HTLFP Heartland Financial USA Inc

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023:

• Net income available to common stockholders of $49.7 million compared to $50.8 million, a decrease of $1.1 million or 2%.
• Earnings per diluted common share of $1.16 compared to $1.19, a decrease of $0.03 or 3%.
• Adjusted earnings available to common stockholders of $52.4 million or $1.22 per diluted common share compared to $53.7 million or $1.26 per diluted common share.
• Net interest income of $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.
• Return on average assets was 1.08% compared to 1.06%.
• Return on average common equity was 10.90% compared to 12.43%.
• Return on average tangible common equity (non-GAAP) was 16.49% compared to 20.03%.

HTLF 3.0 Highlights

HTLF’s new strategic plan, HTLF 3.0, was announced and initiated in the fourth quarter of 2023. HTLF 3.0's initiatives include:

• Investing in growth through banker expansion and talent acquisition in the Central Valley of California, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix.
• Expanding Treasury Management products and capabilities.
• Creation of consumer and small business digital platforms.
• Footprint and facilities optimization, with a focus on efficient return on capital.

In the quarter we took the following actions as part of HTLF 3.0:

• Reduced wholesale and institutional deposits by $312.4 million.
• Announced sale of Rocky Mountain Bank division.
• Completed key hires and promotions in wealth management and commercial and middle market banking.

Rocky Mountain Bank Sale

HTLF Bank has signed definitive agreements to sell all nine Rocky Mountain Bank branches in Montana along with all associated deposits and certain related assets to two purchasers. Per the terms of the agreements, six branches will be sold to Glacier Bank and three branches will be sold to Stockman Bank of Montana. Loans of $352.7 million, deposits of $596.3 million and fixed assets of $13.2 million have been moved to available for sale categories as of March 31, 2024. The transactions are expected to close early in the third quarter of this year with an estimated pre-tax premium of $30-$35 million based upon current deposit balances.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.52% (3.57% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2024 compared to 3.47% (3.52% on a fully tax-equivalent basis, non-GAAP) for the fourth quarter of 2023, and 3.36% (3.40% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2023.

Total interest income and average earning asset changes for the first quarter of 2024 compared to the first quarter of 2023 were:

• Total interest income was $251.7 million compared to $217.0 million, an increase of $34.7 million or 16% and primarily attributable to an increase in yields on average earning assets.
• Total interest income on a tax-equivalent basis (non-GAAP) was $253.7 million, an increase of $34.5 million or 16% from $219.2 million.
• Average earning assets decreased $795.6 million or 4% to $17.60 billion compared to $18.39 billion.
• The average rate on earning assets increased 97 basis points to 5.80% from 4.83%, primarily due to recent interest rate increases.

Total interest expense and average interest bearing liability changes for the first quarter of 2024 compared to the first quarter of 2023 were:

• Total interest expense was $97.5 million, an increase of $32.7 million from $64.8 million, due to increases in the average interest rate paid and the average balance of interest bearing liabilities.
• The average interest rate paid on interest bearing liabilities increased 102 basis points to 3.11% from 2.09%.
• Average interest bearing deposits decreased $395.8 million or 3% to $11.59 billion from $11.99 billion.
• The average interest rate paid on interest bearing deposits increased 100 basis points to 2.92% from 1.92%.
• Average borrowings increased $421.3 million or 71% to $1.02 billion from $594.7 million, and the average interest rate paid on borrowings was 5.29% compared to 5.37%.

Net interest income changes for the first quarter of 2024 compared to the first quarter of 2023 were:

• Net interest income totaled $154.2 million compared to $152.2 million, an increase of $2.0 million or 1%.
• Net interest income on a tax-equivalent basis (non-GAAP) totaled $156.2 million compared to $154.4 million, an increase of $1.8 million or 1%.

Noninterest Income and Noninterest Expense

Total noninterest income was $27.7 million during the first quarter of 2024 compared to $30.0 million during the first quarter of 2023, a decrease of $2.3 million or 8%. Significant changes within the noninterest income category for the first quarter of 2024 compared to the first quarter of 2023 were:

• Trust fees decreased $614,000 or 11% to $5.0 million from $5.7 million, primarily attributable to reduced retirement plan services income following the sale of the recordkeeping and administrative functions of HTLF Retirement Plan Services in May of 2023.
• Capital market fees decreased $1.6 million or 64% to $891,000 from $2.4 million due to lower capital markets activity.
• Net security gains totaled $58,000 compared to net losses of $1.1 million.
• Net gains on sales of loans held for sale decreased $1.7 million or 94% to $104,000 from $1.8 million, primarily attributable to a decrease in residential mortgage loans sold to the secondary market as HTLF exited mortgage loan originations through PrimeWest.
• Other noninterest income increased $884,000 or 60% to $2.3 million compared to $1.5 million. HTLF recorded $715,000 of income on assets associated with its deferred compensation plan which was largely offset with additional salaries and benefits expenses.

