Heartland Financial USA, Inc. ("HTLF") Reports Quarterly and Year to Date Results as of September 30, 2021

Highlights and Developments

• Quarterly net income available to common stockholders of $53.9 million compared to $45.5 million for the third quarter of 2020, an increase of $8.4 million or 18%  
• Year to date net income available to common stockholders of $164.3 million compared to $95.7 million for the nine months ended September 30, 2020, an increase of $68.6 million or 72%  
• Quarterly loan growth of $262.8 million or 11% annualized, exclusive of Paycheck Protection Program ("PPP") loans  
• Net recoveries on previously charged off loans of $1.3 million, nonperforming assets to total assets declined to 0.46%, and 30-89 day loan delinquencies fell to 0.12% of total loans for the third quarter of 2021  
• PPP loan forgiveness received of $419.9 million during the third quarter of 2021  
• Completed offering of $150.0 million of subordinated notes with net proceeds totaling $147.6 million and fixed-to-floating interest rate set at 2.75% for the first five years  
• Announced an 8% increase in the regular quarterly dividend to $0.27 per common share

	Quarter EndedSeptember 30,								Nine Months EndedSeptember 30,
	2021				2020				2021				2020
Net income available to common stockholders (in millions)	$	53.9			$	45.5			$	164.3			$	95.7
Diluted earnings per common share	1.27				1.23				3.88				2.59
Return on average assets	1.19		%		1.26		%		1.25		%		0.92		%
Return on average common equity	10.32				10.90				10.95				7.90
Return on average tangible common equity (non-GAAP)(1)	15.14				16.11				16.34				12.10
Net interest margin	3.30				3.51				3.37				3.70
Net interest margin, fully tax-equivalent (non-GAAP)(1)	3.34				3.55				3.41				3.74
Efficiency ratio, fully-tax equivalent (non-GAAP)(1)	60.38				54.67				58.05				57.28

(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 had another solid quarter driven by our strong balance sheet and excellent credit metrics. We were pleased with the trajectory of non-PPP loan growth, our record low level of loan delinquencies and the net recoveries on previously charged-off loans for the quarter. We are also continuing to explore ways to improve operational efficiency, including evaluating the consolidation of our 11 bank charters."

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

DUBUQUE, Iowa, Oct. 25, 2021 (GLOBE NEWSWIRE) -- Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following results for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020:

• Net income available to common stockholders of $53.9 million compared to $45.5 million, an increase of $8.4 million or 18%.
• Earnings per diluted common share of $1.27 compared to $1.23, an increase of $0.04 or 3%.
• Net interest income of $142.5 million compared to $122.5 million, an increase of $20.0 million or 16%.
• Return on average common equity was 10.32% and return on average assets was 1.19% compared to 10.90% and 1.26%.
• Return on average tangible common equity (non-GAAP) was 15.14% compared to 16.11%.

HTLF reported the following results for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020:

• Net income available to common stockholders of $164.3 million compared to $95.7 million, an increase of $68.6 million or 72%.
• Earnings per diluted common share of $3.88 compared to $2.59, an increase of $1.29 or 50%.
• Net interest income of $423.4 million compared to $359.2 million, an increase of $64.2 million or 18%.
• Return on average common equity was 10.95% and return on average assets was 1.25% compared to 7.90% and 0.92%.
• Return on average tangible common equity (non-GAAP) was 16.34% compared to 12.10%.

"HTLF had another solid quarter driven by our strong balance sheet and excellent credit metrics. We were pleased with the trajectory of non-PPP loan growth, our record low level of loan delinquencies and the net recoveries on previously charged-off loans for the quarter. We are also continuing to explore ways to improve operational efficiency, including evaluating the consolidation of our 11 bank charters," said Bruce K. Lee, president and chief executive officer of HTLF.

Net Interest Income and Net Interest Margin

Net interest margin, expressed as a percentage of average earning assets, was 3.30% (3.34% on a fully tax-equivalent basis, non-GAAP) during the third quarter of 2021, compared to 3.37% (3.41% on a fully tax-equivalent basis, non-GAAP) during the second quarter of 2021 and 3.51% (3.55% on a fully tax-equivalent basis, non-GAAP) during the third quarter of 2020.

