EX-99.1 2 ex991q32022pressrelease.htm EX-99.1 Document

htlflogo-01.jpg
newslogoa61.jpg
CONTACT:FOR IMMEDIATE RELEASE
Bryan R. McKeagOctober 31, 2022
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, 2022

Highlights and Developments
§Quarterly loan growth of $254.8 million or 2%, exclusive of Paycheck Protection Program ("PPP") loans
§Total revenue growth of $8.1 million or 5% during the quarter to $185.1 million
§Quarterly net income available to common stockholders of $54.6 million
§Efficiency ratio of 55.26%
§Diluted earnings per common share of $1.28
§Quarterly net charge-offs of $26,000 and 30-89 day loan delinquencies were 0.10% of total loans
§Completed the consolidation of two bank charters during the quarter, and one charter consolidation completed subsequent to the end of the quarter
Quarter Ended
September 30,		Nine Months Ended September 30,
2022202120222021
Net income available to common stockholders (in millions)$54.6 $53.9 $145.5 $164.3 
Diluted earnings per common share1.28 1.27 3.42 3.88 
Return on average assets1.13 %1.19 %1.04 %1.25 %
Return on average common equity12.93 10.32 10.80 10.95 
Return on average tangible common equity (non-GAAP)(1)
20.76 15.14 16.79 16.34 
Net interest margin3.41 3.30 3.22 3.37 
Net interest margin, fully tax-equivalent (non-GAAP)(1)
3.45 3.34 3.27 3.41 
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)
55.26 60.38 58.99 58.05 
(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 completed another successful quarter as we continue to execute on our growth and efficiency strategies. Our third quarter results were highlighted by an improved efficiency ratio, solid loan growth and clean credit metrics."
Bruce K. Lee, president and chief executive officer, HTLF


Dubuque, Iowa, Monday, October 31, 2022-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021:
•Net income available to common stockholders of $54.6 million compared to $53.9 million, an increase of $640,000 or 1%.
•Earnings per diluted common share of $1.28 compared to $1.27, an increase of $0.01 or 1%.
•Net interest income of $155.9 million compared to $142.6 million, an increase of $13.3 million or 9%.
•Return on average assets was 1.13% compared to 1.19%.
•Return on average common equity was 12.93% compared to 10.32%.
•Return on average tangible common equity (non-GAAP) was 20.76% compared to 15.14%.

"HTLF completed another successful quarter as we continue to execute on our growth and efficiency strategies. Our third quarter results were highlighted by an improved efficiency ratio, solid loan growth and clean credit metrics," said Bruce K. Lee, president and chief executive officer of HTLF.

HTLF reported the following results for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021:
•Net income available to common stockholders of $145.5 million compared to $164.3 million, a decrease of $18.8 million or 11%.
•Earnings per diluted common share of $3.42 compared to $3.88, a decrease of $0.46 or 12%.
•Net interest income of $433.0 million compared to $423.4 million, an increase of $9.7 million or 2%.
•Return on average assets was 1.04% compared to 1.25%.
•Return on average common equity was 10.80% compared to 10.95%.
•Return on average tangible common equity (non-GAAP) was 16.79% compared to 16.34%.

Charter Consolidation Update

During the third quarter of 2022, the charters of Premier Valley Bank and Minnesota Bank & Trust were consolidated into HTLF Bank. Subsequent to September 30, 2022, the Arizona Bank & Trust charter was consolidated into HTLF Bank. Citywide Banks, Premier Valley Bank, Minnesota Bank & Trust and Arizona Bank & Trust are now operating as divisions of HTLF Bank. During the fourth quarter of 2022, one additional charter consolidation is expected to be completed, and the remaining six charters are expected to be consolidated by the end of 2023. Charter consolidation follows a template that retains the current brands, local leadership and local decision making.

Consolidation restructuring costs are projected to be $19-$20 million with approximately $12-$13 million of expenses remaining to be incurred through 2023. Charter consolidation is designed to eliminate redundancies and improve HTLF’s operating efficiency and capacity to support ongoing product and service enhancements, as well as current and future growth. HTLF realized some operating efficiency and financial benefits in the third quarter of 2022 with the completion of two charter consolidations, and total benefits are estimated to be approximately $20.0 million annually after the project is completed.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.41% (3.45% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2022 compared to 3.30% (3.34% on a fully tax-equivalent basis, non-GAAP) for the third quarter of 2021.

Total interest income and average earning asset changes for the third quarter of 2022 compared to the third quarter of 2021 were:
•Total interest income was $175.8 million compared to $149.2 million, which was an increase of $26.6 million or 18% and primarily attributable to an increase in average earning assets and higher yields partially offset by a reduction of PPP loan interest income. PPP loan interest income totaled $363,000 compared to $11.2 million, which was a decrease of $10.8 million or 97%.
•Total interest income on a tax-equivalent basis (non-GAAP) was $178.0 million, which was an increase of $27.1 million or 18% from $150.9 million.
•Average earning assets increased $1.03 billion or 6% to $18.16 billion compared to $17.12 billion.


•The average rate on earning assets increased 39 basis points to 3.89% compared to 3.50%, which was primarily due to recent interest rate increases.

Total interest expense and average interest bearing liability changes for the third quarter of 2022 compared to the third quarter of 2021 were:
•Total interest expense was $19.9 million, an increase of $13.3 million from $6.6 million, based on an increase in the average interest rate paid and an increase in average interest bearing liabilities.
•The average interest rate paid on interest bearing liabilities increased to 0.67% compared to 0.27%.
•Average interest bearing deposits increased $1.76 billion or 19% to $11.22 billion from $9.46 billion.
•The average interest rate paid on interest bearing deposits increased 40 basis points to 0.54% compared to 0.14%.
•Average borrowings increased $86.6 million or 21% to $506.5 million from $419.9 million, and the average interest rate paid on borrowings was 3.74% compared to 3.02%.

