Highlights
- Quarterly net income available to common stockholders of $19.1 million, a 33% increase from the fourth quarter of the prior year
- Record annual net income available to common stockholders of $80.1 million, a 35% increase from the prior year
- Diluted earnings per common share of $0.74 for the quarter, a 10% increase from the fourth quarter of the prior year, and $3.22 for the year, a 14% increase from the prior year
- Net interest margin of 3.96% for the quarter, fully tax-equivalent (non-GAAP)(1) of 4.14%
- Net interest margin of 3.95% for the year, fully tax-equivalent (non-GAAP)(1) of 4.13%
- Return on average common equity of 10.48% for the quarter and 11.80% for the year
- Return on average tangible common equity (non-GAAP)(2) of 13.24% for the quarter and 15.15% for the year
- Completed offering of 1,379,690 shares of common stock with net proceeds of $49.7 million
- Announced agreement to acquire Founders Bancorp of San Luis Obispo, CA
- Declared and paid a special dividend of $0.10 per common share
| Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Net income available to common stockholders (in millions) | $ | 19.1 | $ | 14.4 | $ | 80.1 | $ | 59.2 | |||||||||
| Diluted earnings per common share | 0.74 | 0.67 | 3.22 | 2.83 | |||||||||||||
| Return on average assets | 0.92 | % | 0.79 | % | 0.98 | % | 0.88 | % | |||||||||
| Return on average common equity | 10.48 | 10.69 | 11.80 | 11.92 | |||||||||||||
| Return on average tangible common equity (non-GAAP)(2) | 13.24 | 12.79 | 15.15 | 13.90 | |||||||||||||
| Net interest margin | 3.96 | 3.82 | 3.95 | 3.80 | |||||||||||||
| Net interest margin, fully tax-equivalent (non-GAAP)(1) | 4.14 | 3.99 | 4.13 | 3.97 | |||||||||||||
| "Heartland just completed its best year on record with net income available to common stockholders of $80.1 million, a 35 percent increase over 2015, with earnings per share growing by 14 percent." Lynn B. Fuller, chairman and chief executive officer, Heartland Financial USA, Inc. |
(1) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table included in this earnings release.
(2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table included in this earnings release.
DUBUQUE, Iowa, Jan. 30, 2017 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ:HTLF) today reported net income available to common stockholders of $19.1 million, or $0.74 per diluted common share, for the quarter ended December 31, 2016, compared to $14.4 million, or $0.67 per diluted common share, for the fourth quarter of 2015. Return on average common equity was 10.48% and return on average assets was 0.92% for the fourth quarter of 2016, compared to 10.69% and 0.79%, respectively, for the same quarter in 2015.
Net income available to common stockholders for the year 2016 was $80.1 million, or $3.22 per diluted common share, compared to $59.2 million, or $2.83 per diluted common share, recorded during the year 2015. Return on average common equity was 11.80% and return on average assets was 0.98% for the year 2016, compared to 11.92% and 0.88%, respectively, for the same period in 2015.
Commenting on Heartland’s results for 2016, Lynn B. Fuller, Heartland’s chairman and chief executive officer said, "Heartland just completed its best year on record with net income available to common stockholders of $80.1 million, a 35 percent increase over 2015, with earnings per share growing by 14 percent."
On October 29, 2016, Heartland entered into a definitive merger agreement for the acquisition of Founders Bancorp, parent company of Founders Community Bank, based in San Luis Obispo, California. The transaction is valued at approximately $29.1 million, subject to adjustment. Of the merger consideration, 70% will be in the form of shares of Heartland common stock, and 30% will be in cash. As of September 30, 2016, Founders Community Bank had total assets of $198.5 million, which includes gross loans of $106.6 million and total deposits of $180.5 million. The closing of the acquisition is subject to customary closing conditions, including approvals by the Founders Bancorp shareholders and banking regulators, and is expected to occur in the first quarter of 2017. Simultaneous with the close, Founders Community Bank will be merged into Heartland's Premier Valley Bank subsidiary. Heartland expects the acquisition to be accretive to its earnings per share during 2018.
On November 8, 2016, Heartland closed its sale of 1,379,690 shares of the its common stock pursuant to an underwriting agreement with Raymond James & Associates, Inc. as underwriter, providing for the offer and sale of the shares in a firm commitment underwritten public offering. The net proceeds from this offering were approximately $49.7 million. Heartland is using the net proceeds from this offering for general corporate purposes, which may include, among other things, working capital, debt repayment or financing potential acquisitions.
Net Interest Margin Remains Consistent As a Percentage of Average Earning Assets and Increases In Dollars
Net interest margin, expressed as a percentage of average earning assets, was 3.96% (4.14% on a fully tax-equivalent basis) during the fourth quarter of 2016, compared to 3.97% (4.14% on a fully tax-equivalent basis) during the third quarter of 2016 and 3.82% (3.99% on a fully tax-equivalent basis) during the fourth quarter of 2015.
Fuller said, "Throughout the year, we were pleased to see tax-equivalent net interest margin maintained nicely above the key 4 percent level. Despite continued pressure from a very low interest rate environment, we continue to find opportunities to increase asset yields while reducing our funding costs."
Interest income for the fourth quarter of 2016 was $82.8 million, an increase of $12.6 million or 18%, compared to the $70.2 million recorded in the fourth quarter of 2015. The tax-equivalent adjustment, which accounts for income taxes saved on the interest earned on nontaxable securities and loans, was $3.5 million for the fourth quarter of 2016 and $2.8 million for the fourth quarter of 2015. With these adjustments, interest income on a tax-equivalent basis was $86.3 million for the fourth quarter of 2016, an increase of $13.3 million or 18%, compared to $73.0 million for the fourth quarter of 2015. The increase in interest income in the fourth quarter of 2016, as compared to the fourth quarter of 2015, was primarily due to an increase in average earning assets, which totaled $7.55 billion during the fourth quarter of 2016 compared to $6.51 billion during the fourth quarter of 2015, a $1.04 billion or 16% increase. A majority of this growth was attributable to the acquisition of Premier Valley Bank completed on November 30, 2015, and acquisition of CIC Bancshares, Inc. completed on February 5, 2016.
Interest expense for the fourth quarter of 2016 was $7.6 million, an increase of $160,000 or 2% from $7.5 million in the fourth quarter of 2015. Average interest bearing liabilities increased $424.6 million or 9% for the quarter ended December 31, 2016, from $4.78 billion in the same quarter in 2015, while the average interest rate paid on Heartland's interest bearing deposits and borrowings declined 4 basis points from 0.62% in the fourth quarter of 2015 to 0.58% in the fourth quarter of 2016. The average interest rate paid on savings deposits was 0.21% during the fourth quarter of 2016 compared to 0.20% during the fourth quarter of 2015, and the average interest rate paid on time deposits was 0.77% during the fourth quarter of 2016 compared to 0.82% during the fourth quarter of 2015.
Net interest income increased $12.5 million or 20% to $75.2 million in the fourth quarter of 2016 from the $62.7 million recorded in the fourth quarter of 2015. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $78.7 million during the fourth quarter of 2016, an increase of $13.1 million or 20% from the $65.5 million recorded during the fourth quarter of 2015.
Noninterest Income and Noninterest Expenses Increase
Noninterest income totaled $24.5 million during the fourth quarter of 2016 compared to $24.4 million during the fourth quarter of 2015. Service charges and fees totaled $8.1 million during the fourth quarter of 2016 compared to $6.7 million during the fourth quarter of 2015, an increase of $1.5 million or 22%. This increase was primarily attributable to a larger demand deposit customer base, a portion of which is attributable to the acquisitions completed during the last quarter of 2015 and first quarter of 2016. Gains on sale of loans held for sale totaled $5.8 million during the fourth quarter of 2016 compared to $7.1 million during the fourth quarter of 2015, a decrease of $1.2 million or 18%. Net securities gains totaled $1.6 million during the fourth quarter of 2016 compared to $3.9 million during the fourth quarter of 2015, a decrease of $2.3 million or 59%.
