Heartland Financial USA, Inc. ("HTLF") Reports Quarterly Results as of June 30, 2024

ソース: Nasdaq GlobeNewswire / 30 7 2024 15:05:02 America/Chicago

Second Quarter Highlights

Quarterly net income available to common stockholders of $37.7 million or $0.88 per common share.
Adjusted earnings available to common stockholders of $49.6 million or $1.15 adjusted diluted earnings per common share (non-GAAP).
$6.0 million of acquisition, integration and restructuring expenses in the quarter.
Sold $108.4 million of securities with CRE exposure at a pre-tax loss of $10.6 million to improve the risk and liquidity profile of the Company.
Common equity ratio increased to 10.19%; Tangible common equity ratio (non-GAAP) improved 40 basis points to 7.28%.
Net interest margin, full tax-equivalent (non-GAAP) increased to 3.73% for the quarter ended June 30, 2024 from 3.57% for the quarter ended March 31, 2024.
- Annualized loan yield increased 13 basis points to 6.76%.
- Annualized cost of deposits decreased 3 basis points to 2.08%.
Closed on the sale of all nine Rocky Mountain Bank branches in Montana in mid-July, including loans of $343.8 million and deposits of $531.8 million. The expected gain of $30 million will be realized in the third quarter of 2024 and may potentially be utilized to offset future losses related to selling securities or disposing of real estate.

	For the Quarter Ended									Six Months Ended June 30,
	6/30/2024			3/31/2024			6/30/2023				2024			2023
Earnings Summary:
Net income/(loss) available to common stockholders (in millions)	$	37.7		$	49.7		$	47.4		$	87.4		$	98.2
Diluted earnings/(loss) per common share		0.88			1.16			1.11			2.03			2.30
Return on average assets		0.84	%		1.08	%		0.98	%		0.96	%		1.02	%
Return on average common equity		8.14			10.90			11.01			9.51			11.70
Return on average tangible common equity (non-GAAP)⁽¹⁾		12.28			16.49			17.31			14.36			18.62
Net interest margin		3.68			3.52			3.19			3.60			3.27
Net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.73			3.57			3.23			3.65			3.32
Efficiency ratio		65.70			62.46			60.93			64.05			60.94
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)⁽¹⁾		57.73			58.77			59.88			58.25			58.51

Adjusted Earnings Summary (1):
Adjusted earnings available to common stockholders (in millions)	$	49.6		$	52.4		$	46.5		$	102.0		$	100.2
Adjusted diluted earnings per common share		1.15			1.22			1.09			2.37			2.34
Adjusted annualized return on average assets		1.09	%		1.13	%		0.96	%		1.11	%		1.04	%
Adjusted annualized return on average common equity		10.71			11.50			10.80			11.10			11.95
Adjusted annualized return on average tangible common equity		16.05			17.38			17.00			16.70			19.00

(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

	"HTLF delivered a solid second quarter. Net interest income increased while our adjusted efficiency ratio decreased. Our margin expanded through increased loan yields and decreased deposit costs as we continue to pay down high cost wholesale deposits. In July we completed the sale of Rocky Mountain Bank in Montana, a result of our strategic initiatives that will drive efficiency, enhance EPS growth, deliver higher return on assets and more efficient use of capital. We’re excited to be working closely with our partners at UMB on integration planning for our two companies as we continue towards an expected Q1 2025 transaction close date."
	*Bruce K. Lee, President and Chief Executive Officer, HTLF*

DENVER, July 30, 2024 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023:

Net income available to common stockholders of $37.7 million compared to $47.4 million, a decrease of $9.7 million or 20%.
Earnings per diluted common share of $0.88 compared to $1.11, a decrease of $0.23 or 21%.
Adjusted earnings available to common stockholders⁽¹⁾ of $49.6 million or $1.15 per diluted common share compared to $46.5 million or $1.09 per diluted common share. Adjusted earnings in the second quarter of 2024 excludes $10.1 million of loss of security sales and $6.0 million of acquisition, integration and restructuring costs.
Net interest income of $158.7 million compared to $147.1 million, an increase of $11.6 million or 8%.
Annualized return on average assets of 0.84% compared to 0.98%. Adjusted annualized return on average assets⁽¹⁾of 1.09% compared to 0.96%.
Annualized return on average common equity of 8.14% compared to 11.01%. Adjusted annualized return on average common equity⁽¹⁾ of 10.71% compared to 10.80%.
Annualized return on average tangible common equity⁽¹⁾ of 12.28% compared to 17.31%. Adjusted annualized return on average tangible common equity⁽¹⁾of 16.05% compared to 17.00%.

Rocky Mountain Bank Sale

HTLF Bank closed on the sale of all nine Rocky Mountain Bank branches in Montana in mid-July along with all associated deposits and certain related assets to two purchasers. Loans of $348.8 million, deposits of $538.3 million and fixed assets of $13.2 million have been moved to available for sale categories as of June 30, 2024.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.68% (3.73% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2024 compared to 3.52% (3.57% on a fully tax-equivalent basis, non-GAAP) for the first quarter of 2024, and 3.19% (3.23% on a fully tax-equivalent basis, non-GAAP) for the second quarter of 2023.

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

Total interest income was $255.6 million compared to $235.5 million, an increase of $20.1 million or 9%, primarily attributable to an increase in yields on average earning assets. Interest income on loans during the second quarter of 2024 was positively impacted by $2.0 million due to the payoff of a $29.6 million owner-occupied commercial real estate loan which had previously been on nonaccrual.
Total interest income on a tax-equivalent basis (non-GAAP) was $257.6 million, an increase of $20.0 million or 8%, from $237.6 million.
Average earning assets decreased $1.19 billion or 6% to $17.33 billion compared to $18.52 billion, primarily due to the sale of $865.4 million of securities during the fourth quarter of 2023, and $108.4 million of securities during the second quarter of 2024. The proceeds were utilized to pay down high-cost wholesale deposits and borrowings.
The average rate on earning assets increased 83 basis points to 5.98% from 5.15%, primarily due to recent interest rate increases on earning assets.

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

Total interest expense was $96.9 million, an increase of $8.5 million from $88.4 million, primarily due to increases in the average interest rate paid on interest-bearing liabilities, partially offset by decreases in average interest-bearing liabilities.
The average interest rate paid on interest-bearing liabilities increased 45 basis points to 3.13% from 2.68%.
Average interest-bearing deposits decreased $1.54 billion or 12% to $11.21 billion from $12.75 billion.
The average interest rate paid on interest-bearing deposits increased 31 basis points to 2.89% from 2.58%.
Average borrowings increased $792.9 million or 172% to $1.25 billion from $461.7 million, and the average interest rate paid on borrowings was 5.26% compared to 5.55%.

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

Net interest income totaled $158.7 million compared to $147.1 million, an increase of $11.6 million or 8%.
Net interest income on a tax-equivalent basis (non-GAAP) totaled $160.7 million compared to $149.3 million, an increase of $11.5 million or 8%.

