 4,452 5,026 7,572 7,518
Nontaxable 2,912 2,896 2,619 2,271 2,340
Interest on federal funds sold 3 - 1 - -
Interest on deposits in other financial institutions   3     3     2     -     -  
Total Interest Income   47,507     46,559     47,030     48,242     47,622  
Interest Expense
Interest on deposits 5,347 5,504 5,604 5,775 6,495
Interest on short-term borrowings 166 215 224 213 204
Interest on other borrowings   4,020     4,028     4,025     4,061     4,086  
Total Interest Expense 9,533 9,747 9,853 10,049 10,785
Net Interest Income 37,974 36,812 37,177 38,193 36,837
Provision for loan and lease losses   3,350     (502 )   3,000     2,354     7,784  
Net Interest Income After Provision for Loan and Lease Losses   34,624     37,314     34,177     35,839     29,053  
Noninterest Income
Service charges and fees 4,002 3,944 3,712 3,584 3,686
Loan servicing income 3,468 3,016 3,056 1,760 2,004
Trust fees 2,538 2,667 2,660 2,613 2,337
Brokerage and insurance commissions 945 908 939 910 889
Securities gains (losses), net (108 ) 5,212 4,951 3,943 4,174
Gain (loss) on trading account securities 164 (163 ) 49 (3 ) (125 )
Impairment loss on securities - - - (981 ) -
Gains on sale of loans 14,257 13,750 12,689 8,502 5,473
Valuation adjustment on mortgage servicing rights 197 (493 ) (194 ) 13 (19 )
Income on bank owned life insurance 311 382 267 482 407
Other noninterest income   1,456     543     149     2,565     212  
Total Noninterest Income   27,230     29,766     28,278     23,388     19,038  
Noninterest Expense
Salaries and employee benefits 29,283 27,064 25,384 23,996 22,135
Occupancy 3,017 2,596 2,534 2,482 2,368
Furniture and equipment 1,822 1,541 1,517 1,446 1,475
Professional fees 4,400 4,217 3,961 2,760 3,385
FDIC insurance assessments 810 811 807 864 848
Advertising 1,736 1,183 1,304 1,071 1,138
Intangible assets amortization 163 146 122 131 141
Net loss on repossessed assets 1,983 3,775 1,307 2,904 4,255
Other noninterest expenses   6,120     5,826     4,523     4,486     4,458  
Total Noninterest Expense   49,334     47,159     41,459     40,140     40,203  
Income Before Income Taxes 12,520 19,921 20,996 19,087 7,888
Income taxes   3,613     6,338     7,032     6,272     1,671  
Net Income 8,907 13,583 13,964 12,815 6,217
Net (income) loss attributable to noncontrolling interest, net of tax   (82 )   4     (7 )   26     31  
Net Income Attributable to Heartland 8,825 13,587 13,957 12,841 6,248
Preferred dividends and discount   (409 )   (949 )   (1,021 )   (1,021 )   (1,021 )
Net Income Available to Common Stockholders $ 8,416   $ 12,638   $ 12,936   $ 11,820   $ 5,227  
Earnings per common share-diluted $ 0.50 $ 0.75 $ 0.77 $ 0.71 $ 0.31
Weighted average shares outstanding-diluted 16,812,947 16,745,968 16,717,846 16,729,925 16,599,741
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    As Of
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Assets                
Cash and cash equivalents $ 168,054 $ 191,126 $ 82,831 $ 150,122 $ 129,834
Securities 1,561,957 1,332,082 1,331,088 1,221,909 1,326,592
Loans held for sale 96,165 99,429 73,284 103,460 53,528
Loans and leases:
Held to maturity 2,821,549 2,647,959 2,629,597 2,532,419 2,481,284
Loans covered by loss share agreements 7,253 8,511 9,567 11,360 13,347
Allowance for loan and lease losses   (38,715 )   (40,401 )   (41,439 )   (39,362 )   (36,808 )
Loans and leases, net 2,790,087 2,616,069 2,597,725 2,504,417 2,457,823
Premises, furniture and equipment, net 128,294 120,334 114,823 111,946 110,206
Goodwill 30,627 26,590 25,909 25,909 25,909
Other intangible assets, net 18,486 15,612 14,295 13,109 12,960
Cash surrender value on life insurance 75,480 72,853 72,448 72,159 67,084
Other real estate, net 35,822 36,139 37,941 38,934 44,387
FDIC indemnification asset 749 1,238 1,148 1,270 1,343
Other assets   78,840     81,725     76,192     69,616     75,392  
Total Assets $ 4,984,561   $ 4,593,197   $ 4,427,684   $ 4,312,851   $ 4,305,058  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 974,232 $ 877,790 $ 799,548 $ 771,421 $ 737,323
Savings 2,004,438 1,809,776 1,734,155 1,731,399 1,678,154
Brokered time deposits 55,521 56,627 51,575 41,475 41,225
Other time deposits   811,469     758,843     749,629     731,464     753,411  
Total deposits 3,845,660 3,503,036 3,334,907 3,275,759 3,210,113
Short-term borrowings 224,626 245,308 249,485 229,533 270,081
Other borrowings 389,025 377,536 377,543 377,362 372,820
Accrued expenses and other liabilities   121,293     72,571     90,755     64,154     99,151  
Total Liabilities 4,580,604 4,198,451 4,052,690 3,946,808 3,952,165
Equity
Preferred equity 81,698 81,698 81,698 81,698 81,698
Common equity   319,525     310,396     290,640     281,696     268,520  
Total Heartland Stockholders' Equity 401,223 392,094 372,338 363,394 350,218
Noncontrolling interest   2,734     2,652     2,656     2,649     2,675  
Total Equity   403,957     394,746     374,994     366,043     352,893  
Total Liabilities and Equity $ 4,984,561   $ 4,593,197   $ 4,427,684   $ 4,312,851   $ 4,305,058  
Common Share Data
Book value per common share $ 18.99 $ 18.81 $ 17.65 $ 17.09 $ 16.29
ASC 320 effect on book value per common share $ 1.21 $ 1.46 $ 0.98 $ 1.09 $ 0.97
Common shares outstanding, net of treasury stock 16,827,835 16,505,241 16,467,889 16,486,539 16,484,790
Tangible Capital Ratio(1) 5.78 % 6.18 % 5.98 % 5.93 % 5.63 %