Total noninterest expense was $113.6 million during the first quarter of 2024 compared to $111.0 million during the first quarter of 2023, which was an increase of $2.6 million or 2%. Significant changes within the noninterest expense category for the first quarter of 2024 compared to the first quarter of 2023 were:

• Salaries and employee benefits totaled $64.0 million compared to $62.1 million, an increase of $1.8 million or 3%. The increase was attributable to higher benefit costs including incentive compensation and retirement plans partially offset by a reduction of full-time equivalent employees. Full-time equivalent employees totaled 1,888 compared to 1,991, a decrease of 103 or 5%.
• Other professional fees totaled $15.5 million compared to $12.8 million, an increase of $2.7 million or 21% which was primarily driven by increases in consulting and legal expenses.
• FDIC insurance assessments totaled $5.0 million compared to $3.3 million, an increase of $1.7 million due to a special assessment expense of $2.0 million. This special assessment is in addition to the $8.1 million HTLF recorded in the fourth quarter of 2023 based upon additional FDIC expected losses.
• Other noninterest expenses totaled $14.1 million compared to $15.4 million, a decrease of $1.3 million or 9% in conjunction with HTLF's 3.0 efficiency efforts.

The effective tax rate was 23.17% for the first quarter of 2024 compared to 22.50% for first quarter of 2023. The following items impacted the first quarter 2024 and 2023 tax calculations:

• Various tax credits of $935,000 compared to $969,000.
• Tax expense of $1.3 million compared to $929,000 resulting from the disallowed interest expense related to tax-exempt loans and securities, aligning with increases in total interest expense.
• Tax-exempt interest income as a percentage of pre-tax income of 11.08% compared to 12.20%.

Total Assets, Total Loans and Total Deposits

Total assets were $19.13 billion at March 31, 2024, a decrease of $278.9 million or 1% from $19.41 billion at year-end 2023. Securities represented 28% and 29% of total assets at March 31, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.64 billion at March 31, 2024, compared to $12.07 billion at December 31, 2023, which was a decrease of $424.0 million or 4%. Excluding the impact of the transfer of $352.7 million of loans to held for sale related to the planned sale of Rocky Mountain Bank, loans held to maturity decreased $71.3 million or 1%.

Significant changes by loan category at March 31, 2024 compared to December 31, 2023 included:

• Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $200.7 million or 3% to $6.09 billion compared to $6.29 billion. Excluding the decrease related to Rocky Mountain Bank, commercial and business lending decreased $41.0 million or 1%.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $28.8 million or 1% to $3.54 billion compared to $3.57 billion. Excluding the decrease related to Rocky Mountain Bank, commercial real estate lending increased $35.7 million or 1%.
• Agricultural and agricultural real estate loans decreased $109.3 million or 12% to $809.9 million compared to $919.2 million. Excluding the decrease related to Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $46.5 million or 5%.
• Residential mortgage loans decreased $41.8 million or 5% to $756.0 million compared to $797.8 million. Excluding the decrease related to Rocky Mountain Bank, residential mortgage loans decreased $9.9 million or 1%.

Total deposits were $15.30 billion as of March 31, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $899.5 million or 6%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, deposits decreased $303.2 million or 2%.

Total customer deposits were $14.27 billion as of March 31, 2024 compared to $14.86 billion at December 31, 2023, which was a decrease of $587.1 million or 4%. Excluding the impact of the transfer of $596.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, customer deposits increased $9.2 million. Significant customer deposit changes by category at March 31, 2024, compared to December 31, 2023, included:

• Customer demand deposits decreased $235.9 million or 5% to $4.26 billion compared to $4.50 billion. Excluding the decrease related to Rocky Mountain Bank, customer demand deposits decreased $91.9 million or 2%.
• Customer savings deposits decreased $141.3 million or 2% to $8.27 billion compared to $8.41 billion. Excluding the decrease related to Rocky Mountain Bank, customer savings deposits increased $189.0 million or 2%.
• Customer time deposits decreased $209.9 million or 11% to $1.73 billion compared to $1.94 billion. Excluding the decrease related to Rocky Mountain Bank, customer time deposits decreased $87.9 million or 5%.

Total wholesale and institutional deposits were $1.03 billion as of March 31, 2024, which was a decrease of $312.4 million or 23% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at March 31, 2024 compared to December 31, 2023 included:

• Wholesale and institutional savings deposits increased $4.9 million or 1% to $399.3 million compared to $394.4 million.
• Wholesale time deposits decreased $317.3 million or 33% to $633.6 million compared to $950.9 million.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans Provision for credit losses for loans for the first quarter of 2024 was $3.7 million, an increase of $1.5 million from $2.2 million recorded in the first quarter of 2023.

The allowance for credit losses for loans totaled $123.9 million at March 31, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at March 31, 2024:

• Provision expense for the three months ended March 31, 2024, totaled $3.7 million. The provision expense reflected a benefit of $2.0 million for the impact of the Rocky Mountain Bank loans transferred to the available for sale category.
• Net charge-offs of $2.3 million were recorded for the first three months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments The allowance for unfunded commitments decreased $2.7 million or 16% to $13.8 million at March 31, 2024, from $16.5 million at December 31, 2023, largely due to a reduction of $105.7 million in unfunded commitments for construction loans, which carry the highest loss rate. Total unfunded commitments decreased $88.1 million or 2% to $4.54 billion at March 31, 2024 compared to $4.63 billion at December 31, 2023.