Noninterest Income and Noninterest Expense

Total noninterest income was $18.2 million during the second quarter of 2024 compared to $32.5 million during the second quarter of 2023, a decrease of $14.3 million or 44%. Significant changes within the noninterest income category for the second quarter of 2024 compared to the second quarter of 2023 were:

Net security losses increased $9.8 million to $10.1 million compared to net security losses of $314,000.
Service charges and fees decreased $2.7 million or 14% to $17.0 million from $19.6 million, primarily attributable to a decrease in consumer NSF and overdraft fees. In the fourth quarter of 2023, HTLF instituted a new fee policy across our single charter customer base in response to industry changes related to consumer overdraft fees.
Capital market fees decreased $2.0 million or 51% to $2.0 million from $4.0 million due to lower capital markets activity.
Net gains on sales of loans held for sale decreased $1.1 million or 100% to $0 from $1.1 million, due to HTLF ceasing originations of residential mortgage loans to be sold to the secondary market.

Total noninterest expense was $116.2 million during the second quarter of 2024 compared to $109.4 million during the second quarter of 2023, an increase of $6.8 million or 6%. Significant changes within the noninterest expense category for the second quarter of 2024 compared to the second quarter of 2023 were:

Acquisition, integration, and restructuring costs totaled $6.0 million compared to $1.9 million, an increase of $4.1 million primarily attributable to expenses related to the pending UMB merger.
Salaries and employee benefits totaled $65.1 million compared to $62.1 million, an increase of $3.0 million or 5%. 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 1,843 compared to 1,966, a decrease of 123 or 6%.
FDIC insurance assessments totaled $3.3 million compared to $3.0 million, an increase of $305,000.
Loss on sale of assets totaled $193,000 compared to a gain on assets of $3.4 million. During the second quarter of 2023, the recordkeeping and administration services component of HTLF's Retirement Plan Services business was sold, which generated a gain of $4.3 million.
Other noninterest expense totaled $14.3 million compared to $15.6 million, a decrease of $1.3 million or 8%, in conjunction with HTLF's 3.0 efficiency efforts.

The effective tax rate was 23.12% for the second quarter of 2024 compared to 23.74% for second quarter of 2023. The following items impacted the second quarter 2024 and 2023 tax calculations:

Various tax credits of $629,000 compared to $568,000.
Tax-exempt interest income as a percentage of pre-tax income of 14.49% compared to 12.40%.
Tax benefit of $92,000 compared to a tax expense of $121,000 resulting from the vesting of restricted stock units.
Tax expense of $1.1 million compared to $1.1 million resulting from the disallowed interest expense related to tax-exempt loans and securities.

Total Assets, Total Loans and Total Deposits

Total assets were $18.81 billion at June 30, 2024, a decrease of $599.0 million or 3% from $19.41 billion at year-end 2023. Securities represented 27% and 29% of total assets at June 30, 2024, and December 31, 2023, respectively.

Total loans held to maturity were $11.61 billion at June 30, 2024, compared to $11.64 billion at March 31, 2024, and $12.07 billion at December 31, 2023. Loans decreased $36.3 million or less than 1% during the second quarter of 2024 and $460.3 million or 4% since year-end 2023. Excluding the impact of the transfer of $348.8 million of loans to held for sale related to the planned sale of Rocky Mountain Bank, loans held to maturity decreased $40.3 million or less than 1% during the second quarter of 2024 and $111.6 million or 1% since year-end 2023. Significant changes by loan category at June 30, 2024 compared to March 31, 2024 included:

Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, increased $6.8 million or less than 1% to $6.10 billion compared to $6.09 billion. Excluding the transfer related to Rocky Mountain Bank, commercial and business lending increased $5.1 million or less than 1%.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $19.7 million or less than 1% to $3.52 billion compared to $3.54 billion. Excluding the transfer related to Rocky Mountain Bank, commercial real estate lending decreased $22.6 million or less than 1%.
Agricultural and agricultural real estate loans decreased $6.9 million or 1% to $803.0 million compared to $809.9 million. Excluding the transfer related to Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $4.3 million or less than 1%.
Residential mortgage loans decreased $22.6 million or 3% to $733.4 million compared to $756.0 million. Excluding the transfer related to Rocky Mountain Bank, residential mortgage loans decreased $23.3 million or 3%.

Significant changes by loan category at June 30, 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 $193.9 million or 3% to $6.10 billion compared to $6.29 billion. Excluding the transfer related to Rocky Mountain Bank, commercial and business lending decreased $35.9 million or 1%.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $48.4 million or 1% to $3.52 billion compared to $3.57 billion. Excluding the transfer related to Rocky Mountain Bank, commercial real estate lending increased $13.1 million or less than 1%.
Agricultural and agricultural real estate loans decreased $116.2 million or 13% to $803.0 million compared to $919.2 million. Excluding the transfer related to Rocky Mountain Bank, agricultural and agricultural real estate loans decreased $50.8 million or 6%.
Residential mortgage loans decreased $64.4 million or 8% to $733.4 million compared to $797.8 million. Excluding the transfer related to Rocky Mountain Bank, residential mortgage loans decreased $33.2 million or 4%.

Total deposits were $14.96 billion as of June 30, 2024, compared to $15.30 billion as of March 31, 2024, a decrease of $345.6 million or 2%. Total deposits were $14.96 billion as of June 30, 2024, compared to $16.20 billion at December 31, 2023, which was a decrease of $1.25 billion or 8%. Excluding the impact of the transfer of $538.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, deposits decreased $403.6 million or 3% during the second quarter of 2024 and $706.8 million or 4% since year-end 2023.

Total customer deposits were $14.13 billion as of June 30, 2024, compared to $14.27 billion at March 31, 2024, a decrease of $135.6 million or less than 1%. Excluding the impact of the transfer of $538.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, customer deposits decreased $193.7 million or 1%. Significant customer deposit changes by category at June 30, 2024, compared to March 31, 2024, included:

Customer demand deposits decreased $20.2 million or less than 1% to $4.24 billion compared to $4.26 billion. Excluding the transfer related to Rocky Mountain Bank, customer demand deposits decreased $31.6 million or less than 1%.
Customer savings deposits decreased $118.2 million or 1% to $8.15 billion compared to $8.27 billion. Excluding the transfer related to Rocky Mountain Bank, customer savings deposits decreased $157.0 million or 2%.
Customer time deposits increased $2.8 million or less than 1% to $1.74 billion compared to $1.73 billion. Excluding the transfer related to Rocky Mountain Bank, customer time deposits decreased $5.0 million or less than 1%.

Total customer deposits were $14.13 billion as of June 30, 2024, compared to $14.86 billion at December 31, 2023, a decrease of $722.7 million or 5%. Excluding the impact of the transfer of $538.3 million of deposits to held for sale related to the planned sale of Rocky Mountain Bank, customer deposits decreased $184.4 million. Significant customer deposit changes by category at June 30, 2024, compared to December 31, 2023, included:

Customer demand deposits decreased $256.1 million or 6% to $4.24 billion compared to $4.50 billion. Excluding the transfer related to Rocky Mountain Bank, customer demand deposits decreased $123.5 million or 3%.
Customer savings deposits decreased $259.4 million or 3% to $8.15 billion compared to $8.41 billion. Excluding the transfer related to Rocky Mountain Bank, customer savings deposits increased $32.0 million or less than 1%.
Customer time deposits decreased $207.2 million or 11% to $1.74 billion compared to $1.94 billion. Excluding the transfer related to Rocky Mountain Bank, customer time deposits decreased $92.9 million or 5%.

