Heartland Financial USA, Inc. ("HTLF") Reports Quarterly and Year to Date Results as of June 30, 2022

Rhea-AI Summary

Heartland Financial USA, Inc. (NASDAQ: HTLF) reported its Q2 2022 results, showing a net income of $49.9 million, down from $59.6 million in Q2 2021. This reflects a 16% decline in profits, with diluted earnings per share at $1.17, a 17% decrease from the previous year. The bank also achieved a 5% loan growth, totaling $551.9 million since March 31, 2022. Key developments include the consolidation of Citywide Banks into HTLF Bank, which aims to enhance operational efficiency, projected to yield $20 million in annual benefits.

Positive

• Quarterly loan growth of $551.9 million, or 5%, excluding PPP loans.
• Net interest income increased by $1.2 million or 1% to $142.5 million.
• Noninterest income rose by $1.4 million or 4% to $34.5 million.

Negative

• Net income available to common stockholders decreased by $9.7 million, or 16%.
• Earnings per diluted common share fell by $0.24, or 17%.
• Return on average assets decreased from 1.35% to 1.06%.

Highlights and Developments

• Quarterly loan growth of $551.9 million or 5%, exclusive of Paycheck Protection Program ("PPP") loans
  
• Quarterly net income available to common stockholders of $49.9 million
  
• Efficiency ratio of 57.66%
  
• Diluted earnings per common share of $1.17
  
• Quarterly net charge-offs of $714,000 and 30-89 day loan delinquencies were 0.06% of total loans
  
• Citywide Banks is now operating as a division of HTLF Bank, completing the first stage of charter consolidation

	Quarter Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
Net income available to common stockholders (in millions)	$	49.9			$	59.6			$	90.9			$	110.4
Diluted earnings per common share		1.17				1.41				2.14				2.61
Return on average assets		1.06	%			1.35	%			0.99	%			1.27	%
Return on average common equity		11.55				12.07				9.82				11.29
Return on average tangible common equity (non-GAAP)(1)		18.35				18.05				15.08				16.99
Net interest margin		3.18				3.37				3.13				3.40
Net interest margin, fully tax-equivalent (non-GAAP)(1)		3.22				3.41				3.17				3.45
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)		57.66				57.11				61.02				56.86

(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's second quarter results were excellent and exceeded our expectations. Our tremendous loan growth, solid credit metrics and an improved efficiency ratio are attributable to the continued execution of our growth strategies and provide strong momentum going into the third quarter."

Bruce K. Lee, president and chief executive officer, HTLF

DUBUQUE, Iowa, July 25, 2022 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021:

• Net income available to common stockholders of $49.9 million compared to $59.6 million, a decrease of $9.7 million or 16%.
• Earnings per diluted common share of $1.17 compared to $1.41, a decrease of $0.24 or 17%.
• Net interest income of $142.5 million compared to $141.2 million, an increase of $1.2 million or 1%.
• Return on average common equity was 11.55% compared to 12.07%, and return on average assets was 1.06% compared to 1.35%.
• Return on average tangible common equity (non-GAAP) was 18.35% compared to 18.05%.
  

"HTLF's second quarter results were excellent and exceeded our expectations. Our tremendous loan growth, solid credit metrics and an improved efficiency ratio are attributable to the continued execution of our growth strategies and provide strong momentum going into the third quarter," said Bruce K. Lee, president and chief executive officer of HTLF.

HTLF reported the following results for the six months ended June 30, 2022 compared to the six months ended June 30, 2021:

• Net income available to common stockholders of $90.9 million compared to $110.4 million, a decrease of $19.5 million or 18%.
• Earnings per diluted common share of $2.14 compared to $2.61, a decrease of $0.47 or 18%.
• Net interest income of $277.1 million compared to $280.8 million, a decrease of $3.7 million or 1%.
• Return on average common equity was 9.82% compared to 11.29%, and return on average assets was 0.99% compared to 1.27%.
• Return on average tangible common equity (non-GAAP) was 15.08% compared to 16.99%.
  

Charter Consolidation Update
During the second quarter of 2022, the consolidation of HTLF’s 11 separate bank charters advanced from planning to execution. Citywide Banks is now operating as a division of HTLF Bank, completing the first stage of charter consolidation. Each of the remaining charters will be consolidated into HTLF Bank in the following 10 stages of the project, using a template that retains their current brands, local leadership and local decision making. The final stage is expected to be completed by the end of 2023. Consolidation restructuring costs are projected to be $19-20 million, with approximately $14-15 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 and current and future growth. The resulting efficiencies and expansion in capacity are projected to generate financial benefits of approximately $20.0 million annually when the project is completed.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.18% (3.22% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2022 compared to 3.37% (3.41% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2021.

Total interest income and average earning asset changes for the second quarter of 2022 compared to the second quarter of 2021 were:

• Total interest income was $152.9 million compared to $148.1 million, which was an increase of $4.8 million or 3% and primarily attributable to an increase in average earning assets partially offset by lower yields and a reduction of PPP loan interest income. PPP loan interest income totaled $1.8 million compared to $11.2 million, which was a decrease of $9.4 million or 84%.
• Total interest income on a tax-equivalent basis (non-GAAP) was $154.9 million, which was an increase of $5.0 million or 3% from $149.8 million.
• Average earning assets increased $1.17 billion or 7% to $17.99 billion compared to $16.82 billion.
• The average rate on earning assets decreased 12 basis points to 3.45% compared to 3.57%, which was primarily due to a shift in earning asset mix. Total average securities were 41% of total average earning assets compared to 39%.

