Heartland Financial USA, Inc. ("HTLF") Reports Annual Earnings and Fourth Quarter Results as of December 31, 2022

Highlights

• Quarterly net income available to common stockholders of $58.6 million or $1.37 per diluted common share
• Annual net income available to common stockholders of $204.1 million or $4.79 per diluted common share
• Quarterly loan growth of $504.8 million or 5%
• Annual loan growth of $1.47 billion or 15%. Excluding decreases in Paycheck Protection Program ("PPP") loans, annual loan growth was $1.66 billion or 17%.
• Total revenue growth during the quarter of $10.1 million or 5% and $37.0 million or 5% during the year
• Nonperforming assets to total assets declined to 0.33% and 30-89 day loan delinquencies fell to 0.04% of total loans
• Net loan recoveries for the quarter of $1.7 million
• Completed the consolidation of two bank charters during the fourth quarter for a total five charter consolidations completed in 2022

	Quarter Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Net income available to common stockholders (in millions)	$	58.6			$	47.6			$	204.1			$	211.9
Diluted earnings per common share		1.37				1.12				4.79				5.00
Return on average assets		1.21	%			1.03	%			1.08	%			1.19	%
Return on average common equity		15.02				9.15				11.74				10.49
Return on average tangible common equity (non-GAAP)(1)		25.19				13.47				18.56				15.59
Net interest margin		3.61				3.08				3.32				3.29
Net interest margin, fully tax-equivalent (non-GAAP)(1)		3.65				3.12				3.37				3.33
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)		54.33				63.86				57.74				59.48
(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 strong fourth quarter and full year results while executing our strategic plans for driving organic growth, improving customer experience and consolidating charters. We continue to demonstrate strong momentum, passing $20 billion in total assets and delivering a record $726.5 million in total revenue for 2022."

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

DENVER, Jan. 30, 2023 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021:

• Net income available to common stockholders of $58.6 million compared to $47.6 million, an increase of $11.1 million or 23%.
• Earnings per diluted common share of $1.37 compared to $1.12, an increase of $0.25 or 22%.
• Net interest income of $165.2 million compared to $137.2 million, an increase of $28.0 million or 20%.
• Return on average assets of 1.21% compared to 1.03%.
• Return on average common equity of 15.02% compared to 9.15%.
• Return on average tangible common equity (non-GAAP) of 25.19% compared to 13.47%.

HTLF reported the following results for the year ended December 31, 2022 compared to the year ended December 31, 2021:

• Net income available to common stockholders of $204.1 million compared to $211.9 million, a decrease of $7.7 million or 4%.
• Earnings per diluted common share of $4.79 compared to $5.00, a decrease of $0.21 or 4%.
• Net interest income of $598.2 million compared to $560.6 million, an increase of $37.7 million or 7%.
• Return on average assets of 1.08% compared to 1.19%.
• Return on average common equity of 11.74% compared to 10.49%.
• Return on average tangible common equity (non-GAAP) of 18.56% compared to 15.59%.

Commenting on HTLF's 2022 results, Bruce K. Lee, HTLF’s president and chief executive officer, said, "HTLF delivered strong fourth quarter and full year results while executing our strategic plans for driving organic growth, improving customer experience and consolidating charters. We continue to demonstrate strong momentum, passing $20 billion in total assets and delivering a record $726.5 million in total revenue for 2022."

Charter Consolidation Update

During the fourth quarter of 2022, the charters of Arizona Bank & Trust and Illinois Bank & Trust were consolidated into HTLF Bank. Citywide Banks, Premier Valley Bank, Minnesota Bank & Trust, Arizona Bank & Trust and Illinois Bank & Trust are now operating as divisions of HTLF Bank. The remaining six charters are expected to be consolidated by the end of 2023. Charter consolidation follows a template that retains the current brands, local leadership and local decision making.

Consolidation restructuring costs are projected to be $19-$20 million with approximately $10 million of expenses remaining to be incurred through 2023. Charter consolidation is designed to eliminate redundancies and improve HTLF’s operating efficiency and capacity to support ongoing product and service enhancements, as well as current and future growth. HTLF realized some operating efficiency and financial benefits in the third and fourth quarters of 2022 with the completion of five charter consolidations, and total benefits are estimated to be approximately $20.0 million annually after the project is completed.

Effective December 31, 2022, the address of HTLF's headquarters was changed to Denver, Colorado, which is where HTLF Bank is headquartered.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.61% (3.65% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2022, compared to 3.08% (3.12% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2021.

Total interest income and average earning asset changes for the fourth quarter of 2022 compared to the fourth quarter of 2021 were:

• Total interest income was $204.7 million, which was an increase of $60.7 million or 42% from $144.0 million and primarily attributable to higher yields and an increase in average earning assets.
• Total interest income on a tax-equivalent basis was $206.9 million, which was an increase of $60.8 million or 42% from $146.0 million.
• Average earning assets increased $493.9 million or 3% to $18.18 billion compared to $17.68 billion, which was primarily attributable to loan growth.
• The average rate on earning assets increased 124 basis points to 4.52% compared to 3.28%, which was primarily due to recent increases in market interest rates and a shift in earning asset mix. Total average securities were 39% of total average earning assets compared to 44%.

Total interest expense and average interest bearing liability changes for the fourth quarter of 2022 compared to the fourth quarter of 2021 were:

• Total interest expense was $39.5 million, an increase of $32.6 million from $6.8 million, which was attributable to an increase in the average interest rate paid and an increase in average interest bearing liabilities.
• The average interest rate paid on HTLF's interest bearing liabilities increased to 1.31% compared to 0.27%, which was primarily due to recent increases in market interest rates.
• Average interest bearing deposits increased $1.65 billion or 17% to $11.31 billion from $9.66 billion which was primarily attributable to deposit growth. Total average interest bearing deposits were 65% of total average deposits compared to 59%.
• The average interest rate paid on HTLF's interest bearing deposits increased 100 basis points to 1.13% compared to 0.13%.
• Average borrowings increased $121.4 million to $670.2 million from $548.9 million. The average interest rate paid on HTLF's borrowings was 4.30% compared to 2.66%.
  

