EX-99.1 2 ex9912023q3newsrelease.htm EX-99.1 Document

htlflogo-01.jpg
newslogoa61.jpg
CONTACT:FOR IMMEDIATE RELEASE
Bryan R. McKeagOctober 30, 2023
Executive Vice President
Chief Financial Officer
(563) 589-1994
BMcKeag@htlf.com

HEARTLAND FINANCIAL USA, INC. ("HTLF") REPORTS QUARTERLY AND YEAR TO DATE RESULTS AS OF SEPTEMBER 30, 2023

Highlights and Developments
§Quarterly net income available to common stockholders of $46.1 million
§Quarterly diluted earnings per common share of $1.08, which includes $.04 of acquisition, integration and restructuring costs
§Quarterly loan growth of $154.5 million or 1%
§Total customer deposit growth during the quarter of $152.3 million or 1%
§Nonperforming assets to total assets and 30-89 day loan delinquencies remained unchanged at 0.33% and 0.12%, respectively
§Nonperforming loans to total loans decreased to 0.44% from 0.54% at June 30, 2023 and 0.60% at September 30, 2022
§Completed the consolidation of two bank charters during the quarter, and the final charter was consolidated following the end of the quarter
Quarter Ended
September 30,		Nine Months Ended September 30,
2023202220232022
Net income available to common stockholders (in millions)$46.1 $54.6 $144.2 $145.5 
Diluted earnings per common share1.08 1.28 3.37 3.42 
Return on average assets0.94 %1.13 %1.00 %1.04 %
Return on average common equity10.47 12.93 11.28 10.80 
Return on average tangible common equity (non-GAAP)(1)
16.34 20.76 17.83 16.79 
Net interest margin3.14 3.41 3.23 3.22 
Net interest margin, fully tax-equivalent (non-GAAP)(1)
3.18 3.45 3.27 3.27 
Efficiency ratio63.77 58.84 61.86 61.39 
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)(1)
59.95 55.26 58.98 58.99 
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

"HTLF delivered another solid quarter highlighted by loan and customer deposit growth, reduced wholesale deposits and continued stable credit quality while effectively managing core expenses. We are also pleased that we successfully completed the final charter consolidation and look forward to 2024 with this significant project behind us."
Bruce K. Lee, President and Chief Executive Officer, HTLF


Denver, Monday, October 30, 2023-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended September 30, 2023, compared to the quarter ended September 30, 2022:
•Net income available to common stockholders of $46.1 million compared to $54.6 million, a decrease of $8.5 million or 16%.
•Earnings per diluted common share of $1.08 compared to $1.28, a decrease of $0.20 or 16%.
•Earnings per diluted common share included $0.04 of acquisition, integration and restructuring costs in both quarters.
•Net interest income of $145.8 million compared to $155.9 million, a decrease of $10.1 million or 6%.
•Return on average assets was 0.94% compared to 1.13%.
•Return on average common equity was 10.47% compared to 12.93%.
•Return on average tangible common equity (non-GAAP) was 16.34% compared to 20.76%.

"HTLF delivered another solid quarter highlighted by loan and customer deposit growth, reduced wholesale deposits and continued stable credit quality while effectively managing core expenses. We are also pleased that we successfully completed the final charter consolidation and look forward to 2024 with this significant project behind us," said Bruce K. Lee, president and chief executive officer of HTLF.

HTLF reported the following results for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022:
•Net income available to common stockholders of $144.2 million compared to $145.5 million, a decrease of $1.2 million or 1%.
•Earnings per diluted common share of $3.37 compared to $3.42, a decrease of $0.05 or 1%.
•Earnings per diluted common share included $0.11 of acquisition, integration and restructuring costs compared to $0.10.
•Net interest income of $445.1 million compared to $433.0 million, an increase of $12.1 million or 3%.
•Return on average assets was 1.00% compared to 1.04%.
•Return on average common equity was 11.28% compared to 10.80%.
•Return on average tangible common equity (non-GAAP) was 17.83% compared to 16.79%.

Charter Consolidation Update

During the third quarter of 2023, Rocky Mountain Bank and New Mexico Bank & Trust were consolidated into HTLF Bank. Subsequent to September 30, 2023, Dubuque Bank and Trust Company was consolidated into HTLF Bank, which marked the completion of charter consolidation. Total consolidation restructuring costs are projected to be $18-$19 million with approximately $2-$3 million of expenses remaining to be incurred in 2023.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.14% (3.18% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2023 compared to 3.19% (3.23% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2023, and 3.41% (3.45% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2022.

Total interest income and average earning asset changes for the third quarter of 2023 compared to the third quarter of 2022 were:
•Total interest income was $245.4 million compared to $175.8 million, an increase of $69.6 million or 40%, primarily attributable to an increase in average earning assets and higher yields.
•Total interest income on a tax-equivalent basis (non-GAAP) was $247.6 million, an increase of $69.6 million or 39% from $178.0 million.
•Average earning assets increased $281.2 million or 2% to $18.44 billion compared to $18.16 billion.
•The average rate on earning assets increased 144 basis points to 5.33% from 3.89%, primarily due to recent interest rate increases.

Total interest expense and average interest bearing liability changes for the third quarter of 2023 compared to the third quarter of 2022 were:


•Total interest expense was $99.7 million, an increase of $79.7 million from $19.9 million, due to increases in the average interest rate paid and the average balance of interest bearing liabilities.
•The average interest rate paid on interest bearing liabilities increased 234 basis points to 3.01% from 0.67%.
•Average interest bearing deposits increased $1.47 billion or 13% to $12.68 billion from $11.22 billion, primarily due to an increase of $1.36 billion in wholesale deposits.
•The average interest rate paid on interest bearing deposits increased 236 basis points to 2.90% from 0.54%.
•Average borrowings decreased $30.8 million or 6% to $475.7 million from $506.5 million, and the average interest rate paid on borrowings was 5.78% compared to 3.74%.

Net interest income changes for the third quarter of 2023 compared to the third quarter of 2022 were:
•Net interest income totaled $145.8 million compared to $155.9 million, a decrease of $10.1 million or 6%.
•Net interest income on a tax-equivalent basis (non-GAAP) totaled $147.9 million compared to $158.0 million, a decrease of $10.1 million or 6%.