Total wholesale and institutional deposits were $822.9 million as of June 30, 2024, a decrease of $209.9 million or 20% from $1.03 billion at March 31, 2024. Significant wholesale and institutional deposit changes by category at June 30, 2024 compared to March 31, 2024 included:

Wholesale and institutional savings deposits decreased $80.6 million or 20% to $318.6 million compared to $399.3 million.
Wholesale time deposits decreased $129.3 million or 20% to $504.3 million compared to $633.6 million.

Total wholesale and institutional deposits were $822.9 million as of June 30, 2024, which was a decrease of $522.4 million or 39% from $1.35 billion at December 31, 2023. Significant wholesale and institutional deposit changes by category at June 30, 2024 compared to December 31, 2023 included:

Wholesale and institutional savings deposits decreased $75.7 million or 19% to $318.6 million compared to $394.4 million.
Wholesale time deposits decreased $446.6 million or 47% to $504.3 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 second quarter of 2024 was $9.7 million, an increase of $1.9 million from $7.8 million recorded in the second quarter of 2023.

The allowance for credit losses for loans totaled $126.9 million at June 30, 2024 and $122.6 million at December 31, 2023. The following items impacted the allowance for credit losses for loans at June 30, 2024:

Provision expense for the six months ended June 30, 2024, totaled $13.4 million. Provision expense was primarily impacted in the second quarter of 2024 by one new nonperforming food manufacturing loan which increased the specific reserve by $10.0 million.
Net charge-offs of $9.1 million, of which the majority have been reserved for in prior periods, were recorded for the first six months of 2024.

Provision and Allowance for Credit Losses for Unfunded Commitments
The allowance for unfunded commitments decreased $3.4 million or 21% to $13.1 million at June 30, 2024, from $16.5 million at December 31, 2023. The following impacted HTLF's allowance for credit losses for unfunded commitments during 2024:

Provision benefit for the six months ended June 30, 2024, totaled $3.4 million.
Reduction of $84.6 million in unfunded commitments for construction loans, which carry the highest loss rate.
Total unfunded commitments decreased $244.2 million or 5% to $4.38 billion at June 30, 2024 compared to $4.63 billion at December 31, 2023.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $9.0 million for the second quarter of 2024 compared to $5.4 million for the second quarter of 2023. The total allowance for lending related credit losses was $139.9 million or 1.21% of total loans at June 30, 2024, compared to $139.0 million or 1.15% of total loans as of December 31, 2023.

Nonperforming Assets

Nonperforming assets were $111.3 million or 0.59% of total assets at June 30, 2024, compared to $110.5 million or 0.57% of total assets at December 31, 2023. Nonperforming assets were reduced by the payoff of a $29.6 million owner occupied commercial real estate loan relationship. The reduction was offset by an increase primarily due to the addition of a $33.2 million food manufacturing customer and the addition of an $8.0 million agriculture customer. Nonperforming loans were $103.8 million or 0.89% of total loans at June 30, 2024, compared to $97.9 million or 0.81% of total loans at December 31, 2023. At June 30, 2024, loans delinquent 30-89 days were 0.25% of total loans compared to 0.09% of total loans at December 31, 2023. The increase in the 30-89 day delinquencies was due to a single $9.2 million real estate construction loan which became current subsequent to June 30, 2024. Other real estate owned, net, decreased $5.0 million or 40% to $7.5 million at June 30, 2024 from $12.5 million at December 31, 2023.

Non-GAAP Financial Measures

This earnings release contains references to financial measures which are not defined by generally accepted accounting principles ("GAAP"). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company's financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. 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 and adjusted diluted earnings per common share, adjust net income for the gain/loss from sale of securities, and other non-operating expenses as well as the tax effect of those transactions. Management believes these measures enhance 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 gain/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.

About HTLF

Heartland Financial USA, Inc., is a Denver, Colorado-based bank holding company operating under the brand name HTLF, with assets of $18.81 billion as of June 30, 2024. HTLF's banks serve communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, 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 and updates in HTLF's Forms 10-Q filed thereafter, and 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;
Risks related to the planned merger with UMB Financial Corporation (the “Merger”), the fluctuation of the market value of the merger consideration, risks related to combining our businesses, including expenses related to the Merger and integration of the combined entity, risks that the Merger may not occur, and the risk of litigation related to the Merger;
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 Quarter Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Interest Income
Interest and fees on loans	$	199,161		$	168,899		$	394,822		$	322,742
Interest on securities:
Taxable		47,381			58,172			94,395			114,148
Nontaxable		6,042			6,378			12,083			12,406
Interest on federal funds sold		—			—			—			—
Interest on deposits with other banks and short-term investments		3,045			2,051			6,051			3,182
Total Interest Income		255,629			235,500			507,351			452,478
Interest Expense
Interest on deposits		80,499			81,975			164,633			138,873
Interest on borrowings		10,825			848			18,349			3,270
Interest on term debt		5,564			5,545			11,413			10,991
Total Interest Expense		96,888			88,368			194,395			153,134
Net Interest Income		158,741			147,132			312,956			299,344
Provision for credit losses		9,008			5,379			9,994			8,453
Net Interest Income After Provision for Credit Losses		149,733			141,753			302,962			290,891
Noninterest Income
Service charges and fees		16,964			19,627			34,027			36,763
Loan servicing income		107			411			238			1,125
Trust fees		5,532			5,419			10,575			11,076
Brokerage and insurance commissions		894			677			1,648			1,373
Capital markets fees		1,996			4,037			2,887			6,486
Securities gains (losses), net		(10,111	)		(314	)		(10,053	)		(1,418	)
Unrealized gain/(loss) on equity securities, net		133			(41	)		228			152
Net gains on sale of loans held for sale		—			1,050			104			2,881
Income on bank owned life insurance		1,326			1,220			2,503			2,184
Other noninterest income		1,366			407			3,713			1,870
Total Noninterest Income		18,207			32,493			45,870			62,492
Noninterest Expense
Salaries and employee benefits		65,120			62,099			129,075			124,248
Occupancy		6,262			6,691			13,525			13,900
Furniture and equipment		2,155			3,063			4,492			5,978
Professional fees		15,372			15,194			30,903			27,991
FDIC insurance assessments		3,340			3,035			8,309			6,314
Advertising		1,368			3,052			2,726			5,037
Core deposit intangibles amortization		1,421			1,715			2,913			3,503
Other real estate and loan collection expenses, net		515			348			1,027			503
(Gain) loss on sales/valuations of assets, net		193			(3,372	)		407			(2,257	)
Acquisition, integration and restructuring costs		5,973			1,892			7,348			3,565
Partnership investment in tax credit projects		222			154			716			692
Other noninterest expense		14,303			15,575			28,398			31,015
Total Noninterest Expense		116,244			109,446			229,839			220,489
Income Before Income Taxes		51,696			64,800			118,993			132,894
Income taxes		11,954			15,384			27,544			30,702
Net Income/(Loss)		39,742			49,416			91,449			102,192
Preferred dividends		(2,012	)		(2,012	)		(4,025	)		(4,025	)
Net Income/(Loss) Available to Common Stockholders	$	37,730		$	47,404		$	87,424		$	98,167
Earnings/(loss) per common share-diluted	$	0.88		$	1.11		$	2.03		$	2.30
Weighted average shares outstanding-diluted		43,060,354			42,757,603			43,001,157			42,753,197