Net interest income increased for the fourth quarter of 2022 compared to the fourth quarter of 2021:

• Net interest income totaled $165.2 million compared to $137.2 million, which was an increase of $28.0 million or 20%.
• Net interest income on a tax-equivalent basis (non-GAAP) totaled $167.4 million compared to $139.2 million, which was an increase of $28.2 million or 20%.

Noninterest Income and Noninterest Expense

Total noninterest income was $30.0 million during the fourth quarter of 2022 compared to $32.7 million during the fourth quarter of 2021, a decrease of $2.8 million or 8%. Significant changes by noninterest income category for the fourth quarter of 2022 compared to the fourth quarter of 2021 were:

• Service charges and fees increased $2.1 million or 14% to $17.4 million from $15.3 million, which was primarily attributable to an increase in credit card revenue. Credit card revenue increased $1.3 million or 24% to $6.5 million compared to $5.2 million.
• Net securities losses totaled $153,000 compared to net securities gains of $1.6 million, which was a decrease of $1.7 million.
• Net gains of sales of loans held for sale decreased $3.3 million to $888,000 compared to $4.2 million, primarily due to a decrease of loans sold to the secondary market.
  

Total noninterest expense for the fourth quarter of 2022 was $117.2 million compared to $115.4 million for the same quarter of 2021, which was an increase of $1.8 million or 2%. Significant changes within the noninterest expense category for the fourth quarter of 2022 compared to the fourth quarter of 2021 were:

• Salaries and employee benefits totaled $61.6 million compared to $63.0 million, which was a decrease of $1.4 million or 2% and included lower salary expense due to a reduction of full-time equivalent employees which was partially offset by higher incentive compensation expense.
• Net losses on sales/valuation of assets totaled $2.4 million compared to $214,000, which was an increase of $2.2 million. HTLF recorded losses primarily associated with franchise optimization activities in the fourth quarter of 2022.
• Acquisition, integration and restructuring costs totaled $2.4 million compared to $2.0 million, an increase of $453,000 or 23% due to the progression of the charter consolidation project.
• Partnership investment in tax credit projects increased $698,000 or 27% to $3.2 million compared to $2.5 million. The expense is dependent upon the number and timing of tax credit projects placed into service.
• Occupancy expense decreased $377,000 or 5% to $6.9 million compared to $7.3 million, and furniture and equipment decreased $345,000 or 10% to $3.0 million from $3.4 million. These decreases are primarily attributable to the reduction in branch locations. Branch locations totaled 119 at December 31, 2022 compared to 130 at December 31, 2021.
• Other noninterest expenses totaled $15.4 million compared to $14.6 million, which was an increase of $801,000 or 5%. Credit card processing expense, which is driven by volume, totaled $4.1 million compared to $3.3 million, an increase of $794,000 or 24%.

HTLF's effective tax rate was 18.68% for the fourth quarter of 2022 compared to 17.16% for the fourth quarter of 2021. The following items impacted HTLF's fourth quarter 2022 and 2021 tax calculations:

• Solar energy tax credits of $2.5 million in each quarterly calculation.
• Federal low-income housing tax credits of $263,000 and $135,000.
• New markets tax credits of $75,000 in each quarterly calculation.
• Historic rehabilitation tax credits of $842,000 and $272,000.
• Tax-exempt interest income as a percentage of pre-tax income of 11.80% compared to 9.86%.
• Tax benefits of $165,000 and $491,000 related to the release of valuation allowances on deferred tax assets.

For the years ended December 31, 2022 and 2021, HTLF's effective tax rate was 20.76% and 20.10%, respectively.

Total Assets, Total Loans and Total Deposits

Total assets were $20.24 billion at December 31, 2022, an increase of $969.7 million or 5% from $19.27 billion at year-end 2021. Securities represented 35% and 40% of total assets at December 31, 2022, and December 31, 2021, respectively.

Total loans held to maturity were $11.43 billion at December 31, 2022, compared to $10.92 billion at September 30, 2022 and $9.95 billion at December 31, 2021. Excluding total PPP loans, loans increased $507.3 million or 5% during the fourth quarter of 2022 and $1.66 billion or 17% since year-end 2021.

Significant changes by loan category at December 31, 2022 compared to September 30, 2022 included:

• Commercial and business lending, which includes commercial and industrial PPP, and owner occupied commercial real estate loans, increased $162.6 million or 3% to $5.74 billion at December 31, 2022, compared to $5.58 billion at September 30, 2022.
  • PPP loans originated in 2020 ("PPP I") loans decreased $423,000 or 23%. PPP loans originated in 2021 ("PPP II") decreased $2.1 million or 18%.
  • Excluding total PPP loans, commercial and business lending increased $165.0 million or 3% to $5.73 billion from $5.56 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $191.5 million or 6% to $3.41 billion from $3.22 billion.
• Agricultural and agricultural real estate loans totaled $920.5 million compared to $781.4 million, an increase of $139.2 million or 18%.
• Consumer loans increased $11.2 million or 2% to $506.7 million from $495.5 million.

Significant changes by loan category at December 31, 2022 compared to December 31, 2021 included:

• Commercial and business lending, which includes commercial and industrial PPP, and owner occupied commercial real estate loans, increased $655.4 million or 13% to $5.74 billion at December 31, 2022, compared to $5.09 billion at December 31, 2021.
  • PPP I loans decreased $25.7 million or 95%. PPP II loans decreased $163.2 million or 94%.
  • Excluding total PPP loans, commercial and business lending increased $844.3 million or 17% to $5.73 billion from $4.89 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $540.3 million or 19% to $3.41 billion from $2.87 billion.
• Agricultural and agricultural real estate loans totaled $920.5 million, an increase of $166.8 million or 22% from $753.8 million.
• Consumer loans increased $87.2 million or 21% to $506.7 million from $419.5 million.  

Total deposits were $17.51 billion as of December 31, 2022, $17.27 billion as of September 30, 2022 and $16.42 billion at December 31, 2021. Significant deposit changes by category at December 31, 2022 compared to September 30, 2022 included:

• Demand deposits decreased $382.2 million or 6% to $5.70 billion compared to $6.08 billion.
• Savings deposits decreased $66.1 million or 1% to $9.99 billion from $10.06 billion.
• Time deposits increased $694.2 million or 62% to $1.82 billion from $1.12 billion.
  