For the fourth quarter of 2016, noninterest expenses totaled $69.9 million compared to $66.0 million during the fourth quarter of 2015, an increase of $3.9 million or 6%. The category with the most significant increase was salaries and employee benefits, which increased $5.5 million or 16%. Other categories experiencing increases, primarily attributable to the recent acquisitions, were occupancy, furniture and equipment, professional fees and intangible assets amortization.
Heartland's effective tax rate was 30.38% for the fourth quarter of 2016 compared to 23.03% for the fourth quarter of 2015. Included in Heartland's income taxes for the fourth quarter of 2015 were federal historic rehabilitation tax credits totaling $1.4 million associated with Heartland's ownership interest in a qualifying real estate project. Federal low-income housing tax credits included in the determination of Heartland's income taxes totaled $304,000 during the fourth quarter of 2016 compared to $145,000 during the fourth quarter of 2015. Heartland's effective tax rate was also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 23.69% during the fourth quarter of 2016 compared to 27.70% during the fourth quarter of 2015.
Loans and Deposits Increase
Total assets were $8.25 billion at December 31, 2016, an increase of $552.3 million or 7% from $7.70 billion at year-end 2015. Included in this growth, at fair value, were $772.6 million of assets acquired in the CIC Bancshares, Inc. transaction. Securities represented 26% of total assets at December 31, 2016, compared to 24% at December 31, 2015.
Total loans held to maturity were $5.35 billion at December 31, 2016, compared to $5.00 billion at year-end 2015, an increase of $350.2 million or 7%. This increase includes $581.5 million of total loans held to maturity, at fair value, acquired in the CIC Bancshares, Inc. transaction. Exclusive of this transaction, total loans held to maturity decreased $87.0 million during the fourth quarter of 2016 and decreased $231.2 million during the year 2016.
Total deposits were $6.85 billion as of December 31, 2016, compared to $6.41 billion at year-end 2015, an increase of $441.6 million or 7%. This increase included $648.1 million of deposits, at fair value, acquired in the CIC Bancshares, Inc. acquisition. Exclusive of this transaction, total deposits decreased $65.3 million during the fourth quarter of 2016 and $206.5 million during the year 2016. Demand deposits totaled $2.20 billion at December 31, 2016, an increase of $287.9 million or 15% from $1.91 billion at year-end 2015, with $164.3 million of the increase attributable to the CIC Bancshares, Inc. transaction. Exclusive of this transaction, demand deposits decreased $36.7 million during the fourth quarter of 2016 and increased $123.6 million during the year 2016.
Fuller said, "Though deposit growth has slowed, we continue to be pleased with the favorable shift in deposit mix as non-time deposits represent 87 percent of total deposits."
Nonperforming Assets Increase; Provision for Loan Losses Remains Constant
Nonperforming assets were $74.8 million or 0.91% of total assets at December 31, 2016, compared to $51.7 million or 0.67% of total assets at December 31, 2015. Exclusive of $3.5 million of nonperforming assets, at fair value, acquired in the CIC Bancshares, Inc. transaction, nonperforming assets increased $19.6 million or 38% since year-end 2015. Nonperforming loans were $64.4 million or 1.20% of total loans at December 31, 2016, compared to $39.7 million or 0.79% of total loans at December 31, 2015. Contributing to the increase in nonperforming loans during 2016 were two loans totaling $20.7 million at Dubuque Bank and Trust Company, both of which are in the process of collection. Based upon the current valuation of the collateral securing each loan relationship, we anticipate no additional provision for loan losses on either of these credits.
The allowance for loan losses at December 31, 2016, was 1.02% of loans and 84.37% of nonperforming loans, compared to 0.97% of loans and 122.77% of nonperforming loans at December 31, 2015. The provision for loan losses was $2.2 million for both the fourth quarter of 2016 and 2015.
Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EST today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, log on to www.htlf.com at least 15 minutes before start time. A replay will be available until January 29, 2018, by logging on to www.htlf.com.
About Heartland Financial USA, Inc.
Heartland Financial USA, Inc. is a diversified financial services company with assets exceeding $8 billion. The company provides banking, mortgage, private client, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 108 banking locations serving 85 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado, Minnesota, Kansas, Missouri, Texas and California. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.
Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war, (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions, (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.
-FINANCIAL TABLES FOLLOW-
| HEARTLAND FINANCIAL USA, INC. | ||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | ||||||||||||||||
| For the Quarter Ended December 31, | For the Year Ended December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ | 69,848 | $ | 59,905 | $ | 278,128 | $ | 227,106 | ||||||||
| Interest on securities: | ||||||||||||||||
| Taxable | 8,480 | 6,917 | 32,858 | 26,646 | ||||||||||||
| Nontaxable | 4,292 | 3,311 | 15,085 | 12,178 | ||||||||||||
| Interest on federal funds sold | — | 21 | 12 | 24 | ||||||||||||
| Interest on deposits in other financial institutions | 157 | 3 | 396 | 14 | ||||||||||||
| Total Interest Income | 82,777 | 70,157 | 326,479 | 265,968 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Interest on deposits | 3,744 | 3,772 | 15,939 | 15,530 | ||||||||||||
| Interest on short-term borrowings | 119 | 200 | 1,202 | 838 | ||||||||||||
| Interest on other borrowings | 3,754 | 3,485 | 14,672 | 15,602 | ||||||||||||
| Total Interest Expense | 7,617 | 7,457 | 31,813 | 31,970 | ||||||||||||
| Net Interest Income | 75,160 | 62,700 | 294,666 | 233,998 | ||||||||||||
| Provision for loan losses | 2,181 | 2,171 | 11,694 | 12,697 | ||||||||||||
| Net Interest Income After Provision for Loan Losses | 72,979 | 60,529 | 282,972 | 221,301 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Service charges and fees | 8,128 | 6,654 | 31,590 | 24,308 | ||||||||||||
| Loan servicing income | 1,068 | 1,704 | 4,501 | 5,276 | ||||||||||||
