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| 8-K - FORM 8-K 2ND QUARTER EARNINGS RELEASE - HEARTLAND FINANCIAL USA INC | q220128kcoverpage.htm |
CONTACT: | FOR IMMEDIATE RELEASE |
John K. Schmidt | July 30, 2012 |
Chief Operating Officer | |
Chief Financial Officer | |
(563) 589-1994 | |
jschmidt@htlf.com | |
HEARTLAND FINANCIAL USA, INC. REPORTS SECOND QUARTER 2012 RESULTS
Quarterly Highlights
§ | Record net income of $14.0 million or $0.77 per diluted common share |
§ | Net interest margin of 4.05% |
§ | Gains on sale of loans increased $4.2 million or 49% over the first quarter 2012 |
§ | Growth in loans held to maturity of $97.2 million since March 31, 2012 |
§ | Deposit growth of $59.1 million since March 31, 2012 |
§ | Nonperforming assets not covered under loss share agreements decreased $6.3 million since March 31, 2012 |
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income (in millions) | $ | 14.0 | $ | 10.2 | $ | 26.8 | $ | 14.4 | |||||||
Net income available to common stockholders (in millions) | 12.9 | 8.9 | 24.8 | 11.8 | |||||||||||
Diluted earnings per common share | 0.77 | 0.54 | 1.48 | 0.71 | |||||||||||
Return on average assets | 1.20 | % | 0.89 | % | 1.16 | % | 0.59 | % | |||||||
Return on average common equity | 18.28 | 13.69 | 17.78 | 9.28 | |||||||||||
Net interest margin | 4.05 | 4.23 | 4.14 | 4.21 | |||||||||||
“Heartland set another earnings record in the second quarter, reporting net income of $14.0 million, a 37 percent increase over last year's second quarter. Year-to-date net income of $26.8 million is nearly double our earnings in the first half of 2011.” Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc. | ||||
Dubuque, Iowa, Monday, July 30, 2012-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $14.0 million for the quarter ended June 30, 2012, which was an increase of $3.8 million or 37 percent from the $10.2 million recorded for the second quarter of 2011. Net income available to common stockholders was $12.9 million, or $0.77 per diluted common share, for the quarter ended June 30, 2012, compared to $8.9 million, or $0.54 per diluted common share, for the second quarter of 2011. Return on average common equity was 18.28 percent and return on average assets was 1.20 percent for the second quarter of 2012, compared to 13.69 percent and 0.89 percent, respectively, for the same quarter in 2011.
Earnings for the second quarter of 2012, in comparison to the second quarter of 2011, were most significantly affected by the continued expansion of mortgage operations in both new and existing markets. Solid loan growth also contributed to the maintenance of a net interest margin above 4.00 percent for the 12th consecutive quarter.
Net income recorded for the first six months of 2012 was $26.8 million, compared to $14.4 million recorded during the first six months of 2011. Net income available to common stockholders was $24.8 million, or $1.48 per diluted common share, for the six months ended June 30, 2012, compared to $11.8 million, or $0.71 per diluted common share, earned during the first six months of 2011. Return on average common equity was 17.78 percent and return on average assets was 1.16 percent for the first six months of 2012, compared to 9.28 percent and 0.59 percent, respectively, for the same period in 2011.
Earnings for the first six months of 2012 compared to the first six months of 2011 were positively affected by reduced provision for loan and lease losses, combined with increases in net interest income, gains on sale of loans and securities gains. 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 second quarter results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, “Heartland set another earnings record in the second quarter, reporting net income of $14.0 million, a 37 percent increase over last year's second quarter. Year-to-date net income of $26.8 million is nearly double our earnings in the first half of 2011.”
Net Interest Margin Remains Above 4.00 Percent
Net interest margin, expressed as a percentage of average earning assets, was 4.05 percent during the second quarter of 2012 compared to 4.23 percent for the second quarter of 2011. For the six-month periods ended June 30, net interest margin was 4.14 percent during 2012 and 4.21 percent during 2011. Positively affecting net interest margin was improvement in the level of nonperforming loans not covered under loss share agreements, which had balances of $44.8 million or 1.71 percent of total loans and leases at June 30, 2012, and $68.1 million or 2.90 percent of total loans and leases at June 30, 2011.
Fuller said, “Heartland's earnings continue to be enhanced by a net interest margin exceeding four percent. The consistency of this key metric over the past three years can be attributed to our pricing discipline.”
On a tax-equivalent basis, interest income in the second quarter of 2012 was $48.8 million compared to $49.9 million in the second quarter of 2011, a decrease of $1.1 million or 2 percent. For the first six months of 2012, interest income on a tax-equivalent basis was $98.7 million compared to $99.2 million during the same period in 2011, a decrease of $511,000 or 1 percent. Even though average earning assets increased $270.3 million or 8 percent during the second quarter of 2012 compared to the second quarter of 2011 and $235.5 million or 7 percent during the first six months of 2012 compared to the same period in 2011, this growth did not cover the decline in interest income due to a decrease in the rates earned on these assets. The average interest rate earned on these assets was 5.07 percent during the second quarter of 2012 compared to 5.57 percent during the second quarter of 2011. For the first six months of the year, the average interest rate earned on these assets was 5.19 percent during 2012 compared to 5.57 percent during 2011. The most significant contributor to these declines was the interest rate earned on the securities portfolio, which decreased 90 basis points during the quarter ended June 30, 2012, compared to the same quarter in 2011 and 63 basis points during the six months ended June 30, 2012, compared to the same six months in 2011.
Interest expense for the second quarter of 2012 was $9.9 million, a decrease of $2.1 million or 18 percent from $12.0 million in the second quarter of 2011. On a six-month comparative basis, interest expense decreased $4.3 million or 18 percent. Even though average interest bearing liabilities increased $135.1 million or 4 percent for the quarter ended June 30, 2012, as compared to the same quarter in 2011, and $102.9 million or 3 percent for the six
month period ended on June 30, 2012, as compared to the same six month period in 2011, the average interest rate paid on Heartland's deposits and borrowings declined 34 basis points during the quarterly period under comparison and 33 basis points during the six-month period under comparison. Contributing to this improvement in interest expense was a change in the mix of deposits as average savings balances, the lowest cost interest-bearing deposits, as a percentage of total average interest bearing deposits was 69 percent during both the second quarter and first six month periods of 2012 compared to 64 percent for both the second quarter and first six month periods of 2011. Additionally, the average interest rate paid on savings deposits was 0.40 percent during both the second quarter and first six months of 2012 compared to 0.62 percent during the second quarter and 0.64 percent during the first six months of 2011.
Net interest income on a tax-equivalent basis totaled $39.0 million during the second quarter of 2012, an increase of $980,000 or 3 percent from the $38.0 million recorded during the second quarter of 2011. For the first six months of 2012, net interest income on a tax-equivalent basis was $78.8 million, an increase of $3.8 million or 5 percent from the $75.0 million recorded during the first six months of 2011.
Higher Noninterest Income; Noninterest Expense Increases
Noninterest income was $28.3 million during the second quarter of 2012 compared to $14.7 million during the second quarter of 2011, an increase of $13.6 million or 93 percent. For the six-month period ended June 30, noninterest income was $51.7 million in 2012 compared to $27.3 million in 2011, an increase of $24.4 million or 89 percent. The categories contributing most significantly to the improvement in noninterest income during both periods were loan servicing income and gains on sale of loans. Gains on sale of loans totaled $12.7 million during the second quarter of 2012 compared to $1.3 million during the second quarter of 2011. For the six-month period ended June 30, gains on sale of loans totaled $21.2 million during 2012 compared to $2.7 million during 2011. The volume of loans sold totaled $360.7 million during the second quarter of 2012, more than five times the $65.8 million sold during the second quarter of 2011. For the six months ended June 30, the volume of loans sold totaled $604.6 million during 2012 compared to $146.8 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. Other major contributors to the increase in noninterest income for the six-month comparative period were securities gains and other noninterest income. Securities gains totaled $8.9 million during the first six months of 2012 compared to $6.8 million during the first six months of 2011, as volatility in the bond market continued to provide opportunities to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. Offsetting, in part, the securities gains was an impairment loss on securities totaling $981,000 recorded during the first quarter of 2012. Other noninterest income totaled $2.7 million during the first six months of 2012 compared to $45,000 during the first six months of 2011. Included in other noninterest income during the first quarter of 2012 was $2.0 million in equity earnings which resulted from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member.