Net interest income changes for the third quarter of 2022 compared to the third quarter of 2021 were:
•Net interest income totaled $155.9 million compared to $142.5 million, which was an increase of $13.3 million or 9%.
•Net interest income on a tax-equivalent basis (non-GAAP) totaled $158.0 million compared to $144.3 million, which was an increase of $13.8 million or 10%.

Noninterest Income and Noninterest Expense

Total noninterest income was $29.2 million during the third quarter of 2022 compared to $32.7 million during the third quarter of 2021, a decrease of $3.5 million or 11%. Significant changes within the noninterest income category for the third quarter of 2022 compared to the third quarter of 2021 were:
•Service charges and fees increased $1.7 million or 11% to $17.3 million from $15.1 million, which was primarily attributable to an increase of $1.2 million or 25% in credit card revenue to $6.2 million compared to $5.0 million.
•Net security losses totaled $1.1 million compared to net gains of $1.5 million.
•Net gains on sales of loans held for sale totaled $1.8 million compared to $5.3 million, which was a decrease of $3.4 million or 65% and was primarily attributable to a decrease of loans sold to the secondary market.
•Other noninterest income totaled $3.8 million compared to $1.2 million, which was an increase of $2.5 million and was primarily attributable to an increase in commercial swap fees and syndication income to $1.8 million from $131,000.
Total noninterest expense was $108.9 million during the third quarter of 2022 compared to $110.6 million during the third quarter of 2021, which was a decrease of $1.7 million or 2%. Significant changes within the noninterest expense category for the third quarter of 2022 compared to the third quarter of 2021 were:
•Salaries and employee benefits totaled $62.7 million compared to $60.7 million, which was an increase of $2.0 million or 3%. The increase was primarily attributable to higher incentive compensation expenses.
•Acquisition, integration and restructuring costs totaled $2.2 million compared to $204,000, an increase of $2.0 million due to the progression of the charter consolidation project.
•Partnership investment in tax credit projects decreased $1.4 million or 59% to $979,000 from $2.4 million.
•Occupancy expense decreased $572,000 or 8% to $6.8 million from $7.4 million, and furniture and equipment expense decreased $437,000 or 13% to $2.9 million from $3.4 million. These decreases are primarily attributable to the reduction in branch locations. Branch locations totaled 121 at September 30, 2022, compared to 131 at September 30, 2021.

The effective tax rate was 19.97% for the third quarter of 2022 compared to 19.15% for the third quarter of 2021. The following items impacted the third quarter 2022 and 2021 tax calculations:
•Solar energy tax credits of $1.1 million compared to $2.1 million.
•Federal low-income housing tax credits of $519,000 compared to $135,000.
•New markets tax credits of $75,000 in each quarterly calculation.
•Historic rehabilitation tax credits of $63,000 compared to $327,000.
•Tax-exempt interest income as a percentage of pre-tax income of 11.45% compared to 9.32%.



Total Assets, Total Loans and Total Deposits

Total assets were $19.68 billion at September 30, 2022, an increase of $408.4 million or 2% from $19.27 billion at year-end 2021. Securities represented 35% and 40% of total assets at September 30, 2022, and December 31, 2021, respectively.

During the third quarter of 2022, HTLF transferred taxable municipal bonds with a book value of $934.5 million and a fair value of $748.3 million from the available for sale portfolio to the held to maturity portfolio.

Total loans held to maturity were $10.92 billion at September 30, 2022, compared to $9.95 billion at December 31, 2021, which was an increase of $969.0 million or 10%. Excluding total PPP loans, loans increased $254.8 million or 2% since June 30, 2022 and $1.16 billion or 12% since December 31, 2021.

Significant changes by loan category at September 30, 2022 compared to June 30, 2022 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $212.8 million or 4% to $5.58 billion compared to $5.37 billion.
•PPP loans originated in 2020 ("PPP I") decreased $883,000 or 32%. PPP loans originated in 2021 ("PPP II") decreased $8.6 million or 43%.
•Excluding total PPP loans, commercial and business lending increased $222.3 million or 4% to $5.56 billion from $5.34 billion.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $48.8 million or 2% to $3.22 billion compared to $3.17 billion.
•Agricultural and agricultural real estate loans decreased $55.3 million or 7% to $781.4 million compared to $836.7 million.
•Consumer loans increased $31.4 million or 7% to $495.5 million from $464.1 million.

Significant changes by loan category at September 30, 2022 compared to December 31, 2021 included:
•Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $492.9 million or 10% to $5.58 billion compared to $5.09 billion.
•PPP I loans decreased $25.2 million or 93%. PPP II loans decreased $161.1 million or 93%.
•Excluding total PPP loans, commercial and business lending increased $679.3 million or 14% to $5.56 billion from $4.89 billion.
•Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $348.8 million or 12% to $3.22 billion compared to $2.87 billion.
•Agricultural and agricultural real estate loans increased $27.6 million or 4% to $781.4 million compared to $753.8 million.
•Consumer loans increased $76.0 million or 18% to $495.5 million from $419.5 million.

Total deposits were $17.27 billion as of September 30, 2022, compared to $16.42 billion at December 31, 2021. Significant deposit changes by category at September 30, 2022 compared to December 31, 2021 included:
•Demand deposits decreased $411.8 million or 6% to $6.08 billion compared to $6.50 billion.
•Savings deposits increased $1.16 billion or 13% to $10.06 billion from $8.90 billion.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the third quarter of 2022 was $4.4 million, which was an increase of $8.8 million from a provision benefit of $4.4 million recorded in the third quarter of 2021. The provision expense for the third quarter of 2022 reflects a stable credit environment with a deteriorating economic outlook due to the long-term impact of rising interest rates and record high inflation. The provision benefit recorded in the third quarter of 2021 reflected an improving credit environment coming off elevated COVID reserving levels with an improving economic outlook due to waning COVID concerns.