Total Provision and Allowance for Lending Related Credit LossesThe total provision expense for lending related credit losses was $986,000 for the first quarter of 2024 compared to $3.1 million for the first quarter of 2023. The total allowance for lending related credit losses was $137.7 million or 1.18% of total loans at March 31, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets decreased $12.5 million or 11% to $98.0 million or 0.51% of total assets at March 31, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming loans were $95.4 million or 0.82% of total loans at March 31, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At March 31, 2024, loans delinquent 30-89 days were 0.31% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was primarily associated with a single $19.9 million construction loan that is currently in process of being sold by owners. Other real estate owned, net, decreased $10.0 million or 79% to $2.6 million at March 31, 2024 from $12.5 million at December 31, 2023. HTLF added one property with a book value of $11.3 million to other real estate during the third quarter of 2023 which was sold in the first quarter of 2024.

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:

• Adjusted earnings available to common stockholders, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability net income available to common stockholders as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
• Adjusted annualized return on average assets, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
• Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
• Adjusted efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this earnings release.
• Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources. Net interest margin, fully tax equivalent, is net interest income adjusted for the tax-favored status of certain loans and securities divided by average earning assets.
• Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
• Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
• Adjusted annualized return on average common equity, adjusts net income for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
• 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.
• Adjusted annualized return on average tangible common equity, adjusts net income available to common stockholders for the loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes this measure enhances the comparability of annualized return on average assets as it reflects adjustments commonly made by management, investors and analysts to evaluate the ongoing operations and enhance comparability with the results of prior periods.
• 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.

Change in Conference Call

As a result of today's announcement that HTLF has entered into a merger agreement with UMB Financial Corporation ("UMB") and a wholly-owned subsidiary of UMB, HTLF has cancelled the previously announced HTLF conference call scheduled for 5:00 p.m. EDT on Wednesday, May 1, 2024, to discuss the Company's performance for the first quarter of 2024.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $19.13 billion as of March 31, 2024. HTLF's banks serve communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, wealth management, investments and residential mortgage. Additional information is available at www.htlf.com.

Safe Harbor Statement

This release (including any information incorporated herein by reference), and future oral and written statements of the company 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 the company'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 the company's operations or performance. These forward-looking statements are generally identified by the use of the words such as "believe", "expect", "intent", "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 the company and its management. Although the company may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of the company 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 the company 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 the company’s Annual Report on Form 10-K for the year ended December 31, 2023, include, among others:

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

There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF's business, financial condition and results of operations. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to or correct or update 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-

CONTACT:
Kevin L. Thompson
Executive Vice President
Chief Financial Officer
(563) 589-1994
kthompson@htlf.com

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Three Months EndedMarch 31,
		2024				2023
Interest Income
Interest and fees on loans	$	195,661			$	153,843
Interest on securities:
Taxable		47,014				55,976
Nontaxable		6,041				6,028
Interest on federal funds sold		—				—
Interest on deposits with other banks and short-term investments		3,006				1,131
Total Interest Income		251,722				216,978
Interest Expense
Interest on deposits		84,134				56,898
Interest on borrowings		7,524				2,422
Interest on term debt		5,849				5,446
Total Interest Expense		97,507				64,766
Net Interest Income		154,215				152,212
Provision for credit losses		986				3,074
Net Interest Income After Provision for Credit Losses		153,229				149,138
Noninterest Income
Service charges and fees		17,063				17,136
Loan servicing income		131				714
Trust fees		5,043				5,657
Brokerage and insurance commissions		754				696
Capital markets fees		891				2,449
Securities gains (losses), net		58				(1,104	)
Unrealized gain/(loss) on equity securities, net		95				193
Net gains on sale of loans held for sale		104				1,831
Income on bank owned life insurance		1,177				964
Other noninterest income		2,347				1,463
Total Noninterest Income		27,663				29,999
Noninterest Expense
Salaries and employee benefits		63,955				62,149
Occupancy		7,263				7,209
Furniture and equipment		2,337				2,915
Professional fees		15,531				12,797
FDIC insurance assessments		4,969				3,279
Advertising		1,358				1,985
Core deposit intangibles amortization		1,492				1,788
Other real estate and loan collection expenses, net		512				155
(Gain) loss on sales/valuations of assets, net		214				1,115
Acquisition, integration and restructuring costs		1,375				1,673
Partnership investment in tax credit projects		494				538
Other noninterest expenses		14,095				15,440
Total Noninterest Expense		113,595				111,043
Income Before Income Taxes		67,297				68,094
Income taxes		15,590				15,318
Net Income/(Loss)		51,707				52,776
Preferred dividends		(2,013	)			(2,013	)
Net Income/(Loss) Available to Common Stockholders	$	49,694			$	50,763
Earnings/(loss) per common share-diluted	$	1.16			$	1.19
Weighted average shares outstanding-diluted		42,915,768				42,742,878