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Interest Income
Interest and fees on loans	$	199,161		$	195,661		$	192,861		$	182,394		$	168,899
Interest on securities:
Taxable		47,381			47,014			54,573			54,800			58,172
Nontaxable		6,042			6,041			6,278			6,584			6,378
Interest on federal funds sold		—			—			—			3			—
Interest on deposits with other banks and short-term investments		3,045			3,006			2,174			1,651			2,051
Total Interest Income		255,629			251,722			255,886			245,432			235,500
Interest Expense
Interest on deposits		80,499			84,134			88,071			92,744			81,975
Interest on borrowings		10,825			7,524			5,874			1,167			848
Interest on term debt		5,564			5,849			5,804			5,765			5,545
Total Interest Expense		96,888			97,507			99,749			99,676			88,368
Net Interest Income		158,741			154,215			156,137			145,756			147,132
Provision for credit losses		9,008			986			11,738			1,516			5,379
Net Interest Income After Provision for Credit Losses		149,733			153,229			144,399			144,240			141,753
Noninterest Income
Service charges and fees		16,964			17,063			18,708			18,553			19,627
Loan servicing income		107			131			158			278			411
Trust fees		5,532			5,043			4,905			4,734			5,419
Brokerage and insurance commissions		894			754			729			692			677
Capital markets fees		1,996			891			1,676			1,845			4,037
Securities gains (losses), net		(10,111	)		58			(140,007	)		(114	)		(314	)
Unrealized gain/(loss) on equity securities, net		133			95			75			13			(41	)
Net gains on sale of loans held for sale		—			104			94			905			1,050
Income on bank owned life insurance		1,326			1,177			729			858			1,220
Other noninterest income		1,366			2,347			1,132			619			407
Total Noninterest Income		18,207			27,663			(111,801	)		28,383			32,493
Noninterest Expense
Salaries and employee benefits		65,120			63,955			64,766			62,262			62,099
Occupancy		6,262			7,263			6,509			6,438			6,691
Furniture and equipment		2,155			2,337			2,901			2,720			3,063
Professional fees		15,372			15,531			17,060			13,616			15,194
FDIC insurance assessments		3,340			4,969			10,313			3,313			3,035
Advertising		1,368			1,358			1,677			1,633			3,052
Core deposit intangibles amortization		1,421			1,492			1,611			1,625			1,715
Other real estate and loan collection expenses, net		515			512			505			481			348
(Gain) loss on sales/valuations of assets, net		193			214			2,072			108			(3,372	)
Acquisition, integration and restructuring costs		5,973			1,375			4,365			2,429			1,892
Partnership investment in tax credit projects		222			494			3,573			1,136			154
Other noninterest expense		14,303			14,095			14,933			15,292			15,575
Total Noninterest Expense		116,244			113,595			130,285			111,053			109,446
Income Before Income Taxes		51,696			67,297			(97,687	)		61,570			64,800
Income taxes		11,954			15,590			(27,324	)		13,479			15,384
Net Income/(Loss)		39,742			51,707			(70,363	)		48,091			49,416
Preferred dividends		(2,012	)		(2,013	)		(2,012	)		(2,013	)		(2,012	)
Net Income/(Loss) Available to Common Stockholders	$	37,730		$	49,694		$	(72,375	)	$	46,078		$	47,404
Earnings/(loss) per common share-diluted	$	0.88		$	1.16		$	(1.69	)	$	1.08		$	1.11
Weighted average shares outstanding-diluted		43,060,354			42,915,768			42,838,405			42,812,563			42,757,603


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Assets
Cash and due from banks	$	226,735		$	208,176		$	275,554		$	248,756		$	317,303
Interest-bearing deposits with other banks and short-term investments		147,211			236,190			47,459			99,239			82,884
Cash and cash equivalents		373,946			444,366			323,013			347,995			400,187
Time deposits in other financial institutions		1,340			1,240			1,240			1,490			1,490
Securities:
Carried at fair value		4,185,054			4,418,222			4,646,891			5,482,687			5,798,041
Held to maturity, at cost		842,980			841,055			838,241			835,468			834,673
Other investments, at cost		70,684			68,524			91,277			90,001			72,291
Loans held for sale		348,761			352,744			5,071			6,262			14,353
Loans:
Held to maturity		11,608,309			11,644,641			12,068,645			11,872,436			11,717,974
Allowance for credit losses		(126,861	)		(123,934	)		(122,566	)		(110,208	)		(111,198	)
Loans, net		11,481,448			11,520,707			11,946,079			11,762,228			11,606,776
Premises, furniture and equipment, net		175,953			176,582			181,070			187,436			190,420
Goodwill		576,005			576,005			576,005			576,005			576,005
Core deposit intangibles, net		15,501			16,923			18,415			20,026			21,651
Cash surrender value on life insurance		199,036			197,671			197,085			196,694			195,793
Other real estate, net		7,533			2,590			12,548			14,362			2,677
Other assets		534,429			516,198			574,772			609,139			510,359
Total Assets	$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793		$	20,224,716
Liabilities and Equity
Liabilities
Deposits:
Demand	$	4,244,169		$	4,264,390		$	4,500,304		$	4,792,813		$	4,897,858
Savings		8,470,416			8,669,221			8,805,597			8,754,911			8,772,596
Time		2,242,005			2,368,555			2,895,813			3,553,269			3,993,089
Total deposits		14,956,590			15,302,166			16,201,714			17,100,993			17,663,543
Deposits held for sale		538,308			596,328			—			—			—
Borrowings		694,909			650,033			622,255			392,634			44,364
Term debt		372,988			372,652			372,396			372,059			372,403
Accrued expenses and other liabilities		222,025			232,815			282,225			438,577			285,416
Total Liabilities		16,784,820			17,153,994			17,478,590			18,304,263			18,365,726
Stockholders' Equity
Preferred equity		110,705			110,705			110,705			110,705			110,705
Common stock		42,852			42,784			42,688			42,656			42,645
Capital surplus		1,096,619			1,093,207			1,090,740			1,088,267			1,087,358
Retained earnings		1,203,092			1,178,330			1,141,501			1,226,740			1,193,522
Accumulated other comprehensive income/(loss)		(425,418	)		(446,193	)		(452,517	)		(642,838	)		(575,240	)
Total Equity		2,027,850			1,978,833			1,933,117			1,825,530			1,858,990
Total Liabilities and Equity	$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793		$	20,224,716


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Average Balances
Assets	$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920		$	20,221,511
Loans, net of unearned		12,010,289			12,021,930			11,938,272			11,800,064			11,625,442
Total deposits		15,562,920			16,042,402			16,709,394			17,507,813			17,689,138
Customer deposits		14,768,407			14,816,652			14,969,948			14,699,235			14,655,535
Earning assets		17,331,435			17,597,068			17,853,957			18,439,010			18,523,552
Interest-bearing liabilities		12,461,957			12,607,745			12,721,680			13,158,631			13,209,794
Common equity		1,863,236			1,832,959			1,729,086			1,746,818			1,727,013
Total stockholders' equity		1,973,941			1,943,664			1,839,791			1,857,523			1,837,718
Tangible common equity (non-GAAP)⁽¹⁾		1,271,046			1,239,313			1,133,888			1,149,992			1,128,527

