Heartland Financial USA, Inc. Reports Annual Earnings and Fourth Quarter Results as of December 31, 2021

Highlights

• Record annual net income available to common stockholders of $211.9 million or $5.00 per diluted common share
• Quarterly net income available to common stockholders of $47.6 million or $1.12 per diluted common share
• Annual loan growth of $689.4 million or 8%, exclusive of Paycheck Protection Program ("PPP") loans
• Quarterly loan growth of $309.0 million or 13% annualized, exclusive of PPP loans
• Nonperforming assets to total assets declined to 0.37% and 30-89 day loan delinquencies fell to 0.07% of total loans
• Net loan charge-offs for the quarter of $637,000 or 0.03% of average loans, and net charge offs for the year of $3.8 million or 0.04% of average loans
• HTLF Board of Directors approved a consolidation plan for its eleven bank charters

		Quarter Ended December 31,								Year Ended December 31,
			2021				2020				2021				2020
Net income available to common stockholders (in millions)		$	47.6			$	37.8			$	211.9			$	133.5
Diluted earnings per common share			1.12				0.98				5.00				3.57
Return on average assets			1.03	%			0.97	%			1.19	%			0.93	%
Return on average common equity			9.15				8.50				10.49				8.06
Return on average tangible common equity (non-GAAP)(1)			13.47				12.77				15.59				12.28
Net interest margin			3.08				3.51				3.29				3.65
Net interest margin, fully tax-equivalent (non-GAAP)(1)			3.12				3.55				3.33				3.69
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)			63.86				54.93				59.48				56.65
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to the financial tables for reconciliations to the most directly comparable GAAP measures.

"HTLF completed a successful year with record net income available to common stockholders of $211.9 million, or $5.00 per diluted common share. Our success was highlighted by strong loan growth and excellent credit quality."

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

DUBUQUE, Iowa, Jan. 31, 2022 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020:

• Net income available to common stockholders of $47.6 million compared to $37.8 million, an increase of $9.8 million or 26%.
• Earnings per diluted common share of $1.12 compared to $0.98, an increase of $0.14 or 14%.
• Net interest income of $137.2 million compared to $132.6 million, an increase of $4.6 million or 3%.
• Return on average common equity of 9.15% and return on average assets of 1.03% compared to 8.50% and 0.97%, respectively.
• Return on average tangible common equity (non-GAAP) was 13.47% compared to 12.77%.
  

HTLF reported the following results for the year ended December 31, 2021 compared to the year ended December 31, 2020:

• Net income available to common stockholders of $211.9 million compared to $133.5 million, an increase of $78.4 million or 59%.
• Earnings per diluted common share of $5.00 compared to $3.57, an increase of $1.43 or 40%.
• Net interest income of $560.6 million compared to $491.7 million, an increase of $68.8 million or 14%.
• Return on average common equity was 10.49% and return on average assets was 1.19% compared to 8.06% and 0.93%, respectively.
• Return on average tangible common equity (non-GAAP) of 15.59% compared to 12.28%.
  

Commenting on HTLF's 2021 results, Bruce K. Lee, HTLF’s president and chief executive officer, said, "HTLF completed a successful year with record net income available to common stockholders of $211.9 million, or $5.00 per diluted common share. Our success was highlighted by strong loan growth and excellent credit quality."

Recent Developments

In the fourth quarter of 2021, HTLF began evaluating the consolidation of its eleven bank charters as part of its ongoing efforts to improve operational efficiency. As a result, the HTLF Board of Directors approved a plan to consolidate its eleven bank charters into a single Colorado based charter that will continue to operate under separate bank brands in each market. The plan remains subject to regulatory approval. The consolidation project is currently underway and is expected to be completed by the end of 2023.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.08% (3.12% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2021, compared to 3.51% (3.55% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2020.

Total interest income and average earning asset changes for the fourth quarter of 2021 compared to the fourth quarter of 2020 were:

• Total interest income was $144.0 million, which was an increase of $3.2 million or 2% from $140.8 million and primarily attributable to an increase in average earning assets partially offset by lower yields.
• Total interest income on a tax-equivalent basis was $146.0 million, which was an increase of $3.7 million or 3% from $142.4 million.
• Average earning assets increased $2.64 billion or 18% to $17.68 billion compared to $15.04 billion, which was primarily attributable to recent acquisitions and loan growth, including PPP loans.
• The average rate on earning assets decreased 49 basis points to 3.28% compared to 3.77%, which was primarily due to recent decreases in market interest rates and a shift in earning asset mix. Total average securities were 44% of total average earning assets compared to 37%.

Total interest expense and average interest bearing liability changes for the fourth quarter of 2021 compared to the fourth quarter of 2020 were:

• Total interest expense was $6.8 million, a decrease of $1.4 million or 17% from $8.3 million, based on a decrease in the average interest rate paid, which was partially offset by an increase in average interest bearing liabilities.
• The average interest rate paid on Heartland's interest bearing liabilities decreased to 0.27% compared to 0.36%, which was primarily due to recent decreases in market interest rates.
• Average interest bearing deposits increased $1.41 billion or 17% to $9.66 billion from $8.25 billion which was primarily attributable to recent acquisitions and deposit growth.
• The average interest rate paid on Heartland's interest bearing deposits decreased 9 basis points to 0.13% compared to 0.22%.
• Average borrowings decreased $253.7 million to $548.9 million from $802.5 million. The average interest rate paid on Heartland's borrowings was 2.66% compared to 1.81%.
  

Net interest income increased for the fourth quarter of 2021 compared to the fourth quarter of 2020:

• Net interest income totaled $137.2 million compared to $132.6 million, which was an increase of $4.6 million or 3%.
• Net interest income on a tax-equivalent basis (non-GAAP) totaled $139.2 million compared to $134.1 million, which was an increase of $5.1 million or 4%.

Noninterest Income and Noninterest Expense

Total noninterest income was $32.7 million during the fourth quarter of 2021 compared to $32.6 million during the fourth quarter of 2020, an increase of $109,000 or less than 1%. Significant changes by noninterest income category for the fourth quarter of 2021 compared to the fourth quarter of 2020 were:

• Service charges and fees increased $2.6 million or 21% to $15.3 million from $12.7 million. The increase was primarily attributable to acquisitions completed in the fourth quarter of 2020.
• Trust fees increased $874,000 or 16% to $6.4 million from $5.5 million. The increase was primarily attributable to market value increases of assets under management.
• Net securities gains totaled $1.6 million compared to $2.8 million, which was a decrease of $1.3 million or 45%.
• Net gains of sales of loans held for sale decreased $3.0 million to $4.2 million compared to $7.1 million, primarily due to a decrease of loans sold to the secondary market.