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Interest Income
Interest and fees on loans	$	195,661			$	192,861			$	182,394			$	168,899			$	153,843
Interest on securities:
Taxable		47,014				54,573				54,800				58,172				55,976
Nontaxable		6,041				6,278				6,584				6,378				6,028
Interest on federal funds sold		—				—				3				—				—
Interest on deposits with other banks and short-term investments		3,006				2,174				1,651				2,051				1,131
Total Interest Income		251,722				255,886				245,432				235,500				216,978
Interest Expense
Interest on deposits		84,134				88,071				92,744				81,975				56,898
Interest on borrowings		7,524				5,874				1,167				848				2,422
Interest on term debt		5,849				5,804				5,765				5,545				5,446
Total Interest Expense		97,507				99,749				99,676				88,368				64,766
Net Interest Income		154,215				156,137				145,756				147,132				152,212
Provision for credit losses		986				11,738				1,516				5,379				3,074
Net Interest Income After Provision for Credit Losses		153,229				144,399				144,240				141,753				149,138
Noninterest Income
Service charges and fees		17,063				18,708				18,553				19,627				17,136
Loan servicing income		131				158				278				411				714
Trust fees		5,043				4,905				4,734				5,419				5,657
Brokerage and insurance commissions		754				729				692				677				696
Capital markets fees		891				1,676				1,845				4,037				2,449
Securities gains (losses), net		58				(140,007	)			(114	)			(314	)			(1,104	)
Unrealized gain/(loss) on equity securities, net		95				75				13				(41	)			193
Net gains on sale of loans held for sale		104				94				905				1,050				1,831
Income on bank owned life insurance		1,177				729				858				1,220				964
Other noninterest income		2,347				1,132				619				407				1,463
Total Noninterest Income		27,663				(111,801	)			28,383				32,493				29,999
Noninterest Expense
Salaries and employee benefits		63,955				64,766				62,262				62,099				62,149
Occupancy		7,263				6,509				6,438				6,691				7,209
Furniture and equipment		2,337				2,901				2,720				3,063				2,915
Professional fees		15,531				17,060				13,616				15,194				12,797
FDIC insurance assessments		4,969				10,313				3,313				3,035				3,279
Advertising		1,358				1,677				1,633				3,052				1,985
Core deposit intangibles amortization		1,492				1,611				1,625				1,715				1,788
Other real estate and loan collection expenses, net		512				505				481				348				155
(Gain) loss on sales/valuations of assets, net		214				2,072				108				(3,372	)			1,115
Acquisition, integration and restructuring costs		1,375				4,365				2,429				1,892				1,673
Partnership investment in tax credit projects		494				3,573				1,136				154				538
Other noninterest expenses		14,095				14,933				15,292				15,575				15,440
Total Noninterest Expense		113,595				130,285				111,053				109,446				111,043
Income Before Income Taxes		67,297				(97,687	)			61,570				64,800				68,094
Income taxes		15,590				(27,324	)			13,479				15,384				15,318
Net Income/(Loss)		51,707				(70,363	)			48,091				49,416				52,776
Preferred dividends		(2,013	)			(2,012	)			(2,013	)			(2,012	)			(2,013	)
Net Income/(Loss) Available to Common Stockholders	$	49,694			$	(72,375	)		$	46,078			$	47,404			$	50,763
Earnings/(loss) per common share-diluted	$	1.16			$	(1.69	)		$	1.08			$	1.11			$	1.19
Weighted average shares outstanding-diluted		42,915,768				42,838,405				42,812,563				42,757,603				42,742,878

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Assets
Cash and due from banks	$	208,176			$	275,554			$	248,756			$	317,303			$	274,354
Interest bearing deposits with other banks and short-term investments		236,190				47,459				99,239				82,884				87,757
Cash and cash equivalents		444,366				323,013				347,995				400,187				362,111
Time deposits in other financial institutions		1,240				1,240				1,490				1,490				1,740
Securities:
Carried at fair value		4,418,222				4,646,891				5,482,687				5,798,041				6,096,657
Held to maturity, at cost		841,055				838,241				835,468				834,673				832,098
Other investments, at cost		68,524				91,277				90,001				72,291				72,364
Loans held for sale		352,744				5,071				6,262				14,353				10,425
Loans:
Held to maturity		11,644,641				12,068,645				11,872,436				11,717,974				11,495,353
Allowance for credit losses		(123,934	)			(122,566	)			(110,208	)			(111,198	)			(112,707	)
Loans, net		11,520,707				11,946,079				11,762,228				11,606,776				11,382,646
Premises, furniture and equipment, net		176,582				181,070				187,436				190,420				191,267
Goodwill		576,005				576,005				576,005				576,005				576,005
Core deposit intangibles, net		16,923				18,415				20,026				21,651				23,366
Cash surrender value on life insurance		197,671				197,085				196,694				195,793				194,419
Other real estate, net		2,590				12,548				14,362				2,677				7,438
Other assets		516,198				574,772				609,139				510,359				432,008
Total Assets	$	19,132,827			$	19,411,707			$	20,129,793			$	20,224,716			$	20,182,544
Liabilities and Equity
Liabilities
Deposits:
Demand	$	4,264,390			$	4,500,304			$	4,792,813			$	4,897,858			$	5,119,554
Savings		8,669,221				8,805,597				8,754,911				8,772,596				9,256,609
Time		2,368,555				2,895,813				3,553,269				3,993,089				3,305,183
Total deposits		15,302,166				16,201,714				17,100,993				17,663,543				17,681,346
Deposits held for sale		596,328				—				—				—				—
Borrowings		650,033				622,255				392,634				44,364				92,337
Term debt		372,652				372,396				372,059				372,403				372,097
Accrued expenses and other liabilities		232,815				282,225				438,577				285,416				207,359
Total Liabilities		17,153,994				17,478,590				18,304,263				18,365,726				18,353,139
Stockholders' Equity
Preferred equity		110,705				110,705				110,705				110,705				110,705
Common stock		42,784				42,688				42,656				42,645				42,559
Capital surplus		1,093,207				1,090,740				1,088,267				1,087,358				1,084,112
Retained earnings		1,178,330				1,141,501				1,226,740				1,193,522				1,158,948
Accumulated other comprehensive income/(loss)		(446,193	)			(452,517	)			(642,838	)			(575,240	)			(566,919	)
Total Equity		1,978,833				1,933,117				1,825,530				1,858,990				1,829,405
Total Liabilities and Equity	$	19,132,827			$	19,411,707			$	20,129,793			$	20,224,716			$	20,182,544