| Trust fees | 3,718 | 3,230 | 14,845 | 14,281 | ||||||||||||
| Brokerage and insurance commissions | 955 | 917 | 3,869 | 3,789 | ||||||||||||
| Securities gains, net | 1,608 | 3,913 | 11,340 | 13,143 | ||||||||||||
| Impairment loss on securities | — | (769 | ) | — | (769 | ) | ||||||||||
| Gains on sale of loans held for sale | 5,840 | 7,085 | 39,634 | 45,249 | ||||||||||||
| Valuation adjustment on commercial servicing rights | 8 | — | (33 | ) | — | |||||||||||
| Income on bank owned life insurance | 542 | 644 | 2,275 | 1,999 | ||||||||||||
| Other noninterest income | 2,588 | 1,003 | 5,580 | 3,409 | ||||||||||||
| Total Noninterest Income | 24,455 | 24,381 | 113,601 | 110,685 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries and employee benefits | 39,115 | 33,583 | 163,547 | 144,105 | ||||||||||||
| Occupancy | 5,076 | 4,334 | 20,398 | 16,928 | ||||||||||||
| Furniture and equipment | 2,944 | 2,344 | 10,245 | 8,747 | ||||||||||||
| Professional fees | 7,195 | 6,503 | 27,676 | 23,047 | ||||||||||||
| FDIC insurance assessments | 717 | 886 | 4,185 | 3,759 | ||||||||||||
| Advertising | 2,274 | 1,624 | 6,448 | 5,465 | ||||||||||||
| Core deposit intangible amortization | 1,147 | 898 | 5,630 | 2,978 | ||||||||||||
| Other real estate and loan collection expenses | 572 | 723 | 2,443 | 2,437 | ||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 414 | 4,238 | 1,478 | 6,821 | ||||||||||||
| Other noninterest expenses | 10,458 | 10,821 | 37,618 | 36,759 | ||||||||||||
| Total Noninterest Expense | 69,912 | 65,954 | 279,668 | 251,046 | ||||||||||||
| Income Before Income Taxes | 27,522 | 18,956 | 116,905 | 80,940 | ||||||||||||
| Income taxes | 8,360 | 4,365 | 36,556 | 20,898 | ||||||||||||
| Net Income | 19,162 | 14,591 | 80,349 | 60,042 | ||||||||||||
| Preferred dividends and discount | (19 | ) | (204 | ) | (292 | ) | (817 | ) | ||||||||
| Interest expense on convertible preferred debt | 3 | — | 51 | — | ||||||||||||
| Net Income Available to Common Stockholders | $ | 19,146 | $ | 14,387 | $ | 80,108 | $ | 59,225 | ||||||||
| Earnings per common share-diluted | $ | 0.74 | $ | 0.67 | $ | 3.22 | $ | 2.83 | ||||||||
| Weighted average shares outstanding-diluted | 25,800,472 | 21,491,699 | 24,873,430 | 20,929,385 | ||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Interest Income | |||||||||||||||||||
| Interest and fees on loans | $ | 69,848 | $ | 70,046 | $ | 69,809 | $ | 68,425 | $ | 59,905 | |||||||||
| Interest on securities: | |||||||||||||||||||
| Taxable | 8,480 | 7,831 | 7,903 | 8,644 | 6,917 | ||||||||||||||
| Nontaxable | 4,292 | 3,717 | 3,566 | 3,510 | 3,311 | ||||||||||||||
| Interest on federal funds sold | — | 1 | 1 | 10 | 21 | ||||||||||||||
| Interest on deposits in other financial institutions | 157 | 92 | 52 | 95 | 3 | ||||||||||||||
| Total Interest Income | 82,777 | 81,687 | 81,331 | 80,684 | 70,157 | ||||||||||||||
| Interest Expense | |||||||||||||||||||
| Interest on deposits | 3,744 | 4,001 | 4,021 | 4,173 | 3,772 | ||||||||||||||
| Interest on short-term borrowings | 119 | 235 | 519 | 329 | 200 | ||||||||||||||
| Interest on other borrowings | 3,754 | 3,770 | 3,673 | 3,475 | 3,485 | ||||||||||||||
| Total Interest Expense | 7,617 | 8,006 | 8,213 | 7,977 | 7,457 | ||||||||||||||
| Net Interest Income | 75,160 | 73,681 | 73,118 | 72,707 | 62,700 | ||||||||||||||
| Provision for loan losses | 2,181 | 5,328 | 2,118 | 2,067 | 2,171 | ||||||||||||||
| Net Interest Income After Provision for Loan Losses | 72,979 | 68,353 | 71,000 | 70,640 | 60,529 | ||||||||||||||
| Noninterest Income | |||||||||||||||||||
| Service charges and fees | 8,128 | 8,278 | 8,022 | 7,162 | 6,654 | ||||||||||||||
| Loan servicing income | 1,068 | 873 | 1,292 | 1,268 | 1,704 | ||||||||||||||
| Trust fees | 3,718 | 3,689 | 3,625 | 3,813 | 3,230 | ||||||||||||||
| Brokerage and insurance commissions | 955 | 1,006 | 886 | 1,022 | 917 | ||||||||||||||
| Securities gains, net | 1,608 | 1,584 | 4,622 | 3,526 | 3,913 | ||||||||||||||
| Impairment loss on securities | — | — | — | — | (769 | ) | |||||||||||||
| Gains on sale of loans held for sale | 5,840 | 11,459 | 11,270 | 11,065 | 7,085 | ||||||||||||||
| Valuation adjustment on commercial servicing rights | 8 | 5 | (46 | ) | — | — | |||||||||||||
| Income on bank owned life insurance | 542 | 620 | 591 | 522 | 644 | ||||||||||||||
| Other noninterest income | 2,588 | 1,028 | 764 | 1,200 | 1,003 | ||||||||||||||
| Total Noninterest Income | 24,455 | 28,542 | 31,026 | 29,578 | 24,381 | ||||||||||||||
| Noninterest Expense | |||||||||||||||||||
| Salaries and employee benefits | 39,115 | 40,733 | 41,985 | 41,714 | 33,583 | ||||||||||||||
| Occupancy | 5,076 | 5,099 | 5,220 | 5,003 | 4,334 | ||||||||||||||
| Furniture and equipment | 2,944 | 2,746 | 2,442 | 2,113 | 2,344 | ||||||||||||||
| Professional fees | 7,195 | 5,985 | 7,486 | 7,010 | 6,503 | ||||||||||||||
| FDIC insurance assessments | 717 | 1,180 | 1,120 | 1,168 | 886 | ||||||||||||||
| Advertising | 2,274 | 1,339 | 1,551 | 1,284 | 1,624 | ||||||||||||||
| Core deposit intangible amortization | 1,147 | 1,291 | 1,297 | 1,895 | 898 | ||||||||||||||
| Other real estate and loan collection expenses | 572 | 640 | 659 | 572 | 723 | ||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 414 | 794 | (43 | ) | 313 | 4,238 | |||||||||||||
| Other noninterest expenses | 10,458 | 8,620 | 9,303 | 9,237 | 10,821 | ||||||||||||||
| Total Noninterest Expense | 69,912 | 68,427 | 71,020 | 70,309 | 65,954 | ||||||||||||||
| Income Before Income Taxes | 27,522 | 28,468 | 31,006 | 29,909 | 18,956 | ||||||||||||||
| Income taxes | 8,360 | 8,260 | 10,036 | 9,900 | 4,365 | ||||||||||||||
| Net Income | 19,162 | 20,208 | 20,970 | 20,009 | 14,591 | ||||||||||||||
| Preferred dividends and discount | (19 | ) | (53 | ) | (52 | ) | (168 | ) | (204 | ) | |||||||||
| Interest expense on convertible preferred debt | 3 | 17 | 31 | — | — | ||||||||||||||
| Net Income Available to Common Stockholders | $ | 19,146 | $ | 20,172 | $ | 20,949 | $ | 19,841 | $ | 14,387 | |||||||||
| Earnings per common share-diluted | $ | 0.74 | $ | 0.81 | $ | 0.84 | $ | 0.82 | $ | 0.67 | |||||||||
| Weighted average shares outstanding-diluted | 25,800,472 | 24,922,946 | 24,974,995 | 24,117,384 | 21,491,699 | ||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As Of | |||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks | $ | 153,379 | $ | 196,234 | $ | 222,718 | $ | 124,060 | $ | 237,841 | |||||||||
| Federal funds sold and other short-term investments | 5,345 | 5,855 | 7,232 | 9,168 | 20,958 | ||||||||||||||