Key Performance Ratios
Annualized return on average assets		0.84	%		1.08	%	(1.42		)%		0.94	%		0.98	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		1.09			1.13			0.96			0.98			0.96
Annualized return on average common equity (GAAP)		8.14			10.90			(16.61	)		10.47			11.01
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.71			11.50			10.46			10.92			10.80
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		12.28			16.49			(24.89	)		16.32			17.31
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		16.05			17.38			16.38			17.02			17.00
Annualized ratio of net charge-offs/(recoveries) to average loans		0.23			0.08			0.01			0.12			0.32
Annualized net interest margin (GAAP)		3.68			3.52			3.47			3.14			3.19
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.73			3.57			3.52			3.18			3.23
Annualized cost of deposits		2.08			2.11			2.09			2.10			1.86
Efficiency ratio (GAAP)		65.70			62.46			293.86			63.77			60.93
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		57.73			58.77			59.31			59.95			59.88
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.46			2.37			2.63			2.18			2.17
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.30			2.25			2.23			2.08			2.16

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
Average Balances
Assets	$	19,043,362		$	20,221,511		$	19,170,002		$	20,170,044
Loans, net of unearned		12,010,289			11,625,442			12,016,110			11,502,443
Total deposits		15,562,920			17,689,138			15,802,661			17,598,009
Customer deposits		14,768,407			14,655,535			14,792,530			14,888,066
Earning assets		17,331,435			18,523,552			17,464,253			18,458,462
Interest-bearing liabilities		12,461,957			13,209,794			12,534,852			12,897,747
Common equity		1,863,236			1,727,013			1,848,098			1,691,633
Total stockholders' equity		1,973,941			1,837,718			1,958,803			1,802,338
Tangible common equity (non-GAAP)(1)		1,271,046			1,128,527			1,255,180			1,092,273

Key Performance Ratios
Annualized return on average assets		0.84	%		0.98	%		0.96	%		1.02	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		1.09			0.96			1.11			1.04
Annualized return on average common equity (GAAP)		8.14			11.01			9.51			11.70
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.71			10.80			11.10			11.95
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		12.28			17.31			14.36			18.62
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		16.05			17.00			16.70			19.00
Annualized ratio of net charge-offs/(recoveries) to average loans		0.23			0.32			0.15			0.15
Annualized net interest margin (GAAP)		3.68			3.19			3.60			3.27
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.73			3.23			3.65			3.32
Annualized cost of deposits		2.08			1.86			2.10			1.59
Efficiency ratio (GAAP)		65.70			60.93			64.05			60.94
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		57.73			59.88			58.25			58.51
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.46			2.17			2.41			2.20
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.30			2.16			2.28			2.15

(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND FULL TIME EQUIVALENT EMPLOYEE DATA
	As of and for the Quarter Ended
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Common Share Data
Book value per common share	$	44.74		$	43.66		$	42.69		$	40.20		$	41.00
Tangible book value per common share (non-GAAP)⁽¹⁾		30.94			29.81			28.77			26.23			26.98
ASC 320 effect on book value per common share		(10.82	)		(11.18	)		(11.00	)		(16.27	)		(14.04	)

Common shares outstanding, net of treasury stock		42,852,180			42,783,670			42,688,008			42,656,303			42,644,544

Capital Ratios
Common equity ratio		10.19	%		9.76	%		9.39	%		8.52	%		8.64	%
Tangible common equity ratio (non-GAAP)⁽¹⁾		7.28			6.88			6.53			5.73			5.86
Tier 1 leverage ratio		10.13			9.84			9.44			9.59			9.40
Common equity tier 1 ratio⁽²⁾		11.68			11.40			10.97			11.37			11.33
Total risk based capital ratio⁽²⁾		15.32			14.99			14.53			14.90			14.93

Other Selected Trend Information
Effective tax rate		23.12	%		23.17	%		27.97	%		21.89	%		23.74	%
Full time equivalent employees		1,843			1,888			1,970			1,965			1,966

Loans Held to Maturity
Commercial and industrial	$	3,541,239		$	3,545,051		$	3,652,047		$	3,591,809		$	3,590,680
Paycheck Protection Program ("PPP")		1,864			2,172			2,777			3,750			4,139
Owner occupied commercial real estate		2,555,964			2,545,033			2,638,175			2,429,659			2,398,698
Commercial and business lending		6,099,067			6,092,256			6,292,999			6,025,218			5,993,517
Non-owner occupied commercial real estate		2,434,258			2,495,068			2,553,711			2,656,358			2,530,736
Real estate construction		1,082,726			1,041,583			1,011,716			1,029,554			1,013,134
Commercial real estate lending		3,516,984			3,536,651			3,565,427			3,685,912			3,543,870
Total commercial lending		9,616,051			9,628,907			9,858,426			9,711,130			9,537,387
Agricultural and agricultural real estate		802,958			809,876			919,184			842,116			839,817
Residential mortgage		733,401			756,021			797,829			813,803			828,437
Consumer		455,899			449,837			493,206			505,387			512,333
Total loans held to maturity	$	11,608,309		$	11,644,641		$	12,068,645		$	11,872,436		$	11,717,974

Total unfunded loan commitments	$	4,381,565		$	4,537,718		$	4,625,768		$	4,813,798		$	4,905,147

Deposits
Demand-customer	$	4,244,169		$	4,264,390		$	4,500,304		$	4,792,813		$	4,897,858
Savings-customer		8,151,794			8,269,956			8,411,240			8,190,430			8,149,596
Savings-wholesale and institutional		318,622			399,265			394,357			564,481			623,000
Total savings		8,470,416			8,669,221			8,805,597			8,754,911			8,772,596
Time-customer		1,737,723			1,734,971			1,944,884			1,814,335			1,597,849
Time-wholesale		504,282			633,584			950,929			1,738,934			2,395,240
Total time		2,242,005			2,368,555			2,895,813			3,553,269			3,993,089
Total deposits	$	14,956,590		$	15,302,166		$	16,201,714		$	17,100,993		$	17,663,543

Total customer deposits	$	14,133,686		$	14,269,317		$	14,856,428		$	14,797,578		$	14,645,303
Total wholesale and institutional deposits		822,904			1,032,849			1,345,286			2,303,415			3,018,240
Total deposits	$	14,956,590		$	15,302,166		$	16,201,714		$	17,100,993		$	17,663,543

(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) June 30, 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
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
Allowance for Credit Losses-Loans
Balance, beginning of period	$	123,934		$	122,566		$	110,208		$	111,198		$	112,707
Provision for credit losses		9,737			3,668			12,750			2,672			7,829
Charge-offs		(7,388	)		(4,093	)		(3,886	)		(3,964	)		(9,613	)
Recoveries		578			1,793			3,494			302			275
Balance, end of period	$	126,861		$	123,934		$	122,566		$	110,208		$	111,198

