Heartland Financial USA, Inc. ("HTLF") Reports Annual Earnings and Fourth Quarter Results as of December 31, 2023

Source: Nasdaq GlobeNewswire / 29 Jan 2024 16:01:02 America/New_York

Fourth Quarter Highlights

Net loss available to common stockholders of ($72.4) million or ($1.69) per diluted common share.
Adjusted earnings available to common stockholders of $45.6 million, or $1.06 per diluted common share (non-GAAP), which excludes losses related to balance sheet repositioning, losses on sale or write-down of assets, FDIC special assessment expense, and restructuring costs.
Loan growth of $196.2 million or 2%.
Average customer deposits grew $270.7 million or 2%.
Common equity ratio increased to 9.27%; Tangible common equity ratio (non-GAAP) improved 80 basis points to 6.53%.
Net interest margin, fully tax-equivalent (non-GAAP) improved 34 basis points to 3.52%.
Consolidated final charter, with an expense of $1.3 million in the quarter, and initiated HTLF 3.0, the Company's new strategic plan which includes:
- Investing in growth through banker expansion and talent acquisition in the Central Valley of California, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix.
- Expanding Treasury Management products and capabilities.
- Creation of consumer and small business digital platforms.
- Footprint and facilities optimization, with a focus on efficient return on capital.
In the quarter we took the following actions as part of HTLF 3.0:
- An $865.4 million balance sheet repositioning resulting in a $140.0 million pre-tax loss.
- Centralized retail management span of control with restructuring costs of $944,000.
- Footprint consolidation resulting in $1.1 million in restructuring costs and $2.1 million in losses on sales/valuations of facilities.

	Quarter Ended December 31,						Year Ended December 31,
	2023			2022			2023			2022
Earnings Summary:
Net income/(loss) available to common stockholders (in millions)	$	(72.4	)	$	58.6		$	71.9		$	204.1
Diluted earnings/(loss) per common share		(1.69	)		1.37			1.68			4.79
Return on average assets	(1.42		)%		1.21	%		0.40	%		1.08	%
Return on average common equity		(16.61	)		15.02			4.19			11.74
Return on average tangible common equity (non-GAAP)⁽¹⁾		(24.88	)		25.19			6.91			18.56
Net interest margin		3.47			3.61			3.29			3.32
Net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.52			3.65			3.33			3.37
Efficiency ratio		293.86			60.05			79.58			61.03
Adjusted efficiency ratio, fully-tax equivalent (non-GAAP)⁽¹⁾		59.31			54.33			59.06			57.74

Adjusted Earnings Summary (1):
Adjusted earnings available to common stockholders (in millions)	$	45.6		$	62.5		$	193.9		$	209.5
Adjusted diluted earnings per common share		1.06			1.46			4.53			4.91
Adjusted annualized return on average assets		0.96	%		1.28	%		1.01	%		1.11	%
Adjusted annualized return on average common equity		10.46			16.00			11.31			12.06
Adjusted annualized return on average tangible common equity		16.38			26.77			17.82			19.03

(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.

“2023 was a year of significant progress and successful execution of HTLF’s strategic plans. With the completion of the charter consolidation initiative in the fourth quarter, we are now able to focus on HTLF 3.0, a set of initiatives that will drive improved efficiency, enhance EPS growth, deliver higher return on assets, and more efficient use of capital. The balance sheet repositioning, retail span of control and facilities optimization initiatives we executed during the quarter represent the beginning of HTLF 3.0.”

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

DENVER, Jan. 29, 2024 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended December 31, 2023 compared to the quarter ended December 31, 2022:

Net income/(loss) available to common stockholders of ($72.4) million compared to $58.6 million, a decrease of $131.0 million or 223%. Adjusted earnings available to common stockholders⁽¹⁾ of $45.6 million compared to $62.5 million, a decrease of $16.9 million or 27%.
Earnings/(loss) per diluted common share of ($1.69) compared to $1.37, a decrease of $3.06. Adjusted diluted earnings per common share⁽¹⁾ of $1.06 compared to $1.46, a decrease of $0.40.
Net interest income of $156.1 million compared to $165.2 million, a decrease of $9.1 million or 5%.
Return on average assets of (1.42%) compared to 1.21%. Adjusted annualized return on average assets⁽¹⁾ of 0.96% compared to 1.28%.
Return on average common equity of (16.61%) compared to 15.02%. Adjusted annualized return on average common equity⁽¹⁾ of 10.46% compared to 16.00%.
Return on average tangible common equity⁽¹⁾ of (24.88%) compared to 25.19%. Adjusted annualized return on average tangible common equity⁽¹⁾ of 16.38% compared to 26.77%.

HTLF reported the following results for the year ended December 31, 2023 compared to the year ended December 31, 2022:

Net income available to common stockholders of $71.9 million compared to $204.1 million, a decrease of $132.3 million or 65%. Adjusted earnings available to common stockholders⁽¹⁾ of $193.9 million compared to $209.5 million, a decrease of $15.6 million or 7%.
Earnings per diluted common share of $1.68 compared to $4.79, a decrease of $3.11. Adjusted diluted earnings per common share⁽¹⁾ of $4.53 compared to $4.91, a decrease of $0.38 or 8%.
Net interest income of $601.2 million compared to $598.2 million, an increase of $3.0 million or 1%.
Return on average assets of 0.40% compared to 1.08%. Adjusted annualized return on average assets⁽¹⁾ of 1.01% compared to 1.11%.
Return on average common equity of 4.19% compared to 11.74%. Adjusted annualized return on average common equity⁽¹⁾ of 11.31% compared to 12.06%.
Return on average tangible common equity (non-GAAP) of 6.91% compared to 18.56%. Adjusted annualized return on average tangible common equity⁽¹⁾ of 17.82% compared to 19.03%.

Commenting on HTLF's 2023 results, Bruce K. Lee, HTLF’s president and chief executive officer, said, “2023 was a year of significant progress and successful execution of HTLF’s strategic plans. With the completion of the charter consolidation initiative in the fourth quarter, we are now able to focus on HTLF 3.0, a set of initiatives that will drive improved efficiency, enhance EPS growth, deliver higher return on assets, and more efficient use of capital. The balance sheet repositioning, retail span of control and facilities optimization initiatives we executed during the quarter represent the beginning of HTLF 3.0.”

Announced and Initiated HTLF 3.0

HTLF’s new strategic plan, HTLF 3.0, was announced and initiated in the fourth quarter of 2023. HTLF 3.0's initiatives include:

Investing in growth through banker expansion and talent acquisition in the Central Valley of California, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix.
Expanding Treasury Management products and capabilities.
Creation of consumer and small business digital platforms.
Footprint and facilities optimization, with a focus on efficient return on capital.

In the quarter we took the following actions as part of HTLF 3.0:

A $865.4 million balance sheet repositioning resulting in a $140.0 million pre-tax loss.
Centralized retail management span of control with restructuring costs of $944,000.
Footprint consolidation resulting in $1.1 million in restructuring costs and $2.1 million in losses on sales/valuations of facilities.

Charter Consolidation Update

During the fourth quarter of 2023, Dubuque Bank and Trust Company was consolidated into HTLF Bank, which successfully completed the consolidation of all 11 charters. Total consolidation restructuring costs were $17 million, of which $1.3 million were incurred in the fourth quarter of 2023.

Net Interest Income and Net Interest Margin

Net interest margin was 3.47% (3.52% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2023, compared to 3.61% (3.65% on a fully tax-equivalent basis, non-GAAP) during the fourth quarter of 2022.

