Attached files
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| 8-K - FORM 8-K - HEARTLAND FINANCIAL USA INC | q320118kcoverpage.htm |
CONTACT: | FOR IMMEDIATE RELEASE |
John K. Schmidt | October 24, 2011 |
Chief Operating Officer | |
Chief Financial Officer | |
(563) 589-1994 | |
jschmidt@htlf.com | |
HEARTLAND FINANCIAL USA, INC. REPORTS THIRD QUARTER 2011 RESULTS
Quarterly Highlights
§ | Net interest margin of 4.14% |
§ | Provision for loan losses at $7.7 million |
§ | Loan growth of $22.4 million since June 30, 2011 |
§ | Deposit growth of $92.9 million since June 30, 2011 |
§ | Entered SBLF and exited TARP |
§ | Repurchased Warrant from U.S. Treasury |
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (in millions) | $ | 7.4 | $ | 6.9 | $ | 21.8 | $ | 17.3 | |||||||
Net income available to common stockholders (in millions) | 3.4 | 5.6 | 15.2 | 13.4 | |||||||||||
Diluted earnings per common share | 0.20 | 0.34 | 0.92 | 0.81 | |||||||||||
Return on average assets | 0.33 | % | 0.55 | % | 0.50 | % | 0.45 | % | |||||||
Return on average common equity | 4.97 | 8.76 | 7.77 | 7.32 | |||||||||||
Net interest margin | 4.14 | 4.18 | 4.18 | 4.09 | |||||||||||
“We are very pleased with Heartland's solid third quarter earnings of $7.4 million. Most performance measures are moving in a positive direction with growth in loans, deposits and noninterest income. We are especially gratified with the fact that our net interest margin has remained above four percent for nine consecutive quarters.” Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc. | ||||
Dubuque, Iowa, Monday, October 24, 2011-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $7.4 million for the quarter ended September 30, 2011, compared to $6.9 million for the third quarter of 2010, an increase of $468,000 or 7 percent. Net income available to common stockholders was $3.4 million, or $0.20 per diluted common share, for the quarter ended September 30, 2011, compared to $5.6 million, or $0.34 per diluted common share, for the third quarter of 2010. Return on average common equity was 4.97 percent and return on average assets was 0.33 percent for the third quarter of 2011, compared to 8.76 percent and 0.55 percent, respectively, for the same quarter in 2010.
Net income for the third quarter of 2011 remained higher than net income for the third quarter of 2010 despite a $2.9 million or 61 percent increase in provision for loan losses, which resulted primarily from weaknesses recently identified in one significant loan relationship. Earnings for the third quarter of 2011 in comparison to the third quarter of 2010 were positively affected by increased gains on sale of loans, decreased losses on repossessed assets and a smaller provision for income taxes. Net income available to common stockholders decreased significantly during the third quarter of 2011 primarily due to the recognition of $2.6 million in remaining unamortized discount on preferred stock. On September 15, 2011, Heartland joined the Small Business Lending Fund ("SBLF"). Simultaneous with receipt of the SBLF funds, Heartland redeemed the $81.7 million of preferred stock issued to the U.S. Treasury in December 2008 under the Capital Purchase Program, a part of the Troubled Asset Relief Program ("TARP"). Exclusive of this one-time event, net income available to common stockholders for the third quarter of 2011 would have been $6.0 million or $0.36 per diluted common share.
Net income recorded for the first nine months of 2011 was $21.8 million, compared to $17.3 million recorded during the first nine months of 2010, an increase of $4.5 million or 26 percent. Net income available to common stockholders was $15.2 million, or $0.92 per diluted common share, for the nine months ended September 30, 2011, compared to $13.4 million, or $0.81 per diluted common share, earned during the first nine months of 2010. Return on average common equity was 7.77 percent and return on average assets was 0.50 percent for the first nine months of 2011, compared to 7.32 percent and 0.45 percent, respectively, for the same period in 2010.
Earnings for the first nine months of 2011 compared to the first nine months of 2010 were positively affected by increased securities gains, gains on sale of loans and net interest income, combined with reductions in net losses on repossessed assets, FDIC insurance assessments and provision for loan and lease losses. The effect of these improvements was partially offset by increases in salaries and employee benefits, professional fees and other noninterest expenses.
Commenting on Heartland's quarterly results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer, said, “We are very pleased with Heartland's solid third quarter earnings of $7.4 million. Most performance measures are moving in a positive direction with growth in loans, deposits and noninterest income. We are especially gratified with the fact that our net interest margin has remained above four percent for nine consecutive quarters.”
Net Interest Margin Remains Above 4.00 Percent
Net interest margin, expressed as a percentage of average earning assets, was 4.14 percent during the third quarter of 2011 compared to 4.18 percent for the third quarter of 2010. For the nine-month periods ended September 30, net interest margin was 4.18 percent during 2011 and 4.09 percent during 2010. The continuation of a net interest margin above 4.00 percent has been a direct result of Heartland's price discipline, the effect of which would have been more significant had it not been for the amount of foregone interest on nonaccrual loans not covered by loss share agreements, which had balances of $72.6 million or 3.06 percent of total loans and leases at September 30, 2011, and $85.2 million or 3.61 percent of total loans and leases at September 30, 2010.
Fuller said, “Our net interest margin has been relatively stable throughout 2011 with a slight decline during the third quarter to 4.14 percent. Looking ahead, it will be increasingly difficult to manage our net interest margin above four percent. We have moved closer to a bottom on our deposit rates, reinvestment rates on maturing securities have fallen dramatically and our loan rates are presently impacted by competition for new loans.”
Net interest income on a tax-equivalent basis totaled $37.8 million during the third quarter of 2011, a decrease of $194,000 or 1 percent from the $38.0 million recorded during the third quarter of 2010. For the first nine months of 2011, net interest income on a tax-equivalent basis was $112.8 million, an increase of $1.9 million or 2 percent from the $110.9 million recorded during the first nine months of 2010.
On a tax-equivalent basis, interest income in the third quarter of 2011 was $49.1 million compared to $51.5 million in the third quarter of 2010, a decrease of $2.4 million or 5 percent. The $21.6 million or 1 percent growth in average earning assets during the third quarter of 2011 compared to the same period in 2010 was not enough to compensate for the decrease in the average interest rate earned on these assets which was 5.38 percent during the third quarter of 2011 compared to 5.67 percent during the third quarter of 2010. A majority of the reduction in the average interest rate earned was in the securities portfolio which earned 3.56 percent during the third quarter of 2011 compared to 4.05 percent during the third quarter of 2010. Additionally, average total securities as a percent of total earning assets was 35 percent for the third quarter of 2011 compared to 34 percent during the third quarter of 2010. For the first nine months of 2011, interest income on a tax-equivalent basis was $148.4 million compared to $153.8 million during the same period in 2010, a decrease of $5.4 million or 4 percent. The $25.7 million or 1 percent growth in average earning assets during the first nine months of 2011 compared to the same period in 2010 was offset by the impact of a decrease in the average interest rate earned on these assets which was 5.50 percent during the first nine months of 2011 compared to 5.74 percent during the first nine months of 2010, primarily due to the decrease in the average interest rate earned on total securities which was 3.79 percent in 2011 compared to 4.28 percent in 2010.
Interest expense for the third quarter of 2011 was $11.4 million, a decrease of $2.2 million or 16 percent from $13.6 million in the third quarter of 2010. On a nine-month comparative basis, interest expense decreased $7.4 million or 17 percent. Average interest bearing liabilities decreased $81.9 million or 3 percent for the quarter ended September 30, 2011, as compared to the same quarter in 2010. For the nine months ended September 30, 2011, average interest bearing liabilities decreased $128.1 million or 4 percent as compared to the first nine months of 2010. These decreases resulted primarily from an outflow of higher cost certificates of deposit and a reduction in other borrowings. The average interest rates paid on Heartland's interest bearing deposits and borrowings declined 24 basis points to 1.50 percent in the third quarter of 2011 from 1.74 percent in the third quarter of 2010. On a nine-month comparative basis, the average interest rate paid on Heartland's deposits and borrowings declined 25 basis points to 1.58 percent in 2011 from 1.83 percent in 2010.