Total noninterest expense for the fourth quarter of 2021 was $115.4 million compared to $99.3 million for the same quarter of 2020, which was an increase of $16.1 million or 16%. Significant changes within the noninterest expense category for the fourth quarter of 2021 compared to the fourth quarter of 2020 were:

• Salaries and employee benefits totaled $63.0 million compared to $51.6 million, which was an increase of $11.4 million or 22%. The increase was primarily attributable to higher salary and benefit expenses as a result of more full time equivalent employees, including those from the acquisitions completed in the fourth quarter of 2020 and the addition of specialized commercial and agribusiness lending teams in the third quarter of 2021. Total full time equivalent employees were 2,249 compared to 2,013, which was an increase of 236 or 12%.
• Professional fees totaled $17.6 million compared to $15.1 million, which was an increase of $2.5 million or 17%. The increase was primarily attributable to recent technology and automation projects and acquisitions completed in the fourth quarter of 2020.
• Advertising expense totaled $2.2 million compared to $1.1 million, which was an increase of $1.1 million or 100%. The increase was primarily attributable to the resumption of in-person customer events and the acquisitions completed in the fourth quarter of 2020.
• Net losses on sales/valuation of assets totaled $214,000 compared to $2.6 million. HTLF recorded losses of $481,000 associated with branch optimization activities in the fourth quarter of 2021, which were offset by gains of $267,000 related to sales of repossessed assets. The losses recorded in the fourth quarter of 2020 included $2.3 million of write-downs on fixed assets associated with branch optimization activities.
• Other noninterest expenses totaled $14.6 million compared to $11.0 million, which was an increase of $3.6 million or 33%. The increase was primarily attributable to increased travel expenses and customer entertainment activities as in-person meetings and events resumed in 2021 and the acquisitions completed in the fourth quarter of 2020.
  

Heartland's effective tax rate was 17.16% for the fourth quarter of 2021 compared to 18.52% for the fourth quarter of 2020. The following items impacted Heartland's fourth quarter 2021 and 2020 tax calculations:

• Solar energy tax credits of $2.5 million and $461,000.
• Federal low-income housing tax credits of $135,000 and $195,000.
• New markets tax credits of $75,000 compared to $75,000.
• Historic rehabilitation tax credits of $272,000 and $1.1 million.
• Tax-exempt interest income as a percentage of pre-tax income of 9.86% compared to 11.82%.
• Tax benefits of $491,000 and $617,000 related to the release of valuation allowances on deferred tax assets.

For the years ended December 31, 2021 and 2020, Heartland's effective tax rate was 20.10% and 20.72%, respectively.

Total Assets, Total Loans and Total Deposits

Total assets were $19.27 billion at December 31, 2021, an increase of $1.37 billion or 8% from $17.91 billion at year-end 2020. Securities represented 40% and 35% of total assets at December 31, 2021, and December 31, 2020, respectively.

Total loans held to maturity were $9.95 billion at December 31, 2021, $9.85 billion at September 30, 2021 and $10.02 billion at December 31, 2020. Excluding total PPP loans, loans increased $309.0 million or 13% annualized during the fourth quarter of 2021 and $689.4 million or 8% since year-end 2020.

Significant changes by loan category at December 31, 2021 compared to September 30, 2021 included:

• Commercial and business lending, which includes commercial and industrial PPP, and owner occupied commercial real estate loans, increased $2.5 million or less than 1% to $5.09 billion at December 31, 2021, compared to $5.08 billion at September 30, 2021.
  • PPP loans originated in 2020 ("PPP I") loans decreased $47.2 million or 64%. PPP loans originated in 2021 ("PPP II") decreased $162.2 million or 48%.
  • Excluding total PPP loans, commercial and business lending increased $211.8 million or 5% to $4.89 billion from $4.67 billion.
• Agricultural and agricultural real estate loans totaled $753.8 million compared to $684.7 million, an increase of $69.1 million or 10%.

Significant changes by loan category at December 31, 2021 compared to December 31, 2020 included:

• Commercial and business lending, which includes commercial and industrial PPP, and owner occupied commercial real estate loans, decreased $183.7 million or 3% to $5.09 billion at December 31, 2021, compared to $5.27 billion at December 31, 2020.
  • PPP I loans decreased $930.7 million or 97%. PPP II loans totaled $172.8 million.
  • Excluding total PPP loans, commercial and business lending increased $574.2 million or 13% to $4.89 billion from $4.31 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $82.0 million or 3% to $2.87 billion from $2.78 billion.
• Agricultural and agricultural real estate loans totaled $753.8 million, an increase of $39.2 million or 5% from $714.5 million.
  

Total deposits were $16.42 billion as of December 31, 2021, $16.02 billion as of September 30, 2021 and $14.98 billion at December 31, 2020. Significant deposit changes by category at December 31, 2021 compared to September 30, 2021 included:

• Demand deposits decreased $42.4 million or 1% to $6.50 billion compared to $6.54 billion.
• Savings deposits increased $481.7 million or 6% to $8.90 billion from $8.42 billion.
• Time deposits decreased $44.3 million or 4% to $1.02 billion from $1.07 billion.
  

Significant deposit changes by category at December 31, 2021 compared to December 31, 2020 included:

• Demand deposits increased $806.5 million or 14% to $6.50 billion compared to $5.69 billion.
• Savings deposits increased $878.2 million or 11% to $8.90 billion from $8.02 billion.
• Time deposits decreased $247.4 million or 19% to $1.02 billion from $1.27 billion.
  

Year over year growth in non-time deposits was positively impacted by payments related to federal government stimulus programs and other COVID-19 relief programs.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision benefit for credit losses for loans for the fourth quarter of 2021 was $6.8 million, which was a decrease of $22.9 million from $16.1 million of expense recorded in the fourth quarter of 2020. The provision expense recorded in the fourth quarter of 2020 included $9.6 million of provision expense for loans acquired in the quarter. The provision benefit for the fourth quarter of 2021 was impacted by several factors, including:

• Decrease in nonperforming loans of $13.3 million to $69.9 million or 0.70% of total loans compared to $83.2 million or 0.84% of total loans at September 30, 2021, and $88.1 million or 0.88% of total loans at December 31, 2020.
• Improved macroeconomic outlook compared to the fourth quarter of 2020 and consistent economic outlook compared to the third quarter of 2021.

Heartland's allowance for credit losses for loans totaled $110.1 million at December 31, 2021, compared to $117.5 million at September 30, 2021, and $131.6 million at December 31, 2020, respectively. The following items have impacted Heartland's allowance for credit losses for loans for the year ended December 31, 2021:

• Provision benefit for the year ended December 31, 2021, totaled $17.7 million.
• Net charge offs of $3.8 million were recorded for the year or 0.04% of average loans.

Provision and Allowance for Credit Losses for Unfunded Commitments
Heartland's allowance for unfunded commitments totaled $15.5 million and $15.3 million at December 31, 2021 and December 31, 2020, respectively. The following impacted Heartland's allowance for credit losses for unfunded commitments during 2020:

• Provision expense of $1.5 million was recorded for the fourth quarter of 2021, and provision expense for the year ended December 31, 2021 totaled $182,000.
• Unfunded commitments increased $583.3 million or 18% to $3.83 billion at December 31, 2021 compared to $3.25 billion at December 31, 2020.