Significant deposit changes by category at December 31, 2022 compared to December 31, 2021 included:

• Demand deposits decreased $794.0 million or 12% to $5.70 billion compared to $6.50 billion.
• Savings deposits increased $1.10 billion or 12% to $9.99 billion from $8.90 billion. The increase was primarily attributable in an increase of $855.6 million in wholesale funding deposits, which totaled $1.09 billion at December 31, 2022 compared to $235.0 million at December 31, 2021.
• Time deposits increased $793.3 million or 77% to $1.82 billion from $1.02 billion.
  

The increase in time deposits for both the fourth quarter of 2022 and for the year ended December 31, 2022, was primarily attributable to an increase in wholesale funding time deposits, which totaled $965.7 million at December 31, 2022, compared to $150.0 million at September 30, 2022, and $0 at December 31, 2021.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the fourth quarter of 2022 was $2.1 million, which was an increase of $8.9 million from $6.8 million of provision benefit recorded in the fourth quarter of 2021. The provision expense for the fourth quarter of 2022 was impacted by strong quarterly loan growth, net recoveries of $1.7 million, and healthy current credit performance. Management utilized a macroeconomic outlook in the estimation of the allowance for credit losses that anticipates a moderate recession developing within the next twelve months. The provision benefit recorded in the fourth quarter of 2021 reflected an improving credit environment and macroeconomic outlook.

HTLF's allowance for credit losses for loans totaled $109.5 million at December 31, 2022, compared to $110.1 million at December 31, 2021. The following items have impacted HTLF's allowance for credit losses for loans for the year ended December 31, 2022:

• Provision expense for the year ended December 31, 2022, totaled $10.6 million.
• Net charge offs of $11.2 million were recorded for the year or 0.11% of average loans.

Provision and Allowance for Credit Losses for Unfunded Commitments
HTLF's allowance for unfunded commitments totaled $20.2 million and $15.5 million at December 31, 2022 and December 31, 2021. The following impacted HTLF's allowance for credit losses for unfunded commitments during 2022:

• Provision expense for the year ended December 31, 2022, totaled $4.7 million.
• Unfunded commitments increased $899.5 million or 23% to $4.73 billion at December 31, 2022 compared to $3.83 billion at December 31, 2021.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $3.4 million for the fourth quarter of 2022 compared to provision benefit of $5.3 million for the fourth quarter of 2021. The total allowance for lending related credit losses was $129.7 million at December 31, 2022, which was 1.13% of total loans as of December 31, 2022, compared to $125.6 million or 1.26% of total loans as of December 31, 2021.

Nonperforming Assets

Nonperforming assets decreased $5.0 million or 7% to $66.9 million, which was 0.33% of total assets at December 31, 2022, compared to $71.9 million or 0.37% of total assets at December 31, 2021. Nonperforming loans were $58.5 million or 0.51% of total loans at December 31, 2022, compared to $69.9 million or 0.70% of total loans at December 31, 2020. At December 31, 2022, loans delinquent 30-89 days were 0.04% of total loans compared to 0.07% of total loans at December 31, 2021.

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.
• 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.
  

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 via webcast, please visit https://ir.htlf.com/news-and-events/event-calendar/default.aspx 10 minutes prior to the call. A replay will be available until January 29, 2024, by logging on to www.htlf.com.

About HTLF

Heartland Financial USA, Inc., operating under the brand name HTLF, is a bank holding company with assets of $20.24 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, 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, 2021, 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,
		2022				2021				2022				2021
Interest Income
Interest and fees on loans	$	143,970			$	107,721			$	477,970			$	444,137
Interest on securities:
Taxable		53,178				30,637				169,544				125,010
Nontaxable		6,132				5,595				24,006				19,268
Interest on federal funds sold		11				—				11				1
Interest on deposits with other banks and short-term investments		1,410				86				3,125				344
Total Interest Income		204,701				144,039				674,656				588,760
Interest Expense
Interest on deposits		32,215				3,168				56,880				14,797
Interest on short-term borrowings		2,223				123				2,717				471
Interest on other borrowings		5,043				3,554				16,823				12,932
Total Interest Expense		39,481				6,845				76,420				28,200
Net Interest Income		165,220				137,194				598,236				560,560
Provision (benefit) for credit losses		3,387				(5,313	)			15,370				(17,575	)
Net Interest Income After Provision for Credit Losses		161,833				142,507				582,866				578,135
Noninterest Income
Service charges and fees		17,432				15,349				68,031				59,703
Loan servicing income		790				781				2,741				3,276
Trust fees		5,440				6,380				22,570				24,417
Brokerage and insurance commissions		629				962				2,986				3,546
Securities gains (losses), net		(153	)			1,563				(425	)			5,910
Unrealized gain (loss) on equity securities, net		(7	)			(27	)			(622	)			58
Net gains on sale of loans held for sale		888				4,151				9,032				20,605
Valuation adjustment on servicing rights		—				502				1,658				1,088
Income on bank owned life insurance		600				1,056				2,341				3,762
Other noninterest income		4,356				2,013				19,952				6,570
Total Noninterest Income		29,975				32,730				128,264				128,935
Noninterest Expense
Salaries and employee benefits		61,611				63,031				254,478				240,114
Occupancy		6,905				7,282				28,155				29,965
Furniture and equipment		3,019				3,364				12,499				13,323
Professional fees		18,186				17,631				65,606				64,600
Advertising		1,829				2,218				6,221				7,257
Core deposit and customer relationship intangibles amortization		1,841				2,169				7,834				9,395
Other real estate and loan collection expenses, net		373				363				950				990
(Gain) loss on sales/valuations of assets, net		2,388				214				(1,047	)			588
Acquisition, integration and restructuring costs		2,442				1,989				7,586				5,331
Partnership investment in tax credit projects		3,247				2,549				5,040				6,303
Other noninterest expenses		15,377				14,576				56,055				53,946
Total Noninterest Expense		117,218				115,386				443,377				431,812
Income Before Income Taxes		74,590				59,851				267,753				275,258
Income taxes		13,936				10,271				55,573				55,335
Net Income		60,654				49,580				212,180				219,923
Preferred dividends		(2,012	)			(2,012	)			(8,050	)			(8,050	)
Net Income Available to Common Stockholders	$	58,642			$	47,568			$	204,130			$	211,873
Earnings per common share-diluted	$	1.37			$	1.12			$	4.79			$	5.00
Weighted average shares outstanding-diluted		42,699,752				42,479,442				42,630,703				42,410,611