Noninterest Income Increases; Noninterest Expense Decreases
Noninterest income was $13.3 million during the third quarter of 2011 compared to $12.6 million during the third quarter of 2010, an increase of $653,000 or 5 percent. Included in the noninterest income for the third quarter of 2010 was a $1.2 million valuation adjustment on mortgage servicing rights that did not recur in 2011. The category contributing most significantly to this improvement was gains on sale of loans, which resulted from increased refinancing activity as long-term mortgage loan rates fell to all-time lows, combined with the recent opening of loan production offices in Reno, Nevada; Austin, Texas; and San Diego, California. The improvement in gains on sale of loans was offset by reduced loan servicing income and a decrease in other noninterest income, primarily attributable to payment to the FDIC for recoveries on loans covered under loss share agreements. For the nine-month period ended September 30, noninterest income was $40.5 million in 2011 compared to $34.0 million in 2010, an increase of $6.5 million or 19 percent. Securities gains totaled $8.9 million for the first nine months of 2011 compared to $4.7 million for the first nine months of 2010. Volatility in the bond market provided opportunities in 2011 to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. One such strategy was the sale of taxable municipal bonds and the reinvestment into tax-exempt municipal bonds. Another strategy initiated in the second quarter of 2011 shifted a portion of the securities portfolio from agencies to treasuries and shorter-term mortgage-backed securities. Other categories contributing to the increase for the nine-month comparative period were service charges and fees, trust fees, brokerage and insurance commissions, gains on sale of loans and other noninterest income, which included gains on loans covered under loss share agreements.
Fuller commented, “After only nine months in operation, our new Heartland Mortgage and National Residential units have transformed our mortgage origination business. As these units expand both within and outside the Heartland footprint, we are optimistic that we will see continued increases in mortgage loan originations from both new purchases and refinancing activity.”
Loan servicing income decreased $781,000 or 42 percent for the third quarter of 2011 as compared to the third quarter of 2010 and $981,000 or 20 percent for the first nine months of 2011 compared to the first nine months of 2010. 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
$743,000 during the third quarter of 2011 compared to $1.8 million during the third quarter of 2010 and amortization of mortgage servicing rights was $1.1 million during the third quarter of 2011 compared to $1.3 million during the third quarter of 2010. 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 $908,000 during the third quarter of 2011 compared to $778,000 during the third quarter of 2010. The portfolio of mortgage loans serviced for others by Heartland totaled $1.47 billion at September 30, 2011, compared to $1.29 billion at September 30, 2010.
For the third quarter of 2011, noninterest expense totaled $31.9 million, a decrease of $1.6 million or 5 percent from the same quarter of 2010. Included in noninterest expense during the third quarter of 2010 was a $1.6 million goodwill impairment charge. Other reductions in noninterest expense during the third quarter of 2011 compared to the third quarter of 2010 were $533,000 or 40 percent in FDIC insurance assessments and $2.8 million or 67 percent in net losses on repossessed assets. The effect of these reductions was partially offset by a $2.2 million or 14 percent increase in salaries and employee benefits, a large portion of which resulted from the expansion of residential loan origination via the addition of National Residential Mortgage. For the nine-month period ended September 30, noninterest expense totaled $97.1 million in 2011 compared to $91.9 million in 2010, a $5.2 million or 6 percent increase. Contributing to this increase in noninterest expense was a $6.9 million or 15 percent increase in salaries and employee benefits for the nine-month comparative period, primarily attributable to the expansion of residential loan origination. Also contributing to the increase in noninterest expense was additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants, and increases in other noninterest expenses, a portion of which was associated with a writedown on land in Phoenix, Arizona, which had originally been purchased for branch expansion but has now been listed for sale. The effect of these increases was mitigated by a $1.2 million or 29 percent decrease in FDIC insurance assessments and a $2.4 million or 30 percent decrease in net losses on repossessed assets.
Heartland's effective tax rate was 28.37 percent for the first nine months of 2011 compared to 32.65 percent for the first nine months of 2010. Excluding the non-deductible goodwill impairment charge, Heartland's effective tax rate was 30.69 percent for the first nine months of 2010. During the third quarter of 2011, Heartland's income taxes included a $404,000 refund for state taxes attributable to the 2007 and 2008 tax years. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $599,000 during the first nine months of 2011 compared to $163,000 during the first nine months of 2010. 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 25.87 percent during the first nine months of 2011 compared to 26.44 percent during the first nine months of 2010. The tax-equivalent adjustment for this tax-exempt interest income was $4.2 million during the first nine months of 2011 compared to $3.7 million during the first nine months of 2010.
Loan Demand Picks Up; Deposit Growth Continues With Improving Mix
At September 30, 2011, total assets were $4.11 billion, an increase of $113.2 million or 3 percent, over total assets of $4.00 billion at December 31, 2010. Securities represented 32 percent of total assets at both September 30, 2011, and December 31, 2010.
Total loans and leases, exclusive of those covered by loss share agreements, were $2.37 billion at September 30, 2011, compared to $2.34 billion at year-end 2010, an increase of $30.2 million or 2 percent annualized. Commercial and commercial real estate loans, which totaled $1.73 billion at September 30, 2011, increased $6.6 million or 1 percent annualized since year-end 2010. Residential mortgage loans, which totaled $179.6 million at September 30, 2011, increased $15.9 million or 13 percent annualized since year-end 2010. Agricultural and agricultural real estate loans, which totaled $256.9 million at September 30, 2011, increased $5.9 million or 3 percent annualized since year-end 2010. Consumer loans, which totaled $217.0 million at September 30, 2011, increased $2.5 million or 1 percent annualized since year-end 2010.
“Loan demand picked up in the third quarter with loans increasing at a 4 percent annualized rate. We believe this is merely the beginning of a growth trend in our loan portfolio as we redouble our efforts to reach out to qualified borrowers,” added Fuller.
Fuller also noted, “The Small Business Lending Fund, in which we are now participating, provides added incentive for us to reach out within our communities to enhance job creation and economic growth. Fueled by the possibility
of lower funding cost, we will provide affordable credit to small commercial and agricultural clients, which will in turn help to increase employment and assist the economic recovery in the communities we serve.”
Total deposits were $3.17 billion at September 30, 2011, compared to $3.03 billion at year-end 2010, an increase of $139.6 million or 6 percent annualized. The composition of Heartland's deposits continued to shift from higher cost certificates of deposit to no cost demand deposits during the third quarter of 2011, as demand deposits increased $112.3 million or 26 percent annualized since year-end 2010. Time deposits, exclusive of brokered deposits, experienced a decrease of $75.1 million or 12 percent annualized since year-end 2010. At September 30, 2011, brokered time deposits totaled $44.2 million or 1 percent of total deposits compared to $37.3 million or 1 percent of total deposits at December 31, 2010.
Fuller said, “Demand deposit growth continues at a significant rate, increasing by $111 million or 19 percent over the third quarter in 2010. The increase in demand deposits was effectively matched with a corresponding decrease in time deposits. The result is an improving mix of total deposits, with demand deposits representing 22 percent, savings representing 52 percent and time deposits representing 26 percent.”