Total Provision and Allowance for Lending Related Credit Losses
The net provision benefit for lending related credit losses was $5.3 million for the fourth quarter of 2021 compared to provision expense of $17.1 million for the fourth quarter of 2020. The total allowance for lending related credit losses was $125.6 million at December 31, 2021, which was 1.26% of total loans as of December 31, 2021, compared to $146.9 million or 1.47% of total loans as of December 31, 2020. Excluding PPP loans, which are fully guaranteed, the total allowance for lending related credit losses was 1.29% and 1.62% of loans at December 31, 2021 and December 31, 2020, respectively.

Nonperforming Assets

Nonperforming assets decreased $23.1 million or 24% to $71.9 million, which was 0.37% of total assets at December 31, 2021, compared to $95.0 million or 0.53% of total assets at December 31, 2020. Nonperforming loans were $69.9 million or 0.70% of total loans at December 31, 2021, compared to $88.1 million or 0.88% of total loans at December 31, 2020. At December 31, 2021, loans delinquent 30-89 days were 0.07% of total loans compared to 0.23% of total loans at December 31, 2020.

Non-GAAP Financial Measures

This earnings release contains references to financial measures which are not defined by generally accepted accounting principles ("GAAP"). Management believes the non-GAAP measures are helpful for investors to analyze and evaluate the company's financial condition and operating results. However, these non-GAAP measures have inherent limitations and should not be considered a substitute for operating results determined in accordance with GAAP. Additionally, because non-GAAP measures are not standardized, it may not be possible to compare the non-GAAP measures in this earnings release with other companies' non-GAAP measures. Reconciliations of each non-GAAP measure to the most directly comparable GAAP measure may be found in the financial tables in this earnings release.

Below are the non-GAAP measures included in this earnings release, management's reason for including each measure and the method of calculating each measure:

• Annualized net interest margin, fully tax-equivalent, adjusts net interest income for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
• Efficiency ratio, fully tax equivalent, expresses noninterest expenses as a percentage of fully tax-equivalent net interest income and noninterest income. This efficiency ratio is presented on a tax-equivalent basis which adjusts net interest income and noninterest expenses for the tax favored status of certain loans, securities, and tax credit projects. Management believes the presentation of this non-GAAP measure provides supplemental useful information for proper understanding of the financial results as it enhances the comparability of income and expenses arising from taxable and nontaxable sources and excludes specific items as noted in reconciliation contained in this earnings release.
• Net interest income, fully tax equivalent, is net income adjusted for the tax-favored status of certain loans and securities. Management believes this measure enhances the comparability of net interest income arising from taxable and tax-exempt sources.
• Tangible book value per common share is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by common shares outstanding, net of treasury. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.
• Tangible common equity ratio is total common equity less goodwill and core deposit and customer relationship intangibles, net, divided by total assets less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate financial condition and capital strength.
• Annualized return on average tangible common equity is net income excluding intangible amortization calculated as (1) net income excluding tax-effected core deposit and customer relationship intangibles amortization, divided by (2) average common equity less goodwill and core deposit and customer relationship intangibles, net. This measure is included as it is considered to be a critical metric to analyze and evaluate use of equity, financial condition and capital strength.

Conference Call Details

HTLF will host a conference call for shareholders, analysts and other interested parties at 5:00 p.m. EDT today. To join, please register in advance of the conference using the link provided below. Upon registering, participant dial-in numbers, Direct Event passcode and unique registrant ID will be provided. Direct Event online registration can be found at: http://www.directeventreg.com/registration/event/8779156. In the 10 minutes prior to the call start time, participants need to use the conference access information provided in the email received at the point of registering. A replay will be available until January 30, 2023, by logging on to www.htlf.com.

About HTLF

Heartland Financial USA, Inc., operating under the brand name HTLF, is a financial services company with assets of $19.27 billion. HTLF has banks serving communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, residential mortgage, wealth management, investment and insurance. 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, 2020, include, among others:

• COVID-19 Pandemic Risks, including risks related to the ongoing COVID-19 pandemic and measures enacted by the U.S. federal and state governments and adopted by private businesses in response to the COVID-19 pandemic;
• Economic and Market Conditions Risks, including risks related to changes in the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, pandemics, persistent inflation, 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 and climate and other borrower industry risks which may impact the provision for credit losses and net charge-offs;
• Liquidity and Interest Rate Risks, including the impact of capital market conditions, rising interest rates and changes in monetary policy on our borrowings and net interest income;
• Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
• Strategic and External Risks, including competitive forces impacting our business and strategic acquisition risks;
• 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 the company’s business, financial condition and results of operations. In addition, many of these risks and uncertainties are currently amplified by and may continue to be amplified by the COVID-19 pandemic and the impact of varying governmental responses that affect the company’s customers and the economies where they operate. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. The company 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 the company’s financial results, is included in the company’s filings with the SEC.

-FINANCIAL TABLES FOLLOW-

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
		For the Quarter Ended December 31,								For the Year Ended December 31,
			2021				2020				2021				2020
Interest Income
Interest and fees on loans		$	107,721			$	108,865			$	444,137			$	424,941
Interest on securities:
Taxable			30,637				28,154				125,010				98,263
Nontaxable			5,595				3,735				19,268				12,484
Interest on federal funds sold			—				—				1				—
Interest on deposits with other banks and short-term investments			86				77				344				924
Total Interest Income			144,039				140,831				588,760				536,612
Interest Expense
Interest on deposits			3,168				4,609				14,797				30,287
Interest on short-term borrowings			123				175				471				610
Interest on other borrowings			3,554				3,472				12,932				13,986
Total Interest Expense			6,845				8,256				28,200				44,883
Net Interest Income			137,194				132,575				560,560				491,729
Provision (benefit) for credit losses			(5,313	)			17,072				(17,575	)			67,066
Net Interest Income After Provision for Credit Losses			142,507				115,503				578,135				424,663
Noninterest Income
Service charges and fees			15,349				12,725				59,703				47,467
Loan servicing income			781				997				3,276				2,977
Trust fees			6,380				5,506				24,417				20,862
Brokerage and insurance commissions			962				779				3,546				2,756
Securities gains (losses), net			1,563				2,829				5,910				7,793
Unrealized gain (loss) on equity securities, net			(27	)			36				58				640
Net gains on sale of loans held for sale			4,151				7,104				20,605				28,515
Valuation adjustment on servicing rights			502				(102	)			1,088				(1,778	)
Income on bank owned life insurance			1,056				1,021				3,762				3,554
Other noninterest income			2,013				1,726				6,570				7,505
Total Noninterest Income			32,730				32,621				128,935				120,291
Noninterest Expense
Salaries and employee benefits			63,031				51,615				240,114				202,668
Occupancy			7,282				6,849				29,965				26,554
Furniture and equipment			3,364				3,913				13,323				12,514
Professional fees			17,631				15,117				64,600				54,068
Advertising			2,218				1,107				7,257				5,235
Core deposit and customer relationship intangibles amortization			2,169				2,501				9,395				10,670
Other real estate and loan collection expenses, net			363				468				990				1,340
(Gain) loss on sales/valuations of assets, net			214				2,621				588				5,101
Acquisition, integration and restructuring costs			1,989				2,186				5,331				5,381
Partnership investment in tax credit projects			2,549				1,899				6,303				3,801
Other noninterest expenses			14,576				10,993				53,946				43,631
Total Noninterest Expense			115,386				99,269				431,812				370,963
Income Before Income Taxes			59,851				48,855				275,258				173,991
Income taxes			10,271				9,046				55,335				36,053
Net Income			49,580				39,809				219,923				137,938
Preferred dividends			(2,012	)			(2,014	)			(8,050	)			(4,451	)
Net Income Available to Common Stockholders		$	47,568			$	37,795			$	211,873			$	133,487
Earnings per common share-diluted		$	1.12			$	0.98			$	5.00			$	3.57
Weighted average shares outstanding-diluted			42,479,442				38,534,082				42,410,611				37,356,524