 

(1)   Total common stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less intangible assets (excluding mortgage servicing rights). This is a non-GAAP financial measure.
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended     For the Twelve Months Ended
      12/31/2012     12/31/2011     12/31/2012     12/31/2011
Average Balances        
Assets $ 4,739,887 $ 4,197,916 $ 4,463,665 $ 4,071,811
Loans and leases, net of unearned 2,803,361 2,487,778 2,696,452 2,418,864
Deposits 3,674,507 3,215,793 3,396,488 3,114,080
Earning assets 4,171,475 3,749,612 3,962,268 3,639,926
Interest bearing liabilities 3,330,270 3,066,704 3,197,249 3,021,430
Common stockholders' equity 316,073 267,025 293,917 262,504
Total stockholders' equity 400,442 351,538 378,278 344,878
Tangible common stockholders' equity 288,359 239,394 266,423 234,630
 
Earnings Performance Ratios
Annualized return on average assets 0.71 % 0.49 % 1.03 % 0.50 %
Annualized return on average common equity 10.59 % 7.77 % 15.59 % 7.77 %
Annualized return on average common tangible equity 11.61 % 8.66 % 17.19 % 8.70 %
Annualized net interest margin(1) 3.81 % 4.08 % 3.98 % 4.16 %
Efficiency ratio(2) 73.28 % 75.29 % 70.61 % 69.41 %
 

(1)

 

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

(2)

Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure.