Total interest income and average earning asset changes for the fourth quarter of 2023 compared to the fourth quarter of 2022 were:

Total interest income was $255.9 million compared to $204.7 million, an increase of $51.2 million or 25%, primarily attributable to higher yields and an increase in average loans.
Total interest income on a tax-equivalent basis was $257.9 million, an increase of $51.1 million or 25%, from $206.9 million.
Average earning assets decreased $321.9 million or 2% to $17.85 billion compared to $18.17 billion, which was primarily attributable to the balance sheet repositioning completed in the fourth quarter of 2023.
The average rate on earning assets increased 121 basis points to 5.73% from 4.52%, primarily due to recent interest rate increases.

Total interest expense and average interest-bearing liability changes for the fourth quarter of 2023 compared to the fourth quarter of 2022 were:

Total interest expense was $99.7 million, an increase of $60.3 million from $39.5 million, due to increases in the average interest rate paid and the average balance of interest-bearing liabilities.
The average interest rate paid on interest-bearing liabilities increased 180 basis points to 3.11% from 1.31%.
Average interest-bearing deposits increased $638.2 million or 6% to $11.95 billion from $11.31 billion, primarily due to growth in time deposits. Total average interest-bearing deposits were 72% of total average deposits compared to 65%.
The average interest rate paid on HTLF's interest-bearing deposits increased 179 basis points to 2.92% from 1.13%.
Average borrowings increased $103.4 million or 15% to $773.7 million from $670.2 million, and the average interest rate paid on borrowings was 5.99% compared to 4.30%.

Net interest income changes for the fourth quarter of 2023 compared to the fourth quarter of 2022 were:

Net interest income totaled $156.1 million compared to $165.2 million, a decrease of $9.1 million or 5%.
Net interest income on a tax-equivalent basis (non-GAAP) totaled $158.2 million compared to $167.4 million, a decrease of $9.2 million or 5%.

Noninterest Income and Noninterest Expense

Total noninterest income was ($111.8) million during the fourth quarter of 2023 compared to $30.0 million during the fourth quarter of 2022, a decrease of $141.8 million. Significant changes by noninterest income category for the fourth quarter of 2023 compared to the fourth quarter of 2022 were:

Service charges and fees increased $1.3 million or 7% to $18.7 million from $17.4 million, which was primarily attributable to an increase in debit interchange volume.
Net securities losses totaled $140.0 million compared to net securities losses of $153,000, which was an increase of $139.9 million attributable to the balance sheet repositioning strategy executed in the quarter.
Net gains of sales of loans held for sale decreased $794,000 to $94,000 compared to $888,000, primarily due to a decrease of loans sold to the secondary market as HTLF exits mortgage loan originations through PrimeWest.

Total noninterest expense for the fourth quarter of 2023 was $130.3 million compared to $117.2 million for the same quarter of 2022, which was an increase of $13.1 million or 11%. Significant changes within the noninterest expense category for the fourth quarter of 2023 compared to the fourth quarter of 2022 were:

Salaries and employee benefits totaled $64.8 million compared to $61.6 million, which was an increase of $3.2 million or 5%. The fourth quarter of 2023 included $813,000 higher severance related expenses and the fourth quarter of 2022 included a $1.5 million benefit associated with the employer tax credit. Increases in other components of salary expenses during the fourth quarter of 2023 were largely offset by lower incentive compensation expense.
FDIC insurance assessment of $10.3 million, which included a one-time special assessment of $8.1 million in the fourth quarter of 2023 compared to $1.9 million in the fourth quarter of 2022, which was an increase of $8.4 million.
Acquisition, integration and restructuring costs totaled $4.4 million compared to $2.4 million, an increase of $1.9 million or 79% due to the addition of HTLF 3.0 initiatives and the completion of the charter consolidation project.
Partnership investment in tax credit projects increased $326,000 or 10% to $3.6 million compared to $3.2 million. The expense is dependent upon the number and timing of tax credit projects placed into service.

HTLF's effective tax rate was 27.97% for the fourth quarter of 2023 compared to 18.67% for the fourth quarter of 2022. The following items impacted HTLF's fourth quarter 2023 and 2022 tax calculations:

Various tax credits of $3.8 million compared to $3.6 million.
Tax expense of $1.3 million compared to $561,000 resulting from disallowed interest expense related to tax-exempt loans and securities, aligning with the increases in total interest expense.
Tax-exempt interest income as a percentage of pre-tax income of (7.93%) compared to 10.85%.

For the years ended December 31, 2023 and 2022, HTLF's effective tax rate was 17.42% and 20.76%, respectively.

Total Assets, Total Loans and Total Deposits

Total assets were $19.41 billion at December 31, 2023, a decrease of $832.5 million or 4% from $20.24 billion at year-end 2022. Securities represented 29% and 35% of total assets at December 31, 2023, and December 31, 2022, respectively, primarily due to the balance sheet repositioning.

Total loans held to maturity were $12.07 billion at December 31, 2023, compared to $11.87 billion at September 30, 2023 and $11.43 billion at December 31, 2022. Loans increased $196.2 million or 2% during the fourth quarter of 2023 and $640.3 million or 6% since year-end 2022.

Significant changes by loan category at December 31, 2023 compared to September 30, 2023 included:

Commercial and business lending, which includes commercial and industrial, PPP, and owner occupied commercial real estate loans, increased $267.8 million or 4% to $6.29 billion at December 31, 2023, compared to $6.03 billion at September 30, 2023.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $120.5 million or 3% to $3.57 billion from $3.69 billion.
Agricultural and agricultural real estate loans totaled $919.2 million compared to $842.1 million, an increase of $77.1 million or 9%.
Residential loans totaled $797.8 million compared to $813.8 million, a decrease of $16.0 million or 2%.
Consumer loans decreased $12.2 million or 2% to $493.2 million from $505.4 million.

Significant changes by loan category at December 31, 2023 compared to December 31, 2022 included:

Commercial and business lending, which includes commercial and industrial, PPP, and owner occupied commercial real estate loans, increased $552.3 million or 10% to $6.29 billion at December 31, 2023, compared to $5.74 billion at December 31, 2022.
Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $158.4 million or 5% to $3.57 billion from $3.41 billion.
Agricultural and agricultural real estate loans totaled $919.2 million, a decrease of $1.3 million or less than 1% from $920.5 million.
Residential loans totaled $797.8 million compared to $853.4 million, a decrease of $55.5 million or 7%.
Consumer loans decreased $13.5 million or 3% to $493.2 million from $506.7 million.

Total deposits were $16.20 billion as of December 31, 2023, compared to $17.10 billion at September 30, 2023, which was a decrease of $899.3 million or 5%. Total deposits were $16.2 billion as of December 31, 2023, compared to $17.51 billion at December 31, 2022, a decrease of $1.31 billion or 7%.

Total customer deposits were $14.86 billion as of December 31, 2023, compared to $14.80 billion at September 30, 2023, which was an increase of $58.8 million or less than 1%. Significant customer deposit changes by category at December 31, 2023, compared to September 30, 2023, included:

Customer demand deposits decreased $292.5 million or 6% to $4.50 billion compared to $4.79 billion.
Customer savings deposits increased $220.8 million or 3% to $8.41 billion compared to $8.19 billion.
Customer time deposits increased $130.5 million or 7% to $1.94 billion compared to $1.81 billion.

Total customer deposits were $14.86 billion at December 31, 2023 compared to $15.22 billion at December 31, 2022, which was a decrease of $367.3 million or 2%. Significant customer deposit changes by category at December 31, 2023 compared to December 31, 2022, included:

Customer demand deposits decreased $1.20 billion or 21% to $4.50 billion compared to $5.70 billion.
Customer savings deposits decreased $259.7 million or 3% to $8.41 billion compared to $8.67 billion.
Customer time deposits increased $1.09 billion to $1.94 billion compared to $851.5 million.