Total interest expense and average interest bearing liability changes for the second quarter of 2022 compared to the second quarter of 2021 were:

• Total interest expense was $10.4 million, an increase of $3.6 million or 52% from $6.9 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 0.36% compared to 0.28%.
• Average interest bearing deposits increased $1.68 billion or 18% to $11.08 billion from $9.41 billion.
• The average interest rate paid on interest bearing deposits increased 8 basis points to 0.24% compared to 0.16%.
• Average borrowings increased $25.2 million or 5% to $491.1 million from $465.9 million, and the average interest rate paid on borrowings was 3.18% compared to 2.65%.
  

Net interest income changes for the second quarter of 2022 compared to the second quarter of 2021 were:

• Net interest income totaled $142.5 million compared to $141.2 million, which was an increase of $1.2 million or 1%. PPP loan interest income totaled $1.8 million compared to $11.2 million, which was a decrease of $9.4 million or 84%.
• Net interest income on a tax-equivalent basis (non-GAAP) totaled $144.4 million compared to $143.0 million, which was an increase of $1.5 million or 1%.

Noninterest Income and Noninterest Expense

Total noninterest income was $34.5 million during the second quarter of 2022 compared to $33.2 million during the second quarter of 2021, an increase of $1.4 million or 4%. Significant changes within the noninterest income category for the second quarter of 2022 compared to the second quarter of 2021 were:

• Service charges and fees increased $2.9 million or 19% to $18.1 million from $15.1 million. Credit card revenue was $5.8 million compared to $4.3 million, which was an increase of $1.5 million or 35%.
• Net security losses totaled $2.1 million compared to net gains of $2.8 million.
• Net gains on sales of loans held for sale totaled $2.9 million compared to $4.8 million, which was a decrease of $1.9 million or 39% and was primarily attributable to a decrease of loans sold to the secondary market.
• Other noninterest income totaled $7.9 million compared to $2.2 million, which was an increase of $5.7 million. The following items impacted other noninterest income for the second quarter of 2022 compared to the second quarter of 2021:
  • Commercial swap fees and syndication income totaled $4.9 million compared to $193,000.
  • Gains on the sale of VISA B shares totaled $1.9 million compared to $0.  

Total noninterest expense was $106.5 million during the second quarter of 2022 compared to $103.4 million during the second quarter of 2021, which was an increase of $3.1 million or 3%. Significant changes within the noninterest expense category for the second quarter of 2022 compared to the second quarter of 2021 were:

• Salaries and employee benefits totaled $64.0 million compared to $57.3 million, which was an increase of $6.7 million or 12%. The increase was primarily attributable to higher salary expenses due to inflationary wage pressures and increased health care expenses due to normalized health care usage.
• Net gains on sales/valuations of assets totaled $3.2 million compared to net losses of $183,000, and the change was primarily attributable to a gain of $3.0 million associated with the sale of two branches in Illinois and a gain of $413,000 associated with the sale of an insurance subsidiary.
• Acquisition, integration and restructuring costs totaled $2.4 million compared to $210,000, an increase of $2.2 million due to the progression of the charter consolidation project.
  

The effective tax rate was 22.89% for the second quarter of 2022 compared to 21.11% for the second quarter of 2021. The following items impacted the second quarter 2022 and 2021 tax calculations:

• Solar energy tax credits of $702,000 compared to $1.3 million.
• Federal low-income housing tax credits of $135,000 in each quarterly calculation.
• New markets tax credits of $75,000 in each quarterly calculation.
• Historic rehabilitation tax credits of $63,000 compared to $123,000.
• Tax-exempt interest income as a percentage of pre-tax income of 11.05% compared to 8.49%.
• Tax expense of $43,000 compared to a tax benefit of $150,000 resulting from the vesting of restricted stock units.

Total Assets, Total Loans and Total Deposits

Total assets were $19.66 billion at June 30, 2022, an increase of $383.9 million or 2% from $19.27 billion at year-end 2021. Securities represented 37% and 40% of total assets at June 30, 2022, and December 31, 2021, respectively.

Total loans held to maturity were $10.68 billion at June 30, 2022, compared to $9.95 billion at December 31, 2021, which was an increase of $723.6 million or 7%. Excluding total PPP loans, loans increased $551.9 million or 5% since March 31, 2022 and $900.5 million or 9% since December 31, 2021.

Significant changes by loan category at June 30, 2022 compared to March 31, 2022 included:

• Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $210.7 million or 4% to $5.37 billion compared to $5.15 billion.
  • PPP loans originated in 2020 ("PPP I") decreased $2.9 million or 51%. PPP loans originated in 2021 ("PPP II") decreased $48.1 million or 70%.
  • Excluding total PPP loans, commercial and business lending increased $261.8 million or 5% to $5.34 billion from $5.08 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $162.5 million or 5% to $3.17 billion compared to $3.00 billion.
• Agricultural and agricultural real estate loans increased $70.3 million or 9% to $836.7 million compared to $766.4 million.
• Consumer loans increased $37.3 million or 9% to $464.1 million from $426.8 million.

Significant changes by loan category at June 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 $280.1 million or 6% to $5.37 billion compared to $5.09 billion.
  • PPP I loans decreased $24.3 million or 90%. PPP II loans decreased $152.5 million or 88%.
  • Excluding total PPP loans, commercial and business lending increased $456.9 million or 9% to $5.34 billion from $4.89 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $300.1 million or 10% to $3.17 billion compared to $2.87 billion.
• Agricultural and agricultural real estate loans increased $83.0 million or 11% to $836.7 million compared to $753.8 million.
• Consumer loans increased $44.6 million or 11% to $464.1 million from $419.5 million.