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

• Total interest income was $149.2 million, which was an increase of $18.2 million or 14% from $131.0 million and primarily attributable to an increase in average earning assets partially offset by lower yields.
• Total interest income on a tax-equivalent basis (non-GAAP) was $150.9 million, which was an increase of $18.5 million or 14% from $132.4 million.
• Average earning assets increased $3.26 billion or 23% to $17.12 billion compared to $13.87 billion, which was primarily attributable to recent acquisitions and loan growth, including PPP loans.
• The average rate on earning assets decreased 30 basis points to 3.50% compared to 3.80%, which was primarily due to recent decreases in market interest rates and a shift in earning asset mix. Total average securities were 41% of total average earning assets compared to 33%.

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

• Total interest expense was $6.6 million, a decrease of $1.8 million or 22% from $8.5 million, based on a decrease in the average interest rate paid, which was partially offset by an increase in average interest bearing liabilities.
• The average interest rate paid on interest bearing liabilities decreased to 0.27% compared to 0.40%, which was primarily due to recent decreases in market interest rates.
• Average interest bearing deposits increased $1.70 billion or 22% to $9.46 billion from $7.76 billion which was primarily attributable to recent acquisitions and deposit growth.
• The average interest rate paid on interest bearing deposits decreased 11 basis points to 0.14% compared to 0.25%.
• Average borrowings decreased $140.5 million or 25% to $419.9 million from $560.4 million, which was primarily attributable to reduced advances from the PPP lending fund used to fund PPP loans to borrowers. Average advances from the PPP lending fund totaled $2.9 million compared to $158.3 million. The average interest rate paid on borrowings was 3.02% compared to 2.49%.

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

• Net interest income totaled $142.5 million compared to $122.5 million, which was an increase of $20.0 million or 16%.
• Net interest income on a tax-equivalent basis (non-GAAP) totaled $144.3 million compared to $123.9 million, which was an increase of $20.4 million or 16%.

Noninterest Income and Noninterest Expense

Total noninterest income was $32.7 million during the third quarter of 2021 compared to $31.2 million during the third quarter of 2020, an increase of $1.5 million or 5%. Significant changes within the noninterest income category for the third quarter of 2021 compared to the third quarter of 2020 were:

• Service charges and fees increased $3.8 million or 32% to $15.6 million from $11.7 million. The increase was primarily attributable to acquisitions completed in the fourth quarter of 2020.
• Trust fees increased $864,000 or 16% to $6.2 million from $5.4 million. The increase was primarily attributable to an increase in market value of trust assets under management.
• Net gains on sales of loans held for sale totaled $5.3 million compared to $8.9 million, which was a decrease of $3.6 million or 41% and was primarily attributable to a decrease of loans sold to the secondary market.

Total noninterest expense was $110.6 million during the third quarter of 2021 compared to $90.4 million during the third quarter of 2020, which was an increase of $20.2 million or 22%. Significant changes within the noninterest expense category for the third quarter of 2021 compared to the third quarter of 2020 were:

• Salaries and employee benefits totaled $60.7 million compared to $51.0 million, which was an increase of $9.7 million or 19%. The increase was primarily attributable to higher salary and health care expenses as a result of more full time equivalent employees and normalized health care usage. Full-time equivalent employees increased 336 to 2,163 compared to 1,827 which was primarily attributable to the acquisitions completed in the fourth quarter of 2020 and the addition of specialized commercial and agribusiness lending teams during the third quarter of 2021.
• Professional fees increased $4.4 million or 35% to $17.2 million compared to $12.8 million. The increase was primarily attributable to the utilization of external resources to support automation and technology projects, higher cloud based computing expenses and acquisitions completed in the fourth quarter of 2020.
• Other noninterest expenses increased $5.3 million or 54% to $15.1 million compared to $9.8 million. The following items impacted the third quarter of 2021 compared to the third quarter of 2020:
  • Travel and staff and customer entertainment expenses increased $860,000 to $1.2 million from $310,000. Travel and customer events were limited in the third quarter of 2020 due to the pandemic.
  • Credit card processing and rebate expenses increased $1.8 million or 126% to $3.3 million from $1.4 million, which was primarily attributable to increased volume.
  • Fraud losses increased $458,000 or 99% to $919,000 from $461,000. The increase was primarily attributable to check fraud and wire fraud transactions given the heightened fraud environment.