Total wholesale and institutional deposits were $1.35 billion as of December 31, 2023, which was a decrease of $958.1 million or 42% from $2.30 billion at September 30, 2023. Significant wholesale and institutional deposit changes by category at December 31, 2023, compared to September 30, 2023, included:

Wholesale and institutional savings deposits decreased $170.1 million or 30% to $394.4 million compared to $564.5 million.
Wholesale time deposits decreased $788.0 million or 45% to $950.9 million compared to $1.74 billion.

Total wholesale and institutional deposits were $1.35 billion as of December 31, 2023, which was a decrease of $943.9 million or 41% from $2.29 billion at December 31, 2022. Significant wholesale and institutional deposit changes by category at December 31, 2023 compared to December 31, 2022 included:

Wholesale and institutional savings deposits decreased $929.1 million or 70% to $394.4 million compared to $1.32 billion.
Wholesale time deposits decreased $14.8 million or 2% to $950.9 million compared to $965.7 million.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans
Provision for credit losses for loans for the fourth quarter of 2023 was $12.8 million, which was an increase of $10.7 million from $2.1 million of provision benefit recorded in the fourth quarter of 2022. The provision expense for the fourth quarter of 2023 was primarily impacted by a customer that moved to non accrual due to its abrupt decision to discontinue business operations.

HTLF's allowance for credit losses for loans totaled $122.6 million at December 31, 2023, compared to $109.5 million at December 31, 2022, respectively. The following items impacted HTLF's allowance for credit losses for loans for the year ended December 31, 2023:

Provision expense for the year ended December 31, 2023, totaled $25.4 million.
Net charge-offs of $12.4 million were recorded for the year or 0.11% of average loans. Net charge-offs of $392,000 were recorded in the fourth quarter of 2022 or 0.01% of average loans.

Provision and Allowance for Credit Losses for Unfunded Commitments
HTLF's allowance for unfunded commitments totaled $16.5 million and $20.2 million at December 31, 2023 and December 31, 2022, respectively. The following impacted HTLF's allowance for credit losses for unfunded commitments during 2023:

Provision benefit for the year ended December 31, 2023, totaled $3.7 million.
Unfunded commitments decreased $103.9 million or 2% to $4.63 billion at December 31, 2023 compared to $4.73 billion at December 31, 2022.

Total Provision and Allowance for Lending Related Credit Losses
The total provision expense for lending related credit losses was $11.7 million for the fourth quarter of 2023 compared to $3.4 million for the fourth quarter of 2022. The total allowance for lending related credit losses was $139.0 million at December 31, 2023, which was 1.15% of total loans as of December 31, 2023, compared to $129.7 million or 1.13% of total loans as of December 31, 2022.

Nonperforming Assets

Nonperforming assets increased $43.6 million or 65% to $110.5 million, which was 0.57% of total assets at December 31, 2023, compared to $66.9 million or 0.33% of total assets at December 31, 2022. The increase was primarily driven by a well-collateralized long-term manufacturing customer who is experiencing cash flow challenges due to a recent acquisition. Nonperforming loans were $97.9 million or 0.81% of total loans at December 31, 2023, compared to $58.5 million or 0.51% of total loans at December 31, 2022. At December 31, 2023, loans delinquent 30-89 days were 0.09% of total loans compared to 0.04% of total loans at December 31, 2022.

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, 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 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 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.

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 28, 2025, 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 $19.41 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, 2022, 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;
Operational Risks, including processing, information systems, cybersecurity, vendor, business interruption, and fraud risks;
Strategic and External Risks, including economic, political, and competitive forces impacting our business;
Legal, Compliance and Reputational Risks, including regulatory and litigation risks; and
Risks of Owning Stock in HTLF, including stock price volatility and dilution as a result of future equity offerings and acquisitions.

There can be no assurance that other factors not currently anticipated by HTLF will not materially and adversely affect HTLF's business, financial condition and results of operations. Additionally, all statements in this release, including forward-looking statements speak only as of the date they are made. HTLF does not undertake and specifically disclaims any obligation to publicly release the results of any revisions which may be made to or correct or update any forward-looking statement to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events or to otherwise update any statement in light of new information or future events. Further information concerning HTLF and its business, including additional factors that could materially affect HTLF's financial results, is included in HTLF’s filings with the SEC.

-FINANCIAL TABLES FOLLOW-

CONTACT:
Kevin L. Thompson
Executive Vice President
Chief Financial Officer
(563) 589-1994
kthompson@htlf.com


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended December 31,						For the Year Ended December 31,
	2023			2022			2023			2022
Interest Income
Interest and fees on loans	$	192,861		$	143,970		$	697,997		$	477,970
Interest on securities:
Taxable		54,573			53,178			223,521			169,544
Nontaxable		6,278			6,132			25,268			24,006
Interest on federal funds sold		—			11			3			11
Interest on deposits with other banks and short-term investments		2,174			1,410			7,007			3,125
Total Interest Income		255,886			204,701			953,796			674,656
Interest Expense
Interest on deposits		88,071			32,215			319,688			56,880
Interest on borrowings		5,874			2,223			10,311			2,717
Interest on term debt		5,804			5,043			22,560			16,823
Total Interest Expense		99,749			39,481			352,559			76,420
Net Interest Income		156,137			165,220			601,237			598,236
Provision for credit losses		11,738			3,387			21,707			15,370
Net Interest Income After Provision for Credit Losses		144,399			161,833			579,530			582,866
Noninterest Income
Service charges and fees		18,708			17,432			74,024			68,031
Loan servicing income		158			790			1,561			2,741
Trust fees		4,905			5,440			20,715			22,570
Brokerage and insurance commissions		729			629			2,794			2,986
Capital market fees		1,676			1,824			10,007			11,543
Securities gains (losses), net		(140,007	)		(153	)		(141,539	)		(425	)
Unrealized gain (loss) on equity securities, net		75			(7	)		240			(622	)
Net gains on sale of loans held for sale		94			888			3,880			9,032
Valuation adjustment on servicing rights		—			—			—			1,658
Income on bank owned life insurance		729			600			3,771			2,341
Other noninterest income		1,132			2,532			3,621			8,409
Total Noninterest Income		(111,801	)		29,975			(20,926	)		128,264
Noninterest Expense
Salaries and employee benefits		64,766			61,611			251,276			254,478
Occupancy		6,509			6,905			26,847			28,155
Furniture and equipment		2,901			3,019			11,599			12,499
Professional fees		17,060			16,320			58,667			58,606
FDIC insurance assessments		10,313			1,866			19,940			7,000
Advertising		1,677			1,829			8,347			6,221
Core deposit and customer relationship intangibles amortization		1,611			1,841			6,739			7,834
Other real estate and loan collection expenses, net		505			373			1,489			950
(Gain) loss on sales/valuations of assets, net		2,072			2,388			(77	)		(1,047	)
Acquisition, integration and restructuring costs		4,365			2,442			10,359			7,586
Partnership investment in tax credit projects		3,573			3,247			5,401			5,040
Other noninterest expenses		14,933			15,377			61,240			56,055
Total Noninterest Expense		130,285			117,218			461,827			443,377
Income Before Income Taxes		(97,687	)		74,590			96,777			267,753
Income taxes		(27,324	)		13,936			16,857			55,573
Net Income/(Loss)		(70,363	)		60,654			79,920			212,180
Preferred dividends		(2,012	)		(2,012	)		(8,050	)		(8,050	)
Net Income/(Loss) Available to Common Stockholders	$	(72,375	)	$	58,642		$	71,870		$	204,130
Earnings/(loss) per common share-diluted	$	(1.69	)	$	1.37		$	1.68		$	4.79
Weighted average shares outstanding-diluted		42,838,405			42,699,752			42,791,795			42,630,703