 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    For the Quarter Ended
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Average Balances                
Assets $ 4,739,887 $ 4,532,302 $ 4,350,916 $ 4,225,815 $ 4,197,916
Loans and leases, net of unearned 2,803,361 2,727,806 2,675,694 2,577,429 2,487,778
Deposits 3,674,507 3,415,810 3,291,293 3,201,073 3,215,793
Earning assets 4,171,475 4,019,601 3,870,360 3,784,709 3,749,612
Interest bearing liabilities 3,330,270 3,235,440 3,140,063 3,081,340 3,066,704
Common stockholders' equity 316,073 299,408 284,610 275,275 267,025
Total stockholders' equity 400,442 383,763 368,960 359,644 351,538
Tangible common stockholders' equity 288,359 272,078 257,212 247,744 239,394
 
Earnings Performance Ratios
Annualized return on average assets 0.71 % 1.11 % 1.20 % 1.12 % 0.49 %
Annualized return on average common equity 10.59 % 16.79 % 18.28 % 17.27 % 7.77 %
Annualized return on average common tangible equity 11.61 % 18.48 % 20.23 % 19.19 % 8.66 %
Annualized net interest margin(1) 3.81 % 3.84 % 4.05 % 4.23 % 4.08 %
Efficiency ratio(2) 73.28 % 74.47 % 66.56 % 67.71 % 75.29 %
 

(1)

 

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

(2)

Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure.

 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
    As of and for the Quarter Ended
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Loan and Lease Data                
Loans held to maturity:
Commercial and commercial real estate $ 2,001,327 $ 1,902,383 $ 1,903,996 $ 1,842,566 $ 1,809,450
Residential mortgage 249,689 228,972 220,084 202,883 194,436
Agricultural and agricultural real estate 328,311 283,697 279,285 270,687 262,975
Consumer 245,678 236,619 230,594 222,387 220,099
Direct financing leases, net 165 205 290 323 450
Unearned discount and deferred loan fees   (3,621 )   (3,917 )   (4,652 )   (6,427 )   (6,126 )
Total loans and leases held to maturity $ 2,821,549   $ 2,647,959   $ 2,629,597   $ 2,532,419   $ 2,481,284  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 3,074 $ 3,772 $ 4,497 $ 5,730 $ 6,380
Residential mortgage 2,645 3,099 3,309 3,734 4,158
Agricultural and agricultural real estate 748 863 858 934 1,659
Consumer   786     777     903     962     1,150  
Total loans and leases covered under loss share agreements $ 7,253   $ 8,511   $ 9,567   $ 11,360   $ 13,347  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 43,156 $ 40,743 $ 44,845 $ 49,940 $ 57,435
Loans and leases past due ninety days or more as to interest or principal payments - - - - -
Other real estate owned 35,470 35,994 37,709 38,693 43,506
Other repossessed assets   542     496     465     710     648  
Total nonperforming assets not covered under loss share agreements $ 79,168   $ 77,233   $ 83,019   $ 89,343   $ 101,589  
Performing troubled debt restructured loans $ 20,869 $ 22,385 $ 24,715 $ 21,379 $ 25,704
Covered under loss share agreements:
Nonaccrual loans $ 1,259 $ 2,236 $ 2,862 $ 3,189 $ 3,345
Other real estate owned   352     145     232     241     881  
Total nonperforming assets covered under loss share agreements $ 1,611   $ 2,381   $ 3,094   $ 3,430   $ 4,226  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 40,401 $ 41,439 $ 39,362 $ 36,808 $ 44,195
Provision for loan and lease losses 3,350 (502 ) 3,000 2,354 7,784
Charge-offs on loans not covered by loss share agreements (7,473 ) (2,785 ) (2,219 ) (1,608 ) (15,616 )
Charge-offs on loans covered by loss share agreements (137 ) (265 ) (35 ) - (5 )
Recoveries   2,574     2,514     1,331     1,808     450  
Balance, end of period $ 38,715   $ 40,401   $ 41,439   $ 39,362   $ 36,808  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 1.53 % 1.54 % 1.71 % 1.97 % 2.31 %
Ratio of nonperforming assets to total assets 1.59 % 1.68 % 1.87 % 2.07 % 2.39 %
Annualized ratio of net loan charge-offs to average loans and leases 0.71 % 0.08 % 0.14 % (0.03 )% 2.42 %
Allowance for loan and lease losses as a percent of loans and leases 1.37 % 1.53 % 1.58 % 1.55 % 1.48 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 89.71 % 99.16 % 92.40 % 78.82 % 64.09 %
 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
    For the Quarter Ended
December 31, 2012     December 31, 2011
Average         Average        
Balance Interest