| Cash and cash equivalents | 158,724 | 202,089 | 229,950 | 133,228 | 258,799 | ||||||||||||||
| Time deposits in other financial institutions | 2,105 | 2,105 | 2,105 | 2,355 | 2,355 | ||||||||||||||
| Securities: | |||||||||||||||||||
| Available for sale, at fair value | 1,845,864 | 1,655,696 | 1,566,592 | 1,690,516 | 1,578,434 | ||||||||||||||
| Held to maturity, at cost | 263,662 | 265,302 | 270,423 | 271,300 | 279,117 | ||||||||||||||
| Other investments, at cost | 21,560 | 22,082 | 22,680 | 22,325 | 21,443 | ||||||||||||||
| Loans held for sale | 61,261 | 78,317 | 82,538 | 76,565 | 74,783 | ||||||||||||||
| Loans: | |||||||||||||||||||
| Held to maturity | 5,351,719 | 5,438,715 | 5,482,258 | 5,503,005 | 5,001,486 | ||||||||||||||
| Allowance for loan losses | (54,324 | ) | (54,653 | ) | (51,756 | ) | (49,738 | ) | (48,685 | ) | |||||||||
| Loans, net | 5,297,395 | 5,384,062 | 5,430,502 | 5,453,267 | 4,952,801 | ||||||||||||||
| Premises, furniture and equipment, net | 164,028 | 165,841 | 168,701 | 164,788 | 150,148 | ||||||||||||||
| Goodwill | 127,699 | 127,699 | 127,699 | 127,699 | 97,852 | ||||||||||||||
| Core deposit intangibles, net | 22,775 | 23,922 | 25,213 | 26,510 | 22,019 | ||||||||||||||
| Servicing rights, net | 35,778 | 35,906 | 35,654 | 34,910 | 34,926 | ||||||||||||||
| Cash surrender value on life insurance | 112,615 | 112,060 | 111,425 | 110,834 | 110,297 | ||||||||||||||
| Other real estate, net | 9,744 | 10,740 | 11,003 | 11,338 | 11,524 | ||||||||||||||
| Other assets | 123,869 | 116,394 | 119,916 | 128,144 | 100,256 | ||||||||||||||
| Total Assets | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | |||||||||
| Liabilities and Equity | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Demand | $ | 2,202,036 | $ | 2,238,736 | $ | 2,149,911 | $ | 2,079,521 | $ | 1,914,141 | |||||||||
| Savings | 3,788,089 | 3,753,300 | 3,691,791 | 3,702,431 | 3,367,479 | ||||||||||||||
| Time | 857,286 | 920,657 | 995,870 | 1,142,368 | 1,124,203 | ||||||||||||||
| Total deposits | 6,847,411 | 6,912,693 | 6,837,572 | 6,924,320 | 6,405,823 | ||||||||||||||
| Short-term borrowings | 306,459 | 214,105 | 303,707 | 325,741 | 293,898 | ||||||||||||||
| Other borrowings | 288,534 | 294,493 | 296,895 | 265,760 | 263,214 | ||||||||||||||
| Accrued expenses and other liabilities | 63,759 | 76,536 | 78,264 | 68,415 | 68,646 | ||||||||||||||
| Total Liabilities | 7,506,163 | 7,497,827 | 7,516,438 | 7,584,236 | 7,031,581 | ||||||||||||||
| Stockholders' Equity | |||||||||||||||||||
| Preferred equity | 1,357 | 1,357 | 3,777 | 3,777 | 81,698 | ||||||||||||||
| Common stock | 26,120 | 24,683 | 24,544 | 24,520 | 22,436 | ||||||||||||||
| Capital surplus | 328,376 | 279,316 | 274,682 | 273,310 | 216,436 | ||||||||||||||
| Retained earnings | 416,109 | 402,179 | 384,479 | 366,014 | 348,630 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (31,046 | ) | (3,079 | ) | 513 | 1,924 | (6,027 | ) | |||||||||||
| Treasury stock at cost | — | (68 | ) | (32 | ) | (2 | ) | — | |||||||||||
| Total Equity | 740,916 | 704,388 | 687,963 | 669,543 | 663,173 | ||||||||||||||
| Total Liabilities and Equity | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | |||||||||
| HEARTLAND FINANCIAL USA, INC | |||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||
| For the Quarter Ended December 31, | For the Year Ended December 31, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Average Balances | |||||||||||||||
| Assets | $ | 8,280,042 | $ | 7,241,104 | $ | 8,172,576 | $ | 6,763,901 | |||||||
| Loans, net of unearned | 5,473,001 | 4,827,844 | 5,488,112 | 4,551,008 | |||||||||||
| Deposits | 6,928,978 | 5,938,905 | 6,813,781 | 5,458,623 | |||||||||||
| Earning assets | 7,551,997 | 6,512,565 | 7,455,217 | 6,152,090 | |||||||||||
| Interest bearing liabilities | 5,206,393 | 4,781,797 | 5,266,519 | 4,531,510 | |||||||||||
| Common stockholders' equity | 726,455 | 533,845 | 678,989 | 496,877 | |||||||||||
| Total stockholders' equity | 727,812 | 615,543 | 697,493 | 578,575 | |||||||||||
| Tangible common stockholders' equity (non-GAAP)(1) | 575,412 | 446,370 | 528,712 | 425,992 | |||||||||||
| Key Performance Ratios | |||||||||||||||
| Annualized return on average assets | 0.92 | % | 0.79 | % | 0.98 | % | 0.88 | % | |||||||
| Annualized return on average common equity (GAAP) | 10.48 | % | 10.69 | % | 11.80 | % | 11.92 | % | |||||||
| Annualized return on average common tangible equity (non-GAAP)(2) | 13.24 | % | 12.79 | % | 15.15 | % | 13.90 | % | |||||||
| Annualized ratio of net charge-offs to average loans | 0.18 | % | 0.05 | % | 0.11 | % | 0.12 | % | |||||||
| Annualized net interest margin (GAAP) | 3.96 | % | 3.82 | % | 3.95 | % | 3.80 | % | |||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP)(3) | 4.14 | % | 3.99 | % | 4.13 | % | 3.97 | % | |||||||
| Efficiency ratio, fully tax-equivalent (4) | 66.29 | % | 68.53 | % | 66.25 | % | 69.16 | % | |||||||
| Reconciliation of Return on Average Common Tangible Equity (non-GAAP)(5) | |||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 19,146 | $ | 14,387 | $ | 80,108 | $ | 59,225 | |||||||
| Average common stockholders' equity (GAAP) | $ | 726,455 | $ | 533,845 | $ | 678,989 | $ | 496,877 | |||||||
| Less average goodwill | 127,699 | 70,222 | 125,724 | 56,781 | |||||||||||
| Less average core deposit intangibles, net | 23,344 | 17,253 | 24,553 | 14,153 | |||||||||||
| Average common tangible equity (non-GAAP) | $ | 575,412 | $ | 446,370 | $ | 528,712 | $ | 425,943 | |||||||
| Annualized return on average common equity (GAAP) | 10.48 | % | 10.69 | % | 11.80 | % | 11.92 | % | |||||||
| Annualized return on average common tangible equity (non-GAAP) | 13.24 | % | 12.79 | % | 15.15 | % | 13.90 | % | |||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)(6) | |||||||||||||||
| Net Interest Income (GAAP) | $ | 75,160 | $ | 62,700 | $ | 294,666 | $ | 233,998 | |||||||
| Plus tax-equivalent adjustment(7) | 3,511 | 2,827 | 12,919 | 10,216 | |||||||||||
| Net interest income - tax-equivalent (non-GAAP) | $ | 78,671 | $ | 65,527 | $ | 307,585 | $ | 244,214 | |||||||
| Average earning assets | $ | 7,551,997 | $ | 6,512,565 | $ | 7,455,217 | $ | 6,152,090 | |||||||
| Annualized net interest margin (GAAP) | 3.96 | % | 3.82 | % | 3.95 | % | 3.80 | % | |||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.14 | % | 3.99 | % | 4.13 | % | 3.97 | % | |||||||
| (1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net. | |||||||||||||||
| (2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table. | |||||||||||||||
| (3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table. | |||||||||||||||