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Interest Income
Interest and fees on loans	$	192,861		$	182,394		$	168,899		$	153,843		$	143,970
Interest on securities:
Taxable		54,573			54,800			58,172			55,976			53,178
Nontaxable		6,278			6,584			6,378			6,028			6,132
Interest on federal funds sold		—			3			—			—			11
Interest on deposits with other banks and short-term investments		2,174			1,651			2,051			1,131			1,410
Total Interest Income		255,886			245,432			235,500			216,978			204,701
Interest Expense
Interest on deposits		88,071			92,744			81,975			56,898			32,215
Interest on borrowings		5,874			1,167			848			2,422			2,223
Interest on term debt		5,804			5,765			5,545			5,446			5,043
Total Interest Expense		99,749			99,676			88,368			64,766			39,481
Net Interest Income		156,137			145,756			147,132			152,212			165,220
Provision for credit losses		11,738			1,516			5,379			3,074			3,387
Net Interest Income After Provision for Credit Losses		144,399			144,240			141,753			149,138			161,833
Noninterest Income
Service charges and fees		18,708			18,553			19,627			17,136			17,432
Loan servicing income		158			278			411			714			790
Trust fees		4,905			4,734			5,419			5,657			5,440
Brokerage and insurance commissions		729			692			677			696			629
Capital markets fees		1,676			1,845			4,037			2,449			1,824
Securities gains (losses), net		(140,007	)		(114	)		(314	)		(1,104	)		(153	)
Unrealized gain (loss) on equity securities, net		75			13			(41	)		193			(7	)
Net gains on sale of loans held for sale		94			905			1,050			1,831			888
Valuation adjustment on servicing rights		—			—			—			—			—
Income on bank owned life insurance		729			858			1,220			964			600
Other noninterest income		1,132			619			407			1,463			2,532
Total Noninterest Income		(111,801	)		28,383			32,493			29,999			29,975
Noninterest Expense
Salaries and employee benefits		64,766			62,262			62,099			62,149			61,611
Occupancy		6,509			6,438			6,691			7,209			6,905
Furniture and equipment		2,901			2,720			3,063			2,915			3,019
Professional fees		17,060			13,616			15,194			12,797			16,320
FDIC insurance assessments		10,313			3,313			3,035			3,279			1,866
Advertising		1,677			1,633			3,052			1,985			1,829
Core deposit and customer relationship intangibles amortization		1,611			1,625			1,715			1,788			1,841
Other real estate and loan collection expenses, net		505			481			348			155			373
(Gain) loss on sales/valuations of assets, net		2,072			108			(3,372	)		1,115			2,388
Acquisition, integration and restructuring costs		4,365			2,429			1,892			1,673			2,442
Partnership investment in tax credit projects		3,573			1,136			154			538			3,247
Other noninterest expenses		14,933			15,292			15,575			15,440			15,377
Total Noninterest Expense		130,285			111,053			109,446			111,043			117,218
Income Before Income Taxes		(97,687	)		61,570			64,800			68,094			74,590
Income taxes		(27,324	)		13,479			15,384			15,318			13,936
Net Income/(Loss)		(70,363	)		48,091			49,416			52,776			60,654
Preferred dividends		(2,012	)		(2,013	)		(2,012	)		(2,013	)		(2,012	)
Net Income/(Loss) Available to Common Stockholders	$	(72,375	)	$	46,078		$	47,404		$	50,763		$	58,642
Earnings/(loss) per common share-diluted	$	(1.69	)	$	1.08		$	1.11		$	1.19		$	1.37
Weighted average shares outstanding-diluted		42,838,405			42,812,563			42,757,603			42,742,878			42,699,752


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Assets
Cash and due from banks	$	275,554		$	248,756		$	317,303		$	274,354		$	309,045
Interest-bearing deposits with other banks and other short-term investments		47,459			99,239			82,884			87,757			54,042
Cash and cash equivalents		323,013			347,995			400,187			362,111			363,087
Time deposits in other financial institutions		1,240			1,490			1,490			1,740			1,740
Securities:
Carried at fair value		4,646,891			5,482,687			5,798,041			6,096,657			6,147,144
Held to maturity, at cost		838,241			835,468			834,673			832,098			829,403
Other investments, at cost		91,277			90,001			72,291			72,364			74,567
Loans held for sale		5,071			6,262			14,353			10,425			5,277
Loans:
Held to maturity		12,068,645			11,872,436			11,717,974			11,495,353			11,428,352
Allowance for credit losses		(122,566	)		(110,208	)		(111,198	)		(112,707	)		(109,483	)
Loans, net		11,946,079			11,762,228			11,606,776			11,382,646			11,318,869
Premises, furniture and equipment, net		181,070			187,436			190,420			191,267			197,330
Goodwill		576,005			576,005			576,005			576,005			576,005
Core deposit and customer relationship intangibles, net		18,415			20,026			21,651			23,366			25,154
Servicing rights, net		—			—			—			—			7,840
Cash surrender value on life insurance		197,085			196,694			195,793			194,419			193,403
Other real estate, net		12,548			14,362			2,677			7,438			8,401
Other assets		574,772			609,139			510,359			432,008			496,008
Total Assets	$	19,411,707		$	20,129,793		$	20,224,716		$	20,182,544		$	20,244,228
Liabilities and Equity
Liabilities
Deposits:
Demand	$	4,500,304		$	4,792,813		$	4,897,858		$	5,119,554		$	5,701,340
Savings		8,805,597			8,754,911			8,772,596			9,256,609			9,994,391
Time		2,895,813			3,553,269			3,993,089			3,305,183			1,817,278
Total deposits		16,201,714			17,100,993			17,663,543			17,681,346			17,513,009
Borrowings		622,255			392,634			44,364			92,337			376,117
Term debt		372,396			372,059			372,403			372,097			371,753
Accrued expenses and other liabilities		282,225			438,577			285,416			207,359			248,294
Total Liabilities		17,478,590			18,304,263			18,365,726			18,353,139			18,509,173
Stockholders' Equity
Preferred equity		110,705			110,705			110,705			110,705			110,705
Common stock		42,688			42,656			42,645			42,559			42,467
Capital surplus		1,090,740			1,088,267			1,087,358			1,084,112			1,080,964
Retained earnings		1,141,501			1,226,740			1,193,522			1,158,948			1,120,925
Accumulated other comprehensive income/(loss)		(452,517	)		(642,838	)		(575,240	)		(566,919	)		(620,006	)
Total Equity		1,933,117			1,825,530			1,858,990			1,829,405			1,735,055
Total Liabilities and Equity	$	19,411,707		$	20,129,793		$	20,224,716		$	20,182,544		$	20,244,228


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Average Balances
Assets	$	19,667,825		$	20,207,920		$	20,221,511		$	20,118,005		$	19,913,849
Loans, net of unearned		11,938,272			11,800,064			11,625,442			11,378,078			11,117,513
Total deposits		16,709,394			17,507,813			17,689,138			17,505,867			17,319,218
Customer deposits		14,969,948			14,699,235			14,655,535			15,123,181			15,739,698
Earning assets		17,853,957			18,439,010			18,523,552			18,392,649			18,175,838
Interest-bearing liabilities		12,721,680			13,158,631			13,209,794			12,582,234			11,980,032
Common equity		1,729,086			1,746,818			1,727,013			1,655,860			1,548,739
Total stockholders' equity		1,839,791			1,857,523			1,837,718			1,766,565			1,659,444
Tangible common equity (non-GAAP)⁽¹⁾		1,133,888			1,149,992			1,128,527			1,055,617			946,688

Key Performance Ratios
Annualized return on average assets	(1.42		)%		0.94	%		0.98	%		1.06	%		1.21	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		0.96			0.98			0.96			1.12			1.28
Annualized return on average common equity (GAAP)		(16.61	)		10.47			11.01			12.43			15.02
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.46			10.92			10.80			13.16			16.00
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		(24.89	)		16.32			17.31			20.03			25.17
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		16.38			17.02			17.00			21.17			26.77
Annualized ratio of net charge-offs (recoveries) to average loans		0.01			0.12			0.32			(0.04	)		(0.06	)
Annualized net interest margin (GAAP)		3.47			3.14			3.19			3.36			3.61
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.52			3.18			3.23			3.40			3.65
Efficiency ratio (GAAP)		293.86			63.77			60.93			60.94			60.05
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		59.31			59.95			59.88			57.16			54.33
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.63			2.18			2.17			2.24			2.34
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.23			2.08			2.16			2.14			2.14

(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.