Loan servicing income increased $1.8 million or 135 percent for the second quarter of 2012 as compared to the second quarter of 2011 and $2.0 million or 69 percent for the first half of 2012 compared to the first half of 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 $2.6 million during the second quarter of 2012 compared to $616,000 during the second quarter of 2011 and amortization of mortgage servicing rights was $1.1 million during the second quarter of 2012 compared to $808,000 during the second quarter of 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 $1.0 million during the second quarter of 2012 compared to $892,000 during the second quarter of 2011. The portfolio of mortgage loans serviced for others by Heartland totaled $1.78 billion at June 30, 2012, compared to $1.45 billion at June 30, 2011.
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) | 06/30/2012 | 03/31/2012 | 12/31/2011 | 09/30/2011 | 06/30/2011 | ||||||||||||||
Mortgage Servicing Fees | $ | 1,037 | $ | 967 | $ | 932 | $ | 908 | $ | 892 | |||||||||
Mortgage Servicing Rights Income | 2,614 | 1,986 | 1,380 | 743 | 616 | ||||||||||||||
Mortgage Servicing Rights Amortization | (1,112 | ) | (1,718 | ) | (862 | ) | (1,103 | ) | (808 | ) | |||||||||
Total Residential Mortgage Loan Servicing Income | $ | 2,539 | $ | 1,235 | $ | 1,450 | $ | 548 | $ | 700 | |||||||||
Valuation Adjustment on Mortgage Servicing Rights | $ | (194 | ) | $ | 13 | $ | (19 | ) | $ | — | $ | — | |||||||
Gains On Sale of Loans | $ | 12,689 | $ | 8,502 | $ | 5,473 | $ | 3,183 | $ | 1,308 | |||||||||
Residential Mortgage Loans Originated | $ | 374,743 | $ | 293,724 | $ | 253,468 | $ | 143,317 | $ | 111,575 | |||||||||
Residential Mortgage Loans Sold | $ | 360,743 | $ | 243,836 | $ | 208,494 | $ | 97,591 | $ | 65,812 | |||||||||
Residential Mortgage Loan Servicing Portfolio | $ | 1,776,912 | $ | 1,626,129 | $ | 1,541,417 | $ | 1,467,127 | $ | 1,446,527 | |||||||||
For the second quarter of 2012, noninterest expense totaled $41.5 million, an increase of $9.1 million or 28 percent from the same quarter of 2011. For the six-month period ended June 30, noninterest expense totaled $81.6 million in 2012 compared to $65.2 million in 2011, a $16.4 million or 25 percent increase. Contributing to these increases in noninterest expense were a $7.9 million or 45 percent increase in salaries and employee benefits for the quarter and a $13.7 million or 38 percent increase for the six-month period, 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. Full-time equivalent employees totaled 1,321 on June 30, 2012, compared to 1,078 on June 30, 2011. Also contributing to the increases in noninterest expense were additional professional fees, primarily associated with the workout and disposition of nonperforming assets and the services provided to Heartland by third-party consultants.
Fuller commented, “The timely expansion of our Heartland Mortgage and National Residential Mortgage unit is producing growth in noninterest income. In the first six months of this year, we have originated $668 million in mortgages and expect this number to grow as we methodically add new loan production teams.”
Heartland's effective tax rate was 33.19 percent for the first six months of 2012 compared to 29.65 percent for the first six months of 2011. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $399,000 during the first six months of 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 15.86 percent during the first six months of 2012 compared to 24.26 percent during the first six months of 2011. The tax-equivalent adjustment for this tax-exempt interest income was $3.4 million during the first six months of 2012 compared to $2.7 million during the first six months of 2011.
Loan Growth Accelerates; Deposit Growth Continues
Total assets were $4.43 billion at June 30, 2012, an increase of $122.6 million since December 31, 2011, with $114.8 million of this growth occurring in the second quarter. Securities represented 30 percent of total assets at June 30, 2012, compared to 31 percent at year-end 2011.
Total loans and leases held to maturity were $2.63 billion at June 30, 2012, compared to $2.48 billion at year-end 2011, an increase of $148.3 million or 12 percent annualized, with $97.2 million or 66 percent of this growth occurring during the second quarter. Commercial and commercial real estate loans, which totaled $1.90 billion at June 30, 2012, increased $94.5 million or 10 percent annualized since year-end 2011, with $61.4 million or 65 percent of this growth occurring in the second quarter. Residential mortgage loans, which totaled $220.1 million at June 30, 2012, increased $25.6 million or 26 percent annualized since year-end 2011, with $17.2 million of this growth occurring in the second quarter. Agricultural and agricultural real estate loans, which totaled $279.3 million at June 30, 2012, increased $16.3 million or 12 percent annualized since year-end 2011, with $8.6 million of this growth occurring in the second quarter. Consumer loans, which totaled $230.6 million at June 30, 2012, increased $10.5 million or 10 percent annualized since year-end 2011, with $8.2 million of the growth occurring during the second quarter.
Fuller stated, “An important contributor to Heartland's exceptional performance is solid loan growth of nearly $100 million in the second quarter. Our emphasis on outbound calling, combined with improving economies in our Midwest markets, is generating opportunities with new and existing borrowers.”
Total deposits were $3.33 billion at June 30, 2012, compared to $3.21 billion at year-end 2011, an increase of $124.8 million or 8 percent annualized, with $59.1 million or 47 percent of the growth occurring during the second quarter. The composition of Heartland's deposits continues to improve as no cost demand deposits as a percentage of total deposits was 24 percent at June 30, 2012, compared to 23 percent at year-end 2011. Demand deposits increased $62.2 million or 17 percent annualized since year-end 2011, with $28.1 million or 45 percent of this growth occurring during the second quarter. Savings deposits increased $56.0 million or 7 percent annualized since December 31, 2011, with $2.8 million or 5 percent of this growth occurring during the second quarter. Certificates of deposit, exclusive of brokered deposits, decreased $3.8 million or 1 percent annualized since year-end 2011, although, during the second quarter of 2012, certificates of deposit increased $18.2 million, due primarily to additional deposits from a few public entities in the Dubuque, Iowa market. As a percentage of total deposits, certificates of deposit remained below 25 percent at June 30, 2012.
“We continue to see growth in no-cost demand and low-cost savings and money market deposits. The favorable shift in deposit mix continues with these non-time categories now representing 76 percent of total deposits,” Fuller added.
Provision for Loan Losses Continues at Lower Levels; Nonperforming Assets Decline
The allowance for loan and lease losses at June 30, 2012, was 1.58 percent of loans and leases and 92.40 percent of nonperforming loans compared to 1.48 percent of loans and leases and 64.09 percent of nonperforming loans at December 31, 2011, and 1.73 percent of loans and leases and 59.61 percent of nonperforming loans at June 30, 2011. The provision for loan losses was $3.0 million for the second quarter of 2012 compared to $3.8 million for the second quarter of 2011, an $845,000 or 22 percent decrease, primarily as a result of reduced charge-offs and reductions in the level of nonperforming and substandard loans. For the first six months of 2012, provision for loan losses was $5.4 million compared to $13.9 million for the first six months of 2011, an $8.5 million or 61 percent reduction.