Noninterest Income and Noninterest Expense

Total noninterest income was $28.4 million during the third quarter of 2023 compared to $29.2 million during the third quarter of 2022, a decrease of $798,000 or 3%. Significant changes within the noninterest income category for the third quarter of 2023 compared to the third quarter of 2022 were:
•Service charges and fees increased $1.3 million or 7% to $18.6 million from $17.3 million.
•Trust fees decreased $638,000 or 12% to $4.7 million from $5.4 million, primarily attributable to reduced retirement plan services income following the sale of the recordkeeping and administrative functions of HTLF Retirement Plan Services.
•Net security losses totaled $114,000 compared to net losses of $1.1 million.
•Net gains on sales of loans held for sale decreased $927,000 or 51% to $905,000 from $1.8 million, primarily attributable to a decrease in residential mortgage loans sold to the secondary market.
•Other noninterest income decreased $1.4 million or 69% to $619,000 compared to $2.0 million. During the third quarter of 2022, HTLF received a $637,000 recovery on an acquired loan that had been charged off prior to acquisition.
Total noninterest expense was $111.1 million during the third quarter of 2023 compared to $108.9 million during the third quarter of 2022, which was an increase of $2.2 million or 2%. Significant changes within the noninterest expense category for the third quarter of 2023 compared to the third quarter of 2022 were:
•Salaries and employee benefits totaled $62.3 million compared to $62.7 million, a decrease of $399,000 or 1%. The decrease was attributable to a reduction of full-time equivalent employees and lower incentive compensation expense, mostly offset by higher salary expense. Full-time equivalent employees totaled 1,965 compared to 2,020, a decrease of 55 or 3%.
•FDIC insurance assessments totaled $3.3 million compared to $2.0 million, an increase of $1.3 million due to assessment rate changes that were effective with the first quarter 2023 assessment.
•Other noninterest expenses totaled $15.3 million compared to $13.6 million, an increase of $1.7 million or 12%. Credit card processing expenses increased $1.4 million or 49% to $4.3 million from $2.9 million.

The effective tax rate was 21.89% for the third quarter of 2023 compared to 19.97% for third quarter of 2022. The following items impacted the third quarter 2023 and 2022 tax calculations:
•Various tax credits of $1.6 million compared to $1.7 million.
•Tax expense of $1.6 million compared to $258,000 resulting from the disallowed interest expense related to tax-exempt loans and securities, aligning with increases in total interest expense.
•Tax-exempt interest income as a percentage of pre-tax income of 13.14% compared to 11.45%.

Total Assets, Total Loans and Total Deposits

Total assets were $20.13 billion at September 30, 2023, a decrease of $114.4 million or 1% from $20.24 billion at year-end 2022. Securities represented 32% and 35% of total assets at September 30, 2023, and December 31, 2022, respectively.



Total loans held to maturity were $11.87 billion at September 30, 2023, compared to $11.72 billion at June 30, 2023, and $11.43 billion at December 31, 2022, representing increases of $154.5 million or 1%, and $444.1 million or 4%, respectively.

Significant changes by loan category at September 30, 2023 compared to June 30, 2023 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $31.7 million or 1% to $6.03 billion compared to $5.99 billion.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $142.0 million or 4% to $3.69 billion compared to $3.54 billion.
•Residential mortgage loans decreased $14.6 million or 2% to $813.8 million from $828.4 million.

Significant changes by loan category at September 30, 2023 compared to December 31, 2022 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $284.5 million or 5% to $6.03 billion compared to $5.74 billion.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $278.9 million or 8% to $3.69 billion compared to $3.41 billion.
•Agricultural and agricultural real estate loans decreased $78.4 million or 9% to $842.1 million compared to $920.5 million.
•Residential mortgage loans decreased $39.6 million or 5% to $813.8 million compared to $853.4 million.

Total deposits were $17.10 billion as of September 30, 2023, compared to $17.66 billion at June 30, 2023, which was a decrease of $562.6 million or 3%. Total deposits were $17.10 billion as of September 30, 2023, compared to $17.51 billion at December 31, 2022, a decrease of $412.0 million or 2%.

Total customer deposits were $14.80 billion as of September 30, 2023 compared to $14.65 billion at June 30, 2023, which was an increase of $152.3 million or 1%. Significant customer deposit changes by category at September 30, 2023, compared to June 30, 2023, included:
•Customer demand deposits decreased $105.0 million or 2% to $4.79 billion compared to $4.90 billion.
•Customer savings deposits increased $40.8 million or 1% to $8.19 billion compared to $8.15 billion.
•Customer time deposits increased $216.5 million or 14% to $1.81 billion compared to $1.60 billion.

Total customer deposits were $14.80 billion at September 30, 2023 compared to $15.22 billion at December 31, 2022, which was a decrease of $426.2 million or 3%. Significant customer deposit changes by category at September 30, 2023 compared to December 31, 2022, included:
•Customer demand deposits decreased $908.5 million or 16% to $4.79 billion compared to $5.70 billion.
•Customer savings deposits decreased $480.5 million or 6% to $8.19 billion compared to $8.67 billion.
•Customer time deposits increased $962.8 million to $1.81 billion compared to $851.5 million.

Total wholesale and institutional deposits were $2.30 billion as of September 30, 2023, which was a decrease of $714.8 million or 24% from $3.02 billion at June 30, 2023. Significant wholesale and institutional deposit changes by category at September 30, 2023, compared to June 30, 2023, included:
•Wholesale and institutional savings deposits decreased $58.5 million or 9% to $564.5 million compared to $623.0 million.
•Wholesale time deposits decreased $656.3 million or 27% to $1.74 billion compared to $2.40 billion.

Total wholesale and institutional deposits were $2.30 billion as of September 30, 2023, which was an increase of $14.2 million or 1% from $2.29 billion at December 31, 2022. Significant wholesale and institutional deposit changes by category at September 30, 2023 compared to December 31, 2022 included:
•Wholesale and institutional savings deposits decreased $759.0 million or 57% to $564.5 million compared to $1.32 billion.
•Wholesale time deposits increased $773.2 million or 80% to $1.74 billion compared to $965.7 million.



Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the third quarter of 2023 was $2.7 million, which was a decrease of $1.7 million from $4.4 million recorded in the third quarter of 2022.

The allowance for credit losses for loans totaled $110.2 million at September 30, 2023 and $109.5 million at December 31, 2022. The following items impacted the allowance for credit losses for loans at September 30, 2023:
•Provision expense for the nine months ended September 30, 2023, totaled $12.7 million.
•Net charge-offs of $12.0 million were recorded for the first nine months of 2023.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $2.7 million or 13% to $17.5 million at September 30, 2023, from $20.2 million at December 31, 2022, primarily due to a reduction of $85.6 million in unfunded commitments for construction loans, which carry the highest loss rate. Total unfunded commitments increased $84.1 million or 2% to $4.81 billion at September 30, 2023 compared to $4.73 billion at December 31, 2022.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $1.5 million for the third quarter of 2023 compared to $5.5 million for the third quarter of 2022. The total allowance for lending related credit losses was $127.7 million or 1.08% of total loans at September 30, 2023, compared to $129.7 million or 1.13% of total loans as of December 31, 2022.