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Interest Income
Interest and fees on loans	$	143,970			$	122,913			$	108,718			$	102,369			$	107,721
Interest on securities:
Taxable		53,178				45,648				38,098				32,620				30,637
Nontaxable		6,132				6,164				5,508				6,202				5,595
Interest on federal funds sold		11				—				—				—				—
Interest on deposits with other banks and short-term investments		1,410				1,081				563				71				86
Total Interest Income		204,701				175,806				152,887				141,262				144,039
Interest Expense
Interest on deposits		32,215				15,158				6,530				2,977				3,168
Interest on short-term borrowings		2,223				360				88				46				123
Interest on other borrowings		5,043				4,412				3,808				3,560				3,554
Total Interest Expense		39,481				19,930				10,426				6,583				6,845
Net Interest Income		165,220				155,876				142,461				134,679				137,194
Provision (benefit) for credit losses		3,387				5,492				3,246				3,245				(5,313	)
Net Interest Income After Provision for Credit Losses		161,833				150,384				139,215				131,434				142,507
Noninterest Income
Service charges and fees		17,432				17,282				18,066				15,251				15,349
Loan servicing income		790				831				834				286				781
Trust fees		5,440				5,372				5,679				6,079				6,380
Brokerage and insurance commissions		629				649				839				869				962
Securities gains (losses), net		(153	)			(1,055	)			(2,089	)			2,872				1,563
Unrealized gain (loss) on equity securities, net		(7	)			(211	)			(121	)			(283	)			(27	)
Net gains on sale of loans held for sale		888				1,832				2,901				3,411				4,151
Valuation adjustment on servicing rights		—				—				—				1,658				502
Income on bank owned life insurance		600				694				523				524				1,056
Other noninterest income		4,356				3,787				7,907				3,902				2,013
Total Noninterest Income		29,975				29,181				34,539				34,569				32,730
Noninterest Expense
Salaries and employee benefits		61,611				62,661				64,032				66,174				63,031
Occupancy		6,905				6,794				7,094				7,362				7,282
Furniture and equipment		3,019				2,928				3,033				3,519				3,364
Professional fees		18,186				16,277				15,987				15,156				17,631
Advertising		1,829				1,554				1,283				1,555				2,218
Core deposit and customer relationship intangibles amortization		1,841				1,856				2,083				2,054				2,169
Other real estate and loan collection expenses, net		373				304				78				195				363
(Gain) loss on sales/valuations of assets, net		2,388				(251	)			(3,230	)			46				214
Acquisition, integration and restructuring costs		2,442				2,156				2,412				576				1,989
Partnership investment in tax credit projects		3,247				979				737				77				2,549
Other noninterest expenses		15,377				13,625				12,970				14,083				14,576
Total Noninterest Expense		117,218				108,883				106,479				110,797				115,386
Income Before Income Taxes		74,590				70,682				67,275				55,206				59,851
Income taxes		13,936				14,118				15,402				12,117				10,271
Net Income		60,654				56,564				51,873				43,089				49,580
Preferred dividends		(2,012	)			(2,013	)			(2,012	)			(2,013	)			(2,012	)
Net Income Available to Common Stockholders	$	58,642			$	54,551			$	49,861			$	41,076			$	47,568
Earnings per common share-diluted	$	1.37			$	1.28			$	1.17			$	0.97			$	1.12
Weighted average shares outstanding-diluted		42,699,752				42,643,940				42,565,391				42,540,953				42,479,442

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Assets
Cash and due from banks	$	309,045			$	250,394			$	221,077			$	198,559			$	163,895
Interest bearing deposits with other banks and other short-term investments		54,042				149,466				163,717				406,343				271,704
Cash and cash equivalents		363,087				399,860				384,794				604,902				435,599
Time deposits in other financial institutions		1,740				1,740				1,855				2,894				2,894
Securities:
Carried at fair value		6,147,144				6,060,331				7,106,218				7,025,243				7,530,374
Held to maturity, at cost		829,403				830,247				81,939				81,785				84,709
Other investments, at cost		74,567				80,286				85,899				82,751				82,567
Loans held for sale		5,277				9,570				18,803				22,685				21,640
Loans:
Held to maturity		11,428,352				10,923,532				10,678,218				10,177,385				9,954,572
Allowance for credit losses		(109,483	)			(105,715	)			(101,353	)			(100,522	)			(110,088	)
Loans, net		11,318,869				10,817,817				10,576,865				10,076,863				9,844,484
Premises, furniture and equipment, net		197,330				203,585				206,818				213,752				215,827
Goodwill		576,005				576,005				576,005				576,005				576,005
Core deposit and customer relationship intangibles, net		25,154				26,995				28,851				30,934				32,988
Servicing rights, net		7,840				8,379				8,288				8,102				6,890
Cash surrender value on life insurance		193,403				193,184				192,474				192,267				191,722
Other real estate, net		8,401				8,030				4,528				1,422				1,927
Other assets		496,008				466,921				385,062				311,274				246,923
Total Assets	$	20,244,228			$	19,682,950			$	19,658,399			$	19,230,879			$	19,274,549
Liabilities and Equity
Liabilities
Deposits:
Demand	$	5,701,340			$	6,083,563			$	6,087,304			$	6,376,249			$	6,495,326
Savings		9,994,391				10,060,523				10,059,678				9,236,427				8,897,909
Time		1,817,278				1,123,035				1,078,568				1,054,008				1,024,020
Total deposits		17,513,009				17,267,121				17,225,550				16,666,684				16,417,255
Short-term borrowings		376,117				147,000				97,749				107,372				131,597
Other borrowings		371,753				371,446				372,538				372,290				372,072
Accrued expenses and other liabilities		248,294				241,425				188,494				152,676				171,447
Total Liabilities		18,509,173				18,026,992				17,884,331				17,299,022				17,092,371
Stockholders' Equity
Preferred equity		110,705				110,705				110,705				110,705				110,705
Common stock		42,467				42,444				42,439				42,370				42,275
Capital surplus		1,080,964				1,079,277				1,076,766				1,073,048				1,071,956
Retained earnings		1,120,925				1,074,168				1,031,076				992,655				962,994
Accumulated other comprehensive income/(loss)		(620,006	)			(650,636	)			(486,918	)			(286,921	)			(5,752	)
Total Equity		1,735,055				1,655,958				1,774,068				1,931,857				2,182,178
Total Liabilities and Equity	$	20,244,228			$	19,682,950			$	19,658,399			$	19,230,879			$	19,274,549