Nonperforming loans, exclusive of those covered under loss sharing agreements, were $44.8 million or 1.71 percent of total loans and leases at June 30, 2012, compared to $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, and $68.1 million or 2.90 percent of total loans and leases at June 30, 2011. Approximately 42 percent, or $18.7 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 9 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $6.8 million originated by Arizona Bank & Trust, $3.4 million originated by Rocky Mountain Bank, $4.2 million originated by Wisconsin Bank & Trust (formerly known as Wisconsin Community Bank), $2.5 million originated by New Mexico Bank & Trust and $1.8 million originated by Galena State Bank and Trust Company. The portion of Heartland's nonperforming loans covered by government guarantees was $2.0 million at June 30, 2012. As identified using the North American Industry Classification System (NAICS), $8.4 million of nonperforming loans with individual balances exceeding $1.0 million were for lot and land development and the remaining $10.3 million was distributed among seven other industry categories.
Delinquencies in each of the loan portfolios continue to be well-managed and no significant adverse trends were identified during the second quarter of 2012. Loans delinquent 30 to 89 days were 0.46 percent of total loans at June 30, 2012, compared to 0.55 percent at March 31, 2012, 0.23 percent at December 31, 2011, 0.54 percent at September 30, 2011, and 0.60 percent at June 30, 2011.
Other real estate owned was $37.9 million at June 30, 2012, compared to $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, $5.9 million of other real estate owned was sold during the second quarter and $18.3 million during the first six months.
The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the second quarter of 2012 and the first six months of 2012:
(Dollars in thousands) | Nonperforming Loans | Other Real Estate Owned | Other Repossessed Assets | Total Nonperforming Assets | |||||||||||
March 31, 2012 | $ | 53,129 | $ | 38,934 | $ | 710 | $ | 92,773 | |||||||
Loan foreclosures | (5,853 | ) | 5,840 | 13 | — | ||||||||||
Net loan charge offs | (923 | ) | — | — | (923 | ) | |||||||||
New nonperforming loans | 5,600 | — | — | 5,600 | |||||||||||
Reduction of nonperforming loans(1) | (4,246 | ) | — | — | (4,246 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (6,175 | ) | (279 | ) | (6,454 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (658 | ) | (104 | ) | (762 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | 125 | 125 | |||||||||||
June 30, 2012 | $ | 47,707 | $ | 37,941 | $ | 465 | $ | 86,113 | |||||||
(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, 2011 | $ | 60,780 | $ | 44,387 | $ | 648 | $ | 105,815 | |||||||
Loan foreclosures | (14,639 | ) | 14,562 | 77 | — | ||||||||||
Net loan charge offs | (723 | ) | — | — | (723 | ) | |||||||||
New nonperforming loans | 8,955 | — | — | 8,955 | |||||||||||
Reduction of nonperforming loans(1) | (6,666 | ) | — | — | (6,666 | ) | |||||||||
OREO/Repossessed sales proceeds | — | (18,241 | ) | (344 | ) | (18,585 | ) | ||||||||
OREO/Repossessed assets writedowns, net | — | (2,767 | ) | (112 | ) | (2,879 | ) | ||||||||
Net activity at Citizens Finance Co. | — | — | 196 | 196 | |||||||||||
June 30, 2012 | $ | 47,707 | $ | 37,941 | $ | 465 | $ | 86,113 | |||||||
(1) Includes principal reductions and transfers to performing status. | |||||||||||||||
Net charge-offs on loans during the second quarter of 2012 were $923,000 compared to $6.5 million during the second quarter of 2011.
Fuller added, “Steady improvement in credit quality is a significant driver of Heartland's record-setting performance. Over the last twelve months we've reduced nonperforming assets by nearly $26 million, a 23 percent reduction.”
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 480-629-9835 or 877-941-0844 at least five minutes before start time. To listen, 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 July 29, 2013, by logging on to www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a $4.4 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 64 banking locations in 43 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 June 30, | For the Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Interest Income | ||||||||||||||||
Interest and fees on loans and leases | $ | 39,382 | $ | 37,480 | $ | 77,781 | $ | 74,446 | ||||||||
Interest on securities: | ||||||||||||||||
Taxable | 5,026 | 9,305 | 12,598 | 18,526 | ||||||||||||
Nontaxable | 2,619 | 1,796 | 4,890 | 3,550 | ||||||||||||
Interest on federal funds sold | 1 | — | 1 | 1 | ||||||||||||
Interest on deposits in other financial institutions | 2 | 1 | 2 | 1 | ||||||||||||
Total Interest Income | 47,030 | 48,582 | 95,272 | 96,524 | ||||||||||||
Interest Expense | ||||||||||||||||
Interest on deposits | 5,604 | 7,675 | 11,379 | 15,701 | ||||||||||||
Interest on short-term borrowings | 224 | 225 | 437 | 484 | ||||||||||||
Interest on other borrowings | 4,025 | 4,081 | 8,086 | 8,017 | ||||||||||||
Total Interest Expense | 9,853 | 11,981 | 19,902 | 24,202 | ||||||||||||
Net Interest Income | 37,177 | 36,601 | 75,370 | 72,322 | ||||||||||||
Provision for loan and lease losses | 3,000 | 3,845 | 5,354 | 13,854 | ||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 34,177 | 32,756 | 70,016 | 58,468 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges and fees | 3,712 | 3,599 | 7,296 | 6,960 | ||||||||||||
Loan servicing income | 3,056 | 1,298 | 4,816 | 2,847 | ||||||||||||
Trust fees | 2,660 | 2,656 | 5,273 | 5,135 | ||||||||||||
Brokerage and insurance commissions | 939 | 856 | 1,849 | 1,704 | ||||||||||||
Securities gains, net | 4,951 | 4,756 | 8,894 | 6,845 | ||||||||||||
Gain on trading account securities | 49 | 81 | 46 | 297 | ||||||||||||
Impairment loss on securities | — | — | (981 | ) | — | |||||||||||