Nonperforming Assets

Nonperforming assets decreased $753,000 or 1% to $66.2 million or 0.33% of total assets at September 30, 2023, compared to $66.9 million or 0.33% of total assets at December 31, 2022. Nonperforming loans were $51.8 million or 0.44% of total loans at September 30, 2023, compared to $58.5 million or 0.51% of total loans at December 31, 2022. At September 30, 2023, loans delinquent 30-89 days were 0.12% of total loans compared to 0.04% of total loans at December 31, 2022. Other real estate owned, net, increased $6.0 million or 71% to $14.4 million at September 30, 2023 from $8.4 million at December 31, 2022. HTLF added one property with a book value of $11.3 million to other real estate during the third quarter of 2023.

Non-GAAP Financial Measures
This earnings release contains references to financial measures which are not defined by generally accepted accounting principles ("GAAP"). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company's financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. Because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP measures in this earnings release with other companies' non-GAAP measures. Reconciliations of each non-GAAP measure to the most directly comparable GAAP measure may be found in the financial tables in this earnings release.

Below are the non-GAAP measures included in this earnings release, management's reason for including each measure and the method of calculating each measure:
•Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
•Adjusted efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this earnings release.
•Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
•Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included


as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
•Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
•Adjusted tangible common equity ratio is total common equity less goodwill, core deposit and customer relationship intangibles, net, and accumulated other comprehensive loss divided by total assets less goodwill and core deposit and customer relationship intangibles, net, and the fair value adjustment on securities and derivatives, net of deferred taxes. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength, composition and trends on a comparable basis by excluding the variability of the fair value of securities and derivatives, net of deferred taxes.
•Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
•Annualized ratio of core expenses to average assets adjusts noninterest expenses to exclude specific items noted in the reconciliation. Management includes this measure as it is considered to be a critical metric to analyze and evaluate controllable expenses related to primary business operations.
Conference Call Details
HTLF will host a conference call for shareholders, analysts and other interested parties at 5:00 p.m. EDT today. To join via webcast, please visit https://ir.htlf.com/news-and-events/event-calendar/default.aspx 10 minutes prior to the call. A replay will be available until October 29, 2024, by logging on to www.htlf.com.

About HTLF
Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $20.13 billion as of September 30, 2023. HTLF's banks serve communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, wealth management, investments and residential mortgage. Additional information is available at www.htlf.com.

Safe Harbor Statement
This release (including any information incorporated herein by reference) and future oral and written statements of HTLF and its management, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, financial condition, results of operations, plans, objectives and future performance of HTLF.

Any statements about HTLF's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of HTLF's operations or performance, and may be based upon beliefs, expectations and assumptions of HTLF's management. These forward-looking statements are generally identified by the use of the words such as "believe", "expect", "anticipate", "plan", "intend", "estimate", "project", "may", "will", "would", "could", "should", "view", "opportunity", "potential", or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of HTLF and its management. Although HTLF may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of HTLF to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, 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 HTLF currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF's reports filed with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section under Item 1A of Part I of HTLF’s Annual Report on Form 10-K for the year ended December 31, 2022, include, among others:
•Economic and Market Conditions Risks, including risks related to the deterioration of the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, pandemics, such as the COVID-19 pandemic or future pandemics and governmental measures


addressing them, climate change and climate-related regulations, persistent inflation, higher interest rates, recession, supply chain issues, labor shortages, terrorist threats or acts of war;
•Credit Risks, including risks of increasing credit losses due to deterioration in the financial condition of HTLF's borrowers, changes in asset and collateral values and climate and other borrower industry risks which may impact the provision for credit losses and net charge-offs;
•Liquidity and Interest Rate Risks, including the impact of capital market conditions, rising interest rates and changes in monetary policy on our borrowings and net interest income;
•Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
•Strategic and External Risks, including economic, political and competitive forces impacting our business;
•Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and
•Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.

There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF's business, financial condition and results of operations. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events or to otherwise update any statement in light of new information or future events. Further information concerning HTLF and its business, including additional factors that could materially affect HTLF’s financial results, is included in HTLF's filings with the SEC.

-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,
2023202220232022
Interest Income
Interest and fees on loans$182,394 $122,913 $505,136 $334,000 
Interest on securities:
Taxable54,800 45,648 168,948 116,366 
Nontaxable6,584 6,164 18,990 17,874 
Interest on federal funds sold3 — 3 — 
Interest on deposits with other banks and short-term investments1,651 1,081 4,833 1,715 
Total Interest Income245,432 175,806 697,910 469,955 
Interest Expense
Interest on deposits92,744 15,158 231,617 24,665 
Interest on short-term borrowings1,167 360 4,437 494 
Interest on other borrowings5,765 4,412 16,756 11,780 
Total Interest Expense99,676 19,930 252,810 36,939 
Net Interest Income145,756 155,876 445,100 433,016 
Provision for credit losses1,516 5,492 9,969 11,983 
Net Interest Income After Provision for Credit Losses144,240 150,384 435,131 421,033 
Noninterest Income
Service charges and fees18,553 17,282 55,316 50,599 
Loan servicing income278 831 1,403 1,951 
Trust fees4,734 5,372 15,810 17,130 
Brokerage and insurance commissions692 649 2,065 2,357 
Capital markets fees1,845 1,809 8,331 9,719 
Securities losses, net(114)(1,055)(1,532)(272)
Unrealized gain/(loss) on equity securities, net13 (211)165 (615)
Net gains on sale of loans held for sale905 1,832 3,786 8,144 
Valuation adjustment on servicing rights— — — 1,658 
Income on bank owned life insurance858 694 3,042 1,741 
Other noninterest income619 1,978 2,489 5,877 
Total Noninterest Income28,383 29,181 90,875 98,289 
Noninterest Expense
Salaries and employee benefits62,262 62,661 186,510 192,867 
Occupancy6,438 6,794 20,338 21,250 
Furniture and equipment2,720 2,928 8,698 9,480 
Professional fees13,616 14,289 41,607 42,286 
FDIC insurance assessments3,313 1,988 9,627 5,134 
Advertising1,633 1,554 6,670 4,392 
Core deposit and customer relationship intangibles amortization1,625 1,856 5,128 5,993 
Other real estate and loan collection expenses, net481 304 984 577 
(Gain)/loss on sales/valuations of assets, net108 (251)(2,149)(3,435)
Acquisition, integration and restructuring costs2,429 2,156 5,994 5,144 
Partnership investment in tax credit projects1,136 979 1,828 1,793 
Other noninterest expenses15,292 13,625 46,307 40,678 
Total Noninterest Expense111,053 108,883 331,542 326,159 
Income Before Income Taxes61,570 70,682 194,464 193,163 
Income taxes13,479 14,118 44,181 41,637 
Net Income48,091 56,564 150,283 151,526 
Preferred dividends(2,013)(2,013)(6,038)(6,038)
Net Income Available to Common Stockholders$46,078 $54,551 $144,245 $145,488 
Earnings per common share-diluted$1.08 $1.28 $3.37 $3.42 
Weighted average shares outstanding-diluted42,812,563 42,643,940 42,769,872 42,596,301 