The remainder of the increase was primarily attributable to acquisitions completed in the fourth quarter of 2020.

The effective tax rate was 19.15% for the third quarter of 2021 compared to 22.20% for the third quarter of 2020. The following items impacted the third quarter 2021 and 2020 tax calculations:

• Solar energy tax credits of $2.1 million compared to $965,000.
• Federal low-income housing tax credits of $135,000 compared to $195,000.
• New markets tax credits of $75,000 in each quarterly calculation.
• Historic rehabilitation tax credits of $327,000 compared to $0.
• Tax-exempt interest income as a percentage of pre-tax income of 9.32% compared to 8.48%.

Total Assets, Total Loans and Total Deposits

Total assets were $19.00 billion at September 30, 2021, an increase of $1.09 billion or 6% from $17.91 billion at year-end 2020. Securities represented 40% and 35% of total assets at September 30, 2021, and December 31, 2020, respectively.

Total loans held to maturity were $9.85 billion at September 30, 2021, $10.01 billion at June 30, 2021, and $10.02 billion at December 31, 2020. Excluding total PPP loans, loans increased $262.8 million or 11% annualized during the third quarter of 2021 and $380.4 million or 6% annualized since year-end 2020.

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

• Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $205.4 million or 4% to $5.08 billion compared to $5.29 billion.
  • PPP loans originated in 2020 ("PPP I") decreased $299.9 million or 80%. PPP loans originated in 2021 ("PPP II") decreased $120.0 million or 26%.
  • Excluding total PPP loans, commercial and business lending increased $214.6 million or 5% to $4.67 billion from $4.46 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, decreased $7.2 million or less than 1% to $2.83 billion compared to $2.84 billion.
• Residential mortgage loans increased $39.5 million or 5% to $840.4 million from $800.9 million.
• Consumer loans increased $10.9 million or 3% to $412.6 million from $401.6 million.

Significant changes by loan category at September 30, 2021 compared to December 31, 2020, included:

• Commercial and business lending, which includes commercial and industrial, PPP and owner occupied commercial real estate loans, decreased $186.1 million or 4%, to $5.08 billion compared to $5.27 billion.
  • PPP I loans decreased $883.5 million or 92%. PPP II loans totaled $335.0 million.
  • Excluding total PPP loans, commercial and business lending increased $362.4 million or 8% to $4.67 billion from $4.31 billion.
• Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $49.8 million or 2% to $2.83 billion compared to $2.78 billion.
• Agriculture and agricultural real estate loans decreased $29.9 million or 4% to $684.7 million compared to $714.5 million.

Total deposits were $16.02 billion as of September 30, 2021, $15.62 billion as of June 30, 2021 and $14.98 billion at year-end 2020. Significant deposit changes by category at September 30, 2021 compared to June 30, 2021 included:

• Demand deposits increased $238.4 million or 4% to $6.54 billion compared to $6.30 billion.
• Savings deposits increased $227.0 million or 3% to $8.42 billion from $8.19 billion.
• Time deposits decreased $58.3 million or 5% to $1.07 billion from $1.13 billion.

Significant deposit changes by category at September 30, 2021 compared to December 31, 2020 included:

• Demand deposits increased $848.9 million or 15% to $6.54 billion compared to $5.69 billion.
• Savings deposits increased $396.5 million or 5% to $8.42 billion from $8.02 billion.
• Time deposits decreased $203.1 million or 16% to $1.07 billion from $1.27 billion.

Growth in demand deposits during the third quarter and first nine months of 2021 was positively impacted by payments related to federal government stimulus programs and other COVID-19 relief programs.

Provision and Allowance

Provision and Allowance for Credit Losses for Loans Provision benefit for credit losses for loans for the third quarter of 2021 was $4.4 million, which was a decrease of $9.2 million from provision expense of $4.7 million recorded in the third quarter of 2020. The provision benefit for the third quarter of 2021 was impacted by several factors, including:

• decrease in nonperforming loans of $2.1 million to $83.2 or 0.84% of total loans compared to $85.4 million or 0.85% of total loans at June 30, 2021,
• nonpass loans declined to 9.15% of total loans compared to 10.37% of total loans at June 30, 2021,
• loans delinquent 30-89 days as a percent of total loans fell to 0.12% compared to 0.17% at June 30, 2021,
• net recoveries of $1.3 million, and
• stable macroeconomic factors compared to the second quarter of 2021.