Total deposits were $17.23 billion as of June 30, 2022, compared to $16.42 billion at December 31, 2021. Significant deposit changes by category at June 30, 2022 compared to December 31, 2021 included:

• Demand deposits decreased $408.0 million or 6% to $6.09 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 second quarter of 2022 was $1.5 million, which was an increase of $8.0 million from a provision benefit of $6.5 million recorded in the second quarter of 2021. The provision expense for the second quarter of 2022 compared to the second quarter of 2021 was impacted by several factors, including:

• loan growth exclusive of PPP loans totaling $551.9 million compared to $287.7 million,
• decrease in nonperforming loans of $22.4 million to $63.0 million or 0.59% of total loans compared to $85.4 million or 0.85% of total loans at June 30, 2021,
• nonpass loans declined to 5.8% of total loans compared to 10.4% of total loans at June 30, 2021, and
• loans delinquent 30-89 days as a percent of total loans fell to 0.06% compared to 0.17% at June 30, 2021.

The allowance for credit losses for loans totaled $101.4 million and $110.1 million at June 30, 2022, and December 31, 2021, respectively. The following items impacted the allowance for credit losses for loans for the six months ended June 30, 2022:

• Provision expense for the six months ended June 30, 2022, totaled $4.2 million.
• Net charge offs of $12.9 million were recorded for the first six months of 2022.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments totaled $17.8 million at June 30, 2022, which was an increase of $2.3 million from $15.5 million at December 31, 2021. Unfunded commitments increased $628.7 million to $4.46 billion at June 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 $3.2 million for the second quarter of 2022 compared to provision benefit of $7.1 million for the second quarter of 2021. The total allowance for lending related credit losses was $119.1 million or 1.12% of total loans at June 30, 2022, compared to $125.6 million or 1.26% of total loans as of December 31, 2021.

Nonperforming Assets

Nonperforming assets decreased $4.4 million or 6% to $67.5 million or 0.34% of total assets at June 30, 2022, compared to $71.9 million or 0.37% of total assets at December 31, 2021. Nonperforming loans were $63.0 million or 0.59% of total loans at June 30, 2022, compared to $69.9 million or 0.70% of total loans at December 31, 2021. At June 30, 2022, loans delinquent 30-89 days were 0.06% 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.

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 July 23, 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 $19.66 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) contains, 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 June 30,								For the Six Months Ended June 30,
		2022				2021				2022				2021
Interest Income
Interest and fees on loans	$	108,718			$	111,915			$	211,087			$	224,354
Interest on securities:
Taxable		38,098				31,546				70,718				61,989
Nontaxable		5,508				4,561				11,710				9,064
Interest on federal funds sold		—				—				—				1
Interest on deposits with other banks and short-term investments		563				60				634				126
Total Interest Income		152,887				148,082				294,149				295,534
Interest Expense
Interest on deposits		6,530				3,790				9,507				8,185
Interest on short-term borrowings		88				98				134				250
Interest on other borrowings		3,808				2,976				7,368				6,276
Total Interest Expense		10,426				6,864				17,009				14,711
Net Interest Income		142,461				141,218				277,140				280,823
Provision (benefit) for credit losses		3,246				(7,080	)			6,491				(7,728	)
Net Interest Income After Provision (Benefit) for Credit Losses		139,215				148,298				270,649				288,551
Noninterest Income
Service charges and fees		18,066				15,132				33,317				28,803
Loan servicing income		834				873				1,120				1,711
Trust fees		5,679				6,039				11,758				11,816
Brokerage and insurance commissions		839				865				1,708				1,718
Securities gains/(losses), net		(2,089	)			2,842				783				2,812
Unrealized gain/ (loss) on equity securities, net		(121	)			83				(404	)			(27	)
Net gains on sale of loans held for sale		2,901				4,753				6,312				11,173
Valuation adjustment on servicing rights		—				(526	)			1,658				391
Income on bank owned life insurance		523				937				1,047				1,766
Other noninterest income		7,907				2,166				11,809				3,318
Total Noninterest Income		34,539				33,164				69,108				63,481
Noninterest Expense
Salaries and employee benefits		64,032				57,332				130,206				116,394
Occupancy		7,094				7,399				14,456				15,317
Furniture and equipment		3,033				3,501				6,552				6,594
Professional fees		15,987				16,237				31,143				29,727
Advertising		1,283				1,649				2,838				3,118
Core deposit and customer relationship intangibles amortization		2,083				2,415				4,137				4,931
Other real estate and loan collection expenses, net		78				414				273				549
(Gain)/loss on sales/valuations of assets, net		(3,230	)			183				(3,184	)			377
Acquisition, integration and restructuring costs		2,412				210				2,988				3,138
Partnership investment in tax credit projects		737				1,345				814				1,380
Other noninterest expenses		12,970				12,691				27,053				24,274
Total Noninterest Expense		106,479				103,376				217,276				205,799
Income Before Income Taxes		67,275				78,086				122,481				146,233
Income taxes		15,402				16,481				27,519				31,814
Net Income		51,873				61,605				94,962				114,419
Preferred dividends		(2,012	)			(2,012	)			(4,025	)			(4,025	)
Net Income Available to Common Stockholders	$	49,861			$	59,593			$	90,937			$	110,394
Earnings per common share-diluted	$	1.17			$	1.41			$	2.14			$	2.61
Weighted average shares outstanding-diluted		42,565,391				42,359,873				42,562,639				42,357,133