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Interest Income
Interest and fees on loans$182,394 $168,899 $153,843 $143,970 $122,913 
Interest on securities:
Taxable54,800 58,172 55,976 53,178 45,648 
Nontaxable6,584 6,378 6,028 6,132 6,164 
Interest on federal funds sold3 — — 11 — 
Interest on deposits with other banks and short-term investments1,651 2,051 1,131 1,410 1,081 
Total Interest Income245,432 235,500 216,978 204,701 175,806 
Interest Expense
Interest on deposits92,744 81,975 56,898 32,215 15,158 
Interest on short-term borrowings1,167 848 2,422 2,223 360 
Interest on other borrowings5,765 5,545 5,446 5,043 4,412 
Total Interest Expense99,676 88,368 64,766 39,481 19,930 
Net Interest Income145,756 147,132 152,212 165,220 155,876 
Provision for credit losses1,516 5,379 3,074 3,387 5,492 
Net Interest Income After Provision for Credit Losses144,240 141,753 149,138 161,833 150,384 
Noninterest Income
Service charges and fees18,553 19,627 17,136 17,432 17,282 
Loan servicing income278 411 714 790 831 
Trust fees4,734 5,419 5,657 5,440 5,372 
Brokerage and insurance commissions692 677 696 629 649 
Capital markets fees1,845 4,037 2,449 1,824 1,809 
Securities losses, net(114)(314)(1,104)(153)(1,055)
Unrealized gain/(loss) on equity securities, net13 (41)193 (7)(211)
Net gains on sale of loans held for sale905 1,050 1,831 888 1,832 
Valuation adjustment on servicing rights— — — — — 
Income on bank owned life insurance858 1,220 964 600 694 
Other noninterest income619 407 1,463 2,532 1,978 
Total Noninterest Income28,383 32,493 29,999 29,975 29,181 
Noninterest Expense
Salaries and employee benefits62,262 62,099 62,149 61,611 62,661 
Occupancy6,438 6,691 7,209 6,905 6,794 
Furniture and equipment2,720 3,063 2,915 3,019 2,928 
Professional fees13,616 15,194 12,797 16,320 14,289 
FDIC insurance assessments3,313 3,035 3,279 1,866 1,988 
Advertising1,633 3,052 1,985 1,829 1,554 
Core deposit and customer relationship intangibles amortization1,625 1,715 1,788 1,841 1,856 
Other real estate and loan collection expenses, net481 348 155 373 304 
(Gain)/loss on sales/valuations of assets, net108 (3,372)1,115 2,388 (251)
Acquisition, integration and restructuring costs2,429 1,892 1,673 2,442 2,156 
Partnership investment in tax credit projects1,136 154 538 3,247 979 
Other noninterest expenses15,292 15,575 15,440 15,377 13,625 
Total Noninterest Expense111,053 109,446 111,043 117,218 108,883 
Income Before Income Taxes61,570 64,800 68,094 74,590 70,682 
Income taxes13,479 15,384 15,318 13,936 14,118 
Net Income48,091 49,416 52,776 60,654 56,564 
Preferred dividends(2,013)(2,012)(2,013)(2,012)(2,013)
Net Income Available to Common Stockholders$46,078 $47,404 $50,763 $58,642 $54,551 
Earnings per common share-diluted$1.08 $1.11 $1.19 $1.37 $1.28 
Weighted average shares outstanding-diluted42,812,563 42,757,603 42,742,878 42,699,752 42,643,940 



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As of
9/30/20236/30/20233/31/202312/31/20229/30/2022
Assets
Cash and due from banks$248,756 $317,303 $274,354 $309,045 $250,394 
Interest bearing deposits with other banks and short-term investments99,239 82,884 87,757 54,042 149,466 
Cash and cash equivalents347,995 400,187 362,111 363,087 399,860 
Time deposits in other financial institutions1,490 1,490 1,740 1,740 1,740 
Securities:
Carried at fair value5,482,687 5,798,041 6,096,657 6,147,144 6,060,331 
Held to maturity, at cost, less allowance for credit losses835,468 834,673 832,098 829,403 830,247 
Other investments, at cost90,001 72,291 72,364 74,567 80,286 
Loans held for sale6,262 14,353 10,425 5,277 9,570 
Loans:
Held to maturity11,872,436 11,717,974 11,495,353 11,428,352 10,923,532 
 Allowance for credit losses(110,208)(111,198)(112,707)(109,483)(105,715)
Loans, net11,762,228 11,606,776 11,382,646 11,318,869 10,817,817 
Premises, furniture and equipment, net187,436 190,420 191,267 197,330 203,585 
Goodwill576,005 576,005 576,005 576,005 576,005 
Core deposit and customer relationship intangibles, net20,026 21,651 23,366 25,154 26,995 
Servicing rights, net— — — 7,840 8,379 
Cash surrender value on life insurance196,694 195,793 194,419 193,403 193,184 
Other real estate, net14,362 2,677 7,438 8,401 8,030 
Other assets609,139 510,359 432,008 496,008 466,921 
Total Assets$20,129,793 $20,224,716 $20,182,544 $20,244,228 $19,682,950 
Liabilities and Equity
Liabilities
Deposits:
 Demand$4,792,813 $4,897,858 $5,119,554 $5,701,340 $6,083,563 
 Savings8,754,911 8,772,596 9,256,609 9,994,391 10,060,523 
 Time3,553,269 3,993,089 3,305,183 1,817,278 1,123,035 
Total deposits17,100,993 17,663,543 17,681,346 17,513,009 17,267,121 
Short-term borrowings392,634 44,364 92,337 376,117 147,000 
Other borrowings372,059 372,403 372,097 371,753 371,446 
Accrued expenses and other liabilities438,577 285,416 207,359 248,294 241,425 
Total Liabilities18,304,263 18,365,726 18,353,139 18,509,173 18,026,992 
Stockholders' Equity
Preferred equity110,705 110,705 110,705 110,705 110,705 
Common stock42,656 42,645 42,559 42,467 42,444 
Capital surplus1,088,267 1,087,358 1,084,112 1,080,964 1,079,277 
Retained earnings1,226,740 1,193,522 1,158,948 1,120,925 1,074,168 
Accumulated other comprehensive loss(642,838)(575,240)(566,919)(620,006)(650,636)
Total Equity1,825,530 1,858,990 1,829,405 1,735,055 1,655,958 
Total Liabilities and Equity$20,129,793 $20,224,716 $20,182,544 $20,244,228 $19,682,950 





HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
For the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Average Balances
Assets$20,207,920 $20,221,511 $20,118,005 $19,913,849 $19,775,341 
Loans, net of unearned11,800,064 11,625,442 11,378,078 11,117,513 10,783,135 
Deposits17,507,813 17,689,138 17,505,867 17,319,218 17,282,289 
Earning assets18,439,010 18,523,552 18,392,649 18,175,838 18,157,795 
Interest bearing liabilities13,158,631 13,209,794 12,582,234 11,980,032 11,723,026 
Common equity1,746,818 1,727,013 1,655,860 1,548,739 1,674,306 
Total stockholders' equity1,857,523 1,837,718 1,766,565 1,659,444 1,785,011 
Tangible common equity (non-GAAP)(1)
1,149,992 1,128,527 1,055,617 946,688 1,070,399 
Key Performance Ratios
Annualized return on average assets0.94 %0.98 %1.06 %1.21 %1.13 %
Annualized return on average common equity (GAAP)10.47 11.01 12.43 15.02 12.93 
Annualized return on average tangible common equity (non-GAAP)(1)
16.34 17.33 20.05 25.19 20.76 
Annualized ratio of net charge-offs/(recoveries) to average loans0.12 0.32 (0.04)(0.06)0.00 
Annualized net interest margin (GAAP)3.14 3.19 3.36 3.61 3.41 
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.18 3.23 3.40 3.65 3.45 
Efficiency ratio (GAAP)63.77 60.93 60.94 60.05 58.84 
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)
59.95 59.88 57.16 54.33 55.26 
Annualized ratio of total noninterest expenses to average assets (GAAP)2.18 2.17 2.24 2.34 2.18 
Annualized ratio of core expenses to average assets (non-GAAP)(1)
2.08 2.16 2.14 2.14 2.09 
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

For the Quarter Ended
September 30,		For the Nine Months Ended
September 30,
2023202220232022
Average Balances
Assets$20,207,920 $19,775,341 $20,182,808 $19,523,433 
Loans, net of unearned11,800,064 10,783,135 11,602,741 10,437,409 
Deposits17,507,813 17,282,289 17,567,614 16,931,730 
Earning assets18,439,010 18,157,795 18,451,907 17,969,001 
Interest bearing liabilities13,158,631 11,723,026 12,985,665 11,255,232 
Common equity1,746,818 1,674,306 1,710,230 1,801,835 
Total stockholders' equity1,857,523 1,785,011 1,820,935 1,912,540 
Tangible common stockholders' equity1,149,992 1,070,399 1,111,724 1,195,952 
Key Performance Ratios
Annualized return on average assets0.94 %1.13 %1.00 %1.04 %
Annualized return on average common equity (GAAP)10.47 12.93 11.28 10.80 
Annualized return on average tangible common equity (non-GAAP)(1)
16.34 20.76 17.83 16.79 
Annualized ratio of net charge-offs/(recoveries) to average loans0.12 0.00 0.14 0.17 
Annualized net interest margin (GAAP)3.14 3.41 3.23 3.22 
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.18 3.45 3.27 3.27 
Efficiency ratio (GAAP)63.77 58.84 61.86 61.39 
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)
59.95 55.26 58.98 58.99 
Total noninterest expenses to average assets (GAAP)2.18 2.18 2.20 2.23 
Core expenses to average assets (non-GAAP)(1)
2.08 2.09 2.12 2.17 
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA
As of and for the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Common Share Data
Book value per common share$40.20 $41.00 $40.38 $38.25 $36.41 
Tangible book value per common share (non-GAAP)(1)
26.23 26.98 26.30 24.09 22.20 
ASC 320 effect on book value per common share(16.27)(14.04)(13.35)(14.58)(15.31)
Common shares outstanding, net of treasury stock42,656,303 42,644,544 42,558,726 42,467,394 42,444,106 
Tangible common equity ratio (non-GAAP)(1)
5.73 %5.86 %5.72 %5.21 %4.94 %
Adjusted tangible common equity ratio (non-GAAP)(1)
8.73 %8.54 %8.37 %8.11 %8.07 %
Other Selected Trend Information
Effective tax rate21.89 %23.74 %22.50 %18.68 %19.97 %
Full time equivalent employees1,965 1,966 1,991 2,002 2,020 
Loans Held to Maturity
Commercial and industrial$3,591,809 $3,590,680 $3,498,345 $3,464,414 $3,278,703 
Paycheck Protection Program ("PPP") 3,750 4,139 8,258 11,025 13,506 
Owner occupied commercial real estate 2,429,659 2,398,698 2,312,538 2,265,307 2,285,973 
Commercial and business lending6,025,218 5,993,517 5,819,141 5,740,746 5,578,182 
Non-owner occupied commercial real estate2,656,358 2,530,736 2,421,341 2,330,940 2,219,542 
Real estate construction1,029,554 1,013,134 1,102,186 1,076,082 996,017 
Commercial real estate lending 3,685,912 3,543,870 3,523,527 3,407,022 3,215,559 
Total commercial lending 9,711,130 9,537,387 9,342,668 9,147,768 8,793,741 
Agricultural and agricultural real estate842,116 839,817 810,183 920,510 781,354 
Residential mortgage813,803 828,437 841,084 853,361 852,928 
Consumer505,387 512,333 501,418 506,713 495,509 
Total loans held to maturity$11,872,436 $11,717,974 $11,495,353 $11,428,352 $10,923,532 
Total unfunded loan commitments $4,813,798 $4,905,147 $4,867,925 $4,729,677 $4,664,379 
Deposits
Demand-customer$4,792,813 $4,897,858 $5,119,554 $5,701,340 $6,083,563 
Savings-customer8,190,430 8,149,596 8,501,337 8,670,898 8,691,545 
Savings-wholesale and institutional564,481 623,000 755,272 1,323,493 1,368,978 
  Total savings8,754,911 8,772,596 9,256,609 9,994,391 10,060,523 
Time-customer1,814,335 1,597,849 1,071,476 851,539 973,035 
Time-wholesale1,738,934 2,395,240 2,233,707 965,739 150,000 
  Total time 3,553,269 3,993,089 3,305,183 1,817,278 1,123,035 
Total deposits $17,100,993 $17,663,543 $17,681,346 $17,513,009 $17,267,121 
Total customer deposits$14,797,578 $14,645,303 $14,692,367 $15,223,777 $15,748,143 
Total wholesale and institutional deposits 2,303,415 3,018,240 2,988,979 2,289,232 1,518,978 
Total deposits$17,100,993 $17,663,543 $17,681,346 $17,513,009 $17,267,121 
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As of and for the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Allowance for Credit Losses-Loans
Balance, beginning of period$111,198 $112,707 $109,483 $105,715 $101,353 
Provision for credit losses2,672 7,829 2,184 2,075 4,388 
Charge-offs(3,964)(9,613)(2,151)(2,668)(938)
Recoveries302 275 3,191 4,361 912 
Balance, end of period$110,208 $111,198 $112,707 $109,483 $105,715 
Allowance for Unfunded Commitments
Balance, beginning of period$18,636 $21,086 $20,196 $18,884 $17,780 
Provision for credit losses(1,156)(2,450)890 1,312 1,104 
Balance, end of period$17,480 $18,636 $21,086 $20,196 $18,884 
Allowance for lending related credit losses$127,688 $129,834 $133,793 $129,679 $124,599 
Provision for Credit Losses
Provision for credit losses-loans$2,672 $7,829 $2,184 $2,075 $4,388 
Provision (benefit) for credit losses-unfunded commitments (1,156)(2,450)890 1,312 1,104 
Total provision for credit losses$1,516 $5,379 $3,074 $3,387 $5,492 
Asset Quality
Nonaccrual loans$51,304 $61,956 $58,066 $58,231 $64,560 
Loans past due ninety days or more 511 1,459 174 273 678 
Other real estate owned14,362 2,677 7,438 8,401 8,030 
Other repossessed assets1 5 24 26 — 
Total nonperforming assets$66,178 $66,097 $65,702 $66,931 $73,268 
Nonperforming Assets Activity
Balance, beginning of period$66,097 $65,702 $66,931 $73,268 $67,532 
Net loan (charge-offs)/recoveries (3,662)(9,338)1,040 1,693 (26)
New nonperforming loans19,295 19,805 4,626 1,439 8,388 
Reduction of nonperforming loans(1)
(14,691)(5,253)(5,711)(8,875)(2,015)
Net OREO/repossessed assets sales proceeds and losses(861)(4,819)(1,184)(594)(611)
Balance, end of period$66,178 $66,097 $65,702 $66,931 $73,268 
Asset Quality Ratios
Ratio of nonperforming loans to total loans0.44 %0.54 %0.51 %0.51 %0.60 %
Ratio of nonperforming assets to total assets0.33 0.33 0.33 0.33 0.37 
Annualized ratio of net loan charge-offs/(recoveries) to average loans 0.12 0.32 (0.04)(0.06)0.00 
Allowance for loan credit losses as a percent of loans0.93 0.95 0.98 0.96 0.97 
Allowance for lending related credit losses as a percent of loans1.08 1.11 1.16 1.13 1.14 
Allowance for loan credit losses as a percent of nonperforming loans212.70 175.35 193.52 187.14 162.05 
Loans delinquent 30-89 days as a percent of total loans0.12 0.12 0.10 0.04 0.10 
(1) Includes principal reductions, transfers to performing status and transfers to OREO.