Gains on sale of loans | 12,689 | 1,308 | 21,191 | 2,710 | ||||||||||||
Valuation adjustment on mortgage servicing rights | (194 | ) | — | (181 | ) | — | ||||||||||
Income on bank owned life insurance | 267 | 331 | 749 | 734 | ||||||||||||
Other noninterest income | 149 | (216 | ) | 2,714 | 45 | |||||||||||
Total Noninterest Income | 28,278 | 14,669 | 51,666 | 27,277 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 25,384 | 17,480 | 49,380 | 35,666 | ||||||||||||
Occupancy | 2,534 | 2,213 | 5,016 | 4,599 | ||||||||||||
Furniture and equipment | 1,517 | 1,360 | 2,963 | 2,769 | ||||||||||||
Professional fees | 3,961 | 3,053 | 6,721 | 6,072 | ||||||||||||
FDIC insurance assessments | 807 | 786 | 1,671 | 2,131 | ||||||||||||
Advertising | 1,304 | 1,113 | 2,375 | 1,963 | ||||||||||||
Intangible assets amortization | 122 | 144 | 253 | 290 | ||||||||||||
Net loss on repossessed assets | 1,307 | 2,511 | 4,211 | 4,143 | ||||||||||||
Other noninterest expenses | 4,523 | 3,683 | 9,009 | 7,597 | ||||||||||||
Total Noninterest Expense | 41,459 | 32,343 | 81,599 | 65,230 | ||||||||||||
Income Before Income Taxes | 20,996 | 15,082 | 40,083 | 20,515 | ||||||||||||
Income taxes | 7,032 | 4,870 | 13,304 | 6,082 | ||||||||||||
Net Income | 13,964 | 10,212 | 26,779 | 14,433 | ||||||||||||
Net (income) loss attributable to noncontrolling interest, net of tax | (7 | ) | 9 | 19 | 25 | |||||||||||
Net Income Attributable to Heartland | 13,957 | 10,221 | 26,798 | 14,458 | ||||||||||||
Preferred dividends and discount | (1,021 | ) | (1,336 | ) | (2,042 | ) | (2,672 | ) | ||||||||
Net Income Available to Common Stockholders | $ | 12,936 | $ | 8,885 | $ | 24,756 | $ | 11,786 | ||||||||
Earnings per common share-diluted | $ | 0.77 | $ | 0.54 | $ | 1.48 | $ | 0.71 | ||||||||
Weighted average shares outstanding-diluted | 16,717,846 | 16,568,701 | 16,722,005 | 16,561,212 | ||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||||||
Interest Income | |||||||||||||||||||
Interest and fees on loans and leases | $ | 39,382 | $ | 38,399 | $ | 37,764 | $ | 37,393 | $ | 37,480 | |||||||||
Interest on securities: | |||||||||||||||||||
Taxable | 5,026 | 7,572 | 7,518 | 8,051 | 9,305 | ||||||||||||||
Nontaxable | 2,619 | 2,271 | 2,340 | 2,145 | 1,796 | ||||||||||||||
Interest on federal funds sold | 1 | — | — | 2 | 1 | ||||||||||||||
Interest on deposits in other financial institutions | 2 | — | — | — | — | ||||||||||||||
Total Interest Income | 47,030 | 48,242 | 47,622 | 47,591 | 48,582 | ||||||||||||||
Interest Expense | |||||||||||||||||||
Interest on deposits | 5,604 | 5,775 | 6,495 | 7,028 | 7,675 | ||||||||||||||
Interest on short-term borrowings | 224 | 213 | 204 | 205 | 225 | ||||||||||||||
Interest on other borrowings | 4,025 | 4,061 | 4,086 | 4,123 | 4,081 | ||||||||||||||
Total Interest Expense | 9,853 | 10,049 | 10,785 | 11,356 | 11,981 | ||||||||||||||
Net Interest Income | 37,177 | 38,193 | 36,837 | 36,235 | 36,601 | ||||||||||||||
Provision for loan and lease losses | 3,000 | 2,354 | 7,784 | 7,727 | 3,845 | ||||||||||||||
Net Interest Income After Provision for Loan and Lease Losses | 34,177 | 35,839 | 29,053 | 28,508 | 32,756 | ||||||||||||||
Noninterest Income | |||||||||||||||||||
Service charges and fees | 3,712 | 3,584 | 3,686 | 3,657 | 3,599 | ||||||||||||||
Loan servicing income | 3,056 | 1,760 | 2,004 | 1,081 | 1,298 | ||||||||||||||
Trust fees | 2,660 | 2,613 | 2,337 | 2,384 | 2,656 | ||||||||||||||
Brokerage and insurance commissions | 939 | 910 | 889 | 918 | 856 | ||||||||||||||
Securities gains, net | 4,951 | 3,943 | 4,174 | 2,085 | 4,756 | ||||||||||||||
Gain (loss) on trading account securities | 49 | (3 | ) | (125 | ) | (83 | ) | 81 | |||||||||||
Impairment loss on securities | — | (981 | ) | — | — | — | |||||||||||||
Gains on sale of loans | 12,689 | 8,502 | 5,473 | 3,183 | 1,308 | ||||||||||||||
Valuation adjustment on mortgage servicing rights | (194 | ) | 13 | (19 | ) | — | — | ||||||||||||
Income on bank owned life insurance | 267 | 482 | 407 | 208 | 331 | ||||||||||||||
Other noninterest income | 149 | 2,565 | 212 | (171 | ) | (216 | ) | ||||||||||||
Total Noninterest Income | 28,278 | 23,388 | 19,038 | 13,262 | 14,669 | ||||||||||||||
Noninterest Expense | |||||||||||||||||||
Salaries and employee benefits | 25,384 | 23,996 | 22,135 | 17,736 | 17,480 | ||||||||||||||
Occupancy | 2,534 | 2,482 | 2,368 | 2,396 | 2,213 | ||||||||||||||
Furniture and equipment | 1,517 | 1,446 | 1,475 | 1,392 | 1,360 | ||||||||||||||
Professional fees | 3,961 | 2,760 | 3,385 | 3,110 | 3,053 | ||||||||||||||
FDIC insurance assessments | 807 | 864 | 848 | 798 | 786 | ||||||||||||||
Advertising | 1,304 | 1,071 | 1,138 | 1,191 | 1,113 | ||||||||||||||
Intangible assets amortization | 122 | 131 | 141 | 141 | 144 | ||||||||||||||
Net loss on repossessed assets | 1,307 | 2,904 | 4,255 | 1,409 | 2,511 | ||||||||||||||
Other noninterest expenses | 4,523 | 4,486 | 4,458 | 3,690 | 3,683 | ||||||||||||||
Total Noninterest Expense | 41,459 | 40,140 | 40,203 | 31,863 | 32,343 | ||||||||||||||
Income Before Income Taxes | 20,996 | 19,087 | 7,888 | 9,907 | 15,082 | ||||||||||||||
Income taxes | 7,032 | 6,272 | 1,671 | 2,549 | 4,870 | ||||||||||||||
Net Income | 13,964 | 12,815 | 6,217 | 7,358 | 10,212 | ||||||||||||||
Net (income) loss attributable to noncontrolling interest, net of tax | (7 | ) | 26 | 31 | (20 | ) | 9 | ||||||||||||
Net Income Attributable to Heartland | 13,957 | 12,841 | 6,248 | 7,338 | 10,221 | ||||||||||||||
Preferred dividends and discount | (1,021 | ) | (1,021 | ) | (1,021 | ) | (3,947 | ) | (1,336 | ) | |||||||||
Net Income Available to Common Stockholders | $ | 12,936 | $ | 11,820 | $ | 5,227 | $ | 3,391 | $ | 8,885 | |||||||||
Earnings per common share-diluted | $ | 0.77 | $ | 0.71 | $ | 0.31 | $ | 0.20 | $ | 0.54 | |||||||||
Weighted average shares outstanding-diluted | 16,717,846 | 16,729,925 | 16,599,741 | 16,585,021 | 16,568,701 | ||||||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