| (4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure. | |||||||||||||||
| (5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||
| (6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which 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. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||
| (7) Computed on a tax-equivalent basis using an effective tax rate of 35%. | |||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended | |||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Average Balances | |||||||||||||||||||
| Assets | $ | 8,280,042 | $ | 8,172,683 | $ | 8,211,326 | $ | 8,025,070 | $ | 7,241,104 | |||||||||
| Loans, net of unearned | 5,473,001 | 5,538,088 | 5,582,878 | 5,358,102 | 4,827,844 | ||||||||||||||
| Deposits | 6,928,978 | 6,839,334 | 6,806,259 | 6,679,010 | 5,938,905 | ||||||||||||||
| Earning assets | 7,551,997 | 7,382,860 | 7,446,849 | 7,276,703 | 6,512,565 | ||||||||||||||
| Interest bearing liabilities | 5,206,393 | 5,224,172 | 5,363,477 | 5,273,164 | 4,781,797 | ||||||||||||||
| Common stockholders' equity | 726,455 | 689,637 | 669,930 | 629,294 | 533,845 | ||||||||||||||
| Total stockholders' equity | 727,812 | 692,404 | 673,707 | 695,771 | 615,543 | ||||||||||||||
| Tangible common stockholders' equity(1) | 575,412 | 537,375 | 516,347 | 485,108 | 446,370 | ||||||||||||||
| Key Performance Ratios | |||||||||||||||||||
| Annualized return on average assets | 0.92 | % | 0.98 | % | 1.03 | % | 0.99 | % | 0.79 | % | |||||||||
| Annualized return on average common equity (GAAP) | 10.48 | % | 11.64 | % | 12.58 | % | 12.68 | % | 10.69 | % | |||||||||
| Annualized return on average common tangible equity (non-GAAP)(2) | 13.24 | % | 14.93 | % | 16.32 | % | 16.45 | % | 12.79 | % | |||||||||
| Annualized ratio of net charge-offs to average loans | 0.18 | % | 0.17 | % | 0.01 | % | 0.08 | % | 0.05 | % | |||||||||
| Annualized net interest margin (GAAP) | 3.96 | % | 3.97 | % | 3.95 | % | 4.02 | % | 3.82 | % | |||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP)(3) | 4.14 | % | 4.14 | % | 4.12 | % | 4.19 | % | 3.99 | % | |||||||||
| Efficiency ratio, fully tax-equivalent(4) | 66.29 | % | 63.88 | % | 67.95 | % | 66.90 | % | 68.53 | % | |||||||||
| Reconciliation of Return on Average Common Tangible Equity (non-GAAP)(5) | |||||||||||||||||||
| Net income available to common shareholders (GAAP) | $ | 19,146 | $ | 20,172 | $ | 20,949 | $ | 19,841 | $ | 14,387 | |||||||||
| Average common stockholders' equity (GAAP) | $ | 726,455 | $ | 689,637 | $ | 669,930 | $ | 629,294 | $ | 533,845 | |||||||||
| Less average goodwill | 127,699 | 127,699 | 127,699 | 119,750 | 70,222 | ||||||||||||||
| Less average core deposit intangibles, net | 23,344 | 24,563 | 25,884 | 24,436 | 17,253 | ||||||||||||||
| Average common tangible equity (non-GAAP) | $ | 575,412 | $ | 537,375 | $ | 516,347 | $ | 485,108 | $ | 446,370 | |||||||||
| Annualized return on average common equity (GAAP) | 10.48 | % | 11.64 | % | 12.58 | % | 12.68 | % | 10.69 | % | |||||||||
| Annualized return on average common tangible equity (non-GAAP) | 13.24 | % | 14.93 | % | 16.32 | % | 16.45 | % | 12.79 | % | |||||||||
| Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)(6) | |||||||||||||||||||
| Net Interest Income (GAAP) | $ | 75,160 | $ | 73,681 | $ | 73,118 | $ | 72,707 | $ | 62,700 | |||||||||
| Plus tax-equivalent adjustment(7) | 3,511 | 3,221 | 3,146 | 3,041 | 2,827 | ||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) | $ | 78,671 | $ | 76,902 | $ | 76,264 | $ | 75,748 | $ | 65,527 | |||||||||
| Average earning assets | $ | 7,551,997 | $ | 7,382,860 | $ | 7,446,849 | $ | 7,276,703 | $ | 6,512,565 | |||||||||
| Annualized net interest margin (GAAP) | 3.96 | % | 3.97 | % | 3.95 | % | 4.02 | % | 3.82 | % | |||||||||
| Annualized net interest margin, fully tax-equivalent (non-GAAP) | 4.14 | % | 4.14 | % | 4.12 | % | 4.19 | % | 3.99 | % | |||||||||
| (1) Calculated as common stockholders' equity less goodwill and core deposit intangibles, net. | |||||||||||||||||||
| (2) Refer to the "Reconciliation of Return on Average Common Tangible Equity (non-GAAP)" table. | |||||||||||||||||||
| (3) Refer to the "Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)" table. | |||||||||||||||||||
| (4) Refer to the "Reconciliation of Non-GAAP Measure-Efficiency Ratio" table that follows for details of this non-GAAP measure. | |||||||||||||||||||
| (5) Return on average common tangible equity is net income available to common stockholders divided by average common stockholders' equity less goodwill and core deposit intangibles, net. This financial measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (6) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which 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. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (7) Computed on a tax-equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| For the Quarter Ended December 31, | For the Year Ended December 31, | ||||||||||||||||||
| Reconciliation of Non-GAAP Measure-Efficiency Ratio(1) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Net interest income | $ | 75,160 | $ | 62,700 | $ | 294,666 | $ | 233,998 | |||||||||||
| Tax-equivalent adjustment(1) | 3,511 | 2,827 | 12,919 | 10,216 | |||||||||||||||
| Fully tax-equivalent net interest income | 78,671 | 65,527 | 307,585 | 244,214 | |||||||||||||||
| Noninterest income | 24,455 | 24,381 | 113,601 | 110,685 | |||||||||||||||
| Securities gains, net | (1,608 | ) | (3,913 | ) | (11,340 | ) | (13,143 | ) | |||||||||||
| Impairment loss on securities | — | 769 | — | 769 | |||||||||||||||
| Adjusted income | $ | 101,518 | $ | 86,764 | $ | 409,846 | $ | 342,525 | |||||||||||
| Total noninterest expenses | $ | 69,912 | $ | 65,954 | $ | 279,668 | $ | 251,046 | |||||||||||
| Less: | |||||||||||||||||||
| Core deposit intangible amortization | 1,147 | 898 | 5,630 | 2,978 | |||||||||||||||
| Partnership investment in historic rehabilitation tax credits | 1,051 | 1,362 | 1,051 | 4,357 | |||||||||||||||
| (Gain)/loss on sales/valuations of assets, net | 414 | 4,238 | 1,478 | 6,821 | |||||||||||||||
| Adjusted noninterest expenses | $ | 67,300 | $ | 59,456 | $ | 271,509 | $ | 236,890 | |||||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 66.29 | % | 68.53 | % | 66.25 | % | 69.16 | % | |||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| Reconciliation of Non-GAAP Measure-Efficiency Ratio(1) | For the Quarter Ended | ||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Net interest income | $ | 75,160 | $ | 73,681 | $ | 73,118 | $ | 72,707 | $ | 62,700 | |||||||||