The allowance for credit losses for loans totaled $105.7 million and $110.1 million at September 30, 2022, and December 31, 2021, respectively. The following items impacted the allowance for credit losses for loans at September 30, 2022:
•Provision expense for the nine months ended September 30, 2022, totaled $8.6 million.
•Net charge offs of $12.9 million were recorded for the first nine months of 2022.


•Nonpass loans declined to 5.3% of total loans compared to 7.4% of total loans at December 31, 2021.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments totaled $18.9 million at September 30, 2022, which was an increase of $3.4 million from $15.5 million at December 31, 2021. Unfunded commitments increased $834.2 million to $4.66 billion at September 30, 2022 compared to $3.83 billion at December 31, 2021.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $5.5 million for the third quarter of 2022 compared to provision benefit of $4.5 million for the third quarter of 2021. The total allowance for lending related credit losses was $124.6 million or 1.14% of total loans at September 30, 2022, compared to $125.6 million or 1.26% of total loans as of December 31, 2021.

Nonperforming Assets

Nonperforming assets increased $1.4 million or 2% to $73.3 million or 0.37% of total assets at September 30, 2022, compared to $71.9 million or 0.37% of total assets at December 31, 2021. Nonperforming loans were $65.2 million or 0.60% of total loans at September 30, 2022, compared to $69.9 million or 0.70% of total loans at December 31, 2021. At September 30, 2022, loans delinquent 30-89 days were 0.10% of total loans compared to 0.07% of total loans at December 31, 2021.

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. Additionally, 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.
•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.
•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 30, 2023, by logging on to www.htlf.com.

About HTLF
Heartland Financial USA, Inc., operating under the brand name HTLF, is a financial services company with assets of $19.68 billion. HTLF has banks serving 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", "may", "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, 2021, include, among others:
•Coronavirus Disease 2019 ("COVID-19") Pandemic Risks, including risks related to the ongoing COVID-19 pandemic and measures enacted by the U.S. federal and state governments and adopted by private businesses in response to the COVID-19 pandemic;
•Economic and Market Conditions Risks, including risks related to changes in the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, 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 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. In addition, many of these risks and uncertainties are currently amplified


by and may continue to be amplified by the COVID-19 pandemic and the impact of varying governmental responses that affect HTLF’s customers and the economies where they operate. 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,
2022202120222021
Interest Income
Interest and fees on loans$122,913 $112,062 $334,000 $336,416 
Interest on securities:
Taxable45,648 32,384 116,366 94,373 
Nontaxable6,164 4,609 17,874 13,673 
Interest on federal funds sold— — — 1 
Interest on deposits with other banks and short-term investments1,081 132 1,715 258 
Total Interest Income175,806 149,187 469,955 444,721 
Interest Expense
Interest on deposits15,158 3,444 24,665 11,629 
Interest on short-term borrowings360 98 494 348 
Interest on other borrowings4,412 3,102 11,780 9,378 
Total Interest Expense19,930 6,644 36,939 21,355 
Net Interest Income155,876 142,543 433,016 423,366 
Provision (benefit) for credit losses5,492 (4,534)11,983 (12,262)
Net Interest Income After Provision (Benefit) for Credit Losses150,384 147,077 421,033 435,628 
Noninterest Income
Service charges and fees17,282 15,551 50,599 44,354 
Loan servicing income831 784 1,951 2,495 
Trust fees5,372 6,221 17,130 18,037 
Brokerage and insurance commissions649 866 2,357 2,584 
Securities gains/(losses), net(1,055)1,535 (272)4,347 
Unrealized gain/ (loss) on equity securities, net(211)112 (615)85 
Net gains on sale of loans held for sale1,832 5,281 8,144 16,454 
Valuation adjustment on servicing rights— 195 1,658 586 
Income on bank owned life insurance694 940 1,741 2,706 
Other noninterest income3,787 1,239 15,596 4,557 
Total Noninterest Income29,181 32,724 98,289 96,205 
Noninterest Expense
Salaries and employee benefits62,661 60,689 192,867 177,083 
Occupancy6,794 7,366 21,250 22,683 
Furniture and equipment2,928 3,365 9,480 9,959 
Professional fees16,277 17,242 47,420 46,969 
Advertising1,554 1,921 4,392 5,039 
Core deposit and customer relationship intangibles amortization1,856 2,295 5,993 7,226 
Other real estate and loan collection expenses, net304 78 577 627 
(Gain)/loss on sales/valuations of assets, net(251)(3)(3,435)374 
Acquisition, integration and restructuring costs2,156 204 5,144 3,342 
Partnership investment in tax credit projects979 2,374 1,793 3,754 
Other noninterest expenses13,625 15,096 40,678 39,370 
Total Noninterest Expense108,883 110,627 326,159 316,426 
Income Before Income Taxes70,682 69,174 193,163 215,407 
Income taxes14,118 13,250 41,637 45,064 
Net Income56,564 55,924 151,526 170,343 
Preferred dividends(2,013)(2,013)(6,038)(6,038)
Net Income Available to Common Stockholders$54,551 $53,911 $145,488 $164,305 
Earnings per common share-diluted$1.28 $1.27 $3.42 $3.88 
Weighted average shares outstanding-diluted42,643,940 42,415,993 42,596,301 42,381,313 