Increase in Provision for Loan Losses; Slight Increase in Nonperforming Assets
The allowance for loan and lease losses at September 30, 2011, was 1.86 percent of loans and leases and 60.85 percent of nonperforming loans compared to 1.82 percent of loans and leases and 47.12 percent of nonperforming loans at December 31, 2010, and 1.89 percent of loans and leases and 52.51 percent of nonperforming loans at September 30, 2010. The provision for loan losses was $7.7 million for the third quarter of 2011 compared to $4.8 million for the third quarter of 2010, a $2.9 million or 61 percent increase. A majority of the increase in provision for loan losses during the third quarter of 2011 was due to the establishment of an impairment reserve against a credit relationship in the Midwest due to concerns regarding continued repayment ability. While payments have remained current, future cash flows to service all debt under this relationship are beginning to come into question. For the first nine months of 2011, provision for loan losses was $21.6 million compared to $23.6 million for the first nine months of 2010. Additions to the allowance for loan and lease losses continued during 2011 because of the continued depressed economic conditions that impact individual credits and the impact those conditions have on the appraised values of collateral. When updated appraisals have been obtained, many reflect a decline in property values due primarily to a lack of recent comparable sales and an extension of absorption periods.
Nonperforming loans, exclusive of those covered under the loss sharing agreements, were $72.6 million or 3.06 percent of total loans and leases at September 30, 2011, compared to $90.6 million or 3.87 percent of total loans and leases at December 31, 2010, and $85.2 million or 3.61 percent of total loans and leases at September 30, 2010. Nonperforming loans increased $4.5 million or 7 percent since June 30, 2011, primarily as a result of the continued depressed economic conditions in our Western markets. Approximately 62 percent, or $44.8 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 18 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $12.1 million originated by Summit Bank & Trust, $10.2 million originated by Arizona Bank & Trust, $9.5 million originated by Rocky Mountain Bank, $5.1 million originated by Wisconsin Community Bank, $4.9 million originated by New Mexico Bank & Trust and $3.0 million originated by Galena State Bank and Trust Company. The portion of Heartland's nonperforming loans covered by government guarantees was $3.1 million at September 30, 2011. The industry breakdown for nonperforming loans with individual balances exceeding $1.0 million, as identified using the North American Industry Classification System (NAICS), was $16.5 million for lot and land development, $11.5 million to lessors of real estate, $3.4 million for other activities related to real estate and $2.3 million for construction and development. The remaining $11.1 million was distributed among six other industries.
Delinquencies in each of the loan portfolios continue to be well-managed and no significant adverse trends have been identified. Loans delinquent 30 to 89 days as a percent of total loans were 0.54 percent at September 30, 2011, compared to 0.60 percent at June 30, 2011, 0.61 percent at March 31, 2011, 0.67 percent at December 31, 2010, and 1.65 percent at September 30, 2010.
Other real estate owned was $39.2 million at September 30, 2011, compared to $32.0 million at December 31, 2010, and $32.4 million at September 30, 2010. 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 the first nine months of 2011, $16.4 million of other real estate owned was sold, $6.2 million during the third quarter, $4.9 million during the second quarter and $5.3 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 third quarter of 2011 and the first nine months of 2011:
(Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
June 30, 2011 | $ | 72,590 | $ | 39,075 | $ | 188 | $ | 111,853 | |||||||
Loan foreclosures | (7,505 | ) | 7,326 | 179 | — | ||||||||||
Net loan charge offs | (4,134 | ) | — | — | (4,134 | ) | |||||||||
New nonperforming loans | 19,122 | — | — | 19,122 | |||||||||||
Reduction of nonperforming loans(1) | (3,558 | ) | — | — | (3,558 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (6,459 | ) | (25 | ) | (6,484 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (754 | ) | (32 | ) | (786 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | 88 | 88 | |||||||||||
September 30, 2011 | $ | 76,515 | $ | 39,188 | $ | 398 | $ | 116,101 | |||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||
(Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
December 31, 2010 | $ | 95,498 | $ | 32,002 | $ | 302 | $ | 127,802 | |||||||
Loan foreclosures | (27,445 | ) | 27,200 | 245 | — | ||||||||||
Net loan charge offs | (20,079 | ) | — | — | (20,079 | ) | |||||||||
New nonperforming loans | 54,042 | — | — | 54,042 | |||||||||||
Reduction of nonperforming loans(1) | (25,501 | ) | — | — | (25,501 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (16,089 | ) | (170 | ) | (16,259 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (3,925 | ) | (32 | ) | (3,957 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | 53 | 53 | |||||||||||
September 30, 2011 | $ | 76,515 | $ | 39,188 | $ | 398 | $ | 116,101 | |||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||
Net charge-offs on loans during the third quarter of 2011 were $4.1 million compared to $8.4 million during the third quarter of 2010. A large portion of the net charge-offs in both years was related to nonfarm nonresidential real estate and construction, land development and other land loans.
“We are disappointed with the increased provision and the uptick in nonperforming loans during the quarter and will continue to focus significant resources on the reduction and resolution of nonperforming assets. Overall, we continue to believe that the trend is favorable, with nonperforming loans down 20 percent from their peak at year-end 2010,” Fuller concluded.
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-941-8609 at least five minutes before start time, or log onto www.htlf.com. If you are unable to participate on the call, a replay will be available until October 22, 2012, by logging onto www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a $4.1 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 61 banking locations in 42 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona,