As Of | |||||||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 82,831 | $ | 150,122 | $ | 129,834 | $ | 81,605 | $ | 148,388 | |||||||||
Securities | 1,331,088 | 1,221,909 | 1,326,592 | 1,323,464 | 1,193,480 | ||||||||||||||
Loans held for sale | 73,284 | 103,460 | 53,528 | 36,529 | 15,770 | ||||||||||||||
Loans and leases: | |||||||||||||||||||
Held to maturity | 2,629,597 | 2,532,419 | 2,481,284 | 2,374,186 | 2,351,785 | ||||||||||||||
Loans covered by loss share agreements | 9,567 | 11,360 | 13,347 | 14,766 | 16,190 | ||||||||||||||
Allowance for loan and lease losses | (41,439 | ) | (39,362 | ) | (36,808 | ) | (44,195 | ) | (40,602 | ) | |||||||||
Loans and leases, net | 2,597,725 | 2,504,417 | 2,457,823 | 2,344,757 | 2,327,373 | ||||||||||||||
Premises, furniture and equipment, net | 114,823 | 111,946 | 110,206 | 110,127 | 118,828 | ||||||||||||||
Goodwill | 25,909 | 25,909 | 25,909 | 25,909 | 25,909 | ||||||||||||||
Other intangible assets, net | 14,295 | 13,109 | 12,960 | 12,601 | 13,103 | ||||||||||||||
Cash surrender value on life insurance | 72,448 | 72,159 | 67,084 | 66,654 | 66,425 | ||||||||||||||
Other real estate, net | 37,941 | 38,934 | 44,387 | 39,188 | 39,075 | ||||||||||||||
FDIC indemnification asset | 1,148 | 1,270 | 1,343 | 992 | 1,035 | ||||||||||||||
Other assets | 76,192 | 69,616 | 75,392 | 70,853 | 61,231 | ||||||||||||||
Total Assets | $ | 4,427,684 | $ | 4,312,851 | $ | 4,305,058 | $ | 4,112,679 | $ | 4,010,617 | |||||||||
Liabilities and Equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Demand | $ | 799,548 | $ | 771,421 | $ | 737,323 | $ | 692,893 | $ | 649,523 | |||||||||
Savings | 1,734,155 | 1,731,399 | 1,678,154 | 1,654,417 | 1,557,053 | ||||||||||||||
Brokered time deposits | 51,575 | 41,475 | 41,225 | 44,225 | 39,225 | ||||||||||||||
Other time deposits | 749,629 | 731,464 | 753,411 | 782,079 | 834,884 | ||||||||||||||
Total deposits | 3,334,907 | 3,275,759 | 3,210,113 | 3,173,614 | 3,080,685 | ||||||||||||||
Short-term borrowings | 249,485 | 229,533 | 270,081 | 173,199 | 168,021 | ||||||||||||||
Other borrowings | 377,543 | 377,362 | 372,820 | 375,976 | 379,718 | ||||||||||||||
Accrued expenses and other liabilities | 90,755 | 64,154 | 99,151 | 36,667 | 36,643 | ||||||||||||||
Total Liabilities | 4,052,690 | 3,946,808 | 3,952,165 | 3,759,456 | 3,665,067 | ||||||||||||||
Equity | |||||||||||||||||||
Preferred equity | 81,698 | 81,698 | 81,698 | 81,698 | 79,113 | ||||||||||||||
Common equity | 290,640 | 281,696 | 268,520 | 268,819 | 263,769 | ||||||||||||||
Total Heartland Stockholders' Equity | 372,338 | 363,394 | 350,218 | 350,517 | 342,882 | ||||||||||||||
Noncontrolling interest | 2,656 | 2,649 | 2,675 | 2,706 | 2,668 | ||||||||||||||
Total Equity | 374,994 | 366,043 | 352,893 | 353,223 | 345,550 | ||||||||||||||
Total Liabilities and Equity | $ | 4,427,684 | $ | 4,312,851 | $ | 4,305,058 | $ | 4,112,679 | $ | 4,010,617 | |||||||||
Common Share Data | |||||||||||||||||||
Book value per common share | $ | 17.65 | $ | 17.09 | $ | 16.29 | $ | 16.33 | $ | 16.04 | |||||||||
ASC 320 effect on book value per common share | $ | 0.98 | $ | 1.09 | $ | 0.97 | $ | 1.22 | $ | 0.86 | |||||||||
Common shares outstanding, net of treasury stock | 16,467,889 | 16,486,539 | 16,484,790 | 16,459,338 | 16,442,437 | ||||||||||||||
Tangible Capital Ratio(1) | 5.98 | % | 5.93 | % | 5.63 | % | 5.90 | % | 5.92 | % | |||||||||
(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 Six Months Ended | |||||||||||||||
6/30/2012 | 6/30/2011 | 6/30/2012 | 6/30/2011 | |||||||||||||
Average Balances | ||||||||||||||||
Assets | $ | 4,350,916 | $ | 4,014,290 | $ | 4,289,341 | $ | 4,012,077 | ||||||||
Loans and leases, net of unearned | 2,675,694 | 2,388,088 | 2,626,562 | 2,393,872 | ||||||||||||
Deposits | 3,291,293 | 3,059,360 | 3,246,183 | 3,064,057 | ||||||||||||
Earning assets | 3,870,359 | 3,600,095 | 3,827,534 | 3,591,989 | ||||||||||||
Interest bearing liabilities | 3,140,063 | 3,004,928 | 3,110,702 | 3,007,779 | ||||||||||||
Common stockholders' equity | 284,610 | 260,334 | 279,943 | 256,084 | ||||||||||||
Total stockholders' equity | 368,960 | 341,797 | 364,302 | 337,407 | ||||||||||||
Tangible common stockholders' equity | 257,212 | 232,381 | 252,477 | 228,059 | ||||||||||||
Earnings Performance Ratios | ||||||||||||||||
Annualized return on average assets | 1.20 | % | 0.89 | % | 1.16 | % | 0.59 | % | ||||||||
Annualized return on average common equity | 18.28 | % | 13.69 | % | 17.78 | % | 9.28 | % | ||||||||
Annualized return on average common tangible equity | 20.23 | % | 15.34 | % | 19.72 | % | 10.42 | % | ||||||||
Annualized net interest margin(1) | 4.05 | % | 4.23 | % | 4.14 | % | 4.21 | % | ||||||||
Efficiency ratio(2) | 66.56 | % | 67.53 | % | 67.12 | % | 68.35 | % | ||||||||
(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 | |||||||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||||||
Average Balances | |||||||||||||||||||
Assets | $ | 4,350,916 | $ | 4,225,815 | $ | 4,197,916 | $ | 4,063,330 | $ | 4,014,290 | |||||||||
Loans and leases, net of unearned | 2,675,694 | 2,577,429 | 2,487,778 | 2,399,047 | 2,388,088 | ||||||||||||||
Deposits | 3,291,293 | 3,201,073 | 3,215,793 | 3,110,978 | 3,059,360 | ||||||||||||||
Earning assets | 3,870,359 | 3,784,709 | 3,749,612 | 3,624,559 | 3,600,095 | ||||||||||||||
Interest bearing liabilities | 3,140,063 | 3,081,340 | 3,066,704 | 3,002,868 | 3,004,928 | ||||||||||||||
Common stockholders' equity | 284,610 | 275,275 | 267,025 | 270,696 | 260,334 | ||||||||||||||
Total stockholders' equity | 368,960 | 359,644 | 351,538 | 353,003 | 341,797 | ||||||||||||||
Tangible common stockholders' equity | 257,212 | 247,744 | 239,384 | 242,886 | 232,381 | ||||||||||||||
Earnings Performance Ratios | |||||||||||||||||||
Annualized return on average assets | 1.20 | % | 1.12 | % | 0.49 | % | 0.33 | % | 0.89 | % | |||||||||