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
For the Quarter Ended
September 30, 2023June 30, 2023September 30, 2022
Average
Balance		InterestRateAverage
Balance		InterestRateAverage
Balance		InterestRate
Earning Assets
Securities:
Taxable$5,726,057 $54,800 3.80 %$5,962,207 $58,172 3.91 %$6,303,278 $45,648 2.87 %
Nontaxable(1)
881,162 8,085 3.64 895,458 7,896 3.54 951,232 7,802 3.25 
Total securities6,607,219 62,885 3.78 6,857,665 66,068 3.86 7,254,510 53,450 2.92 
Interest on deposits with other banks and short-term investments142,301 1,651 4.60 153,622 2,051 5.36 222,170 1,081 1.93 
Federal funds sold152 3 7.83 — — — 11 — — 
Loans:(2)
Commercial and industrial(1)
3,610,677 63,001 6.92 3,565,449 56,644 6.37 3,182,134 37,526 4.68 
PPP loans3,948 11 1.11 6,302 24 1.53 17,859 363 8.06 
Owner occupied commercial real estate2,412,501 30,127 4.95 2,366,107 28,031 4.75 2,272,666 23,601 4.12 
Non-owner occupied commercial real estate2,586,011 38,779 5.95 2,462,098 35,583 5.80 2,258,424 25,895 4.55 
Real estate construction 1,027,544 19,448 7.51 1,028,109 18,528 7.23 914,520 12,382 5.37 
Agricultural and agricultural real estate822,957 12,582 6.07 848,554 12,256 5.79 799,823 8,966 4.45 
Residential mortgage827,402 9,482 4.55 840,741 9,383 4.48 858,119 8,665 4.01 
Consumer509,024 9,615 7.49 508,082 9,068 7.16 479,590 6,028 4.99 
Less: allowance for credit losses-loans(110,726)— — (113,177)— — (102,031)— — 
Net loans11,689,338 183,045 6.21 11,512,265 169,517 5.91 10,681,104 123,426 4.58 
Total earning assets18,439,010 247,584 5.33 %18,523,552 237,636 5.15 %18,157,795 177,957 3.89 %
Nonearning Assets1,768,910 1,697,959 1,617,546 
Total Assets$20,207,920 $20,221,511 $19,775,341 
Interest Bearing Liabilities
Savings$8,737,581 $49,195 2.23 %$8,935,775 $41,284 1.85 %$10,059,652 $12,907 0.51 %
Time deposits3,945,371 43,549 4.38 3,812,330 40,691 4.28 1,156,908 2,251 0.77 
Short-term borrowings103,567 1,167 4.47 89,441 848 3.80 134,974 360 1.06 
Other borrowings372,112 5,765 6.15 372,248 5,545 5.97 371,492 4,412 4.71 
Total interest bearing liabilities13,158,631 99,676 3.01 %13,209,794 88,368 2.68 %11,723,026 19,930 0.67 %
Noninterest Bearing Liabilities
Noninterest bearing deposits4,824,861 4,941,033 6,065,729 
Accrued interest and other liabilities366,905 232,966 201,575 
Total noninterest bearing liabilities5,191,766 5,173,999 6,267,304 
Equity1,857,523 1,837,718 1,785,011 
Total Liabilities and Equity$20,207,920 $20,221,511 $19,775,341 
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$147,908 $149,268 $158,027 
Net interest spread(1)
2.32 %2.47 %3.22 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.18 %3.23 %3.45 %
Interest bearing liabilities to earning assets71.36 %71.31 %64.56 %
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.






HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
For the Nine Months Ended
September 30, 2023September 30, 2022
Average
Balance		InterestRateAverage
Balance		InterestRate
Earning Assets
Securities:
Taxable$5,927,026 $168,948 3.81 %$6,407,459 $116,366 2.43 %
Nontaxable(1)
899,613 23,611 3.51 990,784 22,625 3.05 
Total securities6,826,639 192,559 3.77 7,398,243 138,991 2.51 %
Interest bearing deposits with other banks and other short-term investments133,910 4,833 4.83 238,819 1,715 0.96 
Federal funds sold51 3 7.86 7 — — 
Loans:(2)
Commercial and industrial(1)
3,547,256 169,552 6.39 %2,977,751 95,020 4.27 
PPP loans 6,718 61 1.21 63,342 6,487 13.69 
Owner occupied commercial real estate2,355,545 84,927 4.82 2,270,486 67,742 3.99 
Non-owner occupied commercial real estate2,459,965 105,111 5.71 2,166,873 69,929 4.31 
Real estate construction1,051,298 56,107 7.14 880,354 31,673 4.81 
Agricultural and agricultural real estate
835,673 36,191 5.79 776,127 23,905 4.12 
Residential mortgage840,143 28,138 4.48 850,444 25,108 3.95 
Consumer506,143 26,925 7.11 452,032 15,632 4.62 
Less: allowance for credit losses-loans(111,434)— — (105,477)— — 
Net loans11,491,307 507,012 5.90 10,331,932 335,496 4.34 
Total earning assets18,451,907 704,407 5.10 %17,969,001 476,202 3.54 %
Nonearning Assets1,730,901 1,554,432 
Total Assets$20,182,808 $19,523,433 
Interest Bearing Liabilities
Savings$9,130,980 $128,372 1.88 %$9,652,651 $20,673 0.29 %
Time deposits3,344,434 103,245 4.13 1,106,095 3,992 0.48 
Short-term borrowings138,157 4,437 4.29 124,459 494 0.53 
Other borrowings372,094 16,756 6.02 372,027 11,780 4.23 
Total interest bearing liabilities12,985,665 252,810 2.60 %11,255,232 36,939 0.44 %
Noninterest Bearing Liabilities
Noninterest bearing deposits5,092,200 6,172,984 
Accrued interest and other liabilities284,008 182,677 
Total noninterest bearing liabilities5,376,208 6,355,661 
Stockholders' Equity1,820,935 1,912,540 
Total Liabilities and Stockholders' Equity$20,182,808 $19,523,433 
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$451,597 $439,263 
Net interest spread(1)
2.50 %3.10 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.27 %3.27 %
Interest bearing liabilities to earning assets70.38 %62.64 %
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
For the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)$46,078 $47,404 $50,763 $58,642 $54,551 
Plus core deposit and customer relationship intangibles amortization, net of tax(1)
1,284 1,354 1,413 1,455 1,466 
Net income available to common stockholders excluding intangible amortization (non-GAAP)$47,362 $48,758 $52,176 $60,097 $56,017 
Average common equity (GAAP)$1,746,818 $1,727,013 $1,655,860 $1,548,739 $1,674,306 
Less average goodwill576,005 576,005 576,005 576,005 576,005 
Less average core deposit and customer relationship intangibles, net20,821 22,481 24,238 26,046 27,902 
Average tangible common equity (non-GAAP)$1,149,992 $1,128,527 $1,055,617 $946,688 $1,070,399 
Annualized return on average common equity (GAAP)10.47 %11.01 %12.43 %15.02 %12.93 %
Annualized return on average tangible common equity (non-GAAP)16.34 %17.33 %20.05 %25.19 %20.76 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)$145,756 $147,132 $152,212 $165,220 $155,876 
Plus tax-equivalent adjustment(1)
2,152 2,136 2,209 2,152 2,151 
Net interest income, fully tax-equivalent (non-GAAP)$147,908 $149,268 $154,421 $167,372 $158,027 
Average earning assets$18,439,010 $18,523,552 $18,392,649 $18,175,838 $18,157,795 
Annualized net interest margin (GAAP)3.14 %3.19 %3.36 %3.61 %3.41 %
Annualized net interest margin, fully tax-equivalent (non-GAAP)3.18 3.23 3.40 3.65 3.45 
Net purchase accounting discount amortization on loans included in annualized net interest margin 0.01 0.03 0.02 0.03 0.03 
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)$1,714,825 $1,748,285 $1,718,700 $1,624,350 $1,545,253 
Less goodwill576,005 576,005 576,005 576,005 576,005 
Less core deposit and customer relationship intangibles, net20,026 21,651 23,366 25,154 26,995 
Tangible common equity (non-GAAP)$1,118,794 $1,150,629 $1,119,329 $1,023,191 $942,253 
Common shares outstanding, net of treasury stock42,656,303 42,644,544 42,558,726 42,467,394 42,444,106 
Common equity (book value) per share (GAAP)$40.20 $41.00 $40.38 $38.25 $36.41 
Tangible book value per common share (non-GAAP)$26.23 $26.98 $26.30 $24.09 $22.20 
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)$1,118,794 $1,150,629 $1,119,329 $1,023,191 $942,253 
Total assets (GAAP)$20,129,793 $20,224,716 $20,182,544 $20,244,228 $19,682,950 
Less goodwill576,005 576,005 576,005 576,005 576,005 
Less core deposit and customer relationship intangibles, net20,026 21,651 23,366 25,154 26,995 
Total tangible assets (non-GAAP)$19,533,762 $19,627,060 $19,583,173 $19,643,069 $19,079,950 
Tangible common equity ratio (non-GAAP)5.73 %5.86 %5.72 %5.21 %4.94 %