Allowance for Unfunded Commitments
Balance, beginning of period	$	13,786		$	16,468		$	17,480		$	18,636		$	21,086
Provision for credit losses		(729	)		(2,682	)		(1,012	)		(1,156	)		(2,450	)
Balance, end of period	$	13,057		$	13,786		$	16,468		$	17,480		$	18,636

Allowance for lending related credit losses	$	139,918		$	137,720		$	139,034		$	127,688		$	129,834

Provision for Credit Losses
Provision for credit losses-loans	$	9,737		$	3,668		$	12,750		$	2,672		$	7,829
Provision for credit losses-unfunded commitments		(729	)		(2,682	)		(1,012	)		(1,156	)		(2,450	)
Total provision (benefit) for credit losses	$	9,008		$	986		$	11,738		$	1,516		$	5,379

Asset Quality
Nonaccrual loans	$	103,123		$	94,800		$	95,426		$	51,304		$	61,956
Loans past due ninety days or more		663			611			2,507			511			1,459
Other real estate owned		7,533			2,590			12,548			14,362			2,677
Other repossessed assets		—			—			—			1			5
Total nonperforming assets	$	111,319		$	98,001		$	110,481		$	66,178		$	66,097

Nonperforming Assets Activity
Balance, beginning of period	$	98,001		$	110,481		$	66,178		$	66,097		$	65,702
Net loan (charge-offs) recoveries		(6,810	)		(2,300	)		(392	)		(3,662	)		(9,338	)
New nonperforming loans		48,346			5,470			61,193			19,295			19,805
Reduction of nonperforming loans⁽¹⁾		(28,050	)		(5,692	)		(14,278	)		(14,691	)		(5,253	)
OREO/Repossessed assets sales proceeds		(168	)		(9,958	)		(2,220	)		(861	)		(4,819	)
Balance, end of period	$	111,319		$	98,001		$	110,481		$	66,178		$	66,097

Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.89	%		0.82	%		0.81	%		0.44	%		0.54	%
Ratio of nonperforming assets to total assets		0.59			0.51			0.57			0.33			0.33
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.23			0.08			0.01			0.12			0.32
Allowance for loan credit losses as a percent of loans		1.09			1.06			1.02			0.93			0.95
Allowance for lending related credit losses as a percent of loans		1.21			1.18			1.15			1.08			1.11
Allowance for loan credit losses as a percent of nonperforming loans		122.23			129.89			125.15			212.70			175.35
Loans delinquent 30-89 days as a percent of total loans		0.25			0.31			0.09			0.12			0.12

(1) Includes principal reductions, transfers to performing status and transfers to OREO.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
	For the Quarter Ended
	June 30, 2024							March 31, 2024							June 30, 2023
	Average Balance			Interest		Rate		Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	4,490,407		$	47,381	4.24	%	$	4,665,196		$	47,014	4.05	%	$	5,962,207		$	58,172	3.91	%
Nontaxable⁽¹⁾		759,234			7,383	3.91			778,632			7,383	3.81			895,458			7,896	3.54
Total securities		5,249,641			54,764	4.20			5,443,828			54,397	4.02			6,857,665			66,068	3.86
Interest on deposits with other banks and short-term investments		194,824			3,045	6.29			253,189			3,006	4.78			153,622			2,051	5.36
Federal funds sold		—			—	—			—			—	—			—			—	—
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,638,004			69,469	7.68			3,642,588			66,985	7.40			3,565,449			56,644	6.37
PPP loans		2,242			7	1.26			2,587			8	1.24			6,302			24	1.53
Owner occupied commercial real estate		2,615,504			37,028	5.69			2,609,773			35,517	5.47			2,366,107			28,031	4.75
Non-owner occupied commercial real estate		2,519,346			39,272	6.27			2,550,419			39,849	6.28			2,462,098			35,583	5.80
Real estate construction		1,093,399			21,770	8.01			1,061,843			20,849	7.90			1,028,109			18,528	7.23
Agricultural and agricultural real estate		879,707			13,390	6.12			878,621			13,756	6.30			848,554			12,256	5.79
Residential real estate		776,821			9,454	4.89			791,248			10,135	5.15			840,741			9,383	4.48
Consumer		485,266			9,421	7.81			484,851			9,201	7.63			508,082			9,068	7.16
Less: allowance for credit losses		(123,319	)		—	—			(121,879	)		—	—			(113,177	)		—	—
Net loans		11,886,970			199,811	6.76			11,900,051			196,300	6.63			11,512,265			169,517	5.91
Total earning assets		17,331,435			257,620	5.98	%		17,597,068			253,703	5.80	%		18,523,552			237,636	5.15	%
Nonearning Assets		1,711,927							1,699,570							1,697,959
Total Assets	$	19,043,362						$	19,296,638						$	20,221,511
Interest-bearing Liabilities
Savings	$	8,834,746		$	55,440	2.52	%	$	8,809,530		$	54,667	2.50	%	$	8,935,775		$	41,284	1.85	%
Time deposits		2,372,653			25,059	4.25			2,782,195			29,467	4.26			3,812,330			40,691	4.28
Borrowings		881,738			10,825	4.94			643,525			7,524	4.70			89,441			848	3.80
Term debt		372,820			5,564	6.00			372,495			5,849	6.32			372,248			5,545	5.97
Total interest-bearing liabilities		12,461,957			96,888	3.13	%		12,607,745			97,507	3.11	%		13,209,794			88,368	2.68	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,355,521							4,450,677							4,941,033
Accrued interest and other liabilities		251,943							294,552							232,966
Total noninterest-bearing liabilities		4,607,464							4,745,229							5,173,999
Stockholders' Equity		1,973,941							1,943,664							1,837,718
Total Liabilities and Stockholders' Equity	$	19,043,362						$	19,296,638						$	20,221,511
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	160,732						$	156,196						$	149,268
Net interest spread⁽¹⁾						2.85	%						2.69	%						2.47	%
Net interest income, fully tax-equivalent (non-GAAP^)(1)(3) to total earning assets						3.73	%						3.57	%						3.23	%
Interest-bearing liabilities to earning assets		71.90	%						71.65	%						71.31	%