 Rate 

Balance Interest

 Rate 

Earning Assets
Securities:
Taxable $ 1,077,167 $ 5,079 1.88 % $ 1,075,605 $ 7,518 2.77 %
Nontaxable(1)   325,864     4,481 5.47 %   227,757     3,600 6.27 %
Total securities   1,403,031     9,560 2.71 %   1,303,362     11,118 3.38 %
Interest bearing deposits 5,580 3 0.21 % 2,065 - - %
Federal funds sold   428     3 2.79 %   73     - - %
Loans and leases:
Commercial and commercial real estate(1) 1,941,618 25,234 5.17 % 1,788,884 24,827 5.51 %
Residential mortgage 318,583 3,380 4.22 % 225,701 2,630 4.62 %
Agricultural and agricultural real estate(1) 301,502 4,094 5.40 % 254,555 3,833 5.97 %
Consumer 241,470 5,906 9.73 % 218,117 5,347 9.73 %
Direct financing leases, net 188 2 4.23 % 521 7 5.33 %
Fees on loans 1,341 - % 1,560 - %
Less: allowance for loan and lease losses   (40,925 )   - %   (43,666 )   - %
Net loans and leases   2,762,436     39,957 5.75 %   2,444,112     38,204 6.20 %
Total earning assets   4,171,475     49,523 4.72 %   3,749,612     49,322 5.22 %
Nonearning Assets   568,412     448,304  
Total Assets $ 4,739,887   $ 49,523 $ 4,197,916   $ 49,322
Interest Bearing Liabilities
Savings $ 1,900,292 $ 1,672 0.35 % $ 1,662,065 $ 1,972 0.47 %
Time, $100,000 and over 295,566 1,174 1.58 % 257,186 1,336 2.06 %
Other time deposits 538,831 2,501 1.85 % 557,930 3,187 2.27 %
Short-term borrowings 214,592 166 0.31 % 215,473 204 0.38 %
Other borrowings   380,989     4,020 4.20 %   374,050     4,086 4.33 %
Total interest bearing liabilities   3,330,270     9,533 1.14 %   3,066,704     10,785 1.40 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 939,818 738,612
Accrued interest and other liabilities   69,357     41,062  
Total noninterest bearing liabilities   1,009,175     779,674  
Stockholders' Equity   400,442     351,538  
Total Liabilities and Stockholders' Equity $ 4,739,887   $ 4,197,916  
Net interest income(1) $ 39,990 $ 38,537
Net interest spread(1) 3.58 % 3.82 %
Net interest income to total earning assets(1) 3.81 % 4.08 %
Interest bearing liabilities to earning assets 79.83 % 81.79 %
 

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

 
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
    For the Year Ended
December 31, 2012     December 31, 2011
Average         Average        
Balance Interest

 Rate 

Balance Interest

 Rate 

Earning Assets
Securities:
Taxable $ 1,015,624 $ 22,129 2.18 % $ 1,069,747 $ 34,095 3.19 %
Nontaxable(1)   283,735     16,459 5.80 %   190,399     12,362 6.49 %
Total securities   1,299,359     38,588 2.97 %   1,260,146     46,457 3.69 %
Interest bearing deposits 5,658 8 0.14 % 3,179 3 0.09 %
Federal funds sold   556     4 0.72 %   430     1 0.23 %
Loans and leases:
Commercial and commercial real estate(1) 1,889,620 100,630 5.33 % 1,747,968 99,986 5.72 %
Residential mortgage 293,850 13,142 4.47 % 198,312 10,172 5.13 %
Agricultural and agricultural real estate(1) 282,519 15,896 5.63 % 255,615 15,553 6.08 %
Consumer 230,192 22,874 9.94 % 216,268 20,526 9.49 %
Direct financing leases, net 271 14 5.17 % 701 38 5.42 %
Fees on loans 5,580 - % 4,939 - %
Less: allowance for loan and lease losses   (39,757 )   - %   (42,693 )   - %
Net loans and leases   2,656,695     158,136 5.95 %   2,376,171     151,214 6.36 %
Total earning assets   3,962,268     196,736 4.97 %   3,639,926     197,675 5.43 %
Nonearning Assets   501,397     431,885  
Total Assets $ 4,463,665   $ 196,736 $ 4,071,811   $ 197,675
Interest Bearing Liabilities
Savings $ 1,763,233 $ 6,736 0.38 % $ 1,589,697 $ 9,090 0.57 %
Time, $100,000 and over 272,338 4,776 1.75 % 265,664 5,928 2.23 %
Other time deposits 531,351 10,718 2.02 % 590,767 14,206 2.40 %
Short-term borrowings 252,849 818 0.32 % 202,183 893 0.44 %
Other borrowings   377,478     16,134 4.27 %   373,119     16,226 4.35 %
Total interest bearing liabilities   3,197,249     39,182 1.23 %   3,021,430     46,343 1.53 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 829,566 667,952
Accrued interest and other liabilities   58,572     37,551  
Total noninterest bearing liabilities   888,138     705,503  
Stockholders' Equity   378,278     344,878  
Total Liabilities and Stockholders' Equity $ 4,463,665   $ 4,071,811  
Net interest income(1) $ 157,554 $ 151,332
Net interest spread(1) 3.74 % 3.90 %
Net interest income to total earning assets(1) 3.98 % 4.16 %
Interest bearing liabilities to earning assets 80.69 % 83.01 %
 