| Tax-equivalent adjustment(2) | 3,511 | 3,221 | 3,146 | 3,041 | 2,827 | ||||||||||||||
| Fully tax-equivalent net interest income | 78,671 | 76,902 | 76,264 | 75,748 | 65,527 | ||||||||||||||
| Noninterest income | 24,455 | 28,542 | 31,026 | 29,578 | 24,381 | ||||||||||||||
| Securities gains, net | (1,608 | ) | (1,584 | ) | (4,622 | ) | (3,526 | ) | (3,913 | ) | |||||||||
| Impairment loss on securities | — | — | — | — | 769 | ||||||||||||||
| Adjusted income | $ | 101,518 | $ | 103,860 | $ | 102,668 | $ | 101,800 | $ | 86,764 | |||||||||
| Total noninterest expenses | $ | 69,912 | $ | 68,427 | $ | 71,020 | $ | 70,309 | $ | 65,954 | |||||||||
| Less: | |||||||||||||||||||
| Core deposit intangible amortization | 1,147 | 1,291 | 1,297 | 1,895 | 898 | ||||||||||||||
| Partnership investment in historic rehabilitation tax credits | 1,051 | — | — | — | 1,362 | ||||||||||||||
| (Gain)/loss on sales/valuation of assets, net | 414 | 794 | (43 | ) | 313 | 4,238 | |||||||||||||
| Adjusted noninterest expenses | $ | 67,300 | $ | 66,342 | $ | 69,766 | $ | 68,101 | $ | 59,456 | |||||||||
| Efficiency ratio, fully tax-equivalent (non-GAAP) | 66.29 | % | 63.88 | % | 67.95 | % | 66.90 | % | 68.53 | % | |||||||||
| (1) 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 historic rehabilitation tax credits. 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 the table. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (2) Computed on a tax-equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||
| 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 | |||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Common Share Data | |||||||||||||||||||
| Book value per common share (GAAP) | $ | 28.31 | $ | 28.48 | $ | 27.88 | $ | 27.15 | $ | 25.92 | |||||||||
| Tangible book value per common share (non-GAAP)(1) | $ | 22.55 | $ | 22.34 | $ | 21.65 | $ | 20.86 | $ | 20.57 | |||||||||
| ASC 320 effect on book value per common share | $ | (1.15 | ) | $ | 0.03 | $ | 0.21 | $ | 0.23 | $ | (0.18 | ) | |||||||
| Common shares outstanding, net of treasury stock | 26,119,929 | 24,681,380 | 24,543,376 | 24,519,928 | 22,435,693 | ||||||||||||||
| Tangible capital ratio (non-GAAP)(2) | 7.28 | % | 6.85 | % | 6.60 | % | 6.32 | % | 6.09 | % | |||||||||
| Reconciliation of Tangible Book Value Per Common Share (non-GAAP)(3) | |||||||||||||||||||
| Common stockholders' equity (GAAP) | $ | 739,559 | $ | 703,031 | $ | 684,186 | $ | 665,766 | $ | 581,475 | |||||||||
| Less goodwill | 127,699 | 127,699 | 127,699 | 127,699 | 97,852 | ||||||||||||||
| Less core deposit intangibles, net | 22,775 | 23,922 | 25,213 | 26,510 | 22,019 | ||||||||||||||
| Tangible common stockholders' equity (non-GAAP) | $ | 589,085 | $ | 551,410 | $ | 531,274 | $ | 511,557 | $ | 461,604 | |||||||||
| Common shares outstanding, net of treasury stock | 26,119,929 | 24,681,380 | 24,543,376 | 24,519,928 | 22,435,693 | ||||||||||||||
| Book value per common share (GAAP) | $ | 28.31 | $ | 28.48 | $ | 27.88 | $ | 27.15 | $ | 25.92 | |||||||||
| Tangible book value per common share (non-GAAP) | $ | 22.55 | $ | 22.34 | $ | 21.65 | $ | 20.86 | $ | 20.57 | |||||||||
| Reconciliation of Tangible Capital Ratio (non-GAAP)(4) | |||||||||||||||||||
| Total assets (GAAP) | $ | 8,247,079 | $ | 8,202,215 | $ | 8,204,401 | $ | 8,253,779 | $ | 7,694,754 | |||||||||
| Less goodwill | 127,699 | 127,699 | 127,699 | 127,699 | 97,852 | ||||||||||||||
| Less core deposit intangibles, net | 22,775 | 23,922 | 25,213 | 26,510 | 22,019 | ||||||||||||||
| Total tangible assets (non-GAAP) | $ | 8,096,605 | $ | 8,050,594 | $ | 8,051,489 | $ | 8,099,570 | $ | 7,574,883 | |||||||||
| Tangible capital ratio (non-GAAP) | 7.28 | % | 6.85 | % | 6.60 | % | 6.32 | % | 6.09 | % | |||||||||
| Loan Data | |||||||||||||||||||
| Loans held to maturity: | |||||||||||||||||||
| Commercial and commercial real estate | $ | 3,825,847 | $ | 3,900,612 | $ | 3,930,879 | $ | 3,951,839 | $ | 3,605,574 | |||||||||
| Residential mortgage | 617,924 | 625,965 | 644,267 | 666,184 | 539,555 | ||||||||||||||
| Agricultural and agricultural real estate | 489,318 | 489,387 | 480,883 | 471,271 | 471,870 | ||||||||||||||
| Consumer | 420,613 | 425,582 | 428,730 | 417,114 | 386,867 | ||||||||||||||
| Unearned discount and deferred loan fees | (1,983 | ) | (2,831 | ) | (2,501 | ) | (3,403 | ) | (2,380 | ) | |||||||||
| Total loans held to maturity | $ | 5,351,719 | $ | 5,438,715 | $ | 5,482,258 | $ | 5,503,005 | $ | 5,001,486 | |||||||||
| Other Selected Trend Information | |||||||||||||||||||
| Effective tax rate | 30.38 | % | 29.02 | % | 32.37 | % | 33.10 | % | 23.03 | % | |||||||||
| Full time equivalent employees | 1,864 | 1,846 | 1,888 | 1,907 | 1,799 | ||||||||||||||
| Total Residential Mortgage Loan Applications | $ | 304,018 | $ | 445,107 | $ | 440,907 | $ | 406,999 | $ | 307,163 | |||||||||
| Residential Mortgage Loans Originated | $ | 278,065 | $ | 324,337 | $ | 324,633 | $ | 238,266 | $ | 258,939 | |||||||||
| Residential Mortgage Loans Sold | $ | 269,133 | $ | 315,917 | $ | 302,448 | $ | 220,381 | $ | 260,189 | |||||||||
| Residential Mortgage Loan Servicing Portfolio | $ | 4,308,580 | $ | 4,259,459 | $ | 4,203,429 | $ | 4,112,519 | $ | 4,057,861 | |||||||||
| (1) Refer to the "Reconciliation of Tangible Book Value Per Common Share (non-GAAP)" table. | |||||||||||||||||||
| (2) Refer to the "Reconciliation of Tangible Capital Ratio (non-GAAP)" table. | |||||||||||||||||||
| (3) Tangible book value per common share is total common stockholders' equity less goodwill and core deposit intangibles, net divided by common shares outstanding, net of treasury. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| (4) The tangible capital ratio is total common stockholders' equity less goodwill and core deposit intangibles, net divided by total assets less goodwill and core deposit intangibles, net. This is a non-GAAP financial measure but has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||
| DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA | |||||||||||||||||||
| As of and for the Quarter Ended | |||||||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||
| Balance, beginning of period | $ | 54,653 | $ | 51,756 | $ | 49,738 | $ | 48,685 | $ | 47,105 | |||||||||
| Provision for loan losses | 2,181 | 5,328 | 2,118 | 2,067 | 2,171 | ||||||||||||||
| Charge-offs | (3,555 | ) | (3,283 | ) | (2,951 | ) | (1,605 | ) | (1,837 | ) | |||||||||
| Recoveries | 1,045 | 852 | 2,851 | 591 | 1,246 | ||||||||||||||
| Balance, end of period | $ | 54,324 | $ | 54,653 | $ | 51,756 | $ | 49,738 | $ | 48,685 | |||||||||