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Average Balances
Assets	$	19,913,849			$	19,775,341			$	19,559,091			$	19,229,872			$	19,151,691
Loans, net of unearned		11,117,513				10,783,135				10,477,368				10,043,594				9,886,027
Deposits		17,319,218				17,282,289				17,044,479				16,459,378				16,265,476
Earning assets		18,175,838				18,157,795				17,987,734				17,757,067				17,681,917
Interest bearing liabilities		11,980,032				11,723,026				11,575,319				10,453,400				10,207,255
Common equity		1,548,739				1,674,306				1,731,393				2,003,424				2,061,973
Total stockholders' equity		1,659,444				1,785,011				1,842,098				2,114,129				2,172,678
Tangible common equity (non-GAAP)(1)		946,688				1,070,399				1,125,543				1,395,488				1,451,950
Key Performance Ratios
Annualized return on average assets		1.21	%			1.13	%			1.06	%			0.91	%			1.03	%
Annualized return on average common equity (GAAP)		15.02				12.93				11.55				8.32				9.15
Annualized return on average tangible common equity (non-GAAP)(1)		25.19				20.76				18.35				12.41				13.47
Annualized ratio of net charge-offs (recoveries) to average loans		(0.06	)			0.00				0.03				0.49				0.03
Annualized net interest margin (GAAP)		3.61				3.41				3.18				3.08				3.08
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.65				3.45				3.22				3.12				3.12
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)		54.33				55.26				57.66				64.65				63.86
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.34				2.18				2.18				2.34				2.39
Annualized ratio of core expenses to average assets (non-GAAP)(1)		2.14				2.09				2.14				2.28				2.25