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Interest Income
Interest and fees on loans	$	108,718			$	102,369			$	107,721			$	112,062			$	111,915
Interest on securities:
Taxable		38,098				32,620				30,637				32,384				31,546
Nontaxable		5,508				6,202				5,595				4,609				4,561
Interest on federal funds sold		—				—				—				—				—
Interest on deposits with other banks and short-term investments		563				71				86				132				60
Total Interest Income		152,887				141,262				144,039				149,187				148,082
Interest Expense
Interest on deposits		6,530				2,977				3,168				3,444				3,790
Interest on short-term borrowings		88				46				123				98				98
Interest on other borrowings		3,808				3,560				3,554				3,102				2,976
Total Interest Expense		10,426				6,583				6,845				6,644				6,864
Net Interest Income		142,461				134,679				137,194				142,543				141,218
Provision (benefit) for credit losses		3,246				3,245				(5,313	)			(4,534	)			(7,080	)
Net Interest Income After Provision (Benefit) for Credit Losses		139,215				131,434				142,507				147,077				148,298
Noninterest Income
Service charges and fees		18,066				15,251				15,349				15,551				15,132
Loan servicing income		834				286				781				784				873
Trust fees		5,679				6,079				6,380				6,221				6,039
Brokerage and insurance commissions		839				869				962				866				865
Securities gains/(losses), net		(2,089	)			2,872				1,563				1,535				2,842
Unrealized gain/ (loss) on equity securities, net		(121	)			(283	)			(27	)			112				83
Net gains on sale of loans held for sale		2,901				3,411				4,151				5,281				4,753
Valuation adjustment on servicing rights		—				1,658				502				195				(526	)
Income on bank owned life insurance		523				524				1,056				940				937
Other noninterest income		7,907				3,902				2,013				1,239				2,166
Total Noninterest Income		34,539				34,569				32,730				32,724				33,164
Noninterest Expense
Salaries and employee benefits		64,032				66,174				63,031				60,689				57,332
Occupancy		7,094				7,362				7,282				7,366				7,399
Furniture and equipment		3,033				3,519				3,364				3,365				3,501
Professional fees		15,987				15,156				17,631				17,242				16,237
Advertising		1,283				1,555				2,218				1,921				1,649
Core deposit and customer relationship intangibles amortization		2,083				2,054				2,169				2,295				2,415
Other real estate and loan collection expenses, net		78				195				363				78				414
(Gain)/loss on sales/valuations of assets, net		(3,230	)			46				214				(3	)			183
Acquisition, integration and restructuring costs		2,412				576				1,989				204				210
Partnership investment in tax credit projects		737				77				2,549				2,374				1,345
Other noninterest expenses		12,970				14,083				14,576				15,096				12,691
Total Noninterest Expense		106,479				110,797				115,386				110,627				103,376
Income Before Income Taxes		67,275				55,206				59,851				69,174				78,086
Income taxes		15,402				12,117				10,271				13,250				16,481
Net Income		51,873				43,089				49,580				55,924				61,605
Preferred dividends		(2,012	)			(2,013	)			(2,012	)			(2,013	)			(2,012	)
Net Income Available to Common Stockholders	$	49,861			$	41,076			$	47,568			$	53,911			$	59,593
Earnings per common share-diluted	$	1.17			$	0.97			$	1.12			$	1.27			$	1.41
Weighted average shares outstanding-diluted		42,565,391				42,540,953				42,479,442				42,415,993				42,359,873

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Assets
Cash and due from banks	$	221,077			$	198,559			$	163,895			$	192,247			$	208,702
Interest bearing deposits with other banks and short-term investments		163,717				406,343				271,704				135,158				240,426
Cash and cash equivalents		384,794				604,902				435,599				327,405				449,128
Time deposits in other financial institutions		1,855				2,894				2,894				3,138				3,138
Securities:
Carried at fair value		7,106,218				7,025,243				7,530,374				7,449,936				6,543,978
Held to maturity, at cost, less allowance for credit losses		81,939				81,785				84,709				85,354				85,439
Other investments, at cost		85,899				82,751				82,567				83,332				76,809
Loans held for sale		18,803				22,685				21,640				37,078				33,248
Loans:
Held to maturity		10,678,218				10,177,385				9,954,572				9,854,907				10,012,014
Allowance for credit losses		(101,353	)			(100,522	)			(110,088	)			(117,533	)			(120,726	)
Loans, net		10,576,865				10,076,863				9,844,484				9,737,374				9,891,288
Premises, furniture and equipment, net		206,818				213,752				215,827				221,996				226,358
Goodwill		576,005				576,005				576,005				576,005				576,005
Core deposit and customer relationship intangibles, net		28,851				30,934				32,988				35,157				37,452
Servicing rights, net		8,288				8,102				6,890				6,351				6,201
Cash surrender value on life insurance		192,474				192,267				191,722				190,576				189,619
Other real estate, net		4,528				1,422				1,927				4,744				6,314
Other assets		385,062				311,274				246,923				237,779				246,029
Total Assets	$	19,658,399			$	19,230,879			$	19,274,549			$	18,996,225			$	18,371,006
Liabilities and Equity
Liabilities
Deposits:
Demand	$	6,087,304			$	6,376,249			$	6,495,326			$	6,537,722			$	6,299,289
Savings		10,059,678				9,236,427				8,897,909				8,416,204				8,189,223
Time		1,078,568				1,054,008				1,024,020				1,068,317				1,126,606
Total deposits		17,225,550				16,666,684				16,417,255				16,022,243				15,615,118
Short-term borrowings		97,749				107,372				131,597				265,620				152,563
Other borrowings		372,538				372,290				372,072				371,765				271,244
Accrued expenses and other liabilities		188,494				152,676				171,447				164,345				172,295
Total Liabilities		17,884,331				17,299,022				17,092,371				16,823,973				16,211,220
Stockholders' Equity
Preferred equity		110,705				110,705				110,705				110,705				110,705
Common stock		42,439				42,370				42,275				42,250				42,245
Capital surplus		1,076,766				1,073,048				1,071,956				1,068,913				1,066,765
Retained earnings		1,031,076				992,655				962,994				926,834				883,484
Accumulated other comprehensive income (loss)		(486,918	)			(286,921	)			(5,752	)			23,550				56,587
Total Equity		1,774,068				1,931,857				2,182,178				2,172,252				2,159,786
Total Liabilities and Equity	$	19,658,399			$	19,230,879			$	19,274,549			$	18,996,225			$	18,371,006