	For the Quarter Ended December 31,						For the Year Ended December 31,
	2023			2022			2023			2022
Average Balances
Assets	$	19,667,825		$	19,913,849		$	20,053,004		$	19,621,839
Loans, net of unearned		11,938,272			11,117,513			11,687,313			10,608,831
Deposits		16,709,394			17,319,218			17,351,294			17,029,398
Earning assets		17,853,957			18,175,838			18,301,190			18,021,134
Interest-bearing liabilities		12,721,680			11,980,032			12,919,125			11,437,921
Common equity		1,729,086			1,548,739			1,714,983			1,738,041
Total stockholders' equity		1,839,791			1,659,444			1,825,688			1,848,746
Tangible common equity (non-GAAP)⁽¹⁾		1,133,888			946,688			1,117,311			1,133,124

Key Performance Ratios
Annualized return on average assets	(1.42		)%		1.21	%		0.40	%		1.08	%
Adjusted annualized return on average assets (non-GAAP)⁽¹⁾		0.96			1.28			1.01			1.11
Annualized return on average common equity (GAAP)		(16.61	)		15.02			4.19			11.74
Adjusted annualized return on average common equity (non-GAAP)⁽¹⁾		10.46			16.00			11.31			12.06
Annualized return on average tangible common equity (non-GAAP)⁽¹⁾		(24.89	)		25.17			6.89			18.55
Adjusted annualized return on average tangible common equity (non-GAAP)⁽¹⁾		16.38			26.77			17.82			19.03
Annualized ratio of net charge-offs (recoveries) to average loans		0.01			(0.06	)		0.11			0.11
Annualized net interest margin (GAAP)		3.47			3.61			3.29			3.32
Annualized net interest margin, fully tax-equivalent (non-GAAP)⁽¹⁾		3.52			3.65			3.33			3.37
Efficiency ratio (GAAP)		293.86			60.05			79.58			61.03
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)⁽¹⁾		59.31			54.33			59.06			57.74
Annualized ratio of total noninterest expenses to average assets (GAAP)		2.63			2.34			2.30			2.26
Annualized ratio of core expenses to average assets (non-GAAP)⁽¹⁾		2.23			2.14			2.15			2.16

(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
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Common Share Data
Book value per common share	$	42.69		$	40.20		$	41.00		$	40.38		$	38.25
Tangible book value per common share (non-GAAP)⁽¹⁾		28.77			26.23			26.98			26.30			24.09
ASC 320 effect on book value per common share		(11.00	)		(16.27	)		(14.04	)		(13.35	)		(14.58	)

Common shares outstanding, net of treasury stock		42,688,008			42,656,303			42,644,544			42,558,726			42,467,394

Capital Ratios
Common equity ratio		9.27	%		8.49	%		8.65	%		8.54	%		8.16	%
Tangible common equity ratio (non-GAAP)⁽¹⁾		6.53			5.73			5.86			5.72			5.21
Tier 1 leverage ratio		9.44			9.59			9.40			9.25			9.13
Common equity tier 1 ratio⁽²⁾		10.97			11.37			11.33			11.28			11.07
Total risk based capital ratio⁽²⁾		14.53			14.90			14.93			14.98			14.76

Other Selected Trend Information
Effective tax rate		27.97	%		21.89	%		23.74	%		22.50	%		18.68	%
Full time equivalent employees		1,970			1,965			1,966			1,991			2,002

Loans Held to Maturity
Commercial and industrial	$	3,652,047		$	3,591,809		$	3,590,680		$	3,498,345		$	3,464,414
Paycheck Protection Program ("PPP")		2,777			3,750			4,139			8,258			11,025
Owner occupied commercial real estate		2,638,175			2,429,659			2,398,698			2,312,538			2,265,307
Commercial and business lending		6,292,999			6,025,218			5,993,517			5,819,141			5,740,746
Non-owner occupied commercial real estate		2,553,711			2,656,358			2,530,736			2,421,341			2,330,940
Real estate construction		1,011,716			1,029,554			1,013,134			1,102,186			1,076,082
Commercial real estate lending		3,565,427			3,685,912			3,543,870			3,523,527			3,407,022
Total commercial lending		9,858,426			9,711,130			9,537,387			9,342,668			9,147,768
Agricultural and agricultural real estate		919,184			842,116			839,817			810,183			920,510
Residential mortgage		797,829			813,803			828,437			841,084			853,361
Consumer		493,206			505,387			512,333			501,418			506,713
Total loans held to maturity	$	12,068,645		$	11,872,436		$	11,717,974		$	11,495,353		$	11,428,352

Total unfunded loan commitments	$	4,625,768		$	4,813,798		$	4,905,147		$	4,867,925		$	4,729,677

Deposits
Demand-customer	$	4,500,304		$	4,792,813		$	4,897,858		$	5,119,554		$	5,701,340
Savings-customer		8,411,240			8,190,430			8,149,596			8,501,337			8,670,898
Savings-wholesale and institutional		394,357			564,481			623,000			755,272			1,323,493
Total savings		8,805,597			8,754,911			8,772,596			9,256,609			9,994,391
Time-customer		1,944,884			1,814,335			1,597,849			1,071,476			851,539
Time-wholesale		950,929			1,738,934			2,395,240			2,233,707			965,739
Total time		2,895,813			3,553,269			3,993,089			3,305,183			1,817,278
Total deposits	$	16,201,714		$	17,100,993		$	17,663,543		$	17,681,346		$	17,513,009

Total customer deposits	$	14,856,428		$	14,797,578		$	14,645,303		$	14,692,367		$	15,223,777
Total wholesale and institutional deposits		1,345,286			2,303,415			3,018,240			2,988,979			2,289,232
Total deposits	$	16,201,714		$	17,100,993		$	17,663,543		$	17,681,346		$	17,513,009

(1) Refer to "Non-GAAP Measures" in this earnings release for additional information on the usage and presentation of these non-GAAP measures, and refer to these financial tables for the reconciliations to the most directly comparable GAAP measures.
(2) December 31, 2023 calculation is preliminary.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and for the Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Allowance for Credit Losses-Loans
Balance, beginning of period	$	110,208		$	111,198		$	112,707		$	109,483		$	105,715
Provision (benefit) for credit losses		12,750			2,672			7,829			2,184			2,075
Charge-offs		(3,886	)		(3,964	)		(9,613	)		(2,151	)		(2,668	)
Recoveries		3,494			302			275			3,191			4,361
Balance, end of period	$	122,566		$	110,208		$	111,198		$	112,707		$	109,483

Allowance for Unfunded Commitments
Balance, beginning of period	$	17,480		$	18,636		$	21,086		$	20,196		$	18,884
Provision for credit losses		(1,012	)		(1,156	)		(2,450	)		890			1,312
Balance, end of period	$	16,468		$	17,480		$	18,636		$	21,086		$	20,196

Allowance for lending related credit losses	$	139,034		$	127,688		$	129,834		$	133,793		$	129,679

