HEARTLAND FINANCIAL USA INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended March 31, 2005

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For transition period __________ to __________

Commission File Number: 0-24724

HEARTLAND FINANCIAL USA, INC.

(Exact name of Registrant as specified in its charter)

(State or other jurisdiction of incorporation or organization)

(I.R.S. employer identification number)

1398 Central Avenue, Dubuque, Iowa 52001

(Address of principal executive offices)(Zip Code)

(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act of 1934). Yes x No o

Indicate the number of shares outstanding of each of the classes of Registrant's common stock as of the latest practicable date: As of May 5, 2005, the Registrant had outstanding 16,440,476 shares of common stock, $1.00 par value per share.

HEARTLAND FINANCIAL USA, INC.

Form 10-Q Quarterly Report

Part I

Item 1.		Financial Statements
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.		Quantitative and Qualitative Disclosures About Market Risk
Item 4.		Controls and Procedures

Part II

Item 1.		Legal Proceedings
Item 2.		Unregistered Sales of Issuer Securities and Use of Proceeds
Item 3.		Defaults Upon Senior Securities
Item 4.		Submission of Matters to a Vote of Security Holders
Item 5.		Other Information
Item 6.		Exhibits

		Form 10-Q Signature Page

ITEM 1. FINANCIAL STATEMENTS

HEARTLAND FINANCIAL USA, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data)

	March 31, 2005 (Unaudited)			December 31, 2004
ASSETS
Cash and due from banks	$	69,442		$	68,919
Federal funds sold and other short-term investments		14,091			4,830
Cash and cash equivalents		83,533			73,749
Time deposits in other financial institutions		1,190			1,178
Securities:
Trading, at fair value		539			521
Available for sale, at fair value (cost of $525,664 at March 31, 2005, and $547,585 at December 31, 2004)		523,909			552,763
Loans held for sale		41,710			32,161
Gross loans and leases:
Loans and leases		1,783,256			1,772,954
Allowance for loan and lease losses		(26,011	)		(24,973	)
Loans and leases, net		1,757,245			1,747,981
Assets under operating leases		37,379			35,188
Premises, furniture and equipment, net		85,234			79,353
Other real estate, net		423			425
Goodwill		35,398			35,374
Other intangible assets, net		9,855			10,162
Other assets		55,322			60,200
TOTAL ASSETS	$	2,631,737		$	2,629,055
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Demand	$	314,430		$	323,014
Savings		750,982			750,870
Time		925,163			909,962
Total deposits		1,990,575			1,983,846
Short-term borrowings		221,081			231,475
Other borrowings		215,423			196,193
Accrued expenses and other liabilities		28,659			41,759
TOTAL LIABILITIES		2,455,738			2,453,273
STOCKHOLDERS’ EQUITY:
Preferred stock (par value $1 per share; authorized, 184,000 shares; none issued or outstanding)		-			-
Series A Junior Participating preferred stock (par value $1 per share; authorized, 16,000 shares; none issued or outstanding)		-			-
Common stock (par value $1 per share; authorized, 20,000,000 shares at March 31, 2005, and December 31, 2004; issued 16,547,482 shares at March 31, 2005, and December 31, 2004)		16,547			16,547
Capital surplus		40,303			40,446
Retained earnings		121,746			117,800
Accumulated other comprehensive income (loss)		(1,257	)		2,889
Treasury stock at cost (66,400 shares at March 31, 2005, and 106,424 shares at December 31, 2004, respectively)		(1,340	)		(1,900	)
TOTAL STOCKHOLDERS’ EQUITY		175,999			175,782
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,631,737		$	2,629,055

See accompanying notes to consolidated financial statements

HEARTLAND FINANCIAL USA, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except per share data)

	Three Months Ended
	March 31, 2005			March 31, 2004
INTEREST INCOME:
Interest and fees on loans and leases	$	29,988		$	21,760
Interest on securities:
Taxable		3,531			3,608
Nontaxable		1,325			1,026
Interest on federal funds sold and other short-term investments		47			5
Interest on interest bearing deposits in other financial institutions		68			44
TOTAL INTEREST INCOME		34,959			26,443
INTEREST EXPENSE:
Interest on deposits		9,182			6,569
Interest on short-term borrowings		1,264			597
Interest on other borrowings		2,506			2,434
TOTAL INTEREST EXPENSE		12,952			9,600
NET INTEREST INCOME		22,007			16,843
Provision for loan and lease losses		1,364			1,356
NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES		20,643			15,487
NONINTEREST INCOME:
Service charges and fees		2,707			2,127
Trust fees		1,595			1,020
Brokerage commissions		223			278
Insurance commissions		137			224
Securities gains, net		53			1,540
Gain on trading account securities		18			85
Rental income on operating leases		3,571			3,462
Gain on sale of loans		712			527
Valuation adjustment on mortgage servicing rights		(2	)		(73	)
Other noninterest income		701			531
TOTAL NONINTEREST INCOME		9,715			9,721
NONINTEREST EXPENSES:
Salaries and employee benefits		11,182			8,821
Occupancy		1,626			1,063
Furniture and equipment		1,367			1,127
Depreciation on equipment under operating leases		2,928			2,861
Outside services		1,928			1,501
FDIC deposit insurance assessment		70			51
Advertising		809			539
Other intangibles amortization		270			88
Other noninterest expenses		2,571			1,965