| Asset Quality | |||||||||||||||||||
| Nonaccrual loans | $ | 64,299 | $ | 57,799 | $ | 57,053 | $ | 47,750 | $ | 39,655 | |||||||||
| Loans past due ninety days or more as to interest or principal payments | 86 | 105 | — | 639 | — | ||||||||||||||
| Other real estate owned | 9,744 | 10,740 | 11,003 | 11,338 | 11,524 | ||||||||||||||
| Other repossessed assets | 663 | 821 | 564 | 426 | 485 | ||||||||||||||
| Total nonperforming assets | $ | 74,792 | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | |||||||||
| Performing troubled debt restructured loans | $ | 10,380 | $ | 10,281 | $ | 9,923 | $ | 10,711 | $ | 10,968 | |||||||||
| Nonperforming Assets Activity | |||||||||||||||||||
| Balance, beginning of period | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | $ | 51,425 | |||||||||
| Net loan charge offs | (2,510 | ) | (2,431 | ) | (100 | ) | (1,014 | ) | (591 | ) | |||||||||
| New nonperforming loans | 23,035 | 10,884 | 19,994 | 12,171 | 9,686 | ||||||||||||||
| Acquired nonperforming assets | — | — | — | 3,516 | 4,956 | ||||||||||||||
| Reduction of nonperforming loans(1) | (13,707 | ) | (6,983 | ) | (10,313 | ) | (3,563 | ) | (6,768 | ) | |||||||||
| OREO/Repossessed assets sales proceeds | (1,037 | ) | (343 | ) | (918 | ) | (2,411 | ) | (2,980 | ) | |||||||||
| OREO/Repossessed assets writedowns, net | (274 | ) | (521 | ) | (337 | ) | (182 | ) | (3,909 | ) | |||||||||
| Net activity at Citizens Finance Co. | (180 | ) | 239 | 141 | (28 | ) | (155 | ) | |||||||||||
| Balance, end of period | $ | 74,792 | $ | 69,465 | $ | 68,620 | $ | 60,153 | $ | 51,664 | |||||||||
| Asset Quality Ratios | |||||||||||||||||||
| Ratio of nonperforming loans to total loans | 1.20 | % | 1.06 | % | 1.04 | % | 0.88 | % | 0.79 | % | |||||||||
| Ratio of nonperforming assets to total assets | 0.91 | % | 0.85 | % | 0.84 | % | 0.73 | % | 0.67 | % | |||||||||
| Annualized ratio of net loan charge-offs to average loans | 0.18 | % | 0.17 | % | 0.01 | % | 0.08 | % | 0.05 | % | |||||||||
| Allowance for loan losses as a percent of loans | 1.02 | % | 1.00 | % | 0.94 | % | 0.90 | % | 0.97 | % | |||||||||
| Allowance for loan losses as a percent of nonperforming loans | 84.37 | % | 94.39 | % | 90.72 | % | 102.79 | % | 122.77 | % | |||||||||
| Loans delinquent 30-89 days as a percent of total loans | 0.37 | % | 0.40 | % | 0.73 | % | 0.45 | % | 0.31 | % | |||||||||
| (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 | |||||||||||||||||||||
| December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 1,471,966 | $ | 8,480 | 2.29 | % | $ | 1,290,462 | $ | 6,917 | 2.13 | % | |||||||||
| Nontaxable(1) | 539,347 | 6,603 | 4.87 | 387,015 | 5,094 | 5.22 | |||||||||||||||
| Total securities | 2,011,313 | 15,083 | 2.98 | 1,677,477 | 12,011 | 2.84 | |||||||||||||||
| Interest bearing deposits | 122,727 | 157 | 0.51 | 12,350 | 3 | 0.10 | |||||||||||||||
| Federal funds sold | 398 | — | — | 42,614 | 21 | 0.20 | |||||||||||||||
| Loans:(2) | |||||||||||||||||||||
| Commercial and commercial real estate(1) | 3,864,826 | 48,124 | 4.95 | 3,395,242 | 40,588 | 4.74 | |||||||||||||||
| Residential mortgage | 699,739 | 7,035 | 4.00 | 580,797 | 5,836 | 3.99 | |||||||||||||||
| Agricultural and agricultural real estate(1) | 485,158 | 5,624 | 4.61 | 470,797 | 5,663 | 4.77 | |||||||||||||||
| Consumer | 423,278 | 8,184 | 7.69 | 381,008 | 7,460 | 7.77 | |||||||||||||||
| Fees on loans | — | 2,081 | — | — | 1,402 | — | |||||||||||||||
| Less: allowance for loan losses | (55,442 | ) | — | — | (47,720 | ) | — | — | |||||||||||||
| Net loans | 5,417,559 | 71,048 | 5.22 | 4,780,124 | 60,949 | 5.06 | |||||||||||||||
| Total earning assets | 7,551,997 | 86,288 | 4.55 | % | 6,512,565 | 72,984 | 4.45 | % | |||||||||||||
| Nonearning Assets | 728,045 | 728,539 | |||||||||||||||||||
| Total Assets | $ | 8,280,042 | $ | 7,241,104 | |||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 3,767,398 | $ | 2,012 | 0.21 | % | $ | 3,118,115 | $ | 1,611 | 0.20 | % | |||||||||
| Time, $100,000 and over | 380,701 | 761 | 0.80 | 334,254 | 779 | 0.92 | |||||||||||||||
| Other time deposits | 512,874 | 971 | 0.75 | 711,622 | 1,382 | 0.77 | |||||||||||||||
| Short-term borrowings | 252,175 | 119 | 0.19 | 325,613 | 200 | 0.24 | |||||||||||||||
| Other borrowings | 293,245 | 3,754 | 5.09 | 292,193 | 3,485 | 4.73 | |||||||||||||||
| Total interest bearing liabilities | 5,206,393 | 7,617 | 0.58 | % | 4,781,797 | 7,457 | 0.62 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 2,268,005 | 1,774,914 | |||||||||||||||||||
| Accrued interest and other liabilities | 77,832 | 68,850 | |||||||||||||||||||
| Total noninterest bearing liabilities | 2,345,837 | 1,843,764 | |||||||||||||||||||
| Stockholders' Equity | 727,812 | 615,543 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 8,280,042 | $ | 7,241,104 | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 78,671 | $ | 65,527 | |||||||||||||||||
| Net interest spread(1) | 3.97 | % | 3.83 | % | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(3) | 4.14 | % | 3.99 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 68.94 | % | 73.42 | % | |||||||||||||||||
| (1) Computed on a tax-equivalent basis using an effective tax rate of 35% | |||||||||||||||||||||
| (2) Nonaccrual loans are included in the average loans outstanding. | |||||||||||||||||||||
| (3) Annualized net interest margin, fully tax-equivalent is a non-GAAP measure, which 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. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) | |||||||||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||||||||
| For the Year Ended | |||||||||||||||||||||
| December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
| Average Balance | Interest | Rate | Average Balance | Interest | Rate | ||||||||||||||||
| Earning Assets | |||||||||||||||||||||
| Securities: | |||||||||||||||||||||
| Taxable | $ | 1,466,062 | $ | 32,858 | 2.24 | % | $ | 1,272,573 | $ | 26,646 | 2.09 | % | |||||||||
| Nontaxable(1) | 465,178 | 23,208 | 4.99 | 348,189 | 18,735 | 5.38 | |||||||||||||||
| Total securities | 1,931,240 | 56,066 | 2.90 | 1,620,762 | 45,381 | 2.80 | |||||||||||||||
| Interest bearing deposits | 78,503 | 396 | 0.50 | 10,997 | 14 | 0.13 | |||||||||||||||
| Federal funds sold | 9,464 | 12 | 0.13 | 14,153 | 24 | 0.17 | |||||||||||||||
| Loans: (2) | |||||||||||||||||||||
| Commercial and commercial real estate(1) | 3,846,285 | 190,101 | 4.94 | 3,199,493 | 152,931 | 4.78 | |||||||||||||||
| Residential mortgage | 738,634 | 30,168 | 4.08 | 542,364 | 21,982 | 4.05 | |||||||||||||||