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Average Balances
Assets	$	19,296,638			$	19,667,825			$	20,207,920			$	20,221,511			$	20,118,005
Loans, net of unearned		12,021,930				11,938,272				11,800,064				11,625,442				11,378,078
Deposits		16,042,402				16,709,394				17,507,813				17,689,138				17,505,867
Customer deposits		14,816,652				14,969,948				14,699,235				14,655,535				15,123,181
Earning assets		17,597,068				17,853,957				18,439,010				18,523,552				18,392,649
Interest-bearing liabilities		12,607,745				12,721,680				13,158,631				13,209,794				12,582,234
Common equity		1,832,959				1,729,086				1,746,818				1,727,013				1,655,860
Total stockholders' equity		1,943,664				1,839,791				1,857,523				1,837,718				1,766,565
Tangible common equity (non-GAAP)(1)		1,239,313				1,133,888				1,149,992				1,128,527				1,055,617
Key Performance Ratios
Annualized return on average assets		1.08	%		(1.42		)%			0.94	%			0.98	%			1.06	%
Adjusted annualized return on average assets (non-GAAP)(1)		1.13				0.96				0.98				0.96				1.12
Annualized return on average common equity (GAAP)		10.90				(16.61	)			10.47				11.01				12.43
Adjusted annualized return on average common equity (non-GAAP)(1)		11.50				10.46				10.92				10.80				13.16
Annualized return on average tangible common equity (non-GAAP)(1)		16.49				(24.89	)			16.32				17.31				20.03
Adjusted annualized return on average tangible common equity (non-GAAP)(1)		17.38				16.38				17.02				17.00				21.17
Annualized ratio of net charge-offs/(recoveries) to average loans		0.08				0.01				0.12				0.32				(0.04	)
Annualized net interest margin (GAAP)		3.52				3.47				3.14				3.19				3.36
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.57				3.52				3.18				3.23				3.40
Annualized cost of deposits		2.11				2.09				2.10				1.86				1.32
Efficiency ratio (GAAP)		62.46				293.86				63.77				60.93				60.94
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)(1)		58.77				59.31				59.95				59.88				57.16
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.37				2.63				2.18				2.17				2.24
Annualized ratio of core expenses to average assets (non-GAAP)(1)		2.25				2.23				2.08				2.16				2.14
(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
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Common Share Data
Book value per common share	$	43.66			$	42.69			$	40.20			$	41.00			$	40.38
Tangible book value per common share (non-GAAP)(1)		29.81				28.77				26.23				26.98				26.30
ASC 320 effect on book value per common share		(11.18	)			(11.00	)			(16.27	)			(14.04	)			(13.35	)
Common shares outstanding, net of treasury stock		42,783,670				42,688,008				42,656,303				42,644,544				42,558,726
Capital Ratios
Common equity ratio		9.76	%			9.39	%			8.52	%			8.64	%			8.52	%
Tangible common equity ratio (non-GAAP)(1)		6.88				6.53				5.73				5.86				5.72
Tier 1 leverage ratio		9.84				9.44				9.59				9.40				9.25
Common equity tier 1 ratio(2)		11.40				10.97				11.37				11.33				11.28
Total risk based capital ratio(2)		14.99				14.53				14.90				14.93				14.98
Other Selected Trend Information
Effective tax rate		23.17	%			27.97	%			21.89	%			23.74	%			22.50	%
Full time equivalent employees		1,888				1,970				1,965				1,966				1,991
Loans Held to Maturity
Commercial and industrial	$	3,545,051			$	3,652,047			$	3,591,809			$	3,590,680			$	3,498,345
Paycheck Protection Program ("PPP")		2,172				2,777				3,750				4,139				8,258
Owner occupied commercial real estate		2,545,033				2,638,175				2,429,659				2,398,698				2,312,538
Commercial and business lending		6,092,256				6,292,999				6,025,218				5,993,517				5,819,141
Non-owner occupied commercial real estate		2,495,068				2,553,711				2,656,358				2,530,736				2,421,341
Real estate construction		1,041,583				1,011,716				1,029,554				1,013,134				1,102,186
Commercial real estate lending		3,536,651				3,565,427				3,685,912				3,543,870				3,523,527
Total commercial lending		9,628,907				9,858,426				9,711,130				9,537,387				9,342,668
Agricultural and agricultural real estate		809,876				919,184				842,116				839,817				810,183
Residential mortgage		756,021				797,829				813,803				828,437				841,084
Consumer		449,837				493,206				505,387				512,333				501,418
Total loans held to maturity	$	11,644,641			$	12,068,645			$	11,872,436			$	11,717,974			$	11,495,353
Total unfunded loan commitments	$	4,537,718			$	4,625,768			$	4,813,798			$	4,905,147			$	4,867,925
Deposits