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Interest Income
Interest and fees on loans	$	107,721			$	112,062			$	111,915			$	112,439			$	108,865
Interest on securities:
Taxable		30,637				32,384				31,546				30,443				28,154
Nontaxable		5,595				4,609				4,561				4,503				3,735
Interest on federal funds sold		—				—				—				1				—
Interest on deposits with other banks and short-term investments		86				132				60				66				77
Total Interest Income		144,039				149,187				148,082				147,452				140,831
Interest Expense
Interest on deposits		3,168				3,444				3,790				4,395				4,609
Interest on short-term borrowings		123				98				98				152				175
Interest on other borrowings		3,554				3,102				2,976				3,300				3,472
Total Interest Expense		6,845				6,644				6,864				7,847				8,256
Net Interest Income		137,194				142,543				141,218				139,605				132,575
Provision (benefit) for credit losses		(5,313	)			(4,534	)			(7,080	)			(648	)			17,072
Net Interest Income After Provision for Credit Losses		142,507				147,077				148,298				140,253				115,503
Noninterest Income
Service charges and fees		15,349				15,551				15,132				13,671				12,725
Loan servicing income		781				784				873				838				997
Trust fees		6,380				6,221				6,039				5,777				5,506
Brokerage and insurance commissions		962				866				865				853				779
Securities gains (losses), net		1,563				1,535				2,842				(30	)			2,829
Unrealized gain (loss) on equity securities, net		(27	)			112				83				(110	)			36
Net gains on sale of loans held for sale		4,151				5,281				4,753				6,420				7,104
Valuation adjustment on servicing rights		502				195				(526	)			917				(102	)
Income on bank owned life insurance		1,056				940				937				829				1,021
Other noninterest income		2,013				1,239				2,166				1,152				1,726
Total Noninterest Income		32,730				32,724				33,164				30,317				32,621
Noninterest Expense
Salaries and employee benefits		63,031				60,689				57,332				59,062				51,615
Occupancy		7,282				7,366				7,399				7,918				6,849
Furniture and equipment		3,364				3,365				3,501				3,093				3,913
Professional fees		17,631				17,242				16,237				13,490				15,117
Advertising		2,218				1,921				1,649				1,469				1,107
Core deposit and customer relationship intangibles amortization		2,169				2,295				2,415				2,516				2,501
Other real estate and loan collection expenses, net		363				78				414				135				468
(Gain) loss on sales/valuations of assets, net		214				(3	)			183				194				2,621
Acquisition, integration and restructuring costs		1,989				204				210				2,928				2,186
Partnership investment in tax credit projects		2,549				2,374				1,345				35				1,899
Other noninterest expenses		14,576				15,096				12,691				11,583				10,993
Total Noninterest Expense		115,386				110,627				103,376				102,423				99,269
Income Before Income Taxes		59,851				69,174				78,086				68,147				48,855
Income taxes		10,271				13,250				16,481				15,333				9,046
Net Income		49,580				55,924				61,605				52,814				39,809
Preferred dividends		(2,012	)			(2,013	)			(2,012	)			(2,013	)			(2,014	)
Net Income Available to Common Stockholders	$	47,568			$	53,911			$	59,593			$	50,801			$	37,795
Earnings per common share-diluted	$	1.12			$	1.27			$	1.41			$	1.20			$	0.98
Weighted average shares outstanding-diluted		42,479,442				42,415,993				42,359,873				42,335,747				38,534,082

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Assets
Cash and due from banks	$	163,895			$	192,247			$	208,702			$	198,177			$	219,243
Interest bearing deposits with other banks and other short-term investments		271,704				135,158				240,426				269,685				118,660
Cash and cash equivalents		435,599				327,405				449,128				467,862				337,903
Time deposits in other financial institutions		2,894				3,138				3,138				3,138				3,129
Securities:
Carried at fair value		7,530,374				7,449,936				6,543,978				6,370,495				6,127,975
Held to maturity, at cost		84,709				85,354				85,439				85,293				88,839
Other investments, at cost		82,567				83,332				76,809				74,935				75,253
Loans held for sale		21,640				37,078				33,248				43,037				57,949
Loans:
Held to maturity		9,954,572				9,854,907				10,012,014				10,050,456				10,023,051
Allowance for credit losses		(110,088	)			(117,533	)			(120,726	)			(130,172	)			(131,606	)
Loans, net		9,844,484				9,737,374				9,891,288				9,920,284				9,891,445
Premises, furniture and equipment, net		215,827				221,996				226,358				225,047				226,094
Goodwill		576,005				576,005				576,005				576,005				576,005
Core deposit and customer relationship intangibles, net		32,988				35,157				37,452				39,867				42,383
Servicing rights, net		6,890				6,351				6,201				6,953				6,052
Cash surrender value on life insurance		191,722				190,576				189,619				188,521				187,664
Other real estate, net		1,927				4,744				6,314				6,236				6,624
Other assets		246,923				237,779				246,029				236,754				281,024
Total Assets	$	19,274,549			$	18,996,225			$	18,371,006			$	18,244,427			$	17,908,339
Liabilities and Equity
Liabilities
Deposits:
Demand	$	6,495,326			$	6,537,722			$	6,299,289			$	6,175,946			$	5,688,810
Savings		8,897,909				8,416,204				8,189,223				8,179,251				8,019,704
Time		1,024,020				1,068,317				1,126,606				1,203,854				1,271,391
Total deposits		16,417,255				16,022,243				15,615,118				15,559,051				14,979,905
Short-term borrowings		131,597				265,620				152,563				140,597				167,872
Other borrowings		372,072				371,765				271,244				349,514				457,042
Accrued expenses and other liabilities		171,447				164,345				172,295				139,058				224,289
Total Liabilities		17,092,371				16,823,973				16,211,220				16,188,220				15,829,108
Stockholders' Equity
Preferred equity		110,705				110,705				110,705				110,705				110,705
Common stock		42,275				42,250				42,245				42,174				42,094
Capital surplus		1,071,956				1,068,913				1,066,765				1,063,497				1,062,083
Retained earnings		962,994				926,834				883,484				833,171				791,630
Accumulated other comprehensive income/(loss)		(5,752	)			23,550				56,587				6,660				72,719
Total Equity		2,182,178				2,172,252				2,159,786				2,056,207				2,079,231
Total Liabilities and Equity	$	19,274,549			$	18,996,225			$	18,371,006			$	18,244,427			$	17,908,339