Montana, Colorado and Minnesota. 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 loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (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, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest Income | |||||||||||||||
Interest and fees on loans and leases | $ | 37,393 | $ | 38,756 | $ | 111,839 | $ | 114,354 | |||||||
Interest on securities and other: | |||||||||||||||
Taxable | 6,826 | 8,225 | 21,820 | 26,618 | |||||||||||
Nontaxable | 3,370 | 3,282 | 10,452 | 9,178 | |||||||||||
Interest on federal funds sold | 2 | — | 3 | 1 | |||||||||||
Interest on deposits in other financial institutions | — | 1 | 1 | 13 | |||||||||||
Total Interest Income | 47,591 | 50,264 | 144,115 | 150,164 | |||||||||||
Interest Expense | |||||||||||||||
Interest on deposits | 7,028 | 9,033 | 22,729 | 29,748 | |||||||||||
Interest on short-term borrowings | 205 | 305 | 689 | 830 | |||||||||||
Interest on other borrowings | 4,123 | 4,213 | 12,140 | 12,380 | |||||||||||
Total Interest Expense | 11,356 | 13,551 | 35,558 | 42,958 | |||||||||||
Net Interest Income | 36,235 | 36,713 | 108,557 | 107,206 | |||||||||||
Provision for loan and lease losses | 7,727 | 4,799 | 21,581 | 23,648 | |||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 28,508 | 31,914 | 86,976 | 83,558 | |||||||||||
Noninterest Income | |||||||||||||||
Service charges and fees | 3,657 | 3,665 | 10,617 | 10,363 | |||||||||||
Loan servicing income | 1,081 | 1,862 | 3,928 | 4,909 | |||||||||||
Trust fees | 2,384 | 2,267 | 7,519 | 6,778 | |||||||||||
Brokerage and insurance commissions | 918 | 739 | 2,622 | 2,236 | |||||||||||
Securities gains, net | 2,085 | 2,158 | 8,930 | 4,664 | |||||||||||
Gain (loss) on trading account securities | (83 | ) | 18 | 214 | (198 | ) | |||||||||
Gains on sale of loans | 3,183 | 2,394 | 5,893 | 4,275 | |||||||||||
Valuation adjustment on mortgage servicing rights | — | (1,239 | ) | — | (1,239 | ) | |||||||||
Income on bank owned life insurance | 208 | 396 | 942 | 1,003 | |||||||||||
Other noninterest income | (171 | ) | 349 | (126 | ) | 1,245 | |||||||||
Total Noninterest Income | 13,262 | 12,609 | 40,539 | 34,036 | |||||||||||
Noninterest Expense | |||||||||||||||
Salaries and employee benefits | 17,736 | 15,502 | 53,402 | 46,499 | |||||||||||
Occupancy | 2,396 | 2,287 | 6,995 | 6,782 | |||||||||||
Furniture and equipment | 1,392 | 1,515 | 4,161 | 4,561 | |||||||||||
Professional fees | 3,110 | 2,621 | 9,182 | 7,381 | |||||||||||
FDIC insurance assessments | 798 | 1,331 | 2,929 | 4,135 | |||||||||||
Advertising | 1,191 | 906 | 3,154 | 2,772 | |||||||||||
Intangible assets amortization | 141 | 149 | 431 | 445 | |||||||||||
Goodwill impairment charge | — | 1,639 | — | 1,639 | |||||||||||
Net loss on repossessed assets | 1,409 | 4,219 | 5,552 | 7,919 | |||||||||||
Other noninterest expenses | 3,690 | 3,277 | 11,287 | 9,789 | |||||||||||
Total Noninterest Expense | 31,863 | 33,446 | 97,093 | 91,922 | |||||||||||
Income Before Income Taxes | 9,907 | 11,077 | 30,422 | 25,672 | |||||||||||
Income taxes | 2,549 | 4,187 | 8,631 | 8,382 | |||||||||||
Net Income | 7,358 | 6,890 | 21,791 | 17,290 | |||||||||||
Net income (loss) attributable to noncontrolling interest, net of tax | (20 | ) | 30 | 5 | 80 | ||||||||||
Net Income Attributable to Heartland | 7,338 | 6,920 | 21,796 | 17,370 | |||||||||||
Preferred dividends and discount | (3,947 | ) | (1,336 | ) | (6,619 | ) | (4,008 | ) | |||||||
Net Income Available to Common Stockholders | $ | 3,391 | $ | 5,584 | $ | 15,177 | $ | 13,362 | |||||||
Earnings per common share-diluted | $ | 0.20 | $ | 0.34 | $ | 0.92 | $ | 0.81 | |||||||
Weighted average shares outstanding-diluted | 16,585,021 | 16,465,650 | 16,569,376 | 16,453,670 | |||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||||||
Interest Income | |||||||||||||||||||
Interest and fees on loans and leases | $ | 37,393 | $ | 37,480 | $ | 36,966 | $ | 37,440 | $ | 38,756 | |||||||||
Interest on securities and other: | |||||||||||||||||||
Taxable | 6,826 | 7,583 | 7,411 | 7,889 | 8,225 | ||||||||||||||
Nontaxable | 3,370 | 3,518 | 3,564 | 3,438 | 3,282 | ||||||||||||||
Interest on federal funds sold | 2 | 1 | — | — | — | ||||||||||||||
Interest on deposits in other financial institutions | — | — | 1 | 1 | 1 | ||||||||||||||
Total Interest Income | 47,591 | 48,582 | 47,942 | 48,768 | 50,264 | ||||||||||||||
Interest Expense | |||||||||||||||||||
Interest on deposits | 7,028 | 7,675 | 8,026 | 8,524 | 9,033 | ||||||||||||||
Interest on short-term borrowings | 205 | 225 | 259 | 330 | 305 | ||||||||||||||
Interest on other borrowings | 4,123 | 4,081 | 3,936 | 4,068 | 4,213 | ||||||||||||||
Total Interest Expense | 11,356 | 11,981 | 12,221 | 12,922 | 13,551 | ||||||||||||||
Net Interest Income | 36,235 | 36,601 | 35,721 | 35,846 | 36,713 | ||||||||||||||
Provision for loan and lease losses | 7,727 | 3,845 | 10,009 | 8,860 | 4,799 | ||||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 28,508 | 32,756 | 25,712 | 26,986 | 31,914 | ||||||||||||||
Noninterest Income | |||||||||||||||||||
Service charges and fees | 3,657 | 3,599 | 3,361 | 3,537 | 3,665 | ||||||||||||||
Loan servicing income | 1,081 | 1,298 | 1,549 | 2,323 | 1,862 | ||||||||||||||
Trust fees | 2,384 | 2,656 | 2,479 | 2,428 | 2,267 | ||||||||||||||
Brokerage and insurance commissions | 918 | 856 | 848 | 948 | 739 | ||||||||||||||
Securities gains, net | 2,085 | 4,756 | 2,089 | 2,170 | 2,158 | ||||||||||||||
Gain (loss) on trading account securities | (83 | ) | 81 | 216 | 107 | 18 | |||||||||||||
Gains on sale of loans | 3,183 | 1,308 | 1,402 | 3,813 | 2,394 | ||||||||||||||
Valuation adjustment on mortgage servicing rights | — | — | — | 1,239 | (1,239 | ) | |||||||||||||
Income on bank owned life insurance | 208 | 331 | 403 | 463 | 396 | ||||||||||||||
Other noninterest income | (171 | ) | (216 | ) | 261 | 1,265 | 349 | ||||||||||||
Total Noninterest Income | 13,262 | 14,669 | 12,608 | 18,293 | 12,609 | ||||||||||||||
Noninterest Expense | |||||||||||||||||||
Salaries and employee benefits | 17,736 | 17,480 | 18,186 | 16,892 | 15,502 | ||||||||||||||