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
	For the Six Months Ended
	June 30, 2024							June 30, 2023
	Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	4,577,802		$	94,395	4.14	%	$	6,029,175		$	114,148	3.82	%
Nontaxable⁽¹⁾		768,933			14,766	3.85			908,992			15,704	3.48
Total securities		5,346,735			109,161	4.11			6,938,167			129,852	2.50
Interest on deposits with other banks and other short-term investments		224,007			6,051	5.42			129,645			3,182	4.95
Federal funds sold		—			—	—			—			—	—
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,640,298			136,454	7.54			3,512,807			106,551	6.12
PPP loans		2,415			14	1.17			8,126			50	1.24
Owner occupied commercial real estate		2,612,638			72,545	5.58			2,327,702			54,800	4.75
Non-owner occupied commercial real estate		2,534,882			79,121	6.28			2,397,004			66,332	5.58
Real estate construction		1,077,621			42,619	7.95			1,063,372			36,659	6.95
Agricultural and agricultural real estate		879,164			27,146	6.21			842,136			23,609	5.65
Residential mortgage		784,034			19,589	5.02			846,618			18,656	4.44
Consumer		485,058			18,622	7.72			504,678			17,310	6.92
Less: allowance for credit losses-loans		(122,599	)		—	—			(111,793	)		—	—
Net loans		11,893,511			396,110	6.70			11,390,650			323,967	5.74
Total earning assets		17,464,253			511,322	5.89	%		18,458,462			457,001	4.99	%
Nonearning Assets		1,705,749							1,711,582
Total Assets	$	19,170,002						$	20,170,044
Interest-bearing Liabilities
Savings	$	8,822,138		$	110,107	2.51	%	$	9,330,939		$	79,177	1.71	%
Time deposits		2,577,424			54,526	4.25			3,038,985			59,696	3.96
Borrowings		762,632			18,349	4.84			155,738			3,270	4.23
Term debt		372,658			11,413	6.16			372,085			10,991	5.96
Total interest-bearing liabilities		12,534,852			194,395	3.12	%		12,897,747			153,134	2.39	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,403,099							5,228,085
Accrued interest and other liabilities		273,248							241,874
Total noninterest-bearing liabilities		4,676,347							5,469,959
Stockholders' Equity		1,958,803							1,802,338
Total Liabilities and Stockholders' Equity	$	19,170,002						$	20,170,044
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	316,927						$	303,867
Net interest spread⁽¹⁾						2.77	%						2.60	%
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾ to total earning assets						3.65	%						3.32	%
Interest-bearing liabilities to earning assets		71.77	%						69.87	%

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
	For the Quarter Ended
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	37,730		$	49,694		$	(72,375	)	$	46,078		$	47,404
Plus core deposit intangibles amortization, net of tax⁽²⁾		1,081			1,131			1,229			1,240			1,309
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	38,811		$	50,825		$	(71,146	)	$	47,318		$	48,713

Average common equity (GAAP)	$	1,863,236		$	1,832,959		$	1,729,086		$	1,746,818		$	1,727,013
Less average goodwill		576,005			576,005			576,005			576,005			576,005
Less average core deposit intangibles, net		16,185			17,641			19,193			20,821			22,481
Average tangible common equity (non-GAAP)	$	1,271,046		$	1,239,313		$	1,133,888		$	1,149,992		$	1,128,527
Annualized return on average common equity (GAAP)		8.14	%		10.90	%	(16.61		)%		10.47	%		11.01	%
Annualized return on average tangible common equity (non-GAAP)		12.28	%		16.49	%	(24.89		)%		16.32	%		17.31	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	158,741		$	154,215		$	156,137		$	145,756		$	147,132
Plus tax-equivalent adjustment⁽¹⁾		1,991			1,981			2,058			2,152			2,136
Net interest income, fully tax-equivalent (non-GAAP)	$	160,732		$	156,196		$	158,195		$	147,908		$	149,268

Average earning assets	$	17,331,435		$	17,597,068		$	17,853,957		$	18,439,010		$	18,523,552

Annualized net interest margin (GAAP)		3.68	%		3.52	%		3.47	%		3.14	%		3.19	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.73			3.57			3.52			3.18			3.23
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.01			0.02			0.02			0.01			0.03

*Reconciliation of Tangible Book Value Per Common Share (non-GAAP)*
Common equity (GAAP)	$	1,917,145		$	1,868,128		$	1,822,412		$	1,714,825		$	1,748,285
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit intangibles, net		15,501			16,923			18,415			20,026			21,651
Tangible common equity (non-GAAP)	$	1,325,639		$	1,275,200		$	1,227,992		$	1,118,794		$	1,150,629

Common shares outstanding, net of treasury stock		42,852,180			42,783,670			42,688,008			42,656,303			42,644,544
Common equity (book value) per share (GAAP)	$	44.74		$	43.66		$	42.69		$	40.20		$	41.00
Tangible book value per common share (non-GAAP)	$	30.94		$	29.81		$	28.77		$	26.23		$	26.98

*Reconciliation of Tangible Common Equity Ratio (non-GAAP)*
Tangible common equity (non-GAAP)	$	1,325,639		$	1,275,200		$	1,227,992		$	1,118,794		$	1,150,629

Total assets (GAAP)	$	18,812,670		$	19,132,827		$	19,411,707		$	20,129,793		$	20,224,716
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit intangibles, net		15,501			16,923			18,415			20,026			21,651
Total tangible assets (non-GAAP)	$	18,221,164		$	18,539,899		$	18,817,287		$	19,533,762		$	19,627,060
Tangible common equity ratio (non-GAAP)		7.28	%		6.88	%		6.53	%		5.73	%		5.86	%

(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
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
*Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)*
Net interest income (GAAP)	$	158,741		$	154,215		$	156,137		$	145,756		$	147,132
Tax-equivalent adjustment⁽¹⁾		1,991			1,981			2,058			2,152			2,136
Fully tax-equivalent net interest income		160,732			156,196			158,195			147,908			149,268
Noninterest income		18,207			27,663			(111,801	)		28,383			32,493
Securities (gains)/losses, net		10,111			(58	)		140,007			114			314
Unrealized (gain)/loss on equity securities, net		(133	)		(95	)		(75	)		(13	)		41
Adjusted revenue (non-GAAP)	$	188,917		$	183,706		$	186,326		$	176,392		$	182,116

Total noninterest expenses (GAAP)	$	116,246		$	113,595		$	130,285		$	111,053		$	109,446
Less:
Core deposit intangibles amortization		1,421			1,492			1,611			1,625			1,715
Partnership investment in tax credit projects		222			494			3,573			1,136			154
(Gain) loss on sales/valuation of assets, net		193			214			2,072			108			(3,372	)
Acquisition, integration and restructuring costs		5,973			1,375			4,365			2,429			1,892
FDIC special assessment		(631	)		2,049			8,145			—			—
Core expenses (non-GAAP)	$	109,068		$	107,971		$	110,519		$	105,755		$	109,057

Efficiency ratio (GAAP)		65.70	%		62.46	%		293.86	%		63.77	%		60.93	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		57.73	%		58.77	%		59.31	%		59.95	%		59.88	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	116,246		$	113,595		$	130,285		$	111,053		$	109,446
Core expenses (non-GAAP)		109,068			107,971			110,519			105,755			109,057

Average assets	$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920		$	20,221,511
Total noninterest expenses to average assets (GAAP)		2.46	%		2.37	%		2.63	%		2.18	%		2.17	%
Core expenses to average assets (non-GAAP)		2.30	%		2.25	%		2.23	%		2.08	%		2.16	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	462		$	168		$	1,425		$	94		$	93
Occupancy		—			—			1,092			—			—
Furniture and equipment		53			—			19			—			—
Professional fees		5,385			931			793			1,617			1,068
Advertising		—			—			28			178			222
Other noninterest expenses		73			276			1,008			540			509
Total acquisition, integration and restructuring costs	$	5,973		$	1,375		$	4,365		$	2,429		$	1,892

(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
	6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
*Reconciliation of Adjusted Earnings*
Net income/(loss)	$	39,742		$	51,707		$	(70,363	)	$	48,091		$	49,416
(Gain)/loss from sale of securities		10,111			(58	)		140,007			114			314
(Gain)/loss on sales/valuation of assets, net		193			214			2,072			108			(3,372	)
Acquisition, integration and restructuring costs		5,973			1,375			4,365			2,429			1,892
FDIC special assessment		(631	)		2,049			8,145			—			—
Total adjustments		15,646			3,580			154,589			2,651			(1,166	)
Tax effect of adjustments⁽²⁾		(3,739	)		(866	)		(36,638	)		(628	)		276
Adjusted earnings	$	51,649		$	54,421		$	47,588		$	50,114		$	48,526