Annualized return on average common equity | 18.28 | % | 17.27 | % | 7.77 | % | 4.97 | % | 13.69 | % | |||||||||
Annualized return on average common tangible equity | 20.23 | % | 19.19 | % | 8.66 | % | 5.54 | % | 15.34 | % | |||||||||
Annualized net interest margin (1) | 4.05 | % | 4.23 | % | 4.08 | % | 4.14 | % | 4.23 | % | |||||||||
Efficiency ratio (2) | 66.56 | % | 67.71 | % | 75.29 | % | 65.07 | % | 67.53 | % | |||||||||
(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 | |||||||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||||||
Loan and Lease Data | |||||||||||||||||||
Loans held to maturity: | |||||||||||||||||||
Commercial and commercial real estate | $ | 1,903,996 | $ | 1,842,566 | $ | 1,809,450 | $ | 1,725,586 | $ | 1,709,955 | |||||||||
Residential mortgage | 220,084 | 202,883 | 194,436 | 179,628 | 173,808 | ||||||||||||||
Agricultural and agricultural real estate | 279,285 | 270,687 | 262,975 | 256,857 | 255,257 | ||||||||||||||
Consumer | 230,594 | 222,387 | 220,099 | 217,007 | 217,263 | ||||||||||||||
Direct financing leases, net | 290 | 323 | 450 | 604 | 667 | ||||||||||||||
Unearned discount and deferred loan fees | (4,652 | ) | (6,427 | ) | (6,126 | ) | (5,496 | ) | (5,165 | ) | |||||||||
Total loans and leases held to maturity | $ | 2,629,597 | $ | 2,532,419 | $ | 2,481,284 | $ | 2,374,186 | $ | 2,351,785 | |||||||||
Loans covered under loss share agreements: | |||||||||||||||||||
Commercial and commercial real estate | $ | 4,497 | $ | 5,730 | $ | 6,380 | $ | 6,788 | $ | 7,315 | |||||||||
Residential mortgage | 3,309 | 3,734 | 4,158 | 4,410 | 4,747 | ||||||||||||||
Agricultural and agricultural real estate | 858 | 934 | 1,659 | 2,139 | 2,298 | ||||||||||||||
Consumer | 903 | 962 | 1,150 | 1,429 | 1,830 | ||||||||||||||
Total loans and leases covered under loss share agreements | $ | 9,567 | $ | 11,360 | $ | 13,347 | $ | 14,766 | $ | 16,190 | |||||||||
Asset Quality | |||||||||||||||||||
Not covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 44,845 | $ | 49,940 | $ | 57,435 | $ | 72,629 | $ | 68,110 | |||||||||
Loans and leases past due ninety days or more as to interest or principal payments | — | — | — | — | — | ||||||||||||||
Other real estate owned | 37,709 | 38,693 | 43,506 | 38,640 | 38,642 | ||||||||||||||
Other repossessed assets | 465 | 710 | 648 | 398 | 188 | ||||||||||||||
Total nonperforming assets not covered under loss share agreements | $ | 83,019 | $ | 89,343 | $ | 101,589 | $ | 111,667 | $ | 106,940 | |||||||||
Performing troubled debt restructured loans | 24,715 | 21,379 | 25,704 | 24,853 | 31,246 | ||||||||||||||
Covered under loss share agreements: | |||||||||||||||||||
Nonaccrual loans | $ | 2,862 | $ | 3,189 | $ | 3,345 | $ | 3,886 | $ | 4,480 | |||||||||
Other real estate owned | 232 | 241 | 881 | 548 | 433 | ||||||||||||||
Total nonperforming assets covered under loss share agreements | $ | 3,094 | $ | 3,430 | $ | 4,226 | $ | 4,434 | $ | 4,913 | |||||||||
Allowance for Loan and Lease Losses | |||||||||||||||||||
Balance, beginning of period | $ | 39,362 | $ | 36,808 | $ | 44,195 | $ | 40,602 | $ | 43,271 | |||||||||
Provision for loan and lease losses | 3,000 | 2,354 | 7,784 | 7,727 | 3,845 | ||||||||||||||
Charge-offs on loans not covered by loss share agreements | (2,219 | ) | (1,608 | ) | (15,616 | ) | (5,985 | ) | (8,076 | ) | |||||||||
Charge-offs on loans covered by loss share agreements | (35 | ) | — | (5 | ) | (168 | ) | (107 | ) | ||||||||||
Recoveries | 1,331 | 1,808 | 450 | 2,019 | 1,669 | ||||||||||||||
Balance, end of period | $ | 41,439 | $ | 39,362 | $ | 36,808 | $ | 44,195 | $ | 40,602 | |||||||||
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements | |||||||||||||||||||
Ratio of nonperforming loans and leases to total loans and leases | 1.71 | % | 1.97 | % | 2.31 | % | 3.06 | % | 2.90 | % | |||||||||
Ratio of nonperforming assets to total assets | 1.87 | % | 2.07 | % | 2.39 | % | 2.72 | % | 2.67 | % | |||||||||
Annualized ratio of net loan charge-offs to average loans and leases | 0.14 | % | (0.03 | )% | 2.42 | % | 0.66 | % | 1.08 | % | |||||||||
Allowance for loan and lease losses as a percent of loans and leases | 1.58 | % | 1.55 | % | 1.48 | % | 1.86 | % | 1.73 | % | |||||||||
Allowance for loan and lease losses as a percent of nonperforming loans and leases | 92.40 | % | 78.82 | % | 64.09 | % | 60.85 | % | 59.61 | % | |||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||
DOLLARS IN THOUSANDS | |||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
June 30, 2012 | June 30, 2011 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 954,684 | $ | 5,026 | 2.12 | % | $ | 1,081,753 | $ | 9,305 | 3.45 | % | |||||||||
Nontaxable(1) | 272,561 | 4,029 | 5.95 | 167,630 | 2,763 | 6.61 | |||||||||||||||
Total securities | 1,227,245 | 9,055 | 2.97 | 1,249,383 | 12,068 | 3.87 | |||||||||||||||
Interest bearing deposits | 6,587 | 1 | 0.06 | 4,402 | — | — | |||||||||||||||
Federal funds sold | 1,433 | 2 | 0.56 | 1,104 | 1 | 0.36 | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate(1) | 1,881,836 | 25,199 | 5.39 | 1,728,649 | 25,222 | 5.85 | |||||||||||||||
Residential mortgage | 290,702 | 3,322 | 4.60 | 186,034 | 2,483 | 5.35 | |||||||||||||||
Agricultural and agricultural real estate(1) | 276,557 | 3,929 | 5.71 | 256,962 | 4,059 | 6.34 | |||||||||||||||
Consumer | 226,295 | 5,793 | 10.30 | 215,723 | 5,004 | 9.30 | |||||||||||||||
Direct financing leases, net | 304 | 4 | 5.29 | 720 | 10 | 5.57 | |||||||||||||||
Fees on loans | — | 1,510 | — | — | 1,116 | — | |||||||||||||||
Less: allowance for loan and lease losses | (40,599 | ) | — | — | (42,882 | ) | — | — | |||||||||||||
Net loans and leases | 2,635,095 | 39,757 | 6.07 | 2,345,206 | 37,894 | 6.48 | |||||||||||||||
Total earning assets | 3,870,360 | 48,815 | 5.07 | % | 3,600,095 | 49,963 | 5.57 | % | |||||||||||||
Nonearning Assets | 480,556 | 414,195 | |||||||||||||||||||