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Average Balances
Assets	$	19,151,691			$	18,608,775			$	18,293,756			$	17,964,723			$	16,401,152
Loans, net of unearned		9,886,027				9,920,047				10,072,071				9,952,152				9,366,430
Deposits		16,265,476				15,817,778				15,576,345				15,044,561				13,518,020
Earning assets		17,681,917				17,123,824				16,819,978				16,460,124				15,042,079
Interest bearing liabilities		10,207,255				9,881,350				9,871,302				9,917,159				9,053,855
Common equity		2,061,973				2,072,593				1,980,904				1,963,674				1,769,575
Total stockholders' equity		2,172,678				2,183,298				2,091,609				2,074,379				1,880,280
Tangible common equity (non-GAAP)(1)		1,451,950				1,460,309				1,366,285				1,346,270				1,238,691
Key Performance Ratios
Annualized return on average assets		1.03	%			1.19	%			1.35	%			1.19	%			0.97	%
Annualized return on average common equity (GAAP)		9.15				10.32				12.07				10.49				8.50
Annualized return on average tangible common equity (non-GAAP)(1)		13.47				15.14				18.05				15.90				12.77
Annualized ratio of net charge-offs (recoveries) to average loans		0.03				(0.05	)			0.12				0.06				0.01
Annualized net interest margin (GAAP)		3.08				3.30				3.37				3.44				3.51
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.12				3.34				3.41				3.48				3.55
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)		63.86				60.38				57.11				56.61				54.93