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
9/30/20236/30/20233/31/202312/31/20229/30/2022
Reconciliation of Adjusted Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)$1,118,794 $1,150,629 $1,119,329 $1,023,191 $942,253 
Accumulated other comprehensive loss642,838 575,240 566,919 620,006 650,636 
Adjusted tangible common equity (non-GAAP)$1,761,632 $1,725,869 $— $1,686,248 $1,643,197 $1,592,889 
Total tangible assets (non-GAAP)$19,533,762 $19,627,060 $19,583,173 $19,643,069 $19,079,950 
Fair value adjustment for securities and derivatives, net of deferred taxes642,838 575,240 566,919 620,006 650,636 
Total adjusted tangible assets (non-GAAP)$20,176,600 $20,202,300 $20,150,092 $20,263,075 $19,730,586 
Adjusted tangible common equity ratio (non-GAAP)8.73 %8.54 %8.37 %8.11 %8.07 %
Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)
Net interest income (GAAP)$145,756 $147,132 $152,212 $165,220 $155,876 
Tax-equivalent adjustment(1)
2,152 2,136 2,209 2,152 2,151 
Fully tax-equivalent net interest income 147,908 149,268 154,421 167,372 158,027 
Noninterest income (GAAP)28,383 32,493 29,999 29,975 29,181 
Securities losses, net114 314 1,104 153 1,055 
Unrealized (gain)/loss on equity securities, net(13)41 (193)7 211 
Gain on extinguishment of debt — — — — — 
Valuation adjustment on servicing rights— — — — — 
Adjusted revenue (non-GAAP)$176,392 $182,116 $185,331 $197,507 $188,474 
Total noninterest expenses (GAAP)$111,053 $109,446 $111,043 $117,218 $108,883 
Less:
Core deposit and customer relationship intangibles amortization1,625 1,715 1,788 1,841 1,856 
Partnership investment in tax credit projects1,136 154 538 3,247 979 
(Gain)/loss on sales/valuation of assets, net 108 (3,372)1,115 2,388 (251)
Acquisition, integration and restructuring costs2,429 1,892 1,673 2,442 2,156 
Core expenses (non-GAAP)$105,755 $109,057 $105,929 $107,300 $104,143 
Efficiency ratio (GAAP)63.77 %60.93 %60.94 %60.05 %58.84 %
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)59.95 %59.88 %57.16 %54.33 %55.26 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)$111,053 $109,446 $111,043 $117,218 $108,883 
Core expenses (non-GAAP)105,755 109,057 105,929 107,300 104,143 
Average assets $20,207,920 $20,221,511 $20,118,005 $19,913,849 $19,775,341 
Total noninterest expenses to average assets (GAAP)2.18 %2.17 %2.24 %2.34 %2.18 %
Core expenses to average assets (non-GAAP)2.08 %2.16 %2.14 %2.14 %2.09 %
Acquisition, integration and restructuring costs
Salaries and employee benefits$94 $93 $74 $424 $365 
Occupancy— — — — — 
Furniture and equipment— — — — — 
Professional fees1,617 1,068 934 1,587 1,480 
Advertising178 222 122 95 131 
(Gain)/loss on sales/valuations of assets, net — — — — — 
Other noninterest expenses540 509 543 336 180 
Total acquisition, integration and restructuring costs$2,429 $1,892 $1,673 $2,442 $2,156 
After tax impact on diluted earnings per common share(1)
$0.04 $0.03 $0.03 $0.05 $0.04 
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.



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,
2023202220232022
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)$46,078 $54,551 $144,245 $145,488 
Plus core deposit and customer relationship intangibles amortization, net of tax(1)
1,284 1,466 4,051 4,734 
Net income available to common stockholders excluding intangible amortization (non-GAAP)$47,362 $56,017 $148,296 $150,222 
Average common equity (GAAP)$1,746,818 $1,674,306 $1,710,230 $1,801,835 
Less average goodwill576,005 576,005 576,005 576,005 
Less average core deposit and customer relationship intangibles, net20,821 27,902 22,501 29,878 
Average tangible common equity (non-GAAP)$1,149,992 $1,070,399 $1,111,724 $1,195,952 
Annualized return on average common equity (GAAP)10.47 %12.93 %11.28 %10.80 %
Annualized return on average tangible common equity (non-GAAP)16.34 %20.76 %17.83 %16.79 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)$145,756 $155,876 $445,100 $433,016 
Plus tax-equivalent adjustment(1)
2,152 2,151 6,497 6,247 
Net interest income, fully tax-equivalent (non-GAAP)$147,908 $158,027 $451,597 $439,263 
Average earning assets$18,439,010 $18,157,795 $18,451,907 $17,969,001 
Annualized net interest margin (GAAP)3.14 %3.41 %3.23 %3.22 %
Annualized net interest margin, fully tax-equivalent (non-GAAP)3.18 3.45 3.27 3.27 
Purchase accounting discount amortization on loans included in annualized net interest margin0.01 0.03 0.02 0.05 
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)For the Quarter Ended
September 30,		For the Nine Months Ended
September 30,
2023202220232022
Net interest income (GAAP)$145,756 $155,876 $445,100 $433,016 
Tax-equivalent adjustment(1)
2,152 2,151 6,497 6,247 
Fully tax-equivalent net interest income147,908 158,027 451,597 439,263 
Noninterest income (GAAP)28,383 29,181 90,875 98,289 
Securities (gains)/losses, net114 1,055 1,532 272 
Unrealized (gain)/loss on equity securities, net(13)211 (165)615 
Valuation adjustment on servicing rights— — — (1,658)
Adjusted revenue (non-GAAP)$176,392 $188,474 $543,839 $536,781 
Total noninterest expenses (GAAP)$111,053 $108,883 $331,542 $326,159 
Less:
Core deposit and customer relationship intangibles amortization1,625 1,856 5,128 5,993 
Partnership investment in tax credit projects1,136 979 1,828 1,793 
(Gain)/loss on sales/valuation of assets, net108 (251)(2,149)(3,435)
Acquisition, integration and restructuring costs2,429 2,156 5,994 5,144 
Core expenses (non-GAAP)$105,755 $104,143 $320,741 $316,664 
Efficiency ratio (GAAP)63.77 %58.84 %61.86 %61.39 %
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)59.95 %55.26 %58.98 %58.99 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)$111,053 $108,883 $331,542 $326,159 
Core expenses (non-GAAP)105,755 104,143 320,741 316,664 
Average assets$20,207,920 $19,775,341 $20,182,808 $19,523,433 
Total noninterest expenses to average assets (GAAP)2.18 %2.18 %2.20 %2.23 %
Core expenses to average assets (non-GAAP)2.08 %2.09 %2.12 %2.17 %
Acquisition, integration and restructuring costs
Salaries and employee benefits$94 $365 $261 $980 
Professional fees1,617 1,480 3,619 3,495 
Advertising178 131 522 287 
Other noninterest expenses540 180 1,592 382 
Total acquisition, integration and restructuring costs$2,429 $2,156 $5,994 $5,144 
After tax impact on diluted earnings per common share(1)
$0.04 $0.04 $0.11 $0.10 
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.