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 LossesThe 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           HEARTLAND FINANCIAL USA, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA   For the Quarter EndedJune 30,   For the Six Months EndedJune 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