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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Average Balances
Assets	$	19,559,091			$	19,229,872			$	19,151,691			$	18,608,775			$	18,293,756
Loans, net of unearned		10,477,368				10,043,594				9,886,027				9,920,047				10,072,071
Deposits		17,044,479				16,459,378				16,265,476				15,817,778				15,576,345
Earning assets		17,987,734				17,757,067				17,681,917				17,123,824				16,819,978
Interest bearing liabilities		11,575,319				10,453,400				10,207,255				9,881,350				9,871,302
Common equity		1,731,393				2,003,424				2,061,973				2,072,593				1,980,904
Total stockholders' equity		1,842,098				2,114,129				2,172,678				2,183,298				2,091,609
Tangible common equity (non-GAAP)(1)		1,125,543				1,395,488				1,451,950				1,460,309				1,366,285
Key Performance Ratios
Annualized return on average assets		1.06	%			0.91	%			1.03	%			1.19	%			1.35	%
Annualized return on average common equity (GAAP)		11.55				8.32				9.15				10.32				12.07
Annualized return on average tangible common equity (non-GAAP)(1)		18.35				12.41				13.47				15.14				18.05
Annualized ratio of net charge-offs/(recoveries) to average loans		0.03				0.49				0.03				(0.05	)			0.12
Annualized net interest margin (GAAP)		3.18				3.08				3.08				3.30				3.37
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.22				3.12				3.12				3.34				3.41
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)		57.66				64.65				63.86				60.38				57.11