	For the Quarter Ended December 31,								For the Year Ended December 31,
		2022				2021				2022				2021
Average Balances
Assets	$	19,913,849			$	19,151,691			$	19,621,839			$	18,508,273
Loans, net of unearned		11,117,513				9,886,027				10,608,831				9,957,290
Deposits		17,319,218				16,265,476				17,029,398				15,679,773
Earning assets		18,175,838				17,681,917				18,021,134				17,025,088
Interest bearing liabilities		11,980,032				10,207,255				11,437,921				9,969,820
Common equity		1,548,739				2,061,973				1,738,041				2,020,200
Total stockholders' equity		1,659,444				2,172,678				1,848,746				2,130,905
Tangible common equity (non-GAAP)(1)		946,688				1,451,950				1,133,124				1,406,641
Key Performance Ratios
Annualized return on average assets		1.21	%			1.03	%			1.08	%			1.19	%
Annualized return on average common equity (GAAP)		15.02				9.15				11.74				10.49
Annualized return on average tangible common equity (non-GAAP)(1)		25.19				13.47				18.56				15.59
Annualized ratio of net charge-offs (recoveries) to average loans		(0.06	)			0.03				0.11				0.04
Annualized net interest margin (GAAP)		3.61				3.08				3.32				3.29
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)		3.65				3.12				3.37				3.33
Efficiency ratio, fully tax-equivalent(1)		54.33				63.86				57.74				59.48
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.34				2.39				2.26				2.33
Annualized ratio of core expenses to average assets (non-GAAP)(1)		2.14				2.25				2.16				2.22
(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
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Common Share Data
Book value per common share	$	38.25			$	36.41			$	39.19			$	42.98			$	49.00
Tangible book value per common share (non-GAAP)(1)	$	24.09			$	22.20			$	24.94			$	28.66			$	34.59
ASC 320 effect on book value per common share	$	(14.58	)		$	(15.31	)		$	(11.43	)		$	(6.74	)		$	(0.10	)
Common shares outstanding, net of treasury stock		42,467,394				42,444,106				42,439,439				42,369,908				42,275,264
Tangible common equity ratio (non-GAAP)(1)		5.21	%			4.94	%			5.56	%			6.52	%			7.84	%
Other Selected Trend Information
Effective tax rate		18.68	%			19.97	%			22.89	%			21.95	%			17.16	%
Full time equivalent employees		2,002				2,020				2,087				2,208				2,249
Loans Held to Maturity
Commercial and industrial	$	3,464,414			$	3,278,703			$	3,059,519			$	2,814,513			$	2,645,085
Paycheck Protection Program ("PPP")		11,025				13,506				23,031				74,065				199,883
Owner occupied commercial real estate		2,265,307				2,285,973				2,282,833				2,266,076				2,240,334
Commercial and business lending		5,740,746				5,578,182				5,365,383				5,154,654				5,085,302
Non-owner occupied commercial real estate		2,330,940				2,219,542				2,321,718				2,161,761				2,010,591
Real estate construction		1,076,082				996,017				845,045				842,483				856,119
Commercial real estate lending		3,407,022				3,215,559				3,166,763				3,004,244				2,866,710
Total commercial lending		9,147,768				8,793,741				8,532,146				8,158,898				7,952,012
Agricultural and agricultural real estate		920,510				781,354				836,703				766,443				753,753
Residential mortgage		853,361				852,928				845,270				825,242				829,283
Consumer		506,713				495,509				464,099				426,802				419,524
Total loans held to maturity	$	11,428,352			$	10,923,532			$	10,678,218			$	10,177,385			$	9,954,572
Total unfunded loan commitments	$	4,729,677			$	4,664,379			$	4,458,874			$	4,130,316			$	3,830,219
(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
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Allowance for Credit Losses-Loans
Balance, beginning of period	$	105,715			$	101,353			$	100,522			$	110,088			$	117,533
Provision (benefit) for credit losses		2,075				4,388				1,545				2,628				(6,808	)
Charge-offs		(2,668	)			(938	)			(1,473	)			(13,217	)			(1,953	)
Recoveries		4,361				912				759				1,023				1,316
Balance, end of period	$	109,483			$	105,715			$	101,353			$	100,522			$	110,088
Allowance for Unfunded Commitments
Balance, beginning of period	$	18,884			$	17,780			$	16,079			$	15,462			$	13,967
Provision for credit losses		1,312				1,104				1,701				617				1,495
Balance, end of period	$	20,196			$	18,884			$	17,780			$	16,079			$	15,462
Allowance for lending related credit losses	$	129,679			$	124,599			$	119,133			$	116,601			$	125,550
Provision for Credit Losses
Provision (benefit) for credit losses-loans	$	2,075			$	4,388			$	1,545			$	2,628			$	(6,808	)
Provision for credit losses-unfunded commitments		1,312				1,104				1,701				617				1,495
Total provision (benefit) for credit losses	$	3,387			$	5,492			$	3,246			$	3,245			$	(5,313	)
Asset Quality
Nonaccrual loans	$	58,231			$	64,560			$	62,909			$	64,174			$	69,369
Loans past due ninety days or more		273				678				95				246				550
Other real estate owned		8,401				8,030				4,528				1,422				1,927
Other repossessed assets		26				—				—				34				43
Total nonperforming assets	$	66,931			$	73,268			$	67,532			$	65,876			$	71,889
Performing troubled debt restructured loans	$	8,279			$	8,047			$	1,350			$	882			$	817
Nonperforming Assets Activity
Balance, beginning of period	$	73,268			$	67,532			$	65,876			$	71,889			$	88,146
Net loan (charge offs) recoveries		1,693				(26	)			(714	)			(12,194	)			(637	)
New nonperforming loans		1,439				8,388				8,590				15,832				5,886
Reduction of nonperforming loans(1)		(8,875	)			(2,015	)			(5,244	)			(8,448	)			(18,429	)
OREO/Repossessed assets sales proceeds		(594	)			(611	)			(976	)			(1,203	)			(3,077	)
Balance, end of period	$	66,931			$	73,268			$	67,532			$	65,876			$	71,889
Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.51	%			0.60	%			0.59	%			0.63	%			0.70	%
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans		0.58				0.67				0.60				0.64				0.71
Ratio of nonperforming assets to total assets		0.33				0.37				0.34				0.34				0.37
Annualized ratio of net loan charge-offs (recoveries) to average loans		(0.06	)			0.00				0.03				0.49				0.03
Allowance for loan credit losses as a percent of loans		0.96				0.97				0.95				0.99				1.11
Allowance for lending related credit losses as a percent of loans		1.13				1.14				1.12				1.15				1.26
Allowance for loan credit losses as a percent of nonperforming loans		187.14				162.05				160.87				156.04				157.45
Loans delinquent 30-89 days as a percent of total loans		0.04				0.10				0.06				0.10				0.07
(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, 2022										September 30, 2022										December 31, 2021
	Average Balance				Interest			Rate			Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,122,313			$	53,178		3.45	%		$	6,303,278			$	45,648		2.87	%		$	6,730,511			$	30,637		1.81	%
Nontaxable(1)		890,368				7,762		3.46				951,232				7,802		3.25				964,712				7,082		2.91
Total securities		7,012,681				60,940		3.45				7,254,510				53,450		2.92				7,695,223				37,719		1.94
Interest on deposits with other banks and other short-term investments		151,405				1,410		3.69				222,170				1,081		1.93				218,809				86		0.16
Federal funds sold		739				11		5.91				11				—		—				—				—		—
Loans:(2)
Commercial and industrial(1)		3,346,843				45,290		5.37				3,182,134				37,526		4.68				2,614,685				26,465		4.02