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
9/30/20226/30/20223/31/202212/31/20219/30/2021
Interest Income
Interest and fees on loans$122,913 $108,718 $102,369 $107,721 $112,062 
Interest on securities:
Taxable45,648 38,098 32,620 30,637 32,384 
Nontaxable6,164 5,508 6,202 5,595 4,609 
Interest on federal funds sold— — — — — 
Interest on deposits with other banks and short-term investments1,081 563 71 86 132 
Total Interest Income175,806 152,887 141,262 144,039 149,187 
Interest Expense
Interest on deposits15,158 6,530 2,977 3,168 3,444 
Interest on short-term borrowings360 88 46 123 98 
Interest on other borrowings4,412 3,808 3,560 3,554 3,102 
Total Interest Expense19,930 10,426 6,583 6,845 6,644 
Net Interest Income155,876 142,461 134,679 137,194 142,543 
Provision (benefit) for credit losses5,492 3,246 3,245 (5,313)(4,534)
Net Interest Income After Provision (Benefit) for Credit Losses150,384 139,215 131,434 142,507 147,077 
Noninterest Income
Service charges and fees17,282 18,066 15,251 15,349 15,551 
Loan servicing income831 834 286 781 784 
Trust fees5,372 5,679 6,079 6,380 6,221 
Brokerage and insurance commissions649 839 869 962 866 
Securities gains/(losses), net(1,055)(2,089)2,872 1,563 1,535 
Unrealized gain/ (loss) on equity securities, net(211)(121)(283)(27)112 
Net gains on sale of loans held for sale1,832 2,901 3,411 4,151 5,281 
Valuation adjustment on servicing rights— — 1,658 502 195 
Income on bank owned life insurance694 523 524 1,056 940 
Other noninterest income3,787 7,907 3,902 2,013 1,239 
Total Noninterest Income29,181 34,539 34,569 32,730 32,724 
Noninterest Expense
Salaries and employee benefits62,661 64,032 66,174 63,031 60,689 
Occupancy6,794 7,094 7,362 7,282 7,366 
Furniture and equipment2,928 3,033 3,519 3,364 3,365 
Professional fees16,277 15,987 15,156 17,631 17,242 
Advertising1,554 1,283 1,555 2,218 1,921 
Core deposit and customer relationship intangibles amortization1,856 2,083 2,054 2,169 2,295 
Other real estate and loan collection expenses, net304 78 195 363 78 
(Gain)/loss on sales/valuations of assets, net(251)(3,230)46 214 (3)
Acquisition, integration and restructuring costs2,156 2,412 576 1,989 204 
Partnership investment in tax credit projects979 737 77 2,549 2,374 
Other noninterest expenses13,625 12,970 14,083 14,576 15,096 
Total Noninterest Expense108,883 106,479 110,797 115,386 110,627 
Income Before Income Taxes70,682 67,275 55,206 59,851 69,174 
Income taxes14,118 15,402 12,117 10,271 13,250 
Net Income56,564 51,873 43,089 49,580 55,924 
Preferred dividends(2,013)(2,012)(2,013)(2,012)(2,013)
Net Income Available to Common Stockholders$54,551 $49,861 $41,076 $47,568 $53,911 
Earnings per common share-diluted$1.28 $1.17 $0.97 $1.12 $1.27 
Weighted average shares outstanding-diluted42,643,940 42,565,391 42,540,953 42,479,442 42,415,993 



HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
As of
9/30/20226/30/20223/31/202212/31/20219/30/2021
Assets
Cash and due from banks$250,394 $221,077 $198,559 $163,895 $192,247 
Interest bearing deposits with other banks and short-term investments149,466 163,717 406,343 271,704 135,158 
Cash and cash equivalents399,860 384,794 604,902 435,599 327,405 
Time deposits in other financial institutions1,740 1,855 2,894 2,894 3,138 
Securities:
Carried at fair value6,060,331 7,106,218 7,025,243 7,530,374 7,449,936 
Held to maturity, at cost, less allowance for credit losses830,247 81,939 81,785 84,709 85,354 
Other investments, at cost80,286 85,899 82,751 82,567 83,332 
Loans held for sale9,570 18,803 22,685 21,640 37,078 
Loans:
Held to maturity10,923,532 10,678,218 10,177,385 9,954,572 9,854,907 
 Allowance for credit losses(105,715)(101,353)(100,522)(110,088)(117,533)
Loans, net10,817,817 10,576,865 10,076,863 9,844,484 9,737,374 
Premises, furniture and equipment, net203,585 206,818 213,752 215,827 221,996 
Goodwill576,005 576,005 576,005 576,005 576,005 
Core deposit and customer relationship intangibles, net26,995 28,851 30,934 32,988 35,157 
Servicing rights, net8,379 8,288 8,102 6,890 6,351 
Cash surrender value on life insurance193,184 192,474 192,267 191,722 190,576 
Other real estate, net8,030 4,528 1,422 1,927 4,744 
Other assets466,921 385,062 311,274 246,923 237,779 
Total Assets$19,682,950 $19,658,399 $19,230,879 $19,274,549 $18,996,225 
Liabilities and Equity
Liabilities
Deposits:
 Demand$6,083,563 $6,087,304 $6,376,249 $6,495,326 $6,537,722 
 Savings10,060,523 10,059,678 9,236,427 8,897,909 8,416,204 
 Time1,123,035 1,078,568 1,054,008 1,024,020 1,068,317 
Total deposits17,267,121 17,225,550 16,666,684 16,417,255 16,022,243 
Short-term borrowings147,000 97,749 107,372 131,597 265,620 
Other borrowings371,446 372,538 372,290 372,072 371,765 
Accrued expenses and other liabilities241,425 188,494 152,676 171,447 164,345 
Total Liabilities18,026,992 17,884,331 17,299,022 17,092,371 16,823,973 
Stockholders' Equity
Preferred equity110,705 110,705 110,705 110,705 110,705 
Common stock42,444 42,439 42,370 42,275 42,250 
Capital surplus1,079,277 1,076,766 1,073,048 1,071,956 1,068,913 
Retained earnings1,074,168 1,031,076 992,655 962,994 926,834 
Accumulated other comprehensive income (loss)(650,636)(486,918)(286,921)(5,752)23,550 
Total Equity1,655,958 1,774,068 1,931,857 2,182,178 2,172,252 
Total Liabilities and Equity$19,682,950 $19,658,399 $19,230,879 $19,274,549 $18,996,225 