	For the Quarter Ended June 30,								For the Six Months Ended June 30,
		2022				2021				2022				2021
Average Balances
Assets	$	19,559,091			$	18,293,756			$	19,395,391			$	18,130,148
Loans, net of unearned		10,477,368				10,072,071				10,261,679				10,012,443
Deposits		17,044,479				15,576,345				16,753,544				15,311,921
Earning assets		17,987,734				16,819,978				17,873,037				16,641,045
Interest bearing liabilities		11,575,319				9,871,302				11,017,459				9,894,103
Common equity		1,731,393				1,980,904				1,866,657				1,972,337
Total stockholders' equity		1,842,098				2,091,609				1,977,362				2,083,042
Tangible common stockholders' equity		1,125,543				1,366,285				1,259,769				1,356,333
Key Performance Ratios
Annualized return on average assets		1.06	%			1.35	%			0.99	%			1.27	%
Annualized return on average common equity (GAAP)		11.55				12.07				9.82				11.29
Annualized return on average tangible common equity (non-GAAP)(1)		18.35				18.05				15.08				16.99
Annualized ratio of net charge-offs/(recoveries) to average loans		0.03				0.12				0.25				0.09
Annualized net interest margin (GAAP)		3.18				3.37				3.13				3.40
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.22				3.41				3.17				3.45
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)		57.66				57.11				61.02				56.86
(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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Common Share Data
Book value per common share	$	39.19			$	42.98			$	49.00			$	48.79			$	48.50
Tangible book value per common share (non-GAAP)(1)	$	24.94			$	28.66			$	34.59			$	34.33			$	33.98
Common shares outstanding, net of treasury stock		42,439,439				42,369,908				42,275,264				42,250,092				42,245,452
Tangible common equity ratio (non-GAAP)(1)		5.56	%			6.52	%			7.84	%			7.89	%			8.08	%
Other Selected Trend Information
Effective tax rate		22.89	%			21.95	%			17.16	%			19.15	%			21.11	%
Full time equivalent employees		2,087				2,208				2,249				2,163				2,091
Loans Held to Maturity
Commercial and industrial	$	3,059,519			$	2,814,513			$	2,645,085			$	2,538,369			$	2,518,908
Paycheck Protection Program ("PPP")		23,031				74,065				199,883				409,247				829,175
Owner occupied commercial real estate		2,282,833				2,266,076				2,240,334				2,135,227				1,940,134
Commercial and business lending		5,365,383				5,154,654				5,085,302				5,082,843				5,288,217
Non-owner occupied commercial real estate		2,321,718				2,161,761				2,010,591				2,020,487				1,987,369
Real estate construction		845,045				842,483				856,119				814,001				854,295
Commercial real estate lending		3,166,763				3,004,244				2,866,710				2,834,488				2,841,664
Total commercial lending		8,532,146				8,158,898				7,952,012				7,917,331				8,129,881
Agricultural and agricultural real estate		836,703				766,443				753,753				684,670				679,608
Residential mortgage		845,270				825,242				829,283				840,356				800,884
Consumer		464,099				426,802				419,524				412,550				401,641
Total loans held to maturity	$	10,678,218			$	10,177,385			$	9,954,572			$	9,854,907			$	10,012,014
Total unfunded loan commitments	$	4,458,874			$	4,130,316			$	3,830,219			$	3,583,417			$	3,433,062
(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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Allowance for Credit Losses-Loans
Balance, beginning of period	$	100,522			$	110,088			$	117,533			$	120,726			$	130,172
Provision (benefit) for credit losses		1,545				2,628				(6,808	)			(4,448	)			(6,466	)
Charge-offs		(1,473	)			(13,217	)			(1,953	)			(1,167	)			(3,497	)
Recoveries		759				1,023				1,316				2,422				517
Balance, end of period	$	101,353			$	100,522			$	110,088			$	117,533			$	120,726
Allowance for Unfunded Commitments
Balance, beginning of period	$	16,079			$	15,462			$	13,967			$	14,002			$	14,619
Provision (benefit) for credit losses		1,701				617				1,495				(35	)			(617	)
Balance, end of period	$	17,780			$	16,079			$	15,462			$	13,967			$	14,002
Allowance for lending related credit losses	$	119,133			$	116,601			$	125,550			$	131,500			$	134,728
Provision for Credit Losses
Provision (benefit) for credit losses-loans	$	1,545			$	2,628			$	(6,808	)		$	(4,448	)		$	(6,466	)
Provision (benefit) for credit losses-unfunded commitments		1,701				617				1,495				(35	)			(617	)
Provision (benefit) for credit losses-held to maturity securities		—				—				—				(51	)			3
Total provision (benefit) for credit losses	$	3,246			$	3,245			$	(5,313	)		$	(4,534	)		$	(7,080	)
Asset Quality
Nonaccrual loans	$	62,909			$	64,174			$	69,369			$	82,375			$	85,268
Loans past due ninety days or more		95				246				550				861				97
Other real estate owned		4,528				1,422				1,927				4,744				6,314
Other repossessed assets		—				34				43				166				50
Total nonperforming assets	$	67,532			$	65,876			$	71,889			$	88,146			$	91,729
Performing troubled debt restructured loans	$	1,350			$	882			$	817			$	1,817			$	2,122
Nonperforming Assets Activity
Balance, beginning of period	$	65,876			$	71,889			$	88,146			$	91,729			$	98,364
Net loan (charge offs)/recoveries		(714	)			(12,194	)			(637	)			1,255				(2,980	)
New nonperforming loans		8,590				15,832				5,886				6,908				7,989
Reduction of nonperforming loans(1)		(5,244	)			(8,448	)			(18,429	)			(8,581	)			(10,948	)
Net OREO/repossessed assets sales proceeds and losses		(976	)			(1,203	)			(3,077	)			(3,165	)			(696	)
Balance, end of period	$	67,532			$	65,876			$	71,889			$	88,146			$	91,729
Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.59	%			0.63	%			0.70	%			0.84	%			0.85	%
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans		0.60				0.64				0.71				0.86				0.87
Ratio of nonperforming assets to total assets		0.34				0.34				0.37				0.46				0.50
Annualized ratio of net loan charge-offs/(recoveries) to average loans		0.03				0.49				0.03				(0.05	)			0.12
Allowance for loan credit losses as a percent of loans		0.95				0.99				1.11				1.19				1.21
Allowance for lending related credit losses as a percent of loans		1.12				1.15				1.26				1.33				1.35
Allowance for loan credit losses as a percent of nonperforming loans		160.87				156.04				157.45				141.20				141.42
Loans delinquent 30-89 days as a percent of total loans		0.06				0.10				0.07				0.12				0.17
(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
	June 30, 2022										March 31, 2022										June 30, 2021
	Average Balance				Interest			Rate			Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,419,615			$	38,098		2.38	%		$	6,501,664			$	32,620		2.03	%		$	5,862,683			$	31,546		2.16	%
Nontaxable(1)		915,880				6,972		3.05				1,106,951				7,851		2.88				740,601				5,773		3.13
Total securities		7,335,495				45,070		2.46				7,608,615				40,471		2.16				6,603,284				37,319		2.27
Interest on deposits with other banks and short-term investments		277,773				563		0.81				216,451				71		0.13				271,891				60		0.09
Federal funds sold		—				—		—				11				—		—				—				—		—
Loans:(2)
Commercial and industrial(1)		3,002,822				30,441		4.07				2,744,336				27,053		4.00				2,469,742				28,562		4.64