Total Assets | $ | 4,350,916 | $ | 48,815 | $ | 4,014,290 | $ | 49,963 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,726,357 | $ | 1,718 | 0.40 | % | $ | 1,553,450 | $ | 2,406 | 0.62 | % | |||||||||
Time, $100,000 and over | 255,701 | 1,195 | 1.88 | 266,036 | 1,546 | 2.33 | |||||||||||||||
Other time deposits | 520,140 | 2,691 | 2.08 | 606,384 | 3,723 | 2.46 | |||||||||||||||
Short-term borrowings | 260,523 | 224 | 0.35 | 201,246 | 225 | 0.45 | |||||||||||||||
Other borrowings | 377,342 | 4,025 | 4.29 | 377,812 | 4,081 | 4.33 | |||||||||||||||
Total interest bearing liabilities | 3,140,063 | 9,853 | 1.26 | 3,004,928 | 11,981 | 1.60 | |||||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 789,095 | 633,490 | |||||||||||||||||||
Accrued interest and other liabilities | 52,798 | 34,075 | |||||||||||||||||||
Total noninterest bearing liabilities | 841,893 | 667,565 | |||||||||||||||||||
Stockholders' Equity | 368,960 | 341,797 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,350,916 | $ | 4,014,290 | |||||||||||||||||
Net interest income(1) | $ | 38,962 | $ | 37,982 | |||||||||||||||||
Net interest spread(1) | 3.81 | % | 3.97 | % | |||||||||||||||||
Net interest income to total earning assets(1) | 4.05 | % | 4.23 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 81.13 | % | 83.47 | % | |||||||||||||||||
(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 Six Months Ended | |||||||||||||||||||||
June 30, 2012 | June 30, 2011 | ||||||||||||||||||||
Average | Average | ||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||
Earning Assets | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 987,956 | $ | 12,598 | 2.56 | % | $ | 1,071,347 | $ | 18,526 | 3.49 | % | |||||||||
Nontaxable(1) | 245,922 | 7,523 | 6.15 | 164,536 | 5,462 | 6.69 | |||||||||||||||
Total securities | 1,233,878 | 20,121 | 3.28 | 1,235,883 | 23,988 | 3.91 | |||||||||||||||
Interest bearing deposits | 5,205 | 1 | 0.04 | 4,392 | 1 | 0.05 | |||||||||||||||
Federal funds sold | 790 | 2 | 0.51 | 718 | 1 | 0.28 | |||||||||||||||
Loans and leases: | |||||||||||||||||||||
Commercial and commercial real estate(1) | 1,854,595 | 50,189 | 5.44 | 1,737,703 | 50,179 | 5.82 | |||||||||||||||
Residential mortgage | 277,649 | 6,438 | 4.66 | 185,667 | 4,893 | 5.31 | |||||||||||||||
Agricultural and agricultural real estate(1) | 271,660 | 7,862 | 5.82 | 254,980 | 7,899 | 6.25 | |||||||||||||||
Consumer | 222,316 | 11,170 | 10.10 | 214,695 | 9,854 | 9.26 | |||||||||||||||
Direct financing leases, net | 342 | 9 | 5.29 | 827 | 23 | 5.61 | |||||||||||||||
Fees on loans | — | 2,905 | — | — | 2,370 | — | |||||||||||||||
Less: allowance for loan and lease losses | (38,901 | ) | — | — | (42,876 | ) | — | — | |||||||||||||
Net loans and leases | 2,587,661 | 78,573 | 6.11 | 2,350,996 | 75,218 | 6.45 | |||||||||||||||
Total earning assets | 3,827,534 | 98,697 | 5.19 | % | 3,591,989 | 99,208 | 5.57 | % | |||||||||||||
Nonearning Assets | 461,807 | 420,088 | |||||||||||||||||||
Total Assets | $ | 4,289,341 | $ | 98,697 | $ | 4,012,077 | $ | 99,208 | |||||||||||||
Interest Bearing Liabilities | |||||||||||||||||||||
Savings | $ | 1,703,004 | $ | 3,381 | 0.40 | % | $ | 1,553,372 | $ | 4,953 | 0.64 | % | |||||||||
Time, $100,000 and over | 251,548 | 2,423 | 1.94 | 268,242 | 3,156 | 2.37 | |||||||||||||||
Other time deposits | 526,647 | 5,575 | 2.13 | 610,033 | 7,592 | 2.51 | |||||||||||||||
Short-term borrowings | 253,807 | 437 | 0.35 | 205,639 | 484 | 0.47 | |||||||||||||||
Other borrowings | 375,696 | 8,086 | 4.33 | 370,493 | 8,017 | 4.36 | |||||||||||||||
Total interest bearing liabilities | 3,110,702 | 19,902 | 1.29 | 3,007,779 | 24,202 | 1.62 | |||||||||||||||
Noninterest Bearing Liabilities | |||||||||||||||||||||
Noninterest bearing deposits | 764,984 | 632,410 | |||||||||||||||||||
Accrued interest and other liabilities | 49,353 | 34,481 | |||||||||||||||||||
Total noninterest bearing liabilities | 814,337 | 666,891 | |||||||||||||||||||
Stockholders' Equity | 364,302 | 337,407 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 4,289,341 | $ | 4,012,077 | |||||||||||||||||
Net interest income(1) | $ | 78,795 | $ | 75,006 | |||||||||||||||||
Net interest spread(1) | 3.90 | % | 3.95 | % | |||||||||||||||||
Net interest income to total earning assets(1) | 4.14 | % | 4.21 | % | |||||||||||||||||
Interest bearing liabilities to earning assets | 81.27 | % | 83.74 | % | |||||||||||||||||
(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 | |||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||
Total Assets | |||||||||||||||
Dubuque Bank and Trust Company | $ | 1,385,409 | $ | 1,407,827 | $ | 1,382,226 | $ | 1,275,116 | $ | 1,294,654 | |||||
New Mexico Bank & Trust | 998,172 | 929,804 | 993,182 | 921,973 | 891,609 | ||||||||||
Wisconsin Bank & Trust | 497,372 | 491,741 | 524,958 | 486,319 | 453,427 | ||||||||||
Rocky Mountain Bank | 443,493 | 432,902 | 440,805 | 425,132 | 419,697 | ||||||||||
Riverside Community Bank | 360,654 | 343,232 | 325,388 | 316,945 | 322,601 | ||||||||||
Galena State Bank & Trust Co. | 309,516 | 289,740 | 290,656 | 294,299 | 296,318 | ||||||||||
Arizona Bank & Trust | 268,103 | 239,434 | 227,993 | 221,481 | 222,148 | ||||||||||
Summit Bank & Trust | 102,875 | 98,247 | 100,994 | 99,528 | 95,130 | ||||||||||
Minnesota Bank & Trust | 101,704 | 95,462 | 81,457 | 75,021 | 67,594 | ||||||||||
Total Deposits | |||||||||||||||
Dubuque Bank and Trust Company | $ | 959,273 | $ | 978,854 | $ | 938,000 | $ | 929,854 | $ | 892,526 | |||||
New Mexico Bank & Trust | 725,537 | 697,060 | 690,293 | 681,413 | 674,096 | ||||||||||
Wisconsin Bank & Trust | 415,277 | 409,994 | 429,062 | 402,957 | 371,037 | ||||||||||
Rocky Mountain Bank | 356,046 | 362,307 | 365,373 | 356,353 | 349,299 | ||||||||||
Riverside Community Bank | 305,120 | 286,529 | 264,699 | 268,432 | 271,553 | ||||||||||
Galena State Bank & Trust Co. | 257,800 | 245,780 | 243,639 | 255,006 | 257,413 | ||||||||||