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
9/30/20226/30/20223/31/202212/31/20219/30/2021
Average Balances
Assets$19,775,341 $19,559,091 $19,229,872 $19,151,691 $18,608,775 
Loans, net of unearned10,783,135 10,477,368 10,043,594 9,886,027 9,920,047 
Deposits17,282,289 17,044,479 16,459,378 16,265,476 15,817,778 
Earning assets18,157,795 17,987,734 17,757,067 17,681,917 17,123,824 
Interest bearing liabilities11,723,026 11,575,319 10,453,400 10,207,255 9,881,350 
Common equity1,674,306 1,731,393 2,003,424 2,061,973 2,072,593 
Total stockholders' equity1,785,011 1,842,098 2,114,129 2,172,678 2,183,298 
Tangible common equity (non-GAAP)(1)
1,070,399 1,125,543 1,395,488 1,451,950 1,460,309 
Key Performance Ratios
Annualized return on average assets1.13 %1.06 %0.91 %1.03 %1.19 %
Annualized return on average common equity (GAAP)12.93 11.55 8.32 9.15 10.32 
Annualized return on average tangible common equity (non-GAAP)(1)
20.76 18.35 12.41 13.47 15.14 
Annualized ratio of net charge-offs/(recoveries) to average loans0.00 0.03 0.49 0.03 (0.05)
Annualized net interest margin (GAAP)3.41 3.18 3.08 3.08 3.30 
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.45 3.22 3.12 3.12 3.34 
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)
55.26 57.66 64.65 63.86 60.38 
Annualized ratio of total noninterest expenses to average assets (GAAP)2.18 2.18 2.34 2.39 2.36 
Annualized ratio of core expenses to average assets (non-GAAP)(1)
2.09 2.14 2.28 2.25 2.25 