Provision for Credit Losses
Provision (benefit) for credit losses-loans	$	12,750		$	2,672		$	7,829		$	2,184		$	2,075
Provision for credit losses-unfunded commitments		(1,012	)		(1,156	)		(2,450	)		890			1,312
Total provision (benefit) for credit losses	$	11,738		$	1,516		$	5,379		$	3,074		$	3,387

Asset Quality
Nonaccrual loans	$	95,426		$	51,304		$	61,956		$	58,066		$	58,231
Loans past due ninety days or more		2,507			511			1,459			174			273
Other real estate owned		12,548			14,362			2,677			7,438			8,401
Other repossessed assets		—			1			5			24			26
Total nonperforming assets	$	110,481		$	66,178		$	66,097		$	65,702		$	66,931

Nonperforming Assets Activity
Balance, beginning of period	$	66,178		$	66,097		$	65,702		$	66,931		$	73,268
Net loan (charge offs) recoveries		(392	)		(3,662	)		(9,338	)		1,040			1,693
New nonperforming loans		61,193			19,295			19,805			4,626			1,439
Reduction of nonperforming loans⁽¹⁾		(14,278	)		(14,691	)		(5,253	)		(5,711	)		(8,875	)
OREO/Repossessed assets sales proceeds		(2,220	)		(861	)		(4,819	)		(1,184	)		(594	)
Balance, end of period	$	110,481		$	66,178		$	66,097		$	65,702		$	66,931

Asset Quality Ratios
Ratio of nonperforming loans to total loans		0.81	%		0.44	%		0.54	%		0.51	%		0.51	%
Ratio of nonperforming assets to total assets		0.57			0.33			0.33			0.33			0.33
Annualized ratio of net loan charge-offs (recoveries) to average loans		0.01			0.12			0.32			(0.04	)		(0.06	)
Allowance for loan credit losses as a percent of loans		1.02			0.93			0.95			0.98			0.96
Allowance for lending related credit losses as a percent of loans		1.15			1.08			1.11			1.16			1.13
Allowance for loan credit losses as a percent of nonperforming loans		125.15			212.70			175.35			193.52			187.14
Loans delinquent 30-89 days as a percent of total loans		0.09			0.12			0.12			0.10			0.04

(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, 2023							September 30, 2023							December 31, 2022
	Average Balance			Interest		Rate		Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	5,119,970		$	54,573	4.23	%	$	5,726,057		$	54,800	3.80	%	$	6,122,313		$	53,178	3.45	%
Nontaxable⁽¹⁾		759,464			7,681	4.01			881,162			8,085	3.64			890,368			7,762	3.46
Total securities		5,879,434			62,254	4.20			6,607,219			62,885	3.78			7,012,681			60,940	3.45
Interest on deposits with other banks and other short-term investments		146,027			2,174	5.91			142,301			1,651	4.60			151,405			1,410	3.69
Federal funds sold		—			—	—			152			3	7.83			739			11	5.91
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,624,034			66,980	7.33			3,610,677			63,001	6.92			3,346,843			45,290	5.37
PPP loans		3,064			8	1.04			3,948			11	1.11			12,252			397	12.86
Owner occupied commercial real estate		2,436,234			31,714	5.16			2,412,501			30,127	4.95			2,277,055			26,194	4.56
Non-owner occupied commercial real estate		2,688,805			42,417	6.26			2,586,011			38,779	5.95			2,286,298			29,273	5.08
Real estate construction		1,035,010			20,200	7.74			1,027,544			19,448	7.51			1,050,802			16,585	6.26
Agricultural and agricultural real estate		844,353			13,069	6.14			822,957			12,582	6.07			785,647			10,159	5.13
Residential mortgage		810,069			9,531	4.67			827,402			9,482	4.55			858,767			9,168	4.24
Consumer		496,703			9,597	7.67			509,024			9,615	7.49			499,849			7,426	5.89
Less: allowance for credit losses-loans		(109,776	)		—	—			(110,726	)		—	—			(106,500	)		—	—
Net loans		11,828,496			193,516	6.49			11,689,338			183,045	6.21			11,011,013			144,492	5.21
Total earning assets		17,853,957			257,944	5.73	%		18,439,010			247,584	5.33	%		18,175,838			206,853	4.52	%
Nonearning Assets		1,813,868							1,768,910							1,738,011
Total Assets	$	19,667,825						$	20,207,920						$	19,913,849
Interest-bearing Liabilities
Savings	$	8,782,197		$	53,807	2.43	%	$	8,737,581		$	49,195	2.23	%	$	9,987,692		$	25,950	1.03	%
Time deposits		3,165,788			34,264	4.29			3,945,371			43,549	4.38			1,322,094			6,265	1.88
Borrowings		401,463			5,874	5.80			103,567			1,167	4.47			298,804			2,223	2.95
Term debt		372,232			5,804	6.19			372,112			5,765	6.15			371,442			5,043	5.39
Total interest-bearing liabilities		12,721,680			99,749	3.11	%		13,158,631			99,676	3.01	%		11,980,032			39,481	1.31	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		4,761,409							4,824,861							6,009,432
Accrued interest and other liabilities		344,945							366,905							264,941
Total noninterest-bearing liabilities		5,106,354							5,191,766							6,274,373
Equity		1,839,791							1,857,523							1,659,444
Total Liabilities and Equity	$	19,667,825						$	20,207,920						$	19,913,849
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	158,195						$	147,908						$	167,372
Net interest spread⁽¹⁾						2.62	%						2.32	%						3.21	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets⁽¹⁾⁽³⁾						3.52	%						3.18	%						3.65	%
Interest-bearing liabilities to earning assets		71.25	%						71.36	%						65.91	%

(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, 2023							December 31, 2022
	Average Balance			Interest		Rate		Average Balance			Interest		Rate
Earning Assets
Securities:
Taxable	$	5,723,603		$	223,521	3.91	%	$	6,335,586		$	169,544	2.68	%
Nontaxable⁽¹⁾		864,288			31,292	3.62			965,474			30,387	3.15
Total securities		6,587,891			254,813	3.87			7,301,060			199,931	2.74
Interest-bearing deposits with other banks and other short-term investments		136,964			7,007	5.12			216,786			3,125	1.44
Federal funds sold		38			3	7.89			192			11	5.73
Loans:⁽²⁾
Commercial and industrial⁽¹⁾		3,566,610			236,532	6.63			3,070,890			140,310	4.57
PPP loans		5,797			69	1.19			50,464			6,884	13.64
Owner occupied commercial real estate		2,375,883			116,641	4.91			2,272,088			93,936	4.13
Non-owner occupied commercial real estate		2,517,645			147,528	5.86			2,196,922			99,202	4.52
Real estate construction		1,047,192			76,307	7.29			923,316			48,258	5.23
Agricultural and agricultural real estate		837,861			49,260	5.88			778,526			34,064	4.38
Residential mortgage		832,562			37,669	4.52			852,541			34,276	4.02
Consumer		503,763			36,522	7.25			464,084			23,058	4.97
Less: allowance for credit losses-loans		(111,016	)		—	—			(105,735	)		—	—
Net loans		11,576,297			700,528	6.05			10,503,096			479,988	4.57
Total earning assets		18,301,190			962,351	5.26	%		18,021,134			683,055	3.79	%
Nonearning Assets		1,751,814							1,600,705
Total Assets	$	20,053,004						$	19,621,839
Interest-bearing Liabilities
Savings	$	9,043,067		$	182,179	2.01	%	$	9,737,100		$	46,623	0.48	%
Time deposits		3,299,405			137,509	4.17			1,160,538			10,257	0.88
Borrowings		204,524			10,311	5.04			168,404			2,717	1.61
Term debt		372,129			22,560	6.06			371,879			16,823	4.52
Total interest-bearing liabilities		12,919,125			352,559	2.73	%		11,437,921			76,420	0.67	%
Noninterest-bearing Liabilities
Noninterest-bearing deposits		5,008,822							6,131,760
Accrued interest and other liabilities		299,369							203,412
Total noninterest-bearing liabilities		5,308,191							6,335,172
Equity		1,825,688							1,848,746
Total Liabilities and Equity	$	20,053,004						$	19,621,839
Net interest income, fully tax-equivalent (non-GAAP)⁽¹⁾⁽³⁾				$	609,792						$	606,635
Net interest spread⁽¹⁾						2.53	%						3.12	%
Net interest income, fully tax-equivalent (non-GAAP) to total earning assets⁽¹⁾⁽³⁾						3.33	%						3.37	%
Interest-bearing liabilities to earning assets		70.59	%						63.47	%