PPP loans		12,252				397		12.86				17,859				363		8.06				302,829				8,106		10.62
Owner occupied commercial real estate		2,277,055				26,194		4.56				2,272,666				23,601		4.12				2,166,768				22,007		4.03
Non-owner occupied commercial real estate		2,286,298				29,273		5.08				2,258,424				25,895		4.55				1,996,186				21,744		4.32
Real estate construction		1,050,802				16,585		6.26				914,520				12,382		5.37				837,716				9,390		4.45
Agricultural and agricultural real estate		785,647				10,159		5.13				799,823				8,966		4.45				697,521				7,089		4.03
Residential mortgage		858,767				9,168		4.24				858,119				8,665		4.01				853,208				8,615		4.01
Consumer		499,849				7,426		5.89				479,590				6,028		4.99				417,114				4,793		4.56
Less: allowance for credit losses-loans		(106,500	)			—		—				(102,031	)			—		—				(118,142	)			—		—
Net loans		11,011,013				144,492		5.21				10,681,104				123,426		4.58				9,767,885				108,209		4.40
Total earning assets		18,175,838				206,853		4.52	%			18,157,795				177,957		3.89	%			17,681,917				146,014		3.28	%
Nonearning Assets		1,738,011										1,617,546										1,469,774
Total Assets	$	19,913,849									$	19,775,341									$	19,151,691
Interest Bearing Liabilities
Savings	$	9,987,692			$	25,950		1.03	%		$	10,059,652			$	12,907		0.51	%		$	8,609,596			$	2,160		0.10	%
Time deposits		1,322,094				6,265		1.88				1,156,908				2,251		0.77				1,048,785				1,008		0.38
Short-term borrowings		298,804				2,223		2.95				134,974				360		1.06				176,956				123		0.28
Other borrowings		371,442				5,043		5.39				371,492				4,412		4.71				371,918				3,554		3.79
Total interest bearing liabilities		11,980,032				39,481		1.31	%			11,723,026				19,930		0.67	%			10,207,255				6,845		0.27	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		6,009,432										6,065,729										6,607,095
Accrued interest and other liabilities		264,941										201,575										164,663
Total noninterest bearing liabilities		6,274,373										6,267,304										6,771,758
Equity		1,659,444										1,785,011										2,172,678
Total Liabilities and Equity	$	19,913,849									$	19,775,341									$	19,151,691
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	167,372									$	158,027									$	139,169
Net interest spread(1)								3.21	%									3.22	%									3.01	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(1)(3)								3.65	%									3.45	%									3.12	%
Interest bearing liabilities to earning assets		65.91	%									64.56	%									57.73	%
(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, 2022										December 31, 2021
	Average Balance				Interest			Rate			Average Balance				Interest			Rate
Earning Assets
Securities:
Taxable	$	6,335,586			$	169,544		2.68	%		$	6,135,732			$	125,010		2.04	%
Nontaxable(1)		965,474				30,387		3.15				799,283				24,390		3.05
Total securities		7,301,060				199,931		2.74				6,935,015				149,400		2.15
Interest bearing deposits with other banks and other short-term investments		216,786				3,125		1.44				254,630				344		0.14
Federal funds sold		192				11		5.73				3,457				1		0.03
Loans:(2)
Commercial and industrial(1)		3,070,890				140,310		4.57				2,543,514				111,473		4.38
PPP loans		50,464				6,884		13.64				734,139				40,627		5.53
Owner occupied commercial real estate		2,272,088				93,936		4.13				1,950,014				81,717		4.19
Non-owner occupied commercial real estate		2,196,922				99,202		4.52				1,969,910				87,728		4.45
Real estate construction		923,316				48,258		5.23				824,055				37,891		4.60
Agricultural and agricultural real estate		778,526				34,064		4.38				681,493				29,822		4.38
Residential mortgage		852,541				34,276		4.02				846,573				36,768		4.34
Consumer		464,084				23,058		4.97				407,592				20,201		4.96
Less: allowance for credit losses-loans		(105,735	)			—		—				(125,304	)			—		—
Net loans		10,503,096				479,988		4.57				9,831,986				446,227		4.54
Total earning assets		18,021,134				683,055		3.79	%			17,025,088				595,972		3.50	%
Nonearning Assets		1,600,705										1,483,185
Total Assets	$	19,621,839									$	18,508,273
Interest Bearing Liabilities
Savings	$	9,737,100			$	46,623		0.48	%		$	8,311,825			$	9,063		0.11	%
Time deposits		1,160,538				10,257		0.88				1,137,097				5,734		0.50
Short-term borrowings		168,404				2,717		1.61				181,165				471		0.26
Other borrowings		371,879				16,823		4.52				339,733				12,932		3.81
Total interest bearing liabilities		11,437,921				76,420		0.67	%			9,969,820				28,200		0.28	%
Noninterest Bearing Liabilities
Noninterest bearing deposits		6,131,760										6,230,851
Accrued interest and other liabilities		203,412										176,697
Total noninterest bearing liabilities		6,335,172										6,407,548
Equity		1,848,746										2,130,905
Total Liabilities and Equity	$	19,621,839									$	18,508,273
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)					$	606,635									$	567,772
Net interest spread(1)								3.12	%									3.22	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets(1)(3)								3.37	%									3.33	%
Interest bearing liabilities to earning assets		63.47	%									58.56	%
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Nonaccrual loans and loans held for sale are included in the average loans outstanding.
(3) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	58,642			$	54,551			$	49,861			$	41,076			$	47,568
Plus core deposit and customer relationship intangibles amortization, net of tax(1)		1,455				1,466				1,645				1,623				1,713
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	60,097			$	56,017			$	51,506			$	42,699			$	49,281
Average common equity (GAAP)	$	1,548,739			$	1,674,306			$	1,731,393			$	2,003,424			$	2,061,973
Less average goodwill		576,005				576,005				576,005				576,005				576,005
Less average core deposit and customer relationship intangibles, net		26,046				27,902				29,845				31,931				34,018
Average tangible common equity (non-GAAP)	$	946,688			$	1,070,399			$	1,125,543			$	1,395,488			$	1,451,950
Annualized return on average common equity (GAAP)		15.02	%			12.93	%			11.55	%			8.32	%			9.15	%
Annualized return on average tangible common equity (non-GAAP)		25.19	%			20.76	%			18.35	%			12.41	%			13.47	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	165,220			$	155,876			$	142,461			$	134,679			$	137,194
Plus tax-equivalent adjustment(1)		2,152				2,151				1,977				2,119				1,975
Net interest income, fully tax-equivalent (non-GAAP)	$	167,372			$	158,027			$	144,438			$	136,798			$	139,169
Average earning assets	$	18,175,838			$	18,157,795			$	17,987,734			$	17,757,067			$	17,681,917
Annualized net interest margin (GAAP)		3.61	%			3.41	%			3.18	%			3.08	%			3.08	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.65				3.45				3.22				3.12				3.12
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.03				0.03				0.07				0.05				0.05
Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)	$	1,624,350			$	1,545,253			$	1,663,363			$	1,821,152			$	2,071,473
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net		25,154				26,995				28,851				30,934				32,988