For the Quarter Ended
September 30,		For the Nine Months Ended
September 30,
2022202120222021
Average Balances
Assets$19,775,341 $18,608,775 $19,523,433 $18,291,444 
Loans, net of unearned10,783,135 9,920,047 10,437,409 9,981,306 
Deposits17,282,289 15,817,778 16,931,730 15,482,394 
Earning assets18,157,795 17,123,824 17,969,001 16,803,740 
Interest bearing liabilities11,723,026 9,881,350 11,255,232 9,889,806 
Common equity1,674,306 2,072,593 1,801,835 2,006,123 
Total stockholders' equity1,785,011 2,183,298 1,912,540 2,116,828 
Tangible common stockholders' equity1,070,399 1,460,309 1,195,952 1,391,373 
Key Performance Ratios
Annualized return on average assets1.13 %1.19 %1.04 %1.25 %
Annualized return on average common equity (GAAP)12.93 10.32 10.80 10.95 
Annualized return on average tangible common equity (non-GAAP)(1)
20.76 15.14 16.79 16.34 
Annualized ratio of net charge-offs/(recoveries) to average loans0.00 (0.05)0.17 0.04 
Annualized net interest margin (GAAP)3.41 3.30 3.22 3.37 
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)
3.45 3.34 3.27 3.41 
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)
55.26 60.38 58.99 58.05 
Total noninterest expenses to average assets (GAAP)2.18 2.36 2.23 2.31 
Core expenses to average assets (non-GAAP)(1)
2.09 2.25 2.17 2.21 
(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
9/30/20226/30/20223/31/202212/31/20219/30/2021
Common Share Data
Book value per common share$36.41 $39.19 $42.98 $49.00 $48.79 
Tangible book value per common share (non-GAAP)(1)
$22.20 $24.94 $28.66 $34.59 $34.33 
Common shares outstanding, net of treasury stock42,444,106 42,439,439 42,369,908 42,275,264 42,250,092 
Tangible common equity ratio (non-GAAP)(1)
4.94 %5.56 %6.52 %7.84 %7.89 %
Other Selected Trend Information
Effective tax rate19.97 %22.89 %21.95 %17.16 %19.15 %
Full time equivalent employees2,020 2,087 2,208 2,249 2,163 
Loans Held to Maturity
Commercial and industrial$3,278,703 $3,059,519 $2,814,513 $2,645,085 $2,538,369 
Paycheck Protection Program ("PPP") 13,506 23,031 74,065 199,883 409,247 
Owner occupied commercial real estate 2,285,973 2,282,833 2,266,076 2,240,334 2,135,227 
Commercial and business lending5,578,182 5,365,383 5,154,654 5,085,302 5,082,843 
Non-owner occupied commercial real estate2,219,542 2,321,718 2,161,761 2,010,591 2,020,487 
Real estate construction996,017 845,045 842,483 856,119 814,001 
Commercial real estate lending 3,215,559 3,166,763 3,004,244 2,866,710 2,834,488 
Total commercial lending 8,793,741 8,532,146 8,158,898 7,952,012 7,917,331 
Agricultural and agricultural real estate781,354 836,703 766,443 753,753 684,670 
Residential mortgage852,928 845,270 825,242 829,283 840,356 
Consumer495,509 464,099 426,802 419,524 412,550 
Total loans held to maturity$10,923,532 $10,678,218 $10,177,385 $9,954,572 $9,854,907 
Total unfunded loan commitments $4,664,379 $4,458,874 $4,130,316 $3,830,219 $3,583,417 
(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
9/30/20226/30/20223/31/202212/31/20219/30/2021
Allowance for Credit Losses-Loans
Balance, beginning of period$101,353 $100,522 $110,088 $117,533 $120,726 
Provision (benefit) for credit losses4,388 1,545 2,628 (6,808)(4,448)
Charge-offs(938)(1,473)(13,217)(1,953)(1,167)
Recoveries912 759 1,023 1,316 2,422 
Balance, end of period$105,715 $101,353 $100,522 $110,088 $117,533 
Allowance for Unfunded Commitments
Balance, beginning of period$17,780 $16,079 $15,462 $13,967 $14,002 
Provision (benefit) for credit losses1,104 1,701 617 1,495 (35)
Balance, end of period$18,884 $17,780 $16,079 $15,462 $13,967 
Allowance for lending related credit losses$124,599$119,133$116,601$125,550$131,500
Provision for Credit Losses
Provision (benefit) for credit losses-loans$4,388 $1,545 $2,628 $(6,808)$(4,448)
Provision (benefit) for credit losses-unfunded commitments 1,104 1,701 617 1,495 (35)
Provision (benefit) for credit losses-held to maturity securities — — — — (51)
Total provision (benefit) for credit losses$5,492 $3,246 $3,245 $(5,313)$(4,534)
Asset Quality
Nonaccrual loans$64,560 $62,909 $64,174 $69,369 $82,375 
Loans past due ninety days or more 678 95 246 550 861 
Other real estate owned8,030 4,528 1,422 1,927 4,744 
Other repossessed assets— — 34 43 166 
Total nonperforming assets$73,268 $67,532 $65,876 $71,889 $88,146 
Performing troubled debt restructured loans$8,047 $1,350 $882 $817 $1,817 
Nonperforming Assets Activity
Balance, beginning of period$67,532 $65,876 $71,889 $88,146 $91,729 
Net loan (charge offs)/recoveries (26)(714)(12,194)(637)1,255 
New nonperforming loans8,388 8,590 15,832 5,886 6,908 
Reduction of nonperforming loans(1)
(2,015)(5,244)(8,448)(18,429)(8,581)
Net OREO/repossessed assets sales proceeds and losses(611)(976)(1,203)(3,077)(3,165)
Balance, end of period$73,268 $67,532 $65,876 $71,889 $88,146 
Asset Quality Ratios
Ratio of nonperforming loans to total loans0.60 %0.59 %0.63 %0.70 %0.84 %
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans0.67 0.60 0.64 0.71 0.86 
Ratio of nonperforming assets to total assets0.37 0.34 0.34 0.37 0.46 
Annualized ratio of net loan charge-offs/(recoveries) to average loans — 0.03 0.49 0.03 (0.05)
Allowance for loan credit losses as a percent of loans0.97 0.95 0.99 1.11 1.19 
Allowance for lending related credit losses as a percent of loans1.14 1.12 1.15 1.26 1.33 
Allowance for loan credit losses as a percent of nonperforming loans162.05 160.87 156.04 157.45 141.20 
Loans delinquent 30-89 days as a percent of total loans0.10 0.06 0.10 0.07 0.12 
(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, 2022June 30, 2022September 30, 2021
Average
Balance		InterestRateAverage
Balance		InterestRateAverage
Balance		InterestRate
Earning Assets
Securities:
Taxable$6,303,278 $45,648 2.87 %$6,419,615 $38,098 2.38 %$6,244,097 $32,384 2.06 %
Nontaxable(1)
951,232 7,802 3.25 915,880 6,972 3.05 759,073 5,835 3.05 
Total securities7,254,510 53,450 2.92 7,335,495 45,070 2.46 7,003,170 38,219 2.17 
Interest on deposits with other banks and short-term investments222,170 1,081 1.93 277,773 563 0.81 322,430 132 0.16 
Federal funds sold11 — — — — — — — — 
Loans:(2)
Commercial and industrial(1)
3,182,134 37,526 4.68 3,002,822 30,441 4.07 2,588,270 28,224 4.33 
PPP loans17,859 363 8.06 41,370 1,801 17.46 602,675 11,186 7.36 