Arizona Bank & Trust | 211,318 | 183,321 | 177,457 | 179,369 | 179,885 | ||||||||||
Summit Bank & Trust | 83,977 | 81,290 | 81,224 | 85,431 | 80,793 | ||||||||||
Minnesota Bank & Trust | 77,119 | 78,338 | 66,875 | 57,058 | 50,091 | ||||||||||
Net Income (Loss) | |||||||||||||||
Dubuque Bank and Trust Company | $ | 8,463 | $ | 9,604 | $ | 4,846 | $ | 5,602 | $ | 6,132 | |||||
New Mexico Bank & Trust | 1,592 | 2,216 | 2,197 | 1,509 | 2,505 | ||||||||||
Wisconsin Bank & Trust | 1,547 | 2,153 | 2,313 | 2,443 | 1,882 | ||||||||||
Rocky Mountain Bank | 2,089 | 963 | 493 | 780 | 646 | ||||||||||
Riverside Community Bank | 914 | 369 | 800 | (339 | ) | 953 | |||||||||
Galena State Bank & Trust Co. | 1,149 | 437 | 1,139 | 941 | 1,113 | ||||||||||
Arizona Bank & Trust | 981 | (215 | ) | (1,202 | ) | (960 | ) | 546 | |||||||
Summit Bank & Trust | (100 | ) | (123 | ) | (154 | ) | (160 | ) | 116 | ||||||
Minnesota Bank & Trust | 35 | (129 | ) | (157 | ) | 102 | (45 | ) | |||||||
Return on Average Assets | |||||||||||||||
Dubuque Bank and Trust Company | 2.39 | % | 2.88 | % | 1.44 | % | 1.74 | % | 1.92 | % | |||||
New Mexico Bank & Trust | 0.66 | 0.96 | 0.93 | 0.65 | 1.11 | ||||||||||
Wisconsin Bank & Trust | 1.39 | 1.69 | 1.83 | 2.05 | 1.63 | ||||||||||
Rocky Mountain Bank | 1.94 | 0.89 | 0.45 | 0.73 | 0.61 | ||||||||||
Riverside Community Bank | 1.05 | 0.45 | 0.98 | (0.42 | ) | 1.24 | |||||||||
Galena State Bank & Trust Co. | 1.58 | 0.62 | 1.54 | 1.28 | 1.61 | ||||||||||
Arizona Bank & Trust | 1.56 | (0.37 | ) | (2.13 | ) | (1.72 | ) | 0.94 | |||||||
Summit Bank & Trust | (0.40 | ) | (0.50 | ) | (0.63 | ) | (0.66 | ) | 0.49 | ||||||
Minnesota Bank & Trust | 0.15 | (0.58 | ) | (0.77 | ) | 0.56 | (0.25 | ) | |||||||
Net Interest Margin as a Percentage of Average Earning Assets | |||||||||||||||
Dubuque Bank and Trust Company | 3.67 | % | 4.03 | % | 4.00 | % | 4.01 | % | 3.62 | % | |||||
New Mexico Bank & Trust | 3.69 | 4.02 | 3.85 | 4.10 | 4.33 | ||||||||||
Wisconsin Bank & Trust | 3.99 | 4.41 | 4.30 | 4.33 | 4.60 | ||||||||||
Rocky Mountain Bank | 4.68 | 4.33 | 4.06 | 4.03 | 3.85 | ||||||||||
Riverside Community Bank | 3.38 | 3.63 | 3.64 | 3.58 | 3.90 | ||||||||||
Galena State Bank and Trust Co. | 3.42 | 3.89 | 3.69 | 3.55 | 3.86 | ||||||||||
Arizona Bank & Trust | 4.19 | 4.40 | 4.06 | 4.10 | 4.52 | ||||||||||
Summit Bank & Trust | 3.89 | 4.07 | 3.41 | 3.84 | 3.33 | ||||||||||
Minnesota Bank & Trust | 4.57 | 4.75 | 4.56 | 4.82 | 4.55 | ||||||||||
HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) | |||||||||||||||||||
DOLLARS IN THOUSANDS | |||||||||||||||||||
As of | |||||||||||||||||||
6/30/2012 | 3/31/2012 | 12/31/2011 | 9/30/2011 | 6/30/2011 | |||||||||||||||
Total Portfolio Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 824,830 | $ | 796,789 | $ | 778,467 | $ | 731,356 | $ | 730,802 | |||||||||
New Mexico Bank & Trust | 500,296 | 506,424 | 508,874 | 507,416 | 506,810 | ||||||||||||||
Wisconsin Bank & Trust | 353,152 | 340,841 | 333,112 | 318,906 | 314,432 | ||||||||||||||
Rocky Mountain Bank | 280,137 | 264,964 | 256,704 | 250,728 | 247,718 | ||||||||||||||
Riverside Community Bank | 158,186 | 153,174 | 155,320 | 155,995 | 157,901 | ||||||||||||||
Galena State Bank and Trust Co. | 169,160 | 167,677 | 157,398 | 143,680 | 138,726 | ||||||||||||||
Arizona Bank & Trust | 177,953 | 150,629 | 146,346 | 137,356 | 137,853 | ||||||||||||||
Summit Bank & Trust | 67,932 | 63,658 | 62,422 | 53,402 | 52,570 | ||||||||||||||
Minnesota Bank & Trust | 80,815 | 73,413 | 58,058 | 50,545 | 43,109 | ||||||||||||||
Allowance For Loan and Lease Losses | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 9,454 | $ | 9,584 | $ | 9,365 | $ | 10,087 | $ | 10,148 | |||||||||
New Mexico Bank & Trust | 8,705 | 7,110 | 6,633 | 10,271 | 8,405 | ||||||||||||||
Wisconsin Bank & Trust | 3,695 | 3,629 | 3,458 | 3,288 | 3,637 | ||||||||||||||
Rocky Mountain Bank | 4,325 | 4,204 | 3,865 | 3,953 | 4,074 | ||||||||||||||
Riverside Community Bank | 3,114 | 3,206 | 2,834 | 4,770 | 2,702 | ||||||||||||||
Galena State Bank & Trust Co. | 1,808 | 1,854 | 1,835 | 1,956 | 2,077 | ||||||||||||||
Arizona Bank & Trust | 5,390 | 5,315 | 4,627 | 5,590 | 5,502 | ||||||||||||||
Summit Bank & Trust | 1,370 | 1,132 | 1,012 | 1,108 | 1,091 | ||||||||||||||
Minnesota Bank & Trust | 822 | 748 | 588 | 507 | 449 | ||||||||||||||
Nonperforming Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | $ | 2,508 | $ | 3,107 | $ | 3,634 | $ | 4,298 | $ | 4,910 | |||||||||
New Mexico Bank & Trust | 10,856 | 13,368 | 15,161 | 15,404 | 16,053 | ||||||||||||||
Wisconsin Bank & Trust | 7,463 | 7,482 | 8,074 | 11,871 | 10,359 | ||||||||||||||
Rocky Mountain Bank | 6,005 | 7,787 | 8,662 | 14,180 | 16,971 | ||||||||||||||
Riverside Community Bank | 5,222 | 5,458 | 6,729 | 5,870 | 5,962 | ||||||||||||||
Galena State Bank & Trust Co. | 3,778 | 3,699 | 3,853 | 5,309 | 5,182 | ||||||||||||||
Arizona Bank & Trust | 5,645 | 5,755 | 7,927 | 10,811 | 4,054 | ||||||||||||||
Summit Bank & Trust | 2,691 | 2,709 | 2,848 | 4,159 | 3,905 | ||||||||||||||
Minnesota Bank & Trust | 6 | 6 | 6 | 6 | 110 | ||||||||||||||
Allowance As a Percent of Total Loans and Leases | |||||||||||||||||||
Dubuque Bank and Trust Company | 1.15 | % | 1.20 | % | 1.20 | % | 1.38 | % | 1.39 | % | |||||||||
New Mexico Bank & Trust | 1.74 | 1.40 | 1.30 | 2.02 | 1.66 | ||||||||||||||
Wisconsin Bank & Trust | 1.05 | 1.06 | 1.04 | 1.03 | 1.16 | ||||||||||||||
Rocky Mountain Bank | 1.54 | 1.59 | 1.51 | 1.58 | 1.64 | ||||||||||||||
Riverside Community Bank | 1.97 | 2.09 | 1.82 | 3.06 | 1.71 | ||||||||||||||
Galena State Bank & Trust Co. | 1.07 | 1.11 | 1.17 | 1.36 | 1.50 | ||||||||||||||
Arizona Bank & Trust | 3.03 | 3.53 | 3.16 | 4.07 | 3.99 | ||||||||||||||
Summit Bank & Trust | 2.02 | 1.78 | 1.62 | 2.07 | 2.08 | ||||||||||||||
Minnesota Bank & Trust | 1.02 | 1.02 | 1.01 | 1.00 | 1.04 | ||||||||||||||