Preferred dividends		(2,012	)		(2,013	)		(2,012	)		(2,013	)		(2,012	)
Adjusted earnings available to common stockholders	$	49,637		$	52,408		$	45,576		$	48,101		$	46,514

Plus core deposit intangibles amortization, net of tax⁽²⁾		1,081			1,131			1,229			1,240			1,309
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	50,718		$	53,539		$	46,805		$	49,341		$	47,823

*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	19,043,362		$	19,296,638		$	19,667,825		$	20,207,920		$	20,221,511
Adjusted annualized return on average assets (non-GAAP)		1.09	%		1.13	%		0.96	%		0.98	%		0.96	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders' equity (GAAP)	$	1,863,236		$	1,832,959		$	1,729,086		$	1,746,818		$	1,727,013
Adjusted annualized average common equity (non-GAAP)		10.71	%		11.50	%		10.46	%		10.92	%		10.80	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,271,046		$	1,239,313		$	1,133,888		$	1,149,992		$	1,128,527
Adjusted annualized average tangible common equity (non-GAAP)		16.05	%		17.38	%		16.38	%		17.02	%		17.00	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		43,060,354			42,915,768			42,838,405			42,812,563			42,757,603
Adjusted diluted earnings per common share	$	1.15		$	1.22		$	1.06		$	1.12		$	1.09

(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 June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	37,730		$	47,404		$	87,424		$	98,167
Plus core deposit intangibles amortization, net of tax⁽²⁾		1,081			1,309			2,211			2,673
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	38,811		$	48,713		$	89,635		$	100,840

Average common equity (GAAP)	$	1,863,236		$	1,727,013		$	1,848,098		$	1,691,633
Less average goodwill		576,005			576,005			576,005			576,005
Less average core deposit intangibles, net		16,185			22,481			16,913			23,355
Average tangible common equity (non-GAAP)	$	1,271,046		$	1,128,527		$	1,255,180		$	1,092,273
Annualized return on average common equity (GAAP)		8.14	%		11.01	%		9.51	%		11.70	%
Annualized return on average tangible common equity (non-GAAP)		12.28	%		17.31	%		14.36	%		18.62	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	158,741		$	147,132		$	312,956		$	299,344
Plus tax-equivalent adjustment⁽¹⁾		1,991			2,136			3,971			4,345
Net interest income, fully tax-equivalent (non-GAAP)	$	160,732		$	149,268		$	316,927		$	303,689

Average earning assets	$	17,331,435		$	18,523,552		$	17,464,253		$	18,458,462

Annualized net interest margin (GAAP)		3.68	%		3.19	%		3.60	%		3.27	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.73			3.23			3.65			3.32
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.01			0.03			0.02			0.02

(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 June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
*Reconciliation of Adjusted Efficiency Ratio, Fully Tax-Equivalent (non-GAAP)*
Net interest income (GAAP)	$	158,741		$	147,132		$	312,956		$	299,344
Tax-equivalent adjustment⁽¹⁾		1,991			2,136			3,971			4,345
Fully tax-equivalent net interest income		160,732			149,268			316,927			303,689
Noninterest income (GAAP)		18,207			32,493			45,870			62,492
Securities (gains)/losses, net		10,111			314			10,053			1,418
Unrealized (gain)/loss on equity securities, net		(133	)		41			(228	)		(152	)
Adjusted revenue (non-GAAP)	$	188,917		$	182,116		$	372,622		$	367,447

Total noninterest expenses (GAAP)	$	116,246		$	109,446		$	229,841		$	220,489
Less:
Core deposit intangibles amortization		1,421			1,715			2,913			3,503
Partnership investment in tax credit projects		222			154			716			692
(Gain)/loss on sales/valuation of assets, net		193			(3,372	)		407			(2,257	)
Acquisition, integration and restructuring costs		5,973			1,892			7,348			3,565
FDIC special assessment		(631	)		—			1,418			—
Core expenses (non-GAAP)	$	109,068		$	109,057		$	217,039		$	214,986

Efficiency ratio (GAAP)		65.70	%		60.93	%		64.05	%		60.94	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		57.73	%		59.88	%		58.25	%		58.51	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	116,246		$	109,446		$	229,841		$	220,489
Core expenses (non-GAAP)		109,068			109,057			217,039			214,986

Average assets	$	19,043,362		$	20,221,511		$	19,170,002		$	20,170,044
Total noninterest expenses to average assets (GAAP)		2.46	%		2.17	%		2.41	%		2.20	%
Core expenses to average assets (non-GAAP)		2.30	%		2.16	%		2.28	%		2.15	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	462		$	93		$	631		$	167
Occupancy		—			—			—			—
Furniture and equipment		53			—			53			—
Professional fees		5,385			1,068			6,316			2,002
Advertising		—			222			—			344
Other noninterest expenses		73			509			348			1,052
Total acquisition, integration and restructuring costs	$	5,973		$	1,892		$	7,348		$	3,565

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended June 30,						For the Six Months Ended June 30,
		2024			2023			2024			2023
*Reconciliation of Adjusted Earnings (non-GAAP)*
Net income/(loss)	$	39,742		$	49,416		$	91,449		$	102,192
(Gain)/loss from sale of securities		10,111			314			10,053			1,418
(Gain)/loss on sales/valuation of assets, net		193			(3,372	)		407			(2,257	)
Acquisition, integration and restructuring costs		5,973			1,892			7,348			3,565
FDIC special assessment		(631	)		—			1,418			—
Total adjustments		15,646			(1,166	)		19,226			2,726
Tax effect of adjustments⁽²⁾		(3,739	)		276			(4,633	)		(646	)
Adjusted earnings	$	51,649		$	48,526		$	106,042		$	104,272

Preferred dividends		(2,012	)		(2,012	)		(4,025	)		(4,025	)
Adjusted earnings available to common stockholders	$	49,637		$	46,514		$	102,017		$	100,247

Plus core deposit intangibles amortization, net of tax⁽²⁾		1,081			1,309			2,211			2,673
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	50,718		$	47,823		$	104,228		$	102,920

*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	19,043,362		$	20,221,511		$	19,170,002		$	20,170,044
Adjusted annualized return on average assets (non-GAAP)		1.09	%		0.96	%		1.11	%		1.04	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders' equity (GAAP)	$	1,863,236		$	1,727,013		$	1,848,098		$	1,691,633
Adjusted annualized return on average common equity (non-GAAP)		10.71	%		10.80	%		11.10	%		11.95	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,271,046		$	1,128,527		$	1,255,180		$	1,092,273
Adjusted annualized return on average tangible common equity (non-GAAP)		16.05	%		17.00	%		16.70	%		19.00	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		43,060,354			42,757,603			43,001,157			42,753,197
Adjusted diluted earnings per common share	$	1.15		$	1.09		$	2.37		$	2.34

(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. ("HTLF") Reports Quarterly Results as of June 30, 2024

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