		For the Quarter Ended December 31,								For the Year Ended December 31,
			2021				2020				2021				2020
Average Balances
Assets		$	19,151,691			$	16,401,152			$	18,508,273			$	14,782,605
Loans, net of unearned			9,886,027				9,366,430				9,957,290				9,035,973
Deposits			16,265,476				13,518,020				15,679,773				12,361,077
Earning assets			17,681,917				15,042,079				17,025,088				13,481,613
Interest bearing liabilities			10,207,255				9,053,855				9,969,820				8,344,798
Common equity			2,061,973				1,769,575				2,020,200				1,656,708
Total stockholders' equity			2,172,678				1,880,280				2,130,905				1,713,878
Tangible common equity (non-GAAP)(1)			1,451,950				1,238,691				1,406,641				1,155,556
Key Performance Ratios
Annualized return on average assets			1.03	%			0.97	%			1.19	%			0.93	%
Annualized return on average common equity (GAAP)			9.15				8.50				10.49				8.06
Annualized return on average tangible common equity (non-GAAP)(1)			13.47				12.77				15.59				12.28
Annualized ratio of net charge-offs (recoveries) to average loans			0.03				0.01				0.04				0.32
Annualized net interest margin (GAAP)			3.08				3.51				3.29				3.65
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)			3.12				3.55				3.33				3.69
Efficiency ratio, fully tax-equivalent(1)			63.86				54.93				59.48				56.65
(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
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Common Share Data
Book value per common share	$	49.00			$	48.79			$	48.50			$	46.13			$	46.77
Tangible book value per common share (non-GAAP)(1)	$	34.59			$	34.33			$	33.98			$	31.53			$	32.07
Common shares outstanding, net of treasury stock		42,275,264				42,250,092				42,245,452				42,173,675				42,093,862
Tangible common equity ratio (non-GAAP)(1)		7.84	%			7.89	%			8.08	%			7.54	%			7.81	%
Other Selected Trend Information
Effective tax rate		17.16	%			19.15	%			21.11	%			22.50	%			18.52	%
Full time equivalent employees		2,249				2,163				2,091				2,131				2,013
Loans Held to Maturity
Commercial and industrial	$	2,645,085			$	2,538,369			$	2,518,908			$	2,421,260			$	2,534,799
Paycheck Protection Program ("PPP")		199,883				409,247				829,175				1,155,328				957,785
Owner occupied commercial real estate		2,240,334				2,135,227				1,940,134				1,837,559				1,776,406
Commercial and business lending		5,085,302				5,082,843				5,288,217				5,414,147				5,268,990
Non-owner occupied commercial real estate		2,010,591				2,020,487				1,987,369				1,967,183				1,921,481
Real estate construction		856,119				814,001				854,295				796,027				863,220
Commercial real estate lending		2,866,710				2,834,488				2,841,664				2,763,210				2,784,701
Total commercial lending		7,952,012				7,917,331				8,129,881				8,177,357				8,053,691
Agricultural and agricultural real estate		753,753				684,670				679,608				683,969				714,526
Residential mortgage		829,283				840,356				800,884				786,994				840,442
Consumer		419,524				412,550				401,641				402,136				414,392
Total loans held to maturity	$	9,954,572			$	9,854,907			$	10,012,014			$	10,050,456			$	10,023,051
Total unfunded loan commitments	$	3,830,219			$	3,583,417			$	3,433,062			$	3,306,042			$	3,246,953
(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and for the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Allowance for Credit Losses-Loans
Balance, beginning of period	$	117,533			$	120,726			$	130,172			$	131,606			$	103,377
Allowance for acquired purchased credit deteriorated loans		—				—				—				—				12,313
Provision (benefit) for credit losses		(6,808	)			(4,448	)			(6,466	)			16				16,132
Charge-offs		(1,953	)			(1,167	)			(3,497	)			(2,126	)			(1,104	)
Recoveries		1,316				2,422				517				676				888
Balance, end of period	$	110,088			$	117,533			$	120,726			$	130,172			$	131,606
Allowance for Unfunded Commitments
Balance, beginning of period	$	13,967			$	14,002			$	14,619			$	15,280			$	14,330
Provision (benefit) for credit losses		1,495				(35	)			(617	)			(661	)			950
Balance, end of period	$	15,462			$	13,967			$	14,002			$	14,619			$	15,280
Allowance for lending related credit losses	$	125,550			$	131,500			$	134,728			$	144,791			$	146,886
Provision for Credit Losses
Provision (benefit) for credit losses-loans	$	(6,808	)		$	(4,448	)		$	(6,466	)		$	16			$	6,572
Provision for credit losses-acquired loans		—				—				—				—				9,560
Provision (benefit) for credit losses-unfunded commitments		1,495				(35	)			(617	)			(661	)			(1,372	)
Provision for credit losses-acquired unfunded commitments		—				—				—				—				2,322
Provision for credit losses-held to maturity securities		—				(51	)			3				(3	)			(10	)
Total provision (benefit) for credit losses	$	(5,313	)		$	(4,534	)		$	(7,080	)		$	(648	)		$	17,072
Asset Quality
Nonaccrual loans	$	69,369			$	82,375			$	85,268			$	91,718			$	87,386
Loans past due ninety days or more		550				861				97				171				720
Other real estate owned		1,927				4,744				6,314				6,236				6,624
Other repossessed assets		43				166				50				239				240
Total nonperforming assets	$	71,889			$	88,146			$	91,729			$	98,364			$	94,970
Performing troubled debt restructured loans	$	817			$	1,817			$	2,122			$	2,394			$	2,370
Nonperforming Assets Activity
Balance, beginning of period	$	88,146			$	91,729			$	98,364			$	94,970			$	85,901
Net loan (charge offs) recoveries		(637	)			1,255				(2,980	)			(1,450	)			(216	)
New nonperforming loans		5,886				6,908				7,989				14,936				8,664
Acquired nonperforming assets		—				—				—				—				12,781
Reduction of nonperforming loans(1)		(18,429	)			(8,581	)			(10,948	)			(8,884	)			(10,811	)
OREO/Repossessed assets sales proceeds		(3,077	)			(3,165	)			(696	)			(1,208	)			(1,349	)
Balance, end of period	$	71,889			$	88,146			$	91,729			$	98,364			$	94,970
Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.70	%			0.84	%			0.85	%			0.91	%			0.88	%
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans		0.71				0.86				0.87				0.94				0.90
Ratio of nonperforming assets to total assets		0.37				0.46				0.50				0.54				0.53
Annualized ratio of net loan charge-offs to average loans		0.03				(0.05	)			0.12				0.06				0.01
Allowance for loan credit losses as a percent of loans		1.11				1.19				1.21				1.30				1.31
Allowance for lending related credit losses as a percent of loans		1.26				1.33				1.35				1.44				1.47
Allowance for loan credit losses as a percent of nonperforming loans		157.45				141.20				141.42				141.66				149.37
Loans delinquent 30-89 days as a percent of total loans		0.07				0.12				0.17				0.16				0.23
(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, 2021										September 30, 2021										December 31, 2020
	Average Balance				Interest			Rate			Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,730,511			$	30,637		1.81	%		$	6,244,097			$	32,384		2.06	%		$	4,957,680			$	28,154		2.26	%
Nontaxable(1)		964,712				7,082		2.91				759,073				5,835		3.05				543,845				4,728		3.46
Total securities		7,695,223				37,719		1.94				7,003,170				38,219		2.17				5,501,525				32,882		2.38
Interest on deposits with other banks and other short-term investments		218,809				86		0.16				322,430				132		0.16				292,436				77		0.10