Tangible common equity (non-GAAP)	$	1,023,191			$	942,253			$	1,058,507			$	1,214,213			$	1,462,480
Common shares outstanding, net of treasury stock		42,467,394				42,444,106				42,439,439				42,369,908				42,275,264
Common equity (book value) per share (GAAP)	$	38.25			$	36.41			$	39.19			$	42.98			$	49.00
Tangible book value per common share (non-GAAP)	$	24.09			$	22.20			$	24.94			$	28.66			$	34.59
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)	$	1,023,191			$	942,253			$	1,058,507			$	1,214,213			$	1,462,480
Total assets (GAAP)	$	20,244,228			$	19,682,950			$	19,658,399			$	19,230,879			$	19,274,549
Less goodwill		576,005				576,005				576,005				576,005				576,005
Less core deposit and customer relationship intangibles, net		25,154				26,995				28,851				30,934				32,988
Total tangible assets (non-GAAP)	$	19,643,069			$	19,079,950			$	19,053,543			$	18,623,940			$	18,665,556
Tangible common equity ratio (non-GAAP)		5.21	%			4.94	%			5.56	%			6.52	%			7.84	%
(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
	12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Net interest income (GAAP)	$	165,220			$	155,876			$	142,461			$	134,679			$	137,194
Tax-equivalent adjustment(1)		2,152				2,151				1,977				2,119				1,975
Fully tax-equivalent net interest income		167,372				158,027				144,438				136,798				139,169
Noninterest income		29,975				29,181				34,539				34,569				32,730
Securities (gains)/losses, net		153				1,055				2,089				(2,872	)			(1,563	)
Unrealized (gain) loss on equity securities, net		7				211				121				283				27
Valuation adjustment on servicing rights		—				—				—				(1,658	)			(502	)
Adjusted revenue (non-GAAP)	$	197,507			$	188,474			$	181,187			$	167,120			$	169,861
Total noninterest expenses (GAAP)	$	117,218			$	108,883			$	106,479			$	110,797			$	115,386
Less:
Core deposit and customer relationship intangibles amortization		1,841				1,856				2,083				2,054				2,169
Partnership investment in tax credit projects		3,247				979				737				77				2,549
(Gain) loss on sales/valuation of assets, net		2,388				(251	)			(3,230	)			46				214
Acquisition, integration and restructuring costs		2,442				2,156				2,412				576				1,989
Core expenses (non-GAAP)	$	107,300			$	104,143			$	104,477			$	108,044			$	108,465
Efficiency ratio, fully tax-equivalent (non-GAAP)		54.33	%			55.26	%			57.66	%			64.65	%			63.86	%
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)	$	117,218			$	108,883			$	106,479			$	110,797			$	115,386
Core expenses (non-GAAP)		107,300				104,143				104,477				108,044				108,465
Average assets	$	19,913,849			$	19,775,341			$	19,559,091			$	19,229,872			$	19,151,691
Total noninterest expenses to average assets (GAAP)		2.34	%			2.18	%			2.18	%			2.34	%			2.39	%
Core expenses to average assets (non-GAAP)		2.14	%			2.09	%			2.14	%			2.28	%			2.25	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	424			$	365			$	275			$	340			$	—
Occupancy		—				—				—				—				—
Furniture and equipment		—				—				—				—				—
Professional fees		1,587				1,480				1,779				236				1,989
Advertising		95				131				156				—				—
(Gain) loss on sales/valuations of assets, net		—				—				—				—				—
Other noninterest expenses		336				180				202				—				—
Total acquisition, integration and restructuring costs	$	2,442			$	2,156			$	2,412			$	576			$	1,989
After tax impact on diluted earnings per share(1)	$	0.05			$	0.04			$	0.04			$	0.01			$	0.05
(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,
		2022				2021				2022				2021
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	58,642			$	47,568			$	204,130			$	211,873
Plus core deposit and customer relationship intangibles amortization, net of tax(1)		1,455				1,713				6,189				7,422
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	60,097			$	49,281			$	210,319			$	219,295
Average common equity (GAAP)	$	1,548,739			$	2,061,973			$	1,738,041			$	2,020,200
Less average goodwill		576,005				576,005				576,005				576,005
Less average core deposit and customer relationship intangibles, net		26,046				34,018				28,912				37,554
Average tangible common equity (non-GAAP)	$	946,688			$	1,451,950			$	1,133,124			$	1,406,641
Annualized return on average common equity (GAAP)		15.02	%			9.15	%			11.74	%			10.49	%
Annualized return on average tangible common equity (non-GAAP)		25.19	%			13.47	%			18.56	%			15.59	%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	165,220			$	137,194			$	598,236			$	560,560
Plus tax-equivalent adjustment(1)		2,152				1,975				8,399				7,212
Net interest income, fully tax-equivalent (non-GAAP)	$	167,372			$	139,169			$	606,635			$	567,772
Average earning assets	$	18,175,838			$	17,681,917			$	18,021,134			$	17,025,088
Annualized net interest margin (GAAP)		3.61	%			3.08	%			3.32	%			3.29	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.65				3.12				3.37				3.33
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.03				0.05				0.04				0.09
(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)		2022				2021				2022				2021
Net interest income (GAAP)	$	165,220			$	137,194			$	598,236			$	560,560
Tax-equivalent adjustment(1)		2,152				1,975				8,399				7,212
Fully tax-equivalent net interest income		167,372				139,169				606,635				567,772
Noninterest income		29,975				32,730				128,264				128,935
Securities (gains)/losses, net		153				(1,563	)			425				(5,910	)
Unrealized (gain) loss on equity securities, net		7				27				622				(58	)
Valuation adjustment on servicing rights		—				(502	)			(1,658	)			(1,088	)
Adjusted revenue (non-GAAP)	$	197,507			$	169,861			$	734,288			$	689,651
Total noninterest expenses (GAAP)	$	117,218			$	115,386			$	443,377			$	431,812
Less:
Core deposit and customer relationship intangibles amortization		1,841				2,169				7,834				9,395
Partnership investment in tax credit projects		3,247				2,549				5,040				6,303
(Gain) loss on sales/valuations of assets, net		2,388				214				(1,047	)			588
Acquisition, integration and restructuring costs		2,442				1,989				7,586				5,331
Core expenses (non-GAAP)	$	107,300			$	108,465			$	423,964			$	410,195
Efficiency ratio, fully tax-equivalent (non-GAAP)		54.33	%			63.86	%			57.74	%			59.48	%
Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)
Total noninterest expenses (GAAP)	$	117,218			$	115,386			$	443,377			$	431,812
Core expenses (non-GAAP)		107,300				108,465				423,964				410,195
Average assets	$	19,913,849			$	19,151,691			$	19,621,839			$	18,508,273
Total noninterest expenses to average assets (GAAP)		2.34	%			2.39	%			2.26	%			2.33	%
Core expenses to average assets (non-GAAP)		2.14	%			2.25	%			2.16	%			2.22	%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	424			$	—			$	1,404			$	578
Occupancy		—				—				—				10
Furniture and equipment		—				—				—				655
Professional fees		1,587				1,989				5,082				2,867
Advertising		95				—				382				173
(Gain)/loss on sales/valuations of assets, net		—				—				—				39
Other noninterest expenses		336				—				718				1,009
Total acquisition, integration and restructuring costs	$	2,442			$	1,989			$	7,586			$	5,331
After tax impact on diluted earnings per share(1)	$	0.05			$	0.05			$	0.14			$	0.13
(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