Demand-customer	$	4,264,390			$	4,500,304			$	4,792,813			$	4,897,858			$	5,119,554
Savings-customer		8,269,956				8,411,240				8,190,430				8,149,596				8,501,337
Savings-wholesale and institutional		399,265				394,357				564,481				623,000				755,272
Total savings		8,669,221				8,805,597				8,754,911				8,772,596				9,256,609
Time-customer		1,734,971				1,944,884				1,814,335				1,597,849				1,071,476
Time-wholesale		633,584				950,929				1,738,934				2,395,240				2,233,707
Total time		2,368,555				2,895,813				3,553,269				3,993,089				3,305,183
Total deposits	$	15,302,166			$	16,201,714			$	17,100,993			$	17,663,543			$	17,681,346
Total customer deposits	$	14,269,317			$	14,856,428			$	14,797,578			$	14,645,303			$	14,692,367
Total wholesale and institutional deposits		1,032,849				1,345,286				2,303,415				3,018,240				2,988,979
Total deposits	$	15,302,166			$	16,201,714			$	17,100,993			$	17,663,543			$	17,681,346
(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.
(2) March 31, 2024 calculation is preliminary.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and for the Quarter Ended
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Allowance for Credit Losses-Loans
Balance, beginning of period	$	122,566			$	110,208			$	111,198			$	112,707			$	109,483
Provision for credit losses		3,668				12,750				2,672				7,829				2,184
Charge-offs		(4,093	)			(3,886	)			(3,964	)			(9,613	)			(2,151	)
Recoveries		1,793				3,494				302				275				3,191
Balance, end of period	$	123,934			$	122,566			$	110,208			$	111,198			$	112,707
Allowance for Unfunded Commitments
Balance, beginning of period	$	16,468			$	17,480			$	18,636			$	21,086			$	20,196
Provision for credit losses		(2,682	)			(1,012	)			(1,156	)			(2,450	)			890
Balance, end of period	$	13,786			$	16,468			$	17,480			$	18,636			$	21,086
Allowance for lending related credit losses	$	137,720			$	139,034			$	127,688			$	129,834			$	133,793
Provision for Credit Losses
Provision for credit losses-loans	$	3,668			$	12,750			$	2,672			$	7,829			$	2,184
Provision (benefit) for credit losses-unfunded commitments		(2,682	)			(1,012	)			(1,156	)			(2,450	)			890
Total provision (benefit) for credit losses	$	986			$	11,738			$	1,516			$	5,379			$	3,074
Asset Quality
Nonaccrual loans	$	94,800			$	95,426			$	51,304			$	61,956			$	58,066
Loans past due ninety days or more		611				2,507				511				1,459				174
Other real estate owned		2,590				12,548				14,362				2,677				7,438
Other repossessed assets		—				—				1				5				24
Total nonperforming assets	$	98,001			$	110,481			$	66,178			$	66,097			$	65,702
Nonperforming Assets Activity
Balance, beginning of period	$	110,481			$	66,178			$	66,097			$	65,702			$	66,931
Net loan (charge-offs) recoveries		(2,300	)			(392	)			(3,662	)			(9,338	)			1,040
New nonperforming loans		5,470				61,193				19,295				19,805				4,626
Reduction of nonperforming loans(1)		(5,692	)			(14,278	)			(14,691	)			(5,253	)			(5,711	)
OREO/Repossessed assets sales proceeds		(9,958	)			(2,220	)			(861	)			(4,819	)			(1,184	)
Balance, end of period	$	98,001			$	110,481			$	66,178			$	66,097			$	65,702
Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.82	%			0.81	%			0.44	%			0.54	%			0.51	%
Ratio of nonperforming assets to total assets		0.51				0.57				0.33				0.33				0.33
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.08				0.01				0.12				0.32				(0.04	)
Allowance for loan credit losses as a percent of loans		1.06				1.02				0.93				0.95				0.98
Allowance for lending related credit losses as a percent of loans		1.18				1.15				1.08				1.11				1.16
Allowance for loan credit losses as a percent of nonperforming loans		129.89				125.15				212.70				175.35				193.52
Loans delinquent 30-89 days as a percent of total loans		0.31				0.09				0.12				0.12				0.10
(1) Includes principal reductions, transfers to performing status and transfers to OREO.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
	For the Quarter Ended
	March 31, 2024										December 31, 2023										March 31, 2023
	AverageBalance				Interest			Rate			AverageBalance				Interest			Rate			AverageBalance				Interest			Rate
Earning Assets
Securities:
Taxable	$	4,665,196			$	47,014		4.05	%		$	5,119,970			$	54,573		4.23	%		$	6,096,888			$	55,976		3.72	%
Nontaxable(1)		778,632				7,383		3.81				759,464				7,681		4.01				922,676				7,630		3.35
Total securities		5,443,828				54,397		4.02				5,879,434				62,254		4.20				7,019,564				63,606		3.67