PPP loans		41,370				1,801		17.46				132,050				4,323		13.28				1,047,559				11,186		4.28
Owner occupied commercial real estate		2,294,524				22,863		4.00				2,243,522				21,278		3.85				1,858,891				20,097		4.34
Non-owner occupied commercial real estate		2,179,048				22,871		4.21				2,060,548				21,163		4.17				1,980,374				21,734		4.40
Real estate construction		878,555				10,015		4.57				847,250				9,276		4.44				815,738				9,212		4.53
Agricultural and agricultural real estate		782,610				7,933		4.07				745,348				7,006		3.81				672,560				7,267		4.33
Residential mortgage		849,174				8,358		3.95				843,881				8,085		3.89				827,291				9,255		4.49
Consumer		449,265				4,949		4.42				426,659				4,655		4.42				399,916				5,152		5.17
Less: allowance for credit losses-loans		(102,902	)			—		—				(111,604	)			—		—				(127,268	)			—		—
Net loans		10,374,466				109,231		4.22				9,931,990				102,839		4.20				9,944,803				112,465		4.54
Total earning assets		17,987,734				154,864		3.45	%			17,757,067				143,381		3.27	%			16,819,978				149,844		3.57	%
Nonearning Assets		1,571,357										1,472,805										1,473,778
Total Assets	$	19,559,091									$	19,229,872									$	18,293,756
Interest Bearing Liabilities
Savings	$	9,995,497			$	5,372		0.22	%		$	8,889,950			$	2,394		0.11	%		$	8,234,151			$	2,233		0.11	%
Time deposits		1,088,765				1,158		0.43				1,071,675				583		0.22				1,171,266				1,557		0.53
Short-term borrowings		118,646				88		0.30				119,588				46		0.16				169,822				98		0.23
Other borrowings		372,411				3,808		4.10				372,187				3,560		3.88				296,063				2,976		4.03
Total interest bearing liabilities		11,575,319				10,426		0.36	%			10,453,400				6,583		0.26	%			9,871,302				6,864		0.28	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		5,960,217										6,497,753										6,170,928
Accrued interest and other liabilities		181,457										164,590										159,917
Total noninterest bearing liabilities		6,141,674										6,662,343										6,330,845
Equity		1,842,098										2,114,129										2,091,609
Total Liabilities and Equity	$	19,559,091									$	19,229,872									$	18,293,756
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	144,438									$	136,798									$	142,980
Net interest spread(1)								3.09	%									3.01	%									3.29	%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets								3.22	%									3.12	%									3.41	%
Interest bearing liabilities to earning assets		64.35	%									58.87	%									58.69	%
(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 Six Months Ended
	June 30, 2022										June 30, 2021
	Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,460,412			$	70,718		2.21	%		$	5,778,333			$	61,989		2.16	%
Nontaxable(1)		1,010,888				14,823		2.96				735,636				11,473		3.15
Total securities		7,471,300				85,541		2.31	%			6,513,969				73,462		2.27	%
Interest bearing deposits with other banks and other short-term investments		247,281				634		0.52				238,376				126		0.11
Federal funds sold		6				—		—				6,971				1		0.03
Loans:(2)
Commercial and industrial(1)		2,874,694				57,494		4.03	%			2,485,210				56,784		4.61	%
PPP loans		86,460				6,124		14.28				1,020,190				21,335		4.22
Owner occupied commercial real estate		2,268,963				44,141		3.92				1,818,932				39,662		4.40
Non-owner occupied commercial real estate		2,119,925				44,034		4.19				1,958,938				43,855		4.51
Real estate construction		862,989				19,291		4.51				811,053				18,910		4.70
Agricultural and agricultural real estate		764,082				14,939		3.94				676,895				15,318		4.56
Residential mortgage		846,542				16,443		3.92				838,545				19,085		4.59
Consumer		438,024				9,604		4.42				402,680				10,519		5.27
Less: allowance for credit losses-loans		(107,229	)			—		—				(130,714	)			—		—
Net loans		10,154,450				212,070		4.21				9,881,729				225,468		4.60
Total earning assets		17,873,037				298,245		3.37	%			16,641,045				299,057		3.62	%
Nonearning Assets		1,522,354										1,489,103
Total Assets	$	19,395,391									$	18,130,148
Interest Bearing Liabilities
Savings	$	9,445,778			$	7,766		0.17	%		$	8,133,787			$	4,663		0.12	%
Time deposits		1,080,267				1,741		0.32				1,202,301				3,522		0.59
Short-term borrowings		119,115				134		0.23				204,735				250		0.25
Other borrowings		372,299				7,368		3.99				353,280				6,276		3.58
Total interest bearing liabilities		11,017,459				17,009		0.31	%			9,894,103				14,711		0.30	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		6,227,499										5,975,833
Accrued interest and other liabilities		173,071										177,170
Total noninterest bearing liabilities		6,400,570										6,153,003
Stockholders' Equity		1,977,362										2,083,042
Total Liabilities and Stockholders' Equity	$	19,395,391									$	18,130,148
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	281,236									$	284,346
Net interest spread(1)								3.06	%									3.32	%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets								3.17	%									3.45	%
Interest bearing liabilities to earning assets		61.64	%									59.46	%
(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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	49,861			$	41,076			$	47,568			$	53,911			$	59,593
Plus core deposit and customer relationship intangibles amortization, net of tax(1)	1,645				1,623				1,713				1,814				1,907
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	51,506			$	42,699			$	49,281			$	55,725			$	61,500
Average common equity (GAAP)	$	1,731,393			$	2,003,424			$	2,061,973			$	2,072,593			$	1,980,904
Less average goodwill	576,005				576,005				576,005				576,005				576,005
Less average core deposit and customer relationship intangibles, net	29,845				31,931				34,018				36,279				38,614
Average tangible common equity (non-GAAP)	$	1,125,543			$	1,395,488			$	1,451,950			$	1,460,309			$	1,366,285
Annualized return on average common equity (GAAP)	11.55		%		8.32		%		9.15		%		10.32		%		12.07		%
Annualized return on average tangible common equity (non-GAAP)	18.35		%		12.41		%		13.47		%		15.14		%		18.05		%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	142,461			$	134,679			$	137,194			$	142,543			$	141,218
Plus tax-equivalent adjustment(1)	1,977				2,119				1,975				1,714				1,762
Net interest income, fully tax-equivalent (non-GAAP)	$	144,438			$	136,798			$	139,169			$	144,257			$	142,980
Average earning assets	$	17,987,734			$	17,757,067			$	17,681,917			$	17,123,824			$	16,819,978
Annualized net interest margin (GAAP)	3.18		%		3.08		%		3.08		%		3.30		%		3.37		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)	3.22				3.12				3.12				3.34				3.41
Net purchase accounting discount amortization on loans included in annualized net interest margin	0.07				0.05				0.05				0.08				0.09
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)	$	1,663,363			$	1,821,152			$	2,071,473			$	2,061,547			$	2,049,081
Less goodwill	576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net	28,851				30,934				32,988				35,157				37,452
Tangible common equity (non-GAAP)	$	1,058,507			$	1,214,213			$	1,462,480			$	1,450,385			$	1,435,624