Occupancy | 2,396 | 2,213 | 2,386 | 2,339 | 2,287 | ||||||||||||||
Furniture and equipment | 1,392 | 1,360 | 1,409 | 1,543 | 1,515 | ||||||||||||||
Professional fees | 3,110 | 3,053 | 3,019 | 3,065 | 2,621 | ||||||||||||||
FDIC insurance assessments | 798 | 786 | 1,345 | 1,306 | 1,331 | ||||||||||||||
Advertising | 1,191 | 1,113 | 850 | 1,058 | 906 | ||||||||||||||
Intangible assets amortization | 141 | 144 | 146 | 146 | 149 | ||||||||||||||
Goodwill impairment charge | — | — | — | — | 1,639 | ||||||||||||||
Net loss on repossessed assets | 1,409 | 2,511 | 1,632 | 7,345 | 4,219 | ||||||||||||||
Other noninterest expenses | 3,690 | 3,683 | 3,914 | 3,623 | 3,277 | ||||||||||||||
Total Noninterest Expense | 31,863 | 32,343 | 32,887 | 37,317 | 33,446 | ||||||||||||||
Income Before Income Taxes | 9,907 | 15,082 | 5,433 | 7,962 | 11,077 | ||||||||||||||
Income taxes | 2,549 | 4,870 | 1,212 | 1,464 | 4,187 | ||||||||||||||
Net Income | 7,358 | 10,212 | 4,221 | 6,498 | 6,890 | ||||||||||||||
Net income (loss) attributable to noncontrolling interest, net of tax | (20 | ) | 9 | 16 | 35 | 30 | |||||||||||||
Net Income Attributable to Heartland | 7,338 | 10,221 | 4,237 | 6,533 | 6,920 | ||||||||||||||
Preferred dividends and discount | (3,947 | ) | (1,336 | ) | (1,336 | ) | (1,336 | ) | (1,336 | ) | |||||||||
Net Income Available to Common Stockholders | $ | 3,391 | $ | 8,885 | $ | 2,901 | $ | 5,197 | $ | 5,584 | |||||||||
Earnings per common share-diluted | $ | 0.20 | $ | 0.54 | $ | 0.18 | $ | 0.31 | $ | 0.34 | |||||||||
Weighted average shares outstanding-diluted | 16,585,021 | 16,568,701 | 16,557,353 | 16,515,657 | 16,465,650 | ||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
As Of | |||||||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 81,605 | $ | 148,388 | $ | 86,278 | $ | 62,572 | $ | 141,702 | |||||||||
Securities | 1,323,464 | 1,193,480 | 1,244,447 | 1,264,564 | 1,211,297 | ||||||||||||||
Loans held for sale | 36,529 | 15,770 | 8,317 | 23,904 | 41,047 | ||||||||||||||
Loans and leases: | |||||||||||||||||||
Held to maturity | 2,374,186 | 2,351,785 | 2,360,604 | 2,343,987 | 2,361,567 | ||||||||||||||
Loans covered by loss share agreements | 14,766 | 16,190 | 19,201 | 20,800 | 23,557 | ||||||||||||||
Allowance for loan and lease losses | (44,195 | ) | (40,602 | ) | (43,271 | ) | (42,693 | ) | (44,732 | ) | |||||||||
Loans and leases, net | 2,344,757 | 2,327,373 | 2,336,534 | 2,322,094 | 2,340,392 | ||||||||||||||
Premises, furniture and equipment, net | 110,127 | 118,828 | 119,954 | 121,012 | 121,940 | ||||||||||||||
Goodwill | 25,909 | 25,909 | 25,909 | 25,909 | 25,909 | ||||||||||||||
Other intangible assets, net | 12,601 | 13,103 | 13,440 | 13,466 | 11,510 | ||||||||||||||
Cash surrender value on life insurance | 66,654 | 66,425 | 66,073 | 61,981 | 62,038 | ||||||||||||||
Other real estate, net | 39,188 | 39,075 | 35,007 | 32,002 | 32,408 | ||||||||||||||
FDIC indemnification asset | 992 | 1,035 | 1,396 | 2,294 | 1,939 | ||||||||||||||
Other assets | 70,853 | 61,231 | 66,019 | 69,657 | 73,002 | ||||||||||||||
Total Assets | $ | 4,112,679 | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | $ | 4,063,184 | |||||||||
Liabilities and Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Demand | $ | 692,893 | $ | 649,523 | $ | 637,452 | $ | 580,589 | $ | 581,957 | |||||||||
Savings | 1,654,417 | 1,557,053 | 1,569,993 | 1,558,998 | 1,572,891 | ||||||||||||||
Brokered time deposits | 44,225 | 39,225 | 39,225 | 37,285 | 37,285 | ||||||||||||||
Other time deposits | 782,079 | 834,884 | 835,704 | 857,176 | 881,510 | ||||||||||||||
Total deposits | 3,173,614 | 3,080,685 | 3,082,374 | 3,034,048 | 3,073,643 | ||||||||||||||
Short-term borrowings | 173,199 | 168,021 | 194,934 | 235,864 | 196,533 | ||||||||||||||
Other borrowings | 375,976 | 379,718 | 365,281 | 362,527 | 413,448 | ||||||||||||||
Accrued expenses and other liabilities | 36,667 | 36,643 | 28,393 | 35,232 | 43,234 | ||||||||||||||
Total Liabilities | 3,759,456 | 3,665,067 | 3,670,982 | 3,667,671 | 3,726,858 | ||||||||||||||
Equity | |||||||||||||||||||
Preferred equity | 81,698 | 79,113 | 78,798 | 78,483 | 78,168 | ||||||||||||||
Common equity | 268,819 | 263,769 | 250,918 | 250,608 | 255,430 | ||||||||||||||
Total Heartland Stockholders' Equity | 350,517 | 342,882 | 329,716 | 329,091 | 333,598 | ||||||||||||||
Noncontrolling interest | 2,706 | 2,668 | 2,676 | 2,693 | 2,728 | ||||||||||||||
Total Equity | 353,223 | 345,550 | 332,392 | 331,784 | 336,326 | ||||||||||||||
Total Liabilities and Equity | $ | 4,112,679 | $ | 4,010,617 | $ | 4,003,374 | $ | 3,999,455 | $ | 4,063,184 | |||||||||
Common Share Data | |||||||||||||||||||
Book value per common share | $ | 16.33 | $ | 16.04 | $ | 15.28 | $ | 15.26 | $ | 15.58 | |||||||||
ASC 320 effect on book value per common share | $ | 1.22 | $ | 0.86 | $ | 0.49 | $ | 0.60 | $ | 1.25 | |||||||||
Common shares outstanding, net of treasury stock | 16,459,338 | 16,442,437 | 16,418,228 | 16,425,055 | 16,392,091 | ||||||||||||||
Tangible Capital Ratio (1) | 5.90 | % | 5.92 | % | 5.61 | % | 5.60 | % | 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). | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | For the Nine Months Ended | ||||||||||||||||||
9/30/2011 | 9/30/2010 | 9/30/2011 | 9/30/2010 | ||||||||||||||||
Average Balances | |||||||||||||||||||
Assets | 4,063,327 | 4,012,107 | 4,034,215 | 4,010,084 | |||||||||||||||
Loans and leases, net of unearned | 2,399,047 | 2,427,141 | 2,398,561 | 2,416,330 | |||||||||||||||
Deposits | 3,110,978 | 3,018,928 | 3,083,548 | 3,028,173 | |||||||||||||||
Earning assets | 3,624,559 | 3,602,953 | 3,607,348 | 3,581,675 | |||||||||||||||
Interest bearing liabilities | 3,002,868 | 3,084,742 | 3,009,841 | 3,137,922 | |||||||||||||||
Common stockholders' equity | 270,696 | 252,781 | 261,296 | 244,208 | |||||||||||||||
Total stockholders' equity | 353,003 | 333,346 | 343,048 | 324,494 | |||||||||||||||
Tangible common stockholders' equity | 242,886 | 222,771 | 233,341 | 214,035 | |||||||||||||||
Earnings Performance Ratios | |||||||||||||||||||
Annualized return on average assets | 0.33 | % | 0.55 | % | 0.50 | % | 0.45 | % | |||||||||||
Annualized return on average common equity | 4.97 | % | 8.76 | % | 7.77 | % | 7.32 | % | |||||||||||
Annualized return on average common tangible equity | 5.54 | % | 9.94 | % | 8.70 | % | 8.35 | % | |||||||||||