Federal funds sold		—				—		—				—				—		—				427				—		—
Loans:(2)
Commercial and industrial(1)		2,614,685				26,465		4.02				2,588,270				28,224		4.33				2,357,056				27,523		4.65
PPP loans		302,829				8,106		10.62				602,675				11,186		7.36				1,064,863				11,806		4.41
Owner occupied commercial real estate		2,166,768				22,007		4.03				1,990,538				20,048		4.00				1,597,446				18,605		4.63
Non-owner occupied commercial real estate		1,996,186				21,744		4.32				1,964,609				22,129		4.47				1,756,443				20,733		4.70
Real estate construction		837,716				9,390		4.45				835,976				9,591		4.55				859,941				9,723		4.50
Agricultural and agricultural real estate		697,521				7,089		4.03				674,510				7,415		4.36				554,596				6,535		4.69
Residential mortgage		853,208				8,615		4.01				855,734				9,068		4.20				785,852				9,288		4.70
Consumer		417,114				4,793		4.56				407,735				4,889		4.76				390,233				5,188		5.29
Less: allowance for credit losses-loans		(118,142	)			—		—				(121,823	)			—		—				(118,739	)			—		—
Net loans		9,767,885				108,209		4.40				9,798,224				112,550		4.56				9,247,691				109,401		4.71
Total earning assets		17,681,917				146,014		3.28	%			17,123,824				150,901		3.50	%			15,042,079				142,360		3.77	%
Nonearning Assets		1,469,774										1,484,951										1,359,073
Total Assets	$	19,151,691									$	18,608,775									$	16,401,152
Interest Bearing Liabilities
Savings	$	8,609,596			$	2,160		0.10	%		$	8,364,326			$	2,240		0.11	%		$	7,176,563			$	2,166		0.12	%
Time deposits		1,048,785				1,008		0.38				1,097,126				1,204		0.44				1,074,746				2,443		0.90
Short-term borrowings		176,956				123		0.28				139,001				98		0.28				268,464				175		0.26
Other borrowings		371,918				3,554		3.79				280,897				3,102		4.38				534,082				3,472		2.59
Total interest bearing liabilities		10,207,255				6,845		0.27	%			9,881,350				6,644		0.27	%			9,053,855				8,256		0.36	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		6,607,095										6,356,326										5,266,711
Accrued interest and other liabilities		164,663										187,801										200,306
Total noninterest bearing liabilities		6,771,758										6,544,127										5,467,017
Equity		2,172,678										2,183,298										1,880,280
Total Liabilities and Equity	$	19,151,691									$	18,608,775									$	16,401,152
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	139,169									$	144,257									$	134,104
Net interest spread(1)								3.01	%									3.23	%									3.41	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(1)(3)								3.12	%									3.34	%									3.55	%
Interest bearing liabilities to earning assets		57.73	%									57.71	%									60.19	%
(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 Year Ended
	December 31, 2021										December 31, 2020
	Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,135,732			$	125,010		2.04	%		$	3,901,202			$	98,263		2.52	%
Nontaxable(1)		799,283				24,390		3.05				424,199				15,802		3.73
Total securities		6,935,015				149,400		2.15				4,325,401				114,065		2.64
Interest bearing deposits with other banks and other short-term investments		254,630				344		0.14				225,024				924		0.41
Federal funds sold		3,457				1		0.03				107				—		—
Loans:(2)
Commercial and industrial(1)		2,543,514				111,473		4.38				2,437,183				118,513		4.86
PPP loans		734,139				40,627		5.53				779,183				25,285		3.25
Owner occupied commercial real estate		1,950,014				81,717		4.19				1,480,109				72,215		4.88
Non-owner occupied commercial real estate		1,969,910				87,728		4.45				1,589,932				78,178		4.92
Real estate construction		824,055				37,891		4.60				1,007,086				46,785		4.65
Agricultural and agricultural real estate		681,493				29,822		4.38				538,646				25,713		4.77
Residential mortgage		846,573				36,768		4.34				793,821				38,210		4.81
Consumer		407,592				20,201		4.96				410,013				22,190		5.41
Less: allowance for credit losses-loans		(125,304	)			—		—				(104,892	)			—		—
Net loans		9,831,986				446,227		4.54				8,931,081				427,089		4.78
Total earning assets		17,025,088				595,972		3.50	%			13,481,613				542,078		4.02	%
Nonearning Assets		1,483,185										1,300,992
Total Assets	$	18,508,273									$	14,782,605
Interest Bearing Liabilities
Savings	$	8,311,825			$	9,063		0.11	%		$	6,718,413			$	16,560		0.25	%
Time deposits		1,137,097				5,734		0.50				1,088,185				13,727		1.26
Short-term borrowings		181,165				471		0.26				155,467				610		0.39
Other borrowings		339,733				12,932		3.81				382,733				13,986		3.65
Total interest bearing liabilities		9,969,820				28,200		0.28	%			8,344,798				44,883		0.54	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		6,230,851										4,554,479
Accrued interest and other liabilities		176,697										169,450
Total noninterest bearing liabilities		6,407,548										4,723,929
Equity		2,130,905										1,713,878
Total Liabilities and Equity	$	18,508,273									$	14,782,605
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	567,772									$	497,195
Net interest spread(1)								3.22	%									3.48	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(1)(3)								3.33	%									3.69	%
Interest bearing liabilities to earning assets		58.56	%									61.90	%
(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.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
	As of and For the Quarter Ended
	12/31/2021		9/30/2021		6/30/2021		3/31/2021		12/31/2020
Total Assets
Arizona Bank & Trust	$	1,969,184	$	1,808,943	$	1,645,816	$	1,614,740	$	1,529,800
Bank of Blue Valley		1,441,980		1,460,751		1,419,003		1,425,434		1,376,080
Citywide Banks		2,696,695		2,685,554		2,611,842		2,632,199		2,628,963
Dubuque Bank and Trust Company		2,235,630		1,968,612		1,990,040		1,932,234		1,853,078
First Bank & Trust		2,878,173		2,855,671		2,882,969		2,991,053		3,171,961
Illinois Bank & Trust		1,686,038		1,680,558		1,671,240		1,584,561		1,525,503
Minnesota Bank & Trust		865,825		872,291		955,638		995,692		1,000,168
New Mexico Bank & Trust		2,623,597		2,586,951		2,494,257		2,356,918		2,032,637
Premier Valley Bank		1,224,396		1,198,540		1,126,807		1,062,607		1,076,615
Rocky Mountain Bank		713,930		718,956		646,821		620,800		616,157
Wisconsin Bank & Trust		1,224,689		1,209,954		1,252,096		1,264,009		1,267,488
Total Deposits
Arizona Bank & Trust	$	1,768,793	$	1,617,732	$	1,450,248	$	1,453,888	$	1,357,158
Bank of Blue Valley		1,179,294		1,192,868		1,168,617		1,178,114		1,138,264
Citywide Banks		2,291,912		2,282,703		2,174,237		2,231,320		2,181,511
Dubuque Bank and Trust Company		1,750,071		1,705,753		1,471,564		1,565,782		1,456,908
First Bank & Trust		2,397,350		2,367,353		2,361,391		2,427,920		2,622,716
Illinois Bank & Trust		1,496,262		1,509,847		1,512,106		1,426,426		1,338,677
Minnesota Bank & Trust		719,489		734,292		762,549		813,693		789,555
New Mexico Bank & Trust		2,308,939		2,206,099		2,195,838		2,077,304		1,749,963
Premier Valley Bank		1,051,286		988,579		963,459		896,715		836,984
Rocky Mountain Bank		640,757		602,155		568,961		549,894		538,012
Wisconsin Bank & Trust		1,070,161		1,048,367		1,093,119		1,067,735		1,057,369