(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
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	(72,375	)	$	46,078		$	47,404		$	50,763		$	58,642
Plus core deposit and customer relationship intangibles amortization, net of tax⁽²⁾		1,229			1,240			1,309			1,364			1,410
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	(71,146	)	$	47,318		$	48,713		$	52,127		$	60,052

Average common equity (GAAP)	$	1,729,086		$	1,746,818		$	1,727,013		$	1,655,860		$	1,548,739
Less average goodwill		576,005			576,005			576,005			576,005			576,005
Less average core deposit and customer relationship intangibles, net		19,193			20,821			22,481			24,238			26,046
Average tangible common equity (non-GAAP)	$	1,133,888		$	1,149,992		$	1,128,527		$	1,055,617		$	946,688
Annualized return on average common equity (GAAP)	(16.61		)%		10.47	%		11.01	%		12.43	%		15.02	%
Annualized return on average tangible common equity (non-GAAP)	(24.89		)%		16.32	%		17.31	%		20.03	%		25.17	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	156,137		$	145,756		$	147,132		$	152,212		$	165,220
Plus tax-equivalent adjustment⁽¹⁾		2,058			2,152			2,136			2,209			2,152
Net interest income, fully tax-equivalent (non-GAAP)	$	158,195		$	147,908		$	149,268		$	154,421		$	167,372

Average earning assets	$	17,853,957		$	18,439,010		$	18,523,552		$	18,392,649		$	18,175,838

Annualized net interest margin (GAAP)		3.47	%		3.14	%		3.19	%		3.36	%		3.61	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.52			3.18			3.23			3.40			3.65
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.02			0.01			0.03			0.02			0.03

*Reconciliation of Tangible Book Value Per Common Share (non-GAAP)*
Common equity (GAAP)	$	1,822,412		$	1,714,825		$	1,748,285		$	1,718,700		$	1,624,350
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit and customer relationship intangibles, net		18,415			20,026			21,651			23,366			25,154
Tangible common equity (non-GAAP)	$	1,227,992		$	1,118,794		$	1,150,629		$	1,119,329		$	1,023,191

Common shares outstanding, net of treasury stock		42,688,008			42,656,303			42,644,544			42,558,726			42,467,394
Common equity (book value) per share (GAAP)	$	42.69		$	40.20		$	41.00		$	40.38		$	38.25
Tangible book value per common share (non-GAAP)	$	28.77		$	26.23		$	26.98		$	26.30		$	24.09

*Reconciliation of Tangible Common Equity Ratio (non-GAAP)*
Tangible common equity (non-GAAP)	$	1,227,992		$	1,118,794		$	1,150,629		$	1,119,329		$	1,023,191

Total assets (GAAP)	$	19,411,707		$	20,129,793		$	20,224,716		$	20,182,544		$	20,244,228
Less goodwill		576,005			576,005			576,005			576,005			576,005
Less core deposit and customer relationship intangibles, net		18,415			20,026			21,651			23,366			25,154
Total tangible assets (non-GAAP)	$	18,817,287		$	19,533,762		$	19,627,060		$	19,583,173		$	19,643,069
Tangible common equity ratio (non-GAAP)		6.53	%		5.73	%		5.86	%		5.72	%		5.21	%

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
*Reconciliation of Adjusted Efficiency Ratio, fully tax-equivalent (non-GAAP)*
Net interest income (GAAP)	$	156,137		$	145,756		$	147,132		$	152,212		$	165,220
Tax-equivalent adjustment⁽¹⁾		2,058			2,152			2,136			2,209			2,152
Fully tax-equivalent net interest income		158,195			147,908			149,268			154,421			167,372
Noninterest income		(111,801	)		28,383			32,493			29,999			29,975
Securities (gains)/losses, net		140,007			114			314			1,104			153
Unrealized (gain) loss on equity securities, net		(75	)		(13	)		41			(193	)		7
Valuation adjustment on servicing rights		—			—			—			—			—
Adjusted revenue (non-GAAP)	$	186,326		$	176,392		$	182,116		$	185,331		$	197,507

Total noninterest expenses (GAAP)	$	130,285		$	111,053		$	109,446		$	111,043		$	117,218
Less:
Core deposit and customer relationship intangibles amortization		1,611			1,625			1,715			1,788			1,841
Partnership investment in tax credit projects		3,573			1,136			154			538			3,247
(Gain) loss on sales/valuation of assets, net		2,072			108			(3,372	)		1,115			2,388
Acquisition, integration and restructuring costs		4,365			2,429			1,892			1,673			2,442
FDIC special assessment		8,145			—			—			—			—
Core expenses (non-GAAP)	$	110,519		$	105,755		$	109,057		$	105,929		$	107,300

Efficiency ratio (GAAP)		293.86	%		63.77	%		60.93	%		60.94	%		60.05	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		59.31	%		59.95	%		59.88	%		57.16	%		54.33	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	130,285		$	111,053		$	109,446		$	111,043		$	117,218
Core expenses (non-GAAP)		110,519			105,755			109,057			105,929			107,300

Average assets	$	19,667,825		$	20,207,920		$	20,221,511		$	20,118,005		$	19,913,849
Total noninterest expenses to average assets (GAAP)		2.63	%		2.18	%		2.17	%		2.24	%		2.34	%
Core expenses to average assets (non-GAAP)		2.23	%		2.08	%		2.16	%		2.14	%		2.14	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	1,425		$	94		$	93		$	74		$	424
Occupancy		1,092			—			—			—			—
Furniture and equipment		19			—			—			—			—
Professional fees		793			1,617			1,068			934			1,587
Advertising		28			178			222			122			95
Other noninterest expenses		1,008			540			509			543			336
Total acquisition, integration and restructuring costs	$	4,365		$	2,429		$	1,892		$	1,673		$	2,442

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
*Reconciliation of Adjusted Earnings*
Net income/(loss)	$	(70,363	)	$	48,091		$	49,416		$	52,776		$	60,654
Loss from sale of securities		140,007			114			314			1,104			153
(Gain) loss on sales/valuation of assets, net		2,072			108			(3,372	)		1,115			2,388
Acquisition, integration and restructuring costs		4,365			2,429			1,892			1,673			2,442
FDIC special assessment		8,145			—			—			—			—
Total adjustments		154,589			2,651			(1,166	)		3,892			4,983
Tax effect of adjustments⁽²⁾		(36,638	)		(628	)		276			(922	)		(1,166	)
Adjusted earnings	$	47,588		$	50,114		$	48,526		$	55,746		$	64,471

Preferred dividends		(2,012	)		(2,013	)		(2,012	)		(2,013	)		(2,012	)
Adjusted earnings available to common stockholders	$	45,576		$	48,101		$	46,514		$	53,733		$	62,459

Plus core deposit and customer relationship intangibles amortization, net of tax⁽²⁾		1,229			1,240			1,309			1,364			1,410
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	46,805		$	49,341		$	47,823		$	55,097		$	63,869