Annualized net interest margin(1) | 4.14 | % | 4.18 | % | 4.18 | % | 4.14 | % | |||||||||||
Efficiency ratio(2) | 65.07 | % | 69.05 | % | 67.24 | % | 65.54 | % | |||||||||||
(1) Tax equivalent basis is calculated an effective tax rate of 35% | |||||||||||||||||||
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||||||
Average Balances | |||||||||||||||||||
Assets | $ | 4,063,327 | $ | 4,014,290 | $ | 4,009,863 | $ | 4,091,276 | $ | 4,012,107 | |||||||||
Loans and leases, net of unearned | 2,399,047 | 2,388,088 | 2,399,656 | 2,414,799 | 2,427,141 | ||||||||||||||
Deposits | 3,110,978 | 3,059,360 | 3,068,753 | 3,075,193 | 3,018,928 | ||||||||||||||
Earning assets | 3,624,559 | 3,600,095 | 3,583,883 | 3,637,735 | 3,602,953 | ||||||||||||||
Interest bearing liabilities | 3,002,868 | 3,004,928 | 3,010,629 | 3,095,791 | 3,084,742 | ||||||||||||||
Common stockholders' equity | 270,696 | 260,334 | 251,833 | 255,940 | 252,781 | ||||||||||||||
Total stockholders' equity | 353,003 | 341,797 | 333,016 | 336,827 | 333,346 | ||||||||||||||
Tangible common stockholders' equity | 242,886 | 232,381 | 223,736 | 227,696 | 222,771 | ||||||||||||||
Earnings Performance Ratios | |||||||||||||||||||
Annualized return on average assets | 0.33 | % | 0.89 | % | 0.29 | % | 0.50 | % | 0.55 | % | |||||||||
Annualized return on average common equity | 4.97 | % | 13.69 | % | 4.67 | % | 8.06 | % | 8.76 | % | |||||||||
Annualized return on average common tangible equity | 5.54 | % | 15.34 | % | 5.26 | % | 9.06 | % | 9.94 | % | |||||||||
Annualized net interest margin (1) | 4.14 | % | 4.23 | % | 4.19 | % | 4.05 | % | 4.18 | % | |||||||||
Efficiency ratio (2) | 65.07 | % | 67.53 | % | 69.17 | % | 70.09 | % | 69.05 | % | |||||||||
(1) Tax equivalent basis is calculated 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 | |||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
As of and for the Quarter Ended | |||||||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||||||
Loan and Lease Data | |||||||||||||||||||
Loans held to maturity: | |||||||||||||||||||
Commercial and commercial real estate | $ | 1,725,586 | $ | 1,709,955 | $ | 1,727,530 | $ | 1,718,993 | $ | 1,714,592 | |||||||||
Residential mortgage | 179,628 | 173,808 | 169,513 | 163,726 | 170,543 | ||||||||||||||
Agricultural and agricultural real estate | 256,857 | 255,257 | 253,189 | 250,943 | 260,393 | ||||||||||||||
Consumer | 217,007 | 217,263 | 214,682 | 214,515 | 219,731 | ||||||||||||||
Direct financing leases, net | 604 | 667 | 876 | 981 | 1,233 | ||||||||||||||
Unearned discount and deferred loan fees | (5,496 | ) | (5,165 | ) | (5,186 | ) | (5,171 | ) | (4,925 | ) | |||||||||
Total loans and leases held to maturity | $ | 2,374,186 | $ | 2,351,785 | $ | 2,360,604 | $ | 2,343,987 | $ | 2,361,567 | |||||||||
Loans covered under loss share agreements: | |||||||||||||||||||
Commercial and commercial real estate | $ | 6,788 | $ | 7,315 | $ | 9,368 | $ | 10,056 | $ | 11,703 | |||||||||
Residential mortgage | 4,410 | 4,747 | 5,291 | 5,792 | 6,545 | ||||||||||||||
Agricultural and agricultural real estate | 2,139 | 2,298 | 2,628 | 2,723 | 2,807 | ||||||||||||||
Consumer | 1,429 | 1,830 | 1,914 | 2,229 | 2,502 | ||||||||||||||
Total loans and leases covered under loss share agreements | $ | 14,766 | $ | 16,190 | $ | 19,201 | $ | 20,800 | $ | 23,557 | |||||||||
Asset Quality | |||||||||||||||||||
Not covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 72,629 | $ | 68,110 | $ | 87,970 | $ | 90,512 | $ | 85,190 | |||||||||
Loans and leases past due ninety days or more as to interest or principal payments | — | — | 3,038 | 85 | — | ||||||||||||||
Other real estate owned | 38,640 | 38,642 | 34,532 | 31,731 | 32,129 | ||||||||||||||
Other repossessed assets | 398 | 188 | 223 | 302 | 492 | ||||||||||||||
Total nonperforming assets not covered under loss share agreements | $ | 111,667 | $ | 106,940 | $ | 125,763 | $ | 122,630 | $ | 117,811 | |||||||||
Covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 3,886 | $ | 4,480 | $ | 4,564 | $ | 4,901 | $ | 5,330 | |||||||||
Loans and leases past due ninety days or more as to interest or principal payments | — | — | — | — | — | ||||||||||||||
Other real estate owned | 548 | 433 | 475 | 271 | 279 | ||||||||||||||
Other repossessed assets | — | — | — | — | — | ||||||||||||||
Total nonperforming assets covered under loss share agreements | $ | 4,434 | $ | 4,913 | $ | 5,039 | $ | 5,172 | $ | 5,609 | |||||||||
Allowance for Loan and Lease Losses | |||||||||||||||||||
Balance, beginning of period | $ | 40,602 | $ | 43,271 | $ | 42,693 | $ | 44,732 | $ | 48,314 | |||||||||
Provision for loan and lease losses | 7,727 | 3,845 | 10,009 | 8,860 | 4,799 | ||||||||||||||
Charge-offs on loans not covered by loss share agreements | (5,985 | ) | (8,076 | ) | (9,785 | ) | (11,133 | ) | (8,735 | ) | |||||||||
Charge-offs on loans covered by loss share agreements | (168 | ) | (107 | ) | (238 | ) | (445 | ) | (43 | ) | |||||||||
Recoveries | 2,019 | 1,669 | 592 | 679 | 397 | ||||||||||||||
Balance, end of period | $ | 44,195 | $ | 40,602 | $ | 43,271 | $ | 42,693 | $ | 44,732 | |||||||||
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements | |||||||||||||||||||
Ratio of nonperforming loans and leases to total loans and leases | 3.06 | % | 2.90 | % | 3.86 | % | 3.87 | % | 3.61 | % | |||||||||
Ratio of nonperforming assets to total assets | 2.72 | % | 2.67 | % | 3.14 | % | 3.07 | % | 2.90 | % | |||||||||
Annualized ratio of net loan charge-offs to average loans and leases | 0.66 | % | 1.08 | % | 1.59 | % | 1.79 | % | 1.37 | % | |||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.86 | % | 1.73 | % | 1.83 | % | 1.82 | % | 1.89 | % | |||||||||
Allowance for loan and lease losses as a percent of nonperforming loans and leases | 60.85 | % | 59.61 | % | 47.55 | % | 47.12 | % | 52.51 | % | |||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
September 30, 2011 | September 30, 2010 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 971,156 | $ | 6,826 | 2.79 | % | $ | 945,261 | $ | 8,225 | 3.45 | % | |||||||||
Nontaxable(1) | 293,585 | 4,525 | 6.11 | 274,819 | 4,228 | 6.10 | |||||||||||||||
Total securities | 1,264,741 | 11,351 | 3.56 | 1,220,080 | 12,453 | 4.05 | |||||||||||||||
Interest bearing deposits | 1,896 | 2 | 0.42 | 3,584 | 1 | 0.11 | |||||||||||||||