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	47,568			$	53,911			$	59,593			$	50,801			$	37,795
Plus core deposit and customer relationship intangibles amortization, net of tax(1)		1,713				1,814				1,907				1,988				1,975
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	49,281			$	55,725			$	61,500			$	52,789			$	39,770
Average common equity (GAAP)	$	2,061,973			$	2,072,593			$	1,980,904			$	1,963,674			$	1,769,575
Less average goodwill		576,005				576,005				576,005				576,005				488,151
Less average core deposit and customer relationship intangibles, net		34,018				36,279				38,614				41,399				42,733
Average tangible common equity (non-GAAP)	$	1,451,950			$	1,460,309			$	1,366,285			$	1,346,270			$	1,238,691
Annualized return on average common equity (GAAP)		9.15	%			10.32	%			12.07	%			10.49	%			8.50	%
Annualized return on average tangible common equity (non-GAAP)		13.47	%			15.14	%			18.05	%			15.90	%			12.77	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	137,194			$	142,543			$	141,218			$	139,605			$	132,575
Plus tax-equivalent adjustment(1)		1,975				1,714				1,762				1,761				1,529
Net interest income, fully tax-equivalent (non-GAAP)	$	139,169			$	144,257			$	142,980			$	141,366			$	134,104
Average earning assets	$	17,681,917			$	17,123,824			$	16,819,978			$	16,460,124			$	15,042,079
Annualized net interest margin (GAAP)		3.08	%			3.30	%			3.37	%			3.44	%			3.51	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.12				3.34				3.41				3.48				3.55
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.05				0.08				0.09				0.12				0.10
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)	$	2,071,473			$	2,061,547			$	2,049,081			$	1,945,502			$	1,968,526
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net		32,988				35,157				37,452				39,867				42,383
Tangible common equity (non-GAAP)	$	1,462,480			$	1,450,385			$	1,435,624			$	1,329,630			$	1,350,138
Common shares outstanding, net of treasury stock		42,275,264				42,250,092				42,245,452				42,173,675				42,093,862
Common equity (book value) per share (GAAP)	$	49.00			$	48.79			$	48.50			$	46.13			$	46.77
Tangible book value per common share (non-GAAP)	$	34.59			$	34.33			$	33.98			$	31.53			$	32.07
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)	$	1,462,480			$	1,450,385			$	1,435,624			$	1,329,630			$	1,350,138
Total assets (GAAP)	$	19,274,549			$	18,996,225			$	18,371,006			$	18,244,427			$	17,908,339
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net		32,988				35,157				37,452				39,867				42,383
Total tangible assets (non-GAAP)	$	18,665,556			$	18,385,063			$	17,757,549			$	17,628,555			$	17,289,951
Tangible common equity ratio (non-GAAP)		7.84	%			7.89	%			8.08	%			7.54	%			7.81	%
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Reconciliation of Efficiency Ratio (non-GAAP)	For the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
Net interest income (GAAP)	$	137,194			$	142,543			$	141,218			$	139,605			$	132,575
Tax-equivalent adjustment(1)		1,975				1,714				1,762				1,761				1,529
Fully tax-equivalent net interest income		139,169				144,257				142,980				141,366				134,104
Noninterest income		32,730				32,724				33,164				30,317				32,621
Securities gains, net		(1,563	)			(1,535	)			(2,842	)			30				(2,829	)
Unrealized (gain) loss on equity securities, net		27				(112	)			(83	)			110				(36	)
Valuation adjustment on servicing rights		(502	)			(195	)			526				(917	)			102
Adjusted revenue (non-GAAP)	$	169,861			$	175,139			$	173,745			$	170,906			$	163,962
Total noninterest expenses (GAAP)	$	115,386			$	110,627			$	103,376			$	102,423			$	99,269
Less:
Core deposit and customer relationship intangibles amortization		2,169				2,295				2,415				2,516				2,501
Partnership investment in tax credit projects		2,549				2,374				1,345				35				1,899
(Gain) loss on sales/valuation of assets, net		214				(3	)			183				194				2,621
Acquisition, integration and restructuring costs		1,989				204				210				2,928				2,186
Adjusted noninterest expenses (non-GAAP)	$	108,465			$	105,757			$	99,223			$	96,750			$	90,062
Efficiency ratio, fully tax-equivalent (non-GAAP)		63.86	%			60.38	%			57.11	%			56.61	%			54.93	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	—			$	—			$	44			$	534			$	232
Occupancy		—				—				1				9				—
Furniture and equipment		—				7				41				607				423
Professional fees		1,989				145				63				670				1,422
Advertising		—				11				6				156				42
(Gain) loss on sales/valuations of assets, net		—				39				—				—				—
Other noninterest expenses		—				2				55				952				67
Total acquisition, integration and restructuring costs	$	1,989			$	204			$	210			$	2,928			$	2,186
After tax impact on diluted earnings per share(1)	$	0.05			$	—			$	—			$	0.05			$	0.04
(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 December 31,								For the Year Ended December 31,
			2021				2020				2021				2020
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)		$	47,568			$	37,795			$	211,873			$	133,487
Plus core deposit and customer relationship intangibles amortization, net of tax(1)			1,713				1,975				7,422				8,429
Net income available to common stockholders excluding intangible amortization (non-GAAP)		$	49,281			$	39,770			$	219,295			$	141,916
Average common equity (GAAP)		$	2,061,973			$	1,769,575			$	2,020,200			$	1,656,708
Less average goodwill			576,005				488,151				576,005				456,854
Less average core deposit and customer relationship intangibles, net			34,018				42,733				37,554				44,298
Average tangible common equity (non-GAAP)		$	1,451,950			$	1,238,691			$	1,406,641			$	1,155,556
Annualized return on average common equity (GAAP)			9.15	%			8.50	%			10.49	%			8.06	%
Annualized return on average tangible common equity (non-GAAP)			13.47	%			12.77	%			15.59	%			12.28	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)		$	137,194			$	132,575			$	560,560			$	491,729
Plus tax-equivalent adjustment(1)			1,975				1,529				7,212				5,466
Net interest income, fully tax-equivalent (non-GAAP)		$	139,169			$	134,104			$	567,772			$	497,195
Average earning assets		$	17,681,917			$	15,042,079			$	17,025,088			$	13,481,613
Annualized net interest margin (GAAP)			3.08	%			3.51	%			3.29	%			3.65	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)			3.12				3.55				3.33				3.69
Net purchase accounting discount amortization on loans included in annualized net interest margin			0.05				0.10				0.09				0.12
(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 December 31,								For the Year Ended December 31,
Reconciliation of Efficiency Ratio (non-GAAP)			2021				2020				2021				2020
Net interest income (GAAP)		$	137,194			$	132,575			$	560,560			$	491,729
Tax-equivalent adjustment(1)			1,975				1,529				7,212				5,466
Fully tax-equivalent net interest income			139,169				134,104				567,772				497,195
Noninterest income			32,730				32,621				128,935				120,291
Securities gains, net			(1,563	)			(2,829	)			(5,910	)			(7,793	)
Unrealized (gain) loss on equity securities, net			27				(36	)			(58	)			(640	)
Valuation adjustment on servicing rights			(502	)			102				(1,088	)			1,778
Adjusted income (non-GAAP)		$	169,861			$	163,962			$	689,651			$	610,831
Total noninterest expenses (GAAP)		$	115,386			$	99,269			$	431,812			$	370,963
Less:
Core deposit and customer relationship intangibles amortization			2,169				2,501				9,395				10,670
Partnership investment in tax credit projects			2,549				1,899				6,303				3,801
(Gain) loss on sales/valuations of assets, net			214				2,621				588				5,101
Acquisition, integration and restructuring costs			1,989				2,186				5,331				5,381
Adjusted noninterest expenses (non-GAAP)		$	108,465			$	90,062			$	410,195			$	346,010
Efficiency ratio, fully tax-equivalent (non-GAAP)			63.86	%			54.93	%			59.48	%			56.65	%
Acquisition, integration and restructuring costs
Salaries and employee benefits		$	—			$	232			$	578			$	398
Occupancy			—				—				10				—
Furniture and equipment			—				423				655				958
Professional fees			1,989				1,422				2,867				3,399
Advertising			—				42				173				143
(Gain)/loss on sales/valuations of assets, net			—				—				39				—
Other noninterest expenses			—				67				1,009				483
Total acquisition, integration and restructuring costs		$	1,989			$	2,186			$	5,331			$	5,381
After tax impact on diluted earnings per share(1)		$	0.05			$	0.04			$	0.13			$	0.11
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and For the Quarter Ended
	12/31/2021				9/30/2021				6/30/2021				3/31/2021				12/31/2020
PPP I loan balances	$	27,092			$	74,255			$	374,174			$	739,562			$	957,785
Average PPP I loans balances		53,321				174,930				597,703				841,262				1,064,863
PPP I fee income	$	497			$	3,886			$	7,313			$	7,464			$	9,109
PPP I interest income		129				403				1,445				2,087				2,697
Total PPP I interest income	$	626			$	4,289			$	8,758			$	9,551			$	11,806
PPP II loan balances	$	172,791			$	334,992			$	455,001			$	415,766			$	—
Average PPP II loan balances		249,508				427,745				449,856				151,255				—
PPP II fee income	$	6,838			$	5,784			$	1,263			$	223			$	—
PPP II interest income		642				1,113				1,165				375				—
Total PPP II interest income	$	7,480			$	6,897			$	2,428			$	598			$	—
Selected ratios excluding total PPP loans and total PPP interest income
Annualized net interest margin (GAAP)		2.95	%			3.15	%			3.31	%			3.39	%			3.44	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		2.99				3.20				3.35				3.44				3.48
Ratio of nonperforming loans to total loans		0.72				0.88				0.93				1.03				0.97
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans		0.73				0.90				0.95				1.06				1.00
Ratio of nonperforming assets to total assets		0.38				0.47				0.52				0.58				0.56
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.03				(0.05	)			0.13				0.07				0.01
Allowance for loan credit losses as a percent of loans		1.13				1.24				1.31				1.46				1.45
Allowance for lending related credit losses as a percent of loans		1.29				1.39				1.47				1.63				1.62
Loans delinquent 30-89 days as a percent of total loans		0.08				0.12				0.18				0.18				0.25
After tax impact of PPP interest income on diluted earnings per share(1)	$	0.15			$	0.21			$	0.21			$	0.19			$	0.24

	As of and For the Year Ended
	December 31, 2021				December 31, 2020
Average PPP I loan balances	$	413,983			$	779,183
Average PPP II loan balances		320,156				—
PPP I and II fee income	$	33,268			$	17,306
PPP I and II interest income		7,359				7,979
Total PPP interest income	$	40,627			$	25,285
Selected ratios excluding total PPP loans and total PPP interest income
Annualized net interest margin (GAAP)		3.19	%			3.67	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.24				3.72
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.04				0.35
After tax impact of PPP interest income on diluted earnings per share(1)	$	0.76			$	0.53
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

CONTACT:
Bryan R. McKeag
Executive Vice President
Chief Financial Officer
(563) 589-1994
bmckeag@htlf.com