The allowance for credit losses for loans totaled $117.5 million and $131.6 million at September 30, 2021, and December 31, 2020, respectively. The following items have impacted the allowance for credit losses for loans for the nine months ended September 30, 2021:

• Provision benefit for the nine months ended September 30, 2021, totaled $10.9 million.
• Net charge offs of $3.2 million were recorded for the first nine months of 2021.

Provision and Allowance for Credit Losses for Unfunded Commitments The allowance for unfunded commitments totaled $14.0 million at September 30, 2021, which was a decrease of $1.3 million from $15.3 million at December 31, 2020. Unfunded commitments increased $336.5 million to $3.58 billion at September 30, 2021 compared to $3.25 billion at December 31, 2020.

Total Provision and Allowance for Lending Related Credit LossesThe total provision benefit for lending related credit losses was $4.5 million for the third quarter of 2021 compared to provision expense of $1.7 million for the third quarter of 2020. The total allowance for lending related credit losses was $131.5 million at September 30, 2021, which was 1.33% of total loans as of September 30, 2021, compared to $146.9 million or 1.47% of total loans as of December 31, 2020. Excluding PPP loans, the allowance for lending related credit losses as a percentage of total loans was 1.39% and 1.62% as of September 30, 2021, and December 31, 2020, respectively.

Nonperforming Assets

Nonperforming assets decreased $6.8 million or 7% to $88.1 million or 0.46% of total assets at September 30, 2021, compared to $95.0 million or 0.53% of total assets at December 31, 2020. Nonperforming loans were $83.2 million or 0.84% of total loans at September 30, 2021, compared to $88.1 million or 0.88% of total loans at December 31, 2020. At September 30, 2021, loans delinquent 30-89 days were 0.12% of total loans compared to 0.23% of total loans at December 31, 2020.

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

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

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

Conference Call DetailsHTLF will host a conference call for shareholders, analysts and other interested parties at 5:00 p.m. EDT today. To join, please register in advance of the conference using the link provided below. Upon registering, participant dial-in numbers, Direct Event passcode and unique registrant ID will be provided. Direct Event online registration can be found at: http://www.directeventreg.com/registration/event/1492767. In the 10 minutes prior to the call start time, participants need to use the conference access information provided in the email received at the point of registering. A replay will be available until October 24, 2022, by logging on to www.htlf.com.

About HTLFHeartland Financial USA, Inc., operating under the brand name HTLF, is a financial services company with assets of $19.00 billion. HTLF has banks serving communities in Arizona, California, Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, New Mexico, Texas and Wisconsin. HTLF is committed to its core commercial business, supported by a strong retail operation, and provides a diversified line of financial services including treasury management, residential mortgage, wealth management, investment and insurance. Additional information is available at www.htlf.com.

Safe Harbor StatementThis release (including any information incorporated herein by reference), and future oral and written statements of the company and its management, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, financial condition, results of operations, plans, objectives and future performance of HTLF.

Any statements about the company's expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements may include information about possible or assumed future results of the company's operations or performance. These forward-looking statements are generally identified by the use of the words such as "believe", "expect", "intent", "anticipate", "plan", "intend", "estimate", "project", "may", "will", "would", "could", "should", "may", "view", "opportunity", "potential", or similar or negative expressions of these words or phrases that are used in this release, and future oral and written statements of the company and its management. Although the company may make these statements based on management’s experience, beliefs, expectations, assumptions and best estimate of future events, the ability of the company to predict results or the actual effect or outcomes of plans or strategies is inherently uncertain, and there may be events or factors that management has not anticipated. Therefore, the accuracy and achievement of such forward-looking statements and estimates are subject to a number of risks, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which the company currently believes could have a material effect on its operations and future prospects, are detailed below and in the risk factors in HTLF's reports filed with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section under Item 1A of Part I of the company’s Annual Report on Form 10-K for the year ended December 31, 2020, include, among others:

• COVID-19 Pandemic Risks, including risks related to the ongoing COVID-19 pandemic and measures enacted by the U.S. federal and state governments and adopted by private businesses in response to the COVID-19 pandemic;
• Economic and Market Conditions Risks, including risks related to changes in the U.S. economy in general and in the local economies in which HTLF conducts its operations and future civil unrest, natural disasters, 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 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 EndedSeptember 30,										For the Nine Months EndedSeptember 30,
	2021					2020					2021					2020
Interest Income
Interest and fees on loans	$	112,062				$	102,657				$	336,416				$	316,076
Interest on securities:
Taxable	32,384					25,016					94,373					70,109
Nontaxable	4,609					3,222					13,673					8,749
Interest on federal funds sold	—					—					1					—
Interest on deposits with other banks and short-term investments	132					72					258					847
Total Interest Income	149,187					130,967					444,721					395,781
Interest Expense
Interest on deposits	3,444					4,962					11,629					25,678
Interest on short-term borrowings	98					78					348					435
Interest on other borrowings	3,102					3,430					9,378					10,514
Total Interest Expense	6,644					8,470					21,355					36,627
Net Interest Income	142,543					122,497					423,366					359,154
Provision (benefit) for credit losses	(4,534		)			1,678					(12,262		)			49,994
Net Interest Income After Provision for Credit Losses	147,077					120,819					435,628					309,160
Noninterest Income
Service charges and fees	15,551					11,749					44,354					34,742
Loan servicing income	784					638					2,495					1,980
Trust fees	6,221					5,357					18,037					15,356
Brokerage and insurance commissions	866					649					2,584					1,977
Securities gains/(losses), net	1,535					1,300					4,347					4,964
Unrealized gain/ (loss) on equity securities, net	112					155					85					604
Net gains on sale of loans held for sale	5,281					8,894					16,454					21,411
Valuation adjustment on servicing rights	195					(120		)			586					(1,676		)
Income on bank owned life insurance	940					868					2,706					2,533
Other noninterest income	1,239					1,726					4,557					5,779
Total Noninterest Income	32,724					31,216					96,205					87,670
Noninterest Expense
Salaries and employee benefits	60,689					50,978					177,083					151,053
Occupancy	7,366					6,732					22,683					19,705
Furniture and equipment	3,365					2,500					9,959					8,601
Professional fees	17,242					12,802					46,969					38,951
Advertising	1,921					928					5,039					4,128
Core deposit and customer relationship intangibles amortization	2,295					2,492					7,226					8,169
Other real estate and loan collection expenses, net	78					335					627					872
(Gain)/loss on sales/valuations of assets, net	(3		)			1,763					374					2,480
Acquisition, integration and restructuring costs	204					1,146					3,342					3,195
Partnership investment in tax credit projects	2,374					927					3,754					1,902
Other noninterest expenses	15,096					9,793					39,370					32,638
Total Noninterest Expense	110,627					90,396					316,426					271,694
Income Before Income Taxes	69,174					61,639					215,407					125,136
Income taxes	13,250					13,681					45,064					27,007
Net Income	55,924					47,958					170,343					98,129
Preferred dividends	(2,013		)			(2,437		)			(6,038		)			(2,437		)
Net Income Available to Common Stockholders	$	53,911				$	45,521				$	164,305				$	95,692
Earnings per common share-diluted	$	1.27				$	1.23				$	3.88				$	2.59
Weighted average shares outstanding-diluted	42,415,993					36,995,572					42,381,313					36,955,970

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	For the Quarter Ended
	9/30/2021					6/30/2021					3/31/2021					12/31/2020					9/30/2020
Interest Income
Interest and fees on loans	$	112,062				$	111,915				$	112,439				$	108,865				$	102,657
Interest on securities:
Taxable	32,384					31,546					30,443					28,154					25,016
Nontaxable	4,609					4,561					4,503					3,735					3,222
Interest on federal funds sold	—					—					1					—					—
Interest on deposits with other banks and short-term investments	132					60					66					77					72
Total Interest Income	149,187					148,082					147,452					140,831					130,967
Interest Expense
Interest on deposits	3,444					3,790					4,395					4,609					4,962
Interest on short-term borrowings	98					98					152					175					78
Interest on other borrowings	3,102					2,976					3,300					3,472					3,430
Total Interest Expense	6,644					6,864					7,847					8,256					8,470
Net Interest Income	142,543					141,218					139,605					132,575					122,497
Provision (benefit) for credit losses	(4,534		)			(7,080		)			(648		)			17,072					1,678
Net Interest Income After Provision for Credit Losses	147,077					148,298					