*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	19,667,825		$	20,207,920		$	20,221,511		$	20,118,005		$	19,913,849
Adjusted annualized return on average assets (non-GAAP)		0.96	%		0.98	%		0.96	%		1.12	%		1.28	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders' equity (GAAP)	$	1,729,086		$	1,746,818		$	1,727,013		$	1,655,860		$	1,548,739
Adjusted annualized average common equity (non-GAAP)		10.46	%		10.92	%		10.80	%		13.16	%		16.00	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,133,888		$	1,149,992		$	1,128,527		$	1,055,617		$	946,688
Adjusted annualized average tangible common equity (non-GAAP)		16.38	%		17.02	%		17.00	%		21.17	%		26.77	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		42,838,405			42,812,563			42,757,603			42,742,878			42,699,752
Adjusted diluted earnings per common share	$	1.06		$	1.12		$	1.09		$	1.26		$	1.46

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended December 31,						For the Year Ended December 31,
	2023			2022			2023			2022
*Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)*
Earnings available to common stockholders (GAAP)	$	(72,375	)	$	58,642		$	71,870		$	204,130
Plus core deposit and customer relationship intangibles amortization, net of tax⁽²⁾		1,229			1,410			5,142			6,071
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	(71,146	)	$	60,052		$	77,012		$	210,201

Average common equity (GAAP)	$	1,729,086		$	1,548,739		$	1,714,983		$	1,738,041
Less average goodwill		576,005			576,005			576,005			576,005
Less average core deposit and customer relationship intangibles, net		19,193			26,046			21,667			28,912
Average tangible common equity (non-GAAP)	$	1,133,888		$	946,688		$	1,117,311		$	1,133,124
Annualized return on average common equity (GAAP)	(16.61		)%		15.02	%		4.19	%		11.74	%
Annualized return on average tangible common equity (non-GAAP)	(24.89		)%		25.17	%		6.89	%		18.55	%

*Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)*
Net Interest Income (GAAP)	$	156,137		$	165,220		$	601,237		$	598,236
Plus tax-equivalent adjustment⁽¹⁾		2,058			2,152			8,555			8,399
Net interest income, fully tax-equivalent (non-GAAP)	$	158,195		$	167,372		$	609,792		$	606,635

Average earning assets	$	17,853,957		$	18,175,838		$	18,301,190		$	18,021,134

Annualized net interest margin (GAAP)		3.47	%		3.61	%		3.29	%		3.32	%
Annualized net interest margin, fully tax-equivalent (non-GAAP)		3.52			3.65			3.33			3.37
Net purchase accounting discount amortization on loans included in annualized net interest margin		0.02			0.03			0.02			0.04

(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.
(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended December 31,						For the Year Ended December 31,
	2023			2022			2023			2022
*Reconciliation of Efficiency Ratio (non-GAAP)*
Net interest income (GAAP)	$	156,137		$	165,220		$	601,237		$	598,236
Tax-equivalent adjustment⁽¹⁾		2,058			2,152			8,555			8,399
Fully tax-equivalent net interest income		158,195			167,372			609,792			606,635
Noninterest income		(111,801	)		29,975			(20,926	)		128,264
Securities (gains)/losses, net		140,007			153			141,539			425
Unrealized (gain) loss on equity securities, net		(75	)		7			(240	)		622
Valuation adjustment on servicing rights		—			—			—			(1,658	)
Adjusted revenue (non-GAAP)	$	186,326		$	197,507		$	730,165		$	734,288

Total noninterest expenses (GAAP)	$	130,285		$	117,218		$	461,827		$	443,377
Less:
Core deposit and customer relationship intangibles amortization		1,611			1,841			6,739			7,834
Partnership investment in tax credit projects		3,573			3,247			5,401			5,040
(Gain) loss on sales/valuations of assets, net		2,072			2,388			(77	)		(1,047	)
Acquisition, integration and restructuring costs		4,365			2,442			10,359			7,586
FDIC special assessment		8,145			—			8,145			—
Core expenses (non-GAAP)	$	110,519		$	107,300		$	431,260		$	423,964
Efficiency ratio (GAAP)		293.86	%		60.05	%		79.58	%		61.03	%
Adjusted efficiency ratio, fully tax-equivalent (non-GAAP)		59.31	%		54.33	%		59.06	%		57.74	%

*Reconciliation of Annualized Ratio of Core Expenses to Average Assets (non-GAAP)*
Total noninterest expenses (GAAP)	$	130,285		$	117,218		$	461,827		$	443,377
Core expenses (non-GAAP)		110,519			107,300			431,260			423,964

Average assets	$	19,667,825		$	19,913,849		$	20,053,004		$	19,621,839
Total noninterest expenses to average assets (GAAP)		2.63	%		2.34	%		2.30	%		2.26	%
Core expenses to average assets (non-GAAP)		2.23	%		2.14	%		2.15	%		2.16	%

Acquisition, integration and restructuring costs
Salaries and employee benefits	$	1,425		$	424		$	1,686		$	1,404
Occupancy		1,092			—			1,092			—
Furniture and equipment		19			—			19			—
Professional fees		793			1,587			4,412			5,082
Advertising		28			95			550			382
Other noninterest expenses		1,008			336			2,600			718
Total acquisition, integration and restructuring costs	$	4,365		$	2,442		$	10,359		$	7,586

(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,
	2023			2022			2023			2022
*Reconciliation of Adjusted Earnings (non-GAAP)*
Net income/(loss)	$	(70,363	)	$	60,654		$	79,920		$	212,180
Loss from sale of securities		140,007			153			141,539			425
(Gain) loss on sales/valuation of assets, net		2,072			2,388			(77	)		(1,047	)
Acquisition, integration and restructuring costs		4,365			2,442			10,359			7,586
FDIC special assessment		8,145			—			8,145			—
Total adjustments		154,589			4,983			159,966			6,964
Tax effect of adjustments⁽²⁾		(36,638	)		(1,166	)		(37,912	)		(1,567	)
Adjusted earnings	$	47,588		$	64,471		$	201,974		$	217,577

Preferred dividends		(2,012	)		(2,012	)		(8,050	)		(8,050	)
Adjusted earnings available to common stockholders	$	45,576		$	62,459		$	193,924		$	209,527

Plus core deposit and customer relationship intangibles amortization, net of tax⁽²⁾		1,229			1,410			5,142			6,071
Earnings available to common stockholders excluding intangible amortization (non-GAAP)	$	46,805		$	63,869		$	199,066		$	215,598


*Reconciliation of Adjusted Annualized Return on Average Assets*
Average assets	$	19,667,825		$	19,913,849		$	20,053,004		$	19,621,839
Adjusted annualized return on average assets (non-GAAP)		0.96	%		1.28	%		1.01	%		1.11	%

*Reconciliation of Adjusted Annualized Return on Average Common Equity*
Average common stockholders' equity (GAAP)	$	1,729,086		$	1,548,739		$	1,714,983		$	1,738,041
Adjusted annualized average common equity (non-GAAP)		10.46	%		16.00	%		11.31	%		12.06	%

*Reconciliation of Adjusted Annualized Return on Average Tangible Common Equity*
Average tangible common equity (non-GAAP)	$	1,133,888		$	946,688		$	1,117,311		$	1,133,124
Adjusted annualized average tangible common equity (non-GAAP)		16.38	%		26.77	%		17.82	%		19.03	%

*Reconciliation of Adjusted Diluted Earnings Per Common Share*
Weighted average shares outstanding-diluted		42,838,405			42,699,752			42,791,795			42,630,703
Adjusted diluted earnings per common share	$	1.06		$	1.46		$	4.53		$	4.91

(2) Tax effect is calculated based on the respective periods’ year-to-date effective tax rate excluding the impact of discrete items.

Heartland Financial USA, Inc. ("HTLF") Reports Annual Earnings and Fourth Quarter Results as of December 31, 2023

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