Common shares outstanding, net of treasury stock	42,439,439				42,369,908				42,275,264				42,250,092				42,245,452
Common equity (book value) per share (GAAP)	$	39.19			$	42.98			$	49.00			$	48.79			$	48.50
Tangible book value per common share (non-GAAP)	$	24.94			$	28.66			$	34.59			$	34.33			$	33.98
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)	$	1,058,507			$	1,214,213			$	1,462,480			$	1,450,385			$	1,435,624
Total assets (GAAP)	$	19,658,399			$	19,230,879			$	19,274,549			$	18,996,225			$	18,371,006
Less goodwill	576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net	28,851				30,934				32,988				35,157				37,452
Total tangible assets (non-GAAP)	$	19,053,543			$	18,623,940			$	18,665,556			$	18,385,063			$	17,757,549
Tangible common equity ratio (non-GAAP)	5.56		%		6.52		%		7.84		%		7.89		%		8.08		%
(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
	6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Net interest income (GAAP)	$	142,461			$	134,679			$	137,194			$	142,543			$	141,218
Tax-equivalent adjustment(1)		1,977				2,119				1,975				1,714				1,762
Fully tax-equivalent net interest income		144,438				136,798				139,169				144,257				142,980
Noninterest income		34,539				34,569				32,730				32,724				33,164
Securities (gains)/losses, net		2,089				(2,872	)			(1,563	)			(1,535	)			(2,842	)
Unrealized (gain)/loss on equity securities, net		121				283				27				(112	)			(83	)
Valuation adjustment on servicing rights		—				(1,658	)			(502	)			(195	)			526
Adjusted revenue (non-GAAP)	$	181,187			$	167,120			$	169,861			$	175,139			$	173,745
Total noninterest expenses (GAAP)	$	106,479			$	110,797			$	115,386			$	110,627			$	103,376
Less:
Core deposit and customer relationship intangibles amortization		2,083				2,054				2,169				2,295				2,415
Partnership investment in tax credit projects		737				77				2,549				2,374				1,345
(Gain)/loss on sales/valuation of assets, net		(3,230	)			46				214				(3	)			183
Acquisition, integration and restructuring costs		2,412				576				1,989				204				210
Adjusted noninterest expenses (non-GAAP)	$	104,477			$	108,044			$	108,465			$	105,757			$	99,223
Efficiency ratio, fully tax-equivalent (non-GAAP)		57.66	%			64.65	%			63.86	%			60.38	%			57.11	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	275			$	340			$	—			$	—			$	44
Occupancy		—				—				—				—				1
Furniture and equipment		—				—				—				7				41
Professional fees		1,779				236				1,989				145				63
Advertising		156				—				—				11				6
(Gain)/loss on sales/valuations of assets, net		—				—				—				39				—
Other noninterest expenses		202				—				—				2				55
Total acquisition, integration and restructuring costs	$	2,412			$	576			$	1,989			$	204			$	210
After tax impact on diluted earnings per common share(1)	$	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 June 30,								For the Six Months Ended June 30,
		2022				2021				2022				2021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	49,861			$	59,593			$	90,937			$	110,394
Plus core deposit and customer relationship intangibles amortization, net of tax(1)		1,645				1,907				3,268				3,895
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	51,506			$	61,500			$	94,205			$	114,289
Average common equity (GAAP)	$	1,731,393			$	1,980,904			$	1,866,657			$	1,972,337
Less average goodwill		576,005				576,005				576,005				576,005
Less average core deposit and customer relationship intangibles, net		29,845				38,614				30,883				39,999
Average tangible common equity (non-GAAP)	$	1,125,543			$	1,366,285			$	1,259,769			$	1,356,333
Annualized return on average common equity (GAAP)		11.55	%			12.07	%			9.82	%			11.29	%
Annualized return on average tangible common equity (non-GAAP)		18.35	%			18.05	%			15.08	%			16.99	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	142,461			$	141,218			$	277,140			$	280,823
Plus tax-equivalent adjustment(1)		1,977				1,762				4,096				3,523
Net interest income, fully tax-equivalent (non-GAAP)	$	144,438			$	142,980			$	281,236			$	284,346
Average earning assets	$	17,987,734			$	16,819,978			$	17,873,037			$	16,641,045
Annualized net interest margin (GAAP)		3.18	%			3.37	%			3.13	%			3.40	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.22				3.41				3.17				3.45
Purchase accounting discount amortization on loans included in annualized net interest margin		0.07				0.09				0.06				0.11
(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 June 30,								For the Six Months Ended June 30,
		2022				2021				2022				2021
Net interest income (GAAP)	$	142,461			$	141,218			$	277,140			$	280,823
Tax-equivalent adjustment(1)		1,977				1,762				4,096				3,523
Fully tax-equivalent net interest income		144,438				142,980				281,236				284,346
Noninterest income		34,539				33,164				69,108				63,481
Securities (gains)/losses, net		2,089				(2,842	)			(783	)			(2,812	)
Unrealized (gain)/loss on equity securities, net		121				(83	)			404				27
Valuation adjustment on servicing rights		—				526				(1,658	)			(391	)
Adjusted revenue (non-GAAP)	$	181,187			$	173,745			$	348,307			$	344,651
Total noninterest expenses (GAAP)	$	106,479			$	103,376			$	217,276			$	205,799
Less:
Core deposit and customer relationship intangibles amortization		2,083				2,415				4,137				4,931
Partnership investment in tax credit projects		737				1,345				814				1,380
(Gain)/loss on sales/valuation of assets, net		(3,230	)			183				(3,184	)			377
Acquisition, integration and restructuring costs		2,412				210				2,988				3,138
Adjusted noninterest expenses (non-GAAP)	$	104,477			$	99,223			$	212,521			$	195,973
Efficiency ratio, fully tax-equivalent (non-GAAP)		57.66	%			57.11	%			61.02	%			56.86	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	275			$	44			$	615			$	578
Occupancy		—				1				—				10
Furniture and equipment		—				41				—				648
Professional fees		1,779				63				2,015				733
Advertising		156				6				156				162
(Gain)/loss on sales/valuations of assets, net		—				—				—				—
Other noninterest expenses		202				55				202				1,007
Total acquisition, integration and restructuring costs	$	2,412			$	210			$	2,988			$	3,138
After tax impact on diluted earnings per common share(1)	$	0.04			$	—			$	0.06			$	0.06
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

CONTACT:

Bryan R. McKeag

Executive Vice President

Chief Financial Officer

(563) 589-1994

BMcKeag@htlf.com

FAQ

What is HTLF's net income for Q2 2022?

HTLF reported a net income of $49.9 million for Q2 2022.

How did HTLF's earnings per share change in Q2 2022?

Earnings per diluted common share decreased to $1.17, down 17% from $1.41 in Q2 2021.

What was the loan growth reported by HTLF for the latest quarter?

HTLF reported a quarterly loan growth of $551.9 million, or 5%.

When is the charter consolidation for HTLF expected to be completed?

The charter consolidation is projected to be completed by the end of 2023.

What operational efficiencies are expected from HTLF's charter consolidation?

The charter consolidation is expected to generate approximately $20 million in annual financial benefits.