| Agricultural and agricultural real estate(1) | 480,221 | 22,576 | 4.70 | 444,808 | 21,498 | 4.83 | |||||||||||||||
| Consumer | 422,972 | 32,636 | 7.72 | 364,343 | 28,936 | 7.94 | |||||||||||||||
| Fees on loans | 7,443 | — | 5,418 | — | |||||||||||||||||
| Less: allowance for loan losses | (52,102 | ) | — | — | (44,830 | ) | — | — | |||||||||||||
| Net loans | 5,436,010 | 282,924 | 5.20 | 4,506,178 | 230,765 | 5.12 | |||||||||||||||
| Total earning assets | 7,455,217 | 339,398 | 4.55 | % | 6,152,090 | 276,184 | 4.49 | % | |||||||||||||
| Nonearning Assets | 717,359 | 611,811 | |||||||||||||||||||
| Total Assets | $ | 8,172,576 | $ | 6,763,901 | |||||||||||||||||
| Interest Bearing Liabilities | |||||||||||||||||||||
| Savings | $ | 3,680,535 | $ | 8,000 | 0.22 | % | $ | 2,918,706 | $ | 6,613 | 0.23 | % | |||||||||
| Time, $100,000 and over | 424,802 | 3,178 | 0.75 | 341,071 | 3,152 | 0.92 | |||||||||||||||
| Other time deposits | 577,908 | 4,761 | 0.82 | 606,030 | 5,765 | 0.95 | |||||||||||||||
| Short-term borrowings | 298,734 | 1,202 | 0.40 | 339,019 | 838 | 0.25 | |||||||||||||||
| Other borrowings | 284,540 | 14,672 | 5.16 | 326,684 | 15,602 | 4.78 | |||||||||||||||
| Total interest bearing liabilities | 5,266,519 | 31,813 | 0.60 | % | 4,531,510 | 31,970 | 0.71 | % | |||||||||||||
| Noninterest Bearing Liabilities | |||||||||||||||||||||
| Noninterest bearing deposits | 2,130,536 | 1,592,816 | |||||||||||||||||||
| Accrued interest and other liabilities | 78,028 | 61,000 | |||||||||||||||||||
| Total noninterest bearing liabilities | 2,208,564 | 1,653,816 | |||||||||||||||||||
| Stockholders' Equity | 697,493 | 578,575 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 8,172,576 | $ | 6,763,901 | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP)(1) | $ | 307,585 | $ | 244,214 | |||||||||||||||||
| Net interest spread(1) | 3.95 | % | 3.78 | % | |||||||||||||||||
| Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(3) | 4.13 | % | 3.97 | % | |||||||||||||||||
| Interest bearing liabilities to earning assets | 70.64 | % | 73.66 | % | |||||||||||||||||
| (1) Computed on a tax-equivalent basis using an effective tax rate of 35%. | |||||||||||||||||||||
| (2) Nonaccrual loans are included in the average loans outstanding. | |||||||||||||||||||||
| (3) Net interest margin, fully tax-equivalent is a non-GAAP measure, which 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. This measure should not be considered a substitute for operating results determined in accordance with GAAP. | |||||||||||||||||||||
| HEARTLAND FINANCIAL USA, INC. | |||||||||||||||
| SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited) | |||||||||||||||
| DOLLARS IN THOUSANDS | |||||||||||||||
| As of and For the Quarter Ended | |||||||||||||||
| 12/31/2016 | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | |||||||||||
| Total Assets | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,497,775 | $ | 1,448,796 | $ | 1,473,461 | $ | 1,498,771 | $ | 1,617,322 | |||||
| New Mexico Bank & Trust | 1,374,647 | 1,318,203 | 1,321,113 | 1,304,886 | 1,336,004 | ||||||||||
| Wisconsin Bank & Trust | 1,065,715 | 1,068,288 | 1,080,224 | 1,094,872 | 1,139,337 | ||||||||||
| Centennial Bank and Trust(1) | 901,782 | 892,723 | 909,697 | 927,040 | 161,806 | ||||||||||
| Morrill & Janes Bank and Trust Company | 863,544 | 862,767 | 843,069 | 872,274 | 902,918 | ||||||||||
| Illinois Bank & Trust | 742,173 | 748,801 | 742,697 | 718,074 | 757,478 | ||||||||||
| Premier Valley Bank | 640,684 | 635,620 | 629,423 | 751,137 | 765,451 | ||||||||||
| Arizona Bank & Trust | 582,266 | 574,561 | 577,002 | 558,369 | 591,066 | ||||||||||
| Rocky Mountain Bank | 477,063 | 481,346 | 473,583 | 479,010 | 491,522 | ||||||||||
| Minnesota Bank & Trust | 229,114 | 238,745 | 230,004 | 220,955 | 214,303 | ||||||||||
| Total Portfolio Loans | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 905,242 | $ | 906,347 | $ | 928,869 | $ | 941,683 | $ | 956,517 | |||||
| New Mexico Bank & Trust | 924,249 | 917,679 | 870,109 | 815,739 | 794,744 | ||||||||||
| Wisconsin Bank & Trust | 650,254 | 711,714 | 732,503 | 758,789 | 793,508 | ||||||||||
| Centennial Bank and Trust(1) | 609,760 | 638,006 | 668,547 | 683,085 | 101,449 | ||||||||||
| Morrill & Janes Bank and Trust Company | 548,544 | 538,666 | 522,518 | 536,738 | 539,198 | ||||||||||
| Illinois Bank & Trust | 473,008 | 469,236 | 466,983 | 465,783 | 465,937 | ||||||||||
| Premier Valley Bank | 348,879 | 354,610 | 376,275 | 376,840 | 383,929 | ||||||||||
| Arizona Bank & Trust | 384,706 | 385,926 | 390,078 | 402,431 | 444,501 | ||||||||||
| Rocky Mountain Bank | 347,839 | 357,346 | 362,475 | 364,189 | 370,440 | ||||||||||
| Minnesota Bank & Trust | 144,098 | 139,581 | 144,009 | 137,412 | 134,137 | ||||||||||
| Total Deposits | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 1,231,016 | $ | 1,182,947 | $ | 1,159,942 | $ | 1,144,470 | $ | 1,209,074 | |||||
| New Mexico Bank & Trust | 1,091,436 | 1,101,550 | 1,062,410 | 1,066,076 | 1,085,052 | ||||||||||
| Wisconsin Bank & Trust | 899,676 | 889,957 | 911,915 | 921,071 | 974,001 | ||||||||||
| Centennial Bank and Trust(1) | 733,449 | 767,128 | 775,417 | 779,607 | 128,759 | ||||||||||
| Morrill & Janes Bank and Trust Company | 738,036 | 676,176 | 696,073 | 698,365 | 713,589 | ||||||||||
| Illinois Bank & Trust | 636,419 | 671,104 | 653,582 | 629,235 | 631,010 | ||||||||||
| Premier Valley Bank | 510,142 | 520,814 | 514,522 | 635,188 | 647,022 | ||||||||||
| Arizona Bank & Trust | 477,213 | 493,331 | 497,599 | 468,312 | 500,490 | ||||||||||
| Rocky Mountain Bank | 414,344 | 420,581 | 405,888 | 409,787 | 417,426 | ||||||||||
| Minnesota Bank & Trust | 194,368 | 214,651 | 207,228 | 200,343 | 194,373 | ||||||||||
| Net Income | |||||||||||||||
| Dubuque Bank and Trust Company | $ | 806 | $ | 5,112 | $ | 4,475 | $ | 6,073 | $ | 3,587 | |||||
| New Mexico Bank & Trust | 4,061 | 3,824 | 5,642 | 4,094 | 2,576 | ||||||||||
| Wisconsin Bank & Trust | 2,970 | 3,368 | 3,399 | 3,379 | 2,443 | ||||||||||
| Centennial Bank and Trust(1) | 1,572 | 925 | 256 | 824 | 62 | ||||||||||
| Morrill & Janes Bank and Trust Company | 2,519 | 1,707 | 2,133 | 2,525 | 1,096 | ||||||||||
| Illinois Bank & Trust | 1,917 | 2,179 | 2,397 | 2,027 | 574 | ||||||||||
| Premier Valley Bank | 2,969 | 1,804 | 1,695 | 1,960 | 1,008 | ||||||||||
| Arizona Bank & Trust | 1,305 | 2,034 | 2,121 | 1,841 | 968 | ||||||||||
| Rocky Mountain Bank | 1,229 | 1,456 | 1,484 | 1,064 | 1,506 | ||||||||||
| Minnesota Bank & Trust | 888 | 675 | 559 | 531 | 166 | ||||||||||
| (1) Formerly known as Summit Bank & Trust. | |||||||||||||||