Owner occupied commercial real estate2,272,666 23,601 4.12 2,294,524 22,863 4.00 1,990,538 20,048 4.00 
Non-owner occupied commercial real estate2,258,424 25,895 4.55 2,179,048 22,871 4.21 1,964,609 22,129 4.47 
Real estate construction 914,520 12,382 5.37 878,555 10,015 4.57 835,976 9,591 4.55 
Agricultural and agricultural real estate799,823 8,966 4.45 782,610 7,933 4.07 674,510 7,415 4.36 
Residential mortgage858,119 8,665 4.01 849,174 8,358 3.95 855,734 9,068 4.20 
Consumer479,590 6,028 4.99 449,265 4,949 4.42 407,735 4,889 4.76 
Less: allowance for credit losses-loans(102,031)— — (102,902)— — (121,823)— — 
Net loans10,681,104 123,426 4.58 10,374,466 109,231 4.22 9,798,224 112,550 4.56 
Total earning assets18,157,795 177,957 3.89 %17,987,734 154,864 3.45 %17,123,824 150,901 3.50 %
Nonearning Assets1,617,546 1,571,357 1,484,951 
Total Assets$19,775,341 $19,559,091 $18,608,775 
Interest Bearing Liabilities
Savings$10,059,652 $12,907 0.51 %$9,995,497 $5,372 0.22 %$8,364,326 $2,240 0.11 %
Time deposits1,156,908 2,251 0.77 1,088,765 1,158 0.43 1,097,126 1,204 0.44 
Short-term borrowings134,974 360 1.06 118,646 88 0.30 139,001 98 0.28 
Other borrowings371,492 4,412 4.71 372,411 3,808 4.10 280,897 3,102 4.38 
Total interest bearing liabilities11,723,026 19,930 0.67 %11,575,319 10,426 0.36 %9,881,350 6,644 0.27 %
Noninterest Bearing Liabilities
Noninterest bearing deposits6,065,729 5,960,217 6,356,326 
Accrued interest and other liabilities201,575 181,457 187,801 
Total noninterest bearing liabilities6,267,304 6,141,674 6,544,127 
Equity1,785,011 1,842,098 2,183,298 
Total Liabilities and Equity$19,775,341 $19,559,091 $18,608,775 
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$158,027 $144,438 $144,257 
Net interest spread(1)
3.22 %3.09 %3.23 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.45 %3.22 %3.34 %
Interest bearing liabilities to earning assets64.56 %64.35 %57.71 %
(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, 2022September 30, 2021
Average
Balance		InterestRateAverage
Balance		InterestRate
Earning Assets
Securities:
Taxable$6,407,459 $116,366 2.43 %$5,935,295 $94,373 2.13 %
Nontaxable(1)
990,784 22,625 3.05 743,534 17,308 3.11 
Total securities7,398,243 138,991 2.51 6,678,829 111,681 2.24 %
Interest bearing deposits with other banks and other short-term investments238,819 1,715 0.96 266,701 258 0.13 
Federal funds sold7 — — 4,622 1 0.03 
Loans:(2)
Commercial and industrial(1)
2,977,751 95,020 4.27 2,519,608 85,008 4.51 
PPP loans 63,342 6,487 13.69 879,489 32,521 4.94 
Owner occupied commercial real estate2,270,486 67,742 3.99 1,876,929 59,710 4.25 
Non-owner occupied commercial real estate2,166,873 69,929 4.31 1,961,016 65,984 4.50 
Real estate construction880,354 31,673 4.81 819,452 28,501 4.65 
Agricultural and agricultural real estate
776,127 23,905 4.12 676,091 22,733 4.50 
Residential mortgage850,444 25,108 3.95 844,337 28,153 4.46 
Consumer452,032 15,632 4.62 404,384 15,408 5.09 
Less: allowance for credit losses-loans(105,477)— — (127,718)— — 
Net loans10,331,932 335,496 4.34 9,853,588 338,018 4.59 
Total earning assets17,969,001 476,202 3.54 %16,803,740 449,958 3.58 %
Nonearning Assets1,554,432 1,487,704 
Total Assets$19,523,433 $18,291,444 
Interest Bearing Liabilities
Savings$9,652,651 $20,673 0.29 %$8,211,478 $6,903 0.11 %
Time deposits1,106,095 3,992 0.48 1,166,858 4,726 0.54 
Short-term borrowings124,459 494 0.53 182,583 348 0.25 
Other borrowings372,027 11,780 4.23 328,887 9,378 3.81 
Total interest bearing liabilities11,255,232 36,939 0.44 %9,889,806 21,355 0.29 %
Noninterest Bearing Liabilities
Noninterest bearing deposits6,172,984 6,104,058 
Accrued interest and other liabilities182,677 180,752 
Total noninterest bearing liabilities6,355,661 6,284,810 
Stockholders' Equity1,912,540 2,116,828 
Total Liabilities and Stockholders' Equity$19,523,433 $18,291,444 
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)
$439,263 $428,603 
Net interest spread(1)
3.10 %3.29 %
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets
3.27 %3.41 %
Interest bearing liabilities to earning assets62.64 %58.85 %
(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
9/30/20226/30/20223/31/202212/31/20219/30/2021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)$54,551 $49,861 $41,076 $47,568 $53,911 
Plus core deposit and customer relationship intangibles amortization, net of tax(1)
1,466 1,645 1,623 1,713 1,814 
Net income available to common stockholders excluding intangible amortization (non-GAAP)$56,017 $51,506 $42,699 $49,281 $55,725 
Average common equity (GAAP)$1,674,306 $1,731,393 $2,003,424 $2,061,973 $2,072,593 
Less average goodwill576,005 576,005 576,005 576,005 576,005 
Less average core deposit and customer relationship intangibles, net27,902 29,845 31,931 34,018 36,279 
Average tangible common equity (non-GAAP)$1,070,399 $1,125,543 $1,395,488 $1,451,950 $1,460,309 
Annualized return on average common equity (GAAP)12.93 %11.55 %8.32 %9.15 %10.32 %
Annualized return on average tangible common equity (non-GAAP)20.76 %18.35 %12.41 %13.47 %15.14 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)$155,876 $142,461 $134,679 $137,194 $142,543 
Plus tax-equivalent adjustment(1)
2,151 1,977 2,119 1,975 1,714 
Net interest income, fully tax-equivalent (non-GAAP)$158,027 $144,438 $136,798 $139,169 $144,257 
Average earning assets$18,157,795 $17,987,734 $17,757,067 $17,681,917 $17,123,824 
Annualized net interest margin (GAAP)3.41 %3.18 %3.08 %3.08 %3.30 %
Annualized net interest margin, fully tax-equivalent (non-GAAP)3.45 3.22 3.12 3.12 3.34 
Net purchase accounting discount amortization on loans included in annualized net interest margin 0.03 0.07 0.05 0.05 0.08 
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)$1,545,253 $1,663,363 $1,821,152 $2,071,473 $2,061,547 
Less goodwill576,005 576,005 576,005 576,005 576,005 
Less core deposit and customer relationship intangibles, net26,995 28,851 30,934 32,988 35,157 
Tangible common equity (non-GAAP)$942,253 $1,058,507 $1,214,213 $1,462,480 $1,450,385 
Common shares outstanding, net of treasury stock42,444,106 42,439,439 42,369,908 42,275,264 42,250,092 
Common equity (book value) per share (GAAP)$36.41 $39.19 $42.98 $49.00 $48.79 