Interest on deposits with other banks and short-term investments		253,189				3,006		4.78				146,027				2,174		5.91				105,400				1,131		4.35
Federal funds sold		—				—		—				—				—		—				—				—		—
Loans:(2)
Commercial and industrial(1)		3,642,588				66,985		7.40				3,624,034				66,980		7.33				3,459,317				49,907		5.85
PPP loans		2,587				8		1.24				3,064				8		1.04				9,970				26		1.06
Owner occupied commercial real estate		2,609,773				35,517		5.47				2,436,234				31,714		5.16				2,289,002				26,769		4.74
Non-owner occupied commercial real estate		2,550,419				39,849		6.28				2,688,805				42,417		6.26				2,331,318				30,749		5.35
Real estate construction		1,061,843				20,849		7.90				1,035,010				20,200		7.74				1,099,026				18,131		6.69
Agricultural and agricultural real estate		878,621				13,756		6.30				844,353				13,069		6.14				835,648				11,353		5.51
Residential real estate		791,248				10,135		5.15				810,069				9,531		4.67				852,561				9,273		4.41
Consumer		484,851				9,201		7.63				496,703				9,597		7.67				501,236				8,242		6.67
Less: allowance for credit losses		(121,879	)			—		—				(109,776	)			—		—				(110,393	)			—		—
Net loans		11,900,051				196,300		6.63				11,828,496				193,516		6.49				11,267,685				154,450		5.56
Total earning assets		17,597,068				253,703		5.80	%			17,853,957				257,944		5.73	%			18,392,649				219,187		4.83	%
Nonearning Assets		1,699,570										1,813,868										1,725,356
Total Assets	$	19,296,638									$	19,667,825									$	20,118,005
Interest-bearing Liabilities
Savings	$	8,809,530			$	54,667		2.50	%		$	8,782,197			$	53,807		2.43	%		$	9,730,494			$	37,893		1.58	%
Time deposits		2,782,195				29,467		4.26				3,165,788				34,264		4.29				2,257,047				19,005		3.41
Borrowings		643,525				7,524		4.70				401,463				5,874		5.80				222,772				2,422		4.41
Term debt		372,495				5,849		6.32				372,232				5,804		6.19				371,921				5,446		5.94
Total interest-bearing liabilities		12,607,745				97,507		3.11	%			12,721,680				99,749		3.11	%			12,582,234				64,766		2.09	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,450,677										4,761,409										5,518,326
Accrued interest and other liabilities		294,552										344,945										250,880
Total noninterest-bearing liabilities		4,745,229										5,106,354										5,769,206
Stockholders' Equity		1,943,664										1,839,791										1,766,565
Total Liabilities and Equity	$	19,296,638									$	19,667,825									$	20,118,005
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	156,196									$	158,195									$	154,421
Net interest spread(1)								2.69	%									2.62	%									2.74	%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)to total earning assets								3.57	%									3.52	%									3.40	%
Interest-bearing liabilities to earning assets		71.65	%									71.25	%									68.41	%
(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
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Earnings available to common stockholders (GAAP)	$	49,694			$	(72,375	)		$	46,078			$	47,404			$	50,763
Plus core deposit intangibles amortization, net of tax(2)		1,131				1,229				1,240				1,309				1,364
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	50,825			$	(71,146	)		$	47,318			$	48,713			$	52,127
Average common equity (GAAP)	$	1,832,959			$	1,729,086			$	1,746,818			$	1,727,013			$	1,655,860
Less average goodwill		576,005				576,005				576,005				576,005				576,005
Less average core deposit intangibles, net		17,641				19,193				20,821				22,481				24,238
Average tangible common equity (non-GAAP)	$	1,239,313			$	1,133,888			$	1,149,992			$	1,128,527			$	1,055,617
Annualized return on average common equity (GAAP)		10.90	%		(16.61		)%			10.47	%			11.01	%			12.43	%
Annualized return on average tangible common equity (non-GAAP)		16.49	%		(24.89		)%			16.32	%			17.31	%			20.03	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	154,215			$	156,137			$	145,756			$	147,132			$	152,212
Plus tax-equivalent adjustment(1)		1,981				2,058				2,152				2,136				2,209
Net interest income, fully tax-equivalent (non-GAAP)	$	156,196			$	158,195			$	147,908			$	149,268			$	154,421
Average earning assets	$	17,597,068			$	17,853,957			$	18,439,010			$	18,523,552			$	18,392,649
Annualized net interest margin (GAAP)		3.52	%			3.47	%			3.14	%			3.19	%			3.36	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.57				3.52				3.18				3.23				3.40
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.02				0.02				0.01				0.03				0.02

Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)	$	1,868,128			$	1,822,412			$	1,714,825			$	1,748,285			$	1,718,700
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit intangibles, net		16,923				18,415				20,026				21,651				23,366
Tangible common equity (non-GAAP)	$	1,275,200			$	1,227,992			$	1,118,794			$	1,150,629			$	1,119,329
Common shares outstanding, net of treasury stock		42,783,670				42,688,008				42,656,303				42,644,544				42,558,726
Common equity (book value) per share (GAAP)	$	43.66			$	42.69			$	40.20			$	41.00			$	40.38
Tangible book value per common share (non-GAAP)	$	29.81			$	28.77			$	26.23			$	26.98			$	26.30
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)	$	1,275,200			$	1,227,992			$	1,118,794			$	1,150,629			$	1,119,329
Total assets (GAAP)	$	19,132,827			$	19,411,707			$	20,129,793			$	20,224,716			$	20,182,544
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit intangibles, net		16,923				18,415				20,026				21,651				23,366
Total tangible assets (non-GAAP)	$	18,539,899			$	18,817,287			$	19,533,762			$	19,627,060			$	19,583,173
Tangible common equity ratio (non-GAAP)		6.88	%			6.53	%			5.73	%			5.86	%			5.72	%
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)
Net interest income (GAAP)	$	154,215			$	156,137			$	145,756			$	147,132			$	152,212
Tax-equivalent adjustment(1)		1,981				2,058				2,152				2,136				2,209
Fully tax-equivalent net interest income		156,196				158,195				147,908				149,268				154,421
Noninterest income		27,663				(111,801	)			28,383				32,493				29,999
Securities (gains)/losses, net		(58	)			140,007				114				314				1,104
Unrealized (gain) loss on equity securities, net		(95	)			(75	)			(13	)			41				(193	)
Valuation adjustment on servicing rights		—				—				—				—				—
Adjusted revenue (non-GAAP)	$	183,706			$	186,326			$	176,392			$	182,116			$	185,331
Total noninterest expenses (GAAP)	$	113,595			$	130,285			$	111,053			$	109,446			$	111,043
Less:
Core deposit intangibles amortization		1,492				1,611				1,625				1,715				1,788
Partnership investment in tax credit projects		494				3,573				1,136				154				538
(Gain) loss on sales/valuation of assets, net		214				2,072				108				(3,372	)			1,115
Acquisition, integration and restructuring costs		1,375				4,365				2,429				1,892				1,673
FDIC special assessment		2,049				8,145				—				—				—
Core expenses (non-GAAP)	$	107,971			$	110,519			$	105,755			$	109,057			$	105,929
Efficiency ratio (GAAP)		62.46	%			293.86	%			63.77	%			60.93	%			60.94	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		58.77	%			59.31	%			59.95	%			59.88	%			57.16	%
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)	$	113,595			$	130,285			$	111,053			$	109,446			$	111,043
Core expenses (non-GAAP)		107,971				110,519				105,755				109,057				105,929
Average assets	$	19,296,638			$	19,667,825			$	20,207,920			$	20,221,511			$	20,118,005
Total noninterest expenses to average assets (GAAP)		2.37	%			2.63	%			2.18	%			2.17	%			2.24	%
Core expenses to average assets (non-GAAP)		2.25	%			2.23	%			2.08	%			2.16	%			2.14	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	168			$	1,425			$	94			$	93			$	74
Occupancy		—				1,092				—				—				—
Furniture and equipment		—				19				—				—				—
Professional fees		931				793				1,617				1,068				934
Advertising		—				28				178				222				122
Other noninterest expenses		276				1,008				540				509				543
Total acquisition, integration and restructuring costs	$	1,375			$	4,365			$	2,429			$	1,892			$	1,673
(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
	3/31/2024				12/31/2023				9/30/2023				6/30/2023				3/31/2023
Reconciliation of Adjusted Earnings
Net income/(loss)	$	51,707			$	(70,363	)		$	48,091			$	49,416			$	52,776
(Gain) loss from sale of securities		(58	)			140,007				114				314				1,104
(Gain) loss on sales/valuation of assets, net		214				2,072				108				(3,372	)			1,115
Acquisition, integration and restructuring costs		1,375				4,365				2,429				1,892				1,673
FDIC special assessment		2,049				8,145				—				—				—
Total adjustments		3,580				154,589				2,651				(1,166	)			3,892
Tax effect of adjustments(2)		(866	)			(36,638	)			(628	)			276				(922	)
Adjusted earnings	$	54,421			$	47,588			$	50,114			$	48,526			$	55,746
Preferred dividends		(2,013	)			(2,012	)			(2,013	)			(2,012	)			(2,013	)
Adjusted earnings available to common stockholders	$	52,408			$	45,576			$	48,101			$	46,514			$	53,733
Plus core deposit intangibles amortization, net of tax(2)		1,131				1,229				1,240				1,309				1,364
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	53,539			$	46,805			$	49,341			$	47,823			$	55,097
Reconciliation of Adjusted Annualized Return on Average Assets
Average assets	$	19,296,638			$	19,667,825			$	20,207,920			$	20,221,511			$	20,118,005
Adjusted annualized return on average assets (non-GAAP)		1.13	%			0.96	%			0.98	%			0.96	%			1.12	%
Reconciliation of Adjusted Annualized Return on Average Common Equity
Average common stockholders' equity (GAAP)	$	1,832,959			$	1,729,086			$	1,746,818			$	1,727,013			$	1,655,860
Adjusted annualized average common equity (non-GAAP)		11.50	%			10.46	%			10.92	%			10.80	%			13.16	%
Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity
Average tangible common equity (non-GAAP)	$	1,239,313			$	1,133,888			$	1,149,992			$	1,128,527			$	1,055,617
Adjusted annualized average tangible common equity (non-GAAP)		17.38	%			16.38	%			17.02	%			17.00	%			21.17	%
Reconciliation of Adjusted Diluted Earnings Per Common Share
Weighted average shares outstanding-diluted		42,915,768				42,838,405				42,812,563				42,757,603				42,742,878
Adjusted diluted earnings per common share	$	1.22			$	1.06			$	1.12			$	1.09			$	1.26
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.