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

 
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
    As of and For the Quarter Ended
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Total Assets                
Dubuque Bank and Trust Company $ 1,476,512 $ 1,478,943 $ 1,385,409 $ 1,407,827 $ 1,382,226
New Mexico Bank & Trust 1,026,952 973,177 998,172 929,804 993,182
Wisconsin Bank & Trust 691,715 511,580 497,372 491,741 524,958
Rocky Mountain Bank 465,614 435,283 443,493 432,902 440,805
Riverside Community Bank 450,863 424,044 360,654 343,232 325,388
Arizona Bank & Trust 307,871 275,053 268,103 239,434 227,993
Galena State Bank & Trust Co. 295,226 295,222 309,516 289,740 290,656
Minnesota Bank & Trust 126,421 109,586 101,704 95,462 81,457
Summit Bank & Trust       119,752         104,066         102,875         98,247         100,994  
Total Deposits
Dubuque Bank and Trust Company $ 1,150,141 $ 1,089,125 $ 959,273 $ 978,854 $ 938,000
New Mexico Bank & Trust 721,445 720,520 725,537 697,060 690,293
Wisconsin Bank & Trust 549,773 424,146 415,277 409,994 429,062
Rocky Mountain Bank 372,135 354,396 356,046 362,307 365,373
Riverside Community Bank 344,005 335,899 305,120 286,529 264,699
Arizona Bank & Trust 243,044 216,851 211,318 183,321 177,457
Galena State Bank & Trust Co. 245,554 247,334 257,800 245,780 243,639
Minnesota Bank & Trust 109,862 91,179 77,119 78,338 66,875
Summit Bank & Trust       93,318         88,540         83,977         81,290         81,224  
Net Income (Loss)
Dubuque Bank and Trust Company $ 4,999 $ 5,485 $ 8,463 $ 9,604 $ 4,846
New Mexico Bank & Trust 1,354 4,395 1,592 2,216 2,197
Wisconsin Bank & Trust 638 1,943 1,547 2,153 2,313
Rocky Mountain Bank 2,029 1,315 2,089 963 493
Riverside Community Bank 482 607 914 369 800
Arizona Bank & Trust 1,346 1,534 981 (215 ) (1,202 )
Galena State Bank & Trust Co. 929 938 1,149 437 1,139
Minnesota Bank & Trust 412 (15 ) 35 (129 ) (157 )
Summit Bank & Trust       (69 )       (1 )       (100 )       (123 )       (154 )
Return on Average Assets
Dubuque Bank and Trust Company 1.34 % 1.50 % 2.39 % 2.88 % 1.44 %
New Mexico Bank & Trust 0.53 1.78 0.66 0.96 0.93
Wisconsin Bank & Trust 0.44 1.53 1.27 1.69 1.83
Rocky Mountain Bank 1.86 1.21 1.94 0.89 0.45
Riverside Community Bank 0.46 0.57 1.05 0.45 0.98
Arizona Bank & Trust 1.87 2.22 1.56 (0.37 ) (2.13 )
Galena State Bank & Trust Co. 1.25 1.24 1.58 0.62 1.54
Minnesota Bank & Trust 1.41 (0.06 ) 0.15 (0.58 ) (0.77 )
Summit Bank & Trust       (0.25 )       -         (0.40 )       (0.50 )       (0.63 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 3.57 % 3.61 % 3.67 % 4.03 % 4.00 %
New Mexico Bank & Trust 3.51 3.50 3.69 4.02 3.85
Wisconsin Bank & Trust 4.16 4.04 4.38 4.41 4.30
Rocky Mountain Bank 4.26 4.35 4.68 4.33 4.06
Riverside Community Bank 3.02 2.44 3.38 3.63 3.64
Arizona Bank & Trust 3.89 3.76 4.19 4.40 4.06
Galena State Bank & Trust Co. 3.31 3.50 3.42 3.89 3.69
Minnesota Bank & Trust 4.04 4.47 4.57 4.75 4.56
Summit Bank & Trust       3.62         3.75         3.89         4.07         3.41  
 
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
    As of
      12/31/2012     9/30/2012     6/30/2012     3/31/2012     12/31/2011
Total Portfolio Loans and Leases                
Dubuque Bank and Trust Company $ 814,400 $ 827,065 $ 824,830 $ 796,789 $ 778,467
New Mexico Bank & Trust 497,837 490,102 500,296 506,424 508,874
Wisconsin Bank & Trust 446,214 355,670 353,152 340,841 333,112
Rocky Mountain Bank 278,252 286,138 280,137 264,964 256,704
Riverside Community Bank 166,852 155,191 158,186 153,174 155,320
Arizona Bank & Trust 189,314 185,186 177,953 150,629 146,346
Galena State Bank & Trust Co. 176,109 172,530 169,160 167,677 157,398
Minnesota Bank & Trust 90,729 85,860 80,815 73,413 58,058
Summit Bank & Trust       77,264         67,909         67,932         63,658         62,422  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 9,217 $ 9,760 $ 9,454 $ 9,584 $ 9,365
New Mexico Bank & Trust 6,837 7,834 8,705 7,110 6,633
Wisconsin Bank & Trust 4,164 3,719 3,695 3,629 3,458
Rocky Mountain Bank 4,072 4,135 4,325 4,204 3,865
Riverside Community Bank 3,240 3,122 3,114 3,206 2,834
Arizona Bank & Trust 4,444 4,723 5,390 5,315 4,627
Galena State Bank & Trust Co. 2,031 1,932 1,808 1,854 1,835
Minnesota Bank & Trust 961 915 822 748 588
Summit Bank & Trust       1,204         1,478         1,370         1,132         1,012  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 2,783 $ 2,378 $ 2,508 $ 3,107 $ 3,634
New Mexico Bank & Trust 10,711 8,455 10,856 13,368 15,161
Wisconsin Bank & Trust 5,433 6,673 7,463 7,482 8,074
Rocky Mountain Bank 8,174 6,167 6,005 7,787 8,662
Riverside Community Bank 3,473 4,685 5,222 5,458 6,729
Arizona Bank & Trust 3,549 5,409 5,645 5,755 7,927
Galena State Bank & Trust Co. 5,080 3,242 3,778 3,699 3,853
Minnesota Bank & Trust 5 5 6 6 6
Summit Bank & Trust       3,159         2,913         2,691         2,709         2,848  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.13 % 1.18 % 1.15 % 1.20 % 1.20 %
New Mexico Bank & Trust 1.37 1.60 1.74 1.40 1.30
Wisconsin Bank & Trust 0.93 1.05 1.05 1.06 1.04
Rocky Mountain Bank 1.46 1.45 1.54 1.59 1.51
Riverside Community Bank 1.94 2.01 1.97 2.09 1.82
Arizona Bank & Trust 2.35 2.55 3.03 3.53 3.16
Galena State Bank & Trust Co. 1.15 1.12 1.07 1.11 1.17
Minnesota Bank & Trust 1.06 1.07 1.02 1.02 1.01
Summit Bank & Trust       1.56         2.18         2.02         1.78         1.62  
 


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