Tangible book value per common share (non-GAAP)$22.20 $24.94 $28.66 $34.59 $34.33 
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)$942,253 $1,058,507 $1,214,213 $1,462,480 $1,450,385 
Total assets (GAAP)$19,682,950 $19,658,399 $19,230,879 $19,274,549 $18,996,225 
Less goodwill576,005 576,005 576,005 576,005 576,005 
Less core deposit and customer relationship intangibles, net26,995 28,851 30,934 32,988 35,157 
Total tangible assets (non-GAAP)$19,079,950 $19,053,543 $18,623,940 $18,665,556 $18,385,063 
Tangible common equity ratio (non-GAAP)4.94 %5.56 %6.52 %7.84 %7.89 %
(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 Efficiency Ratio (non-GAAP)For the Quarter Ended
9/30/20226/30/20223/31/202212/31/20219/30/2021
Net interest income (GAAP)$155,876 $142,461 $134,679 $137,194 $142,543 
Tax-equivalent adjustment(1)
2,151 1,977 2,119 1,975 1,714 
Fully tax-equivalent net interest income 158,027 144,438 136,798 139,169 144,257 
Noninterest income29,181 34,539 34,569 32,730 32,724 
Securities (gains)/losses, net1,055 2,089 (2,872)(1,563)(1,535)
Unrealized (gain)/loss on equity securities, net211 121 283 27 (112)
Valuation adjustment on servicing rights— — (1,658)(502)(195)
Adjusted revenue (non-GAAP)$188,474 $181,187 $167,120 $169,861 $175,139 
Total noninterest expenses (GAAP)$108,883 $106,479 $110,797 $115,386 $110,627 
Less:
Core deposit and customer relationship intangibles amortization1,856 2,083 2,054 2,169 2,295 
Partnership investment in tax credit projects979 737 77 2,549 2,374 
(Gain)/loss on sales/valuation of assets, net (251)(3,230)46 214 (3)
Acquisition, integration and restructuring costs2,156 2,412 576 1,989 204 
Core expenses (non-GAAP)$104,143 $104,477 $108,044 $108,465 $105,757 
Efficiency ratio, fully tax-equivalent (non-GAAP)55.26 %57.66 %64.65 %63.86 %60.38 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)$108,883 $106,479 $110,797 $115,386 $110,627 
Core expenses (non-GAAP)104,143 104,477 108,044 108,465 105,757 
Average assets $19,775,341 $19,559,091 $19,229,872 $19,151,691 $18,608,775 
Total noninterest expenses to average assets (GAAP)2.18 %2.18 %2.34 %2.39 %2.36 %
Core expenses to average assets (non-GAAP)2.09 %2.14 %2.28 %2.25 %2.25 %
Acquisition, integration and restructuring costs
Salaries and employee benefits$365 $275 $340 $— $— 
Occupancy— — — — — 
Furniture and equipment— — — — 7 
Professional fees1,480 1,779 236 1,989 145 
Advertising131 156 — — 11 
(Gain)/loss on sales/valuations of assets, net — — — — 39 
Other noninterest expenses180 202 — — 2 
Total acquisition, integration and restructuring costs$2,156 $2,412 $576 $1,989 $204 
After tax impact on diluted earnings per common share(1)
$0.04 $0.04 $0.01 $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
For the Quarter Ended
September 30,		For the Nine Months Ended
September 30,
2022202120222021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)$54,551 $53,911 $145,488 $164,305 
Plus core deposit and customer relationship intangibles amortization, net of tax(1)
1,466 1,814 4,734 5,709 
Net income available to common stockholders excluding intangible amortization (non-GAAP)$56,017 $55,725 $150,222 $170,014 
Average common equity (GAAP)$1,674,306 $2,072,593 $1,801,835 $2,006,123 
Less average goodwill576,005 576,005 576,005 576,005 
Less average core deposit and customer relationship intangibles, net27,902 36,279 29,878 38,745 
Average tangible common equity (non-GAAP)$1,070,399 $1,460,309 $1,195,952 $1,391,373 
Annualized return on average common equity (GAAP)12.93 %10.32 %10.80 %10.95 %
Annualized return on average tangible common equity (non-GAAP)20.76 %15.14 %16.79 %16.34 %
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)$155,876 $142,543 $433,016 $423,366 
Plus tax-equivalent adjustment(1)
2,151 1,714 6,247 5,237 
Net interest income, fully tax-equivalent (non-GAAP)$158,027 $144,257 $439,263 $428,603 
Average earning assets$18,157,795 $17,123,824 $17,969,001 $16,803,740 
Annualized net interest margin (GAAP)3.41 %3.30 %3.22 %3.37 %
Annualized net interest margin, fully tax-equivalent (non-GAAP)3.45 3.34 3.27 3.41 
Purchase accounting discount amortization on loans included in annualized net interest margin0.03 0.08 0.05 0.10 
(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 Efficiency Ratio (non-GAAP)For the Quarter Ended
September 30,		For the Nine Months Ended
September 30,
2022202120222021
Net interest income (GAAP)$155,876 $142,543 $433,016 $423,366 
Tax-equivalent adjustment(1)
2,151 1,714 6,247 5,237 
Fully tax-equivalent net interest income158,027 144,257 439,263 428,603 
Noninterest income29,181 32,724 98,289 96,205 
Securities (gains)/losses, net1,055 (1,535)272 (4,347)
Unrealized (gain)/loss on equity securities, net211 (112)615 (85)
Valuation adjustment on servicing rights— (195)(1,658)(586)
Adjusted revenue (non-GAAP)$188,474 $175,139 $536,781 $519,790 
Total noninterest expenses (GAAP)$108,883 $110,627 $326,159 $316,426 
Less:
Core deposit and customer relationship intangibles amortization1,856 2,295 5,993 7,226 
Partnership investment in tax credit projects979 2,374 1,793 3,754 
(Gain)/loss on sales/valuation of assets, net(251)(3)(3,435)374 
Acquisition, integration and restructuring costs2,156 204 5,144 3,342 
Core expenses (non-GAAP)$104,143 $105,757 $316,664 $301,730 
Efficiency ratio, fully tax-equivalent (non-GAAP)55.26 %60.38 %58.99 %58.05 %
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)$108,883 $110,627 $326,159 $316,426 
Core expenses (non-GAAP)104,143 105,757 316,664 301,730 
Average assets$19,775,341 $18,608,775 $19,523,433 $18,291,444 
Total noninterest expenses to average assets (GAAP)2.18 %2.36 %2.23 %2.31 %
Core expenses to average assets (non-GAAP)2.09 %2.25 %2.17 %2.21 %
Acquisition, integration and restructuring costs
Salaries and employee benefits$365 $— $980 $578 
Occupancy— — — 10 
Furniture and equipment— 7 — 655 
Professional fees1,480 145 3,495 878 
Advertising131 11 287 173 
(Gain)/loss on sales/valuations of assets, net— 39 — 39 
Other noninterest expenses180 2 382 1,009 
Total acquisition, integration and restructuring costs$2,156 $204 $5,144 $3,342 
After tax impact on diluted earnings per common share(1)
$0.04 $— $0.10 $0.06 
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.