Federal funds sold | 217 | — | — | 960 | — | — | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,727,100 | 24,980 | 5.74 | 1,733,120 | 26,195 | 6.00 | |||||||||||||||
Residential mortgage | 195,847 | 2,649 | 5.37 | 209,400 | 2,777 | 5.26 | |||||||||||||||
Agricultural and agricultural real estate (1) | 257,934 | 3,821 | 5.88 | 261,640 | 4,022 | 6.10 | |||||||||||||||
Consumer | 217,534 | 5,325 | 9.71 | 221,661 | 5,051 | 9.04 | |||||||||||||||
Direct financing leases, net | 632 | 8 | 5.02 | 1,320 | 19 | 5.71 | |||||||||||||||
Fees on loans | — | 1,009 | — | — | 1,016 | — | |||||||||||||||
Less: allowance for loan and lease losses | (41,342 | ) | — | — | (48,812 | ) | — | — | |||||||||||||
Net loans and leases | 2,357,705 | 37,792 | 6.36 | 2,378,329 | 39,080 | 6.52 | |||||||||||||||
Total earning assets | 3,624,559 | 49,145 | 5.38 | % | 3,602,953 | 51,534 | 5.67 | % | |||||||||||||
Nonearning Assets | 438,768 | 409,154 | |||||||||||||||||||
Total Assets | $ | 4,063,327 | $ | 49,145 | $ | 4,012,107 | $ | 51,534 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,588,958 | $ | 2,165 | 0.54 | $ | 1,546,129 | $ | 3,041 | 0.78 | |||||||||||
Time, $100,000 and over | 269,069 | 1,436 | 2.12 | 282,587 | 1,808 | 2.54 | |||||||||||||||
Other time deposits | 585,589 | 3,427 | 2.32 | 637,516 | 4,184 | 2.60 | |||||||||||||||
Short-term borrowings | 181,794 | 205 | 0.45 | 195,298 | 305 | 0.62 | |||||||||||||||
Other borrowings | 377,458 | 4,123 | 4.33 | 423,212 | 4,213 | 3.95 | |||||||||||||||
Total interest bearing liabilities | 3,002,868 | 11,356 | 1.50 | % | 3,084,742 | 13,551 | 1.74 | % | |||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 667,362 | 552,696 | |||||||||||||||||||
Accrued interest and other liabilities | 40,094 | 41,323 | |||||||||||||||||||
Total noninterest bearing liabilities | 707,456 | 594,019 | |||||||||||||||||||
Stockholders' Equity | 353,003 | 333,346 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,063,327 | $ | 4,012,107 | |||||||||||||||||
Net interest income (1) | $ | 37,789 | $ | 37,983 | |||||||||||||||||
Net interest spread (1) | 3.88 | % | 3.93 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.14 | % | 4.18 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 82.85 | % | 85.62 | % | |||||||||||||||||
(1) Tax equivalent basis is calculated using an effective tax rate of 35% | |||||||||||||||||||||
HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||||
For the Nine Months Ended | |||||||||||||||||||||
September 30, 2011 | September 30, 2010 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 949,952 | $ | 21,820 | 3.07 | % | $ | 950,772 | $ | 26,618 | 3.74 | % | |||||||||
Nontaxable (1) | 297,141 | 13,519 | 6.08 | 256,544 | 12,033 | 6.27 | |||||||||||||||
Total securities | 1,247,093 | 35,339 | 3.79 | 1,207,316 | 38,651 | 4.28 | |||||||||||||||
Interest bearing deposits | 3,559 | 3 | 0.11 | 3,662 | 13 | 0.47 | |||||||||||||||
Federal funds sold | 551 | 1 | 0.24 | 642 | 1 | 0.21 | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate (1) | 1,736,296 | 75,159 | 5.79 | 1,726,399 | 76,853 | 5.95 | |||||||||||||||
Residential mortgage | 189,310 | 7,542 | 5.33 | 201,410 | 7,994 | 5.31 | |||||||||||||||
Agricultural and agricultural real estate (1) | 256,284 | 11,720 | 6.11 | 260,237 | 12,104 | 6.22 | |||||||||||||||
Consumer | 215,908 | 15,179 | 9.40 | 226,555 | 15,054 | 8.88 | |||||||||||||||
Direct financing leases, net | 763 | 31 | 5.43 | 1,729 | 76 | 5.88 | |||||||||||||||
Fees on loans | — | 3,379 | — | — | 3,084 | — | |||||||||||||||
Less: allowance for loan and lease losses | (42,416 | ) | — | — | (46,275 | ) | — | — | |||||||||||||
Net loans and leases | 2,356,145 | 113,010 | 6.41 | 2,370,055 | 115,165 | 6.50 | |||||||||||||||
Total earning assets | 3,607,348 | 148,353 | 5.50 | % | 3,581,675 | 153,830 | 5.74 | % | |||||||||||||
Nonearning Assets | 426,867 | 428,409 | |||||||||||||||||||
Total Assets | $ | 4,034,215 | $ | 148,353 | $ | 4,010,084 | $ | 153,830 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,567,209 | $ | 7,118 | 0.61 | $ | 1,557,363 | $ | 10,930 | 0.94 | |||||||||||
Time, $100,000 and over | 268,849 | 4,592 | 2.28 | 302,643 | 5,790 | 2.56 | |||||||||||||||
Other time deposits | 602,574 | 11,019 | 2.44 | 657,019 | 13,028 | 2.65 | |||||||||||||||
Short-term borrowings | 197,691 | 689 | 0.47 | 192,357 | 830 | 0.58 | |||||||||||||||
Other borrowings | 373,518 | 12,140 | 4.35 | 428,540 | 12,380 | 3.86 | |||||||||||||||
Total interest bearing liabilities | 3,009,841 | 35,558 | 1.58 | % | 3,137,922 | 42,958 | 1.83 | % | |||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 644,916 | 511,148 | |||||||||||||||||||
Accrued interest and other liabilities | 36,410 | 36,520 | |||||||||||||||||||
Total noninterest bearing liabilities | 681,326 | 547,668 | |||||||||||||||||||
Stockholders' Equity | 343,048 | 324,494 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,034,215 | $ | 4,010,084 | |||||||||||||||||
Net interest income (1) | $ | 112,795 | $ | 110,872 | |||||||||||||||||
Net interest spread (1) | 3.92 | % | 3.91 | % | |||||||||||||||||
Net interest income to total earning assets (1) | 4.18 | % | 4.14 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 83.44 | % | 87.61 | % | |||||||||||||||||
(1) Tax equivalent basis is calculated 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 | |||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||
Total Assets | |||||||||||||||
Dubuque Bank and Trust Company | $ | 1,275,116 | $ | 1,294,654 | $ | 1,270,387 | $ | 1,247,297 | $ | 1,316,652 | |||||
New Mexico Bank & Trust | 921,973 | 891,609 | 880,980 | 913,776 | 891,642 | ||||||||||
Wisconsin Community Bank | 486,319 | 453,427 | 469,305 | 474,366 | 461,822 | ||||||||||
Rocky Mountain Bank | 425,132 | 419,697 | 417,846 | 417,781 | 438,923 | ||||||||||
Riverside Community Bank | 316,945 | 322,601 | 302,057 | 290,018 | 297,272 | ||||||||||
Galena State Bank & Trust Co. | 294,299 | 296,318 | 275,807 | 278,353 | 289,558 | ||||||||||
Arizona Bank & Trust | 221,481 | 222,148 | 231,020 | 223,574 | 251,245 | ||||||||||
Summit Bank & Trust | 99,528 | 95,130 | 93,600 | 95,414 | 100,843 | ||||||||||
Minnesota Bank & Trust | 75,021 | 67,594 | 62,251 | 58,386 | 57,832 | ||||||||||
Total Deposits | |||||||||||||||
Dubuque Bank and Trust Company | $ | 929,854 | $ | 892,526 | $ | 935,424 | $ | 902,849 | $ | 918,575 | |||||
New Mexico Bank & Trust | 681,413 | 674,096 | 659,373 | 646,302 | 655,724 | ||||||||||
Wisconsin Community Bank | 402,957 | 371,037 | 374,758 | 392,432 | 363,868 | ||||||||||
Rocky Mountain Bank | 356,353 | 349,299 | 348,723 | 347,924 | 349,853 | ||||||||||
Riverside Community Bank | 268,432 | 271,553 | 245,639 | 241,184 | 242,717 | ||||||||||
Galena State Bank & Trust Co. | 255,006 | 257,413 | 239,445 | 236,647 | 250,749 | ||||||||||
Arizona Bank & Trust | 179,369 | 179,885 | 188,415 | 183,279 | 204,663 | ||||||||||
Summit Bank & Trust | 85,431 | 80,793 | 80,327 | 81,024 | 79,823 | ||||||||||
Minnesota Bank & Trust | 57,058 | 50,091 | 46,205 | 44,278 | 41,316 | ||||||||||
Net Income (Loss) | |||||||||||||||
Dubuque Bank and Trust Company | $ | 5,602 | $ | 6,132 | $ | 4,958 | $ | 3,972 | $ | 5,353 | |||||
New Mexico Bank & Trust | 1,509 | 2,505 | 958 | 3,098 | 2,972 | ||||||||||
Wisconsin Community Bank | 2,443 | 1,882 | 1,466 | 1,581 | 2,157 | ||||||||||
Rocky Mountain Bank | 780 | 646 | (630 | ) | 1,393 | (695 | ) | ||||||||
Riverside Community Bank | (339 | ) | 953 | (212 | ) | 190 | (140 | ) | |||||||
Galena State Bank & Trust Co. | 941 | 1,113 | 579 | 1,000 | 877 | ||||||||||
Arizona Bank & Trust | (960 | ) | 546 | (1,452 | ) | (231 | ) | 42 | |||||||
Summit Bank & Trust | (160 | ) | 116 | (604 | ) | (208 | ) | 201 | |||||||
Minnesota Bank & Trust | 102 | (45 | ) | (81 | ) | (178 | ) | (147 | ) | ||||||
Return on Average Assets | |||||||||||||||
Dubuque Bank and Trust Company | 1.74 | % | 1.92 | % | 1.60 | % | 1.18 | % | 1.69 | % | |||||
New Mexico Bank & Trust | 0.65 | 1.11 | 0.43 | 1.33 | 1.34 | ||||||||||
Wisconsin Community Bank | 2.05 | 1.63 | 1.26 | 1.31 | 1.85 | ||||||||||
Rocky Mountain Bank | 0.73 | 0.61 | (0.61 | ) | 1.27 | (0.63 | ) | ||||||||
Riverside Community Bank | (0.42 | ) | 1.24 | (0.28 | ) | 0.25 | (0.19 | ) | |||||||
Galena State Bank & Trust Co. | 1.28 | 1.61 | 0.85 | 1.39 | 1.21 | ||||||||||
Arizona Bank & Trust | (1.72 | ) | 0.94 | (2.58 | ) | (0.38 | ) | (0.06 | ) | ||||||
Summit Bank & Trust | (0.66 | ) | 0.49 | (2.59 | ) | (0.84 | ) | 0.79 | |||||||
Minnesota Bank & Trust | 0.56 | (0.25 | ) | (0.53 | ) | (1.23 | ) | (1.00 | ) | ||||||
Net Interest Margin as a Percentage of Average Earning Assets | |||||||||||||||
Dubuque Bank and Trust Company | 4.01 | % | 3.62 | % | 3.59 | % | 3.83 | % | 3.95 | % | |||||
New Mexico Bank & Trust | 4.10 | 4.33 | 4.34 | 4.00 | 4.35 | ||||||||||
Wisconsin Community Bank | 4.33 | 4.60 | 4.57 | 4.26 | 4.60 | ||||||||||
Rocky Mountain Bank | 4.03 | 3.85 | 3.91 | 3.76 | 3.81 | ||||||||||
Riverside Community Bank | 3.58 | 3.90 | 4.01 | 4.38 | 4.30 | ||||||||||
Galena State Bank and Trust Co. | 3.55 | 3.86 | 3.73 | 3.60 | 3.53 | ||||||||||
Arizona Bank & Trust | 4.10 | 4.52 | 4.25 | 3.72 | 3.77 | ||||||||||
Summit Bank & Trust | 3.84 | 3.33 | 2.99 | 2.78 | 3.22 | ||||||||||
Minnesota Bank & Trust | 4.82 | 4.55 | 4.75 | 4.07 | 3.14 | ||||||||||
HEARTLAND FINANCIAL USA, INC. SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) DOLLARS IN THOUSANDS | |||||||||||||||||||
As of | |||||||||||||||||||
9/30/2011 | 6/30/2011 | 3/31/2011 | 12/31/2010 | 9/30/2010 | |||||||||||||||
Total Portfolio Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 731,356 | $ | 730,802 | $ | 748,354 | $ | 734,226 | $ | 736,776 | |||||||||
New Mexico Bank & Trust | 507,416 | 506,810 | 513,568 | 513,658 | 511,279 | ||||||||||||||
Wisconsin Community Bank | 318,906 | 314,432 | 320,841 | 320,711 | 325,543 | ||||||||||||||
Rocky Mountain Bank | 250,728 | 247,718 | 238,201 | 246,213 | 260,832 | ||||||||||||||
Riverside Community Bank | 155,995 | 157,901 | 161,238 | 162,706 | 165,539 | ||||||||||||||
Galena State Bank and Trust Co. | 143,680 | 138,726 | 136,210 | 137,153 | 131,955 | ||||||||||||||
Arizona Bank & Trust | 137,356 | 137,853 | 134,254 | 124,388 | 129,871 | ||||||||||||||
Summit Bank & Trust | 53,402 | 52,570 | 47,024 | 48,020 | 52,396 | ||||||||||||||
Minnesota Bank & Trust | 50,545 | 43,109 | 40,197 | 36,013 | 26,868 | ||||||||||||||
Allowance For Loan and Lease Losses | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 10,087 | $ | 10,148 | $ | 11,984 | $ | 12,432 | $ | 11,961 | |||||||||
New Mexico Bank & Trust | 10,271 | 8,405 | 7,277 | 7,704 | 8,297 | ||||||||||||||
Wisconsin Community Bank | 3,288 | 3,637 | 3,369 | 3,847 | 4,518 | ||||||||||||||
Rocky Mountain Bank | 3,953 | 4,074 | 4,425 | 3,779 | 5,181 | ||||||||||||||
Riverside Community Bank | 4,770 | 2,702 | 3,693 | 3,524 | 3,109 | ||||||||||||||
Galena State Bank & Trust Co. | 1,956 | 2,077 | 2,278 | 1,811 | 1,743 | ||||||||||||||
Arizona Bank & Trust | 5,590 | 5,502 | 6,018 | 5,407 | 5,915 | ||||||||||||||
Summit Bank & Trust | 1,108 | 1,091 | 1,103 | 1,271 | 1,312 | ||||||||||||||
Minnesota Bank & Trust | 507 | 449 | 636 | 565 | 270 | ||||||||||||||
Nonperforming Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 4,298 | $ | 4,910 | $ | 12,897 | $ | 7,511 | $ | 7,730 | |||||||||
New Mexico Bank & Trust | 15,404 | 16,053 | 15,979 | 20,753 | 14,651 | ||||||||||||||
Wisconsin Community Bank | 11,871 | 10,359 | 11,776 | 12,702 | 12,070 | ||||||||||||||
Rocky Mountain Bank | 14,180 | 16,971 | 18,303 | 21,406 | 29,986 | ||||||||||||||
Riverside Community Bank | 5,870 | 5,962 | 11,443 | 7,611 | 7,662 | ||||||||||||||
Galena State Bank & Trust Co. | 5,309 | 5,182 | 6,259 | 5,308 | 2,976 | ||||||||||||||
Arizona Bank & Trust | 10,811 | 4,054 | 6,959 | 8,797 | 5,758 | ||||||||||||||
Summit Bank & Trust | 4,159 | 3,905 | 4,527 | 5,965 | 3,694 | ||||||||||||||
Minnesota Bank & Trust | 6 | 110 | 2,229 | 8 | — | ||||||||||||||
Allowance As a Percent of Total Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | 1.38 | % | 1.39 | % | 1.60 | % | 1.69 | % | 1.62 | % | |||||||||
New Mexico Bank & Trust | 2.02 | 1.66 | 1.42 | 1.50 | 1.62 | ||||||||||||||
Wisconsin Community Bank | 1.03 | 1.16 | 1.05 | 1.20 | 1.39 | ||||||||||||||
Rocky Mountain Bank | 1.58 | 1.64 | 1.86 | 1.53 | 1.99 | ||||||||||||||
Riverside Community Bank | 3.06 | 1.71 | 2.29 | 2.17 | 1.88 | ||||||||||||||
Galena State Bank & Trust Co. | 1.36 | 1.50 | 1.67 | 1.32 | 1.32 | ||||||||||||||
Arizona Bank & Trust | 4.07 | 3.99 | 4.48 | 4.35 | 4.55 | ||||||||||||||
Summit Bank & Trust | 2.07 | 2.08 | 2.35 | 2.65 | 2.50 | ||||||||||||||
Minnesota Bank & Trust | 1.00 | 1.04 | 1.58 | 1.57 | 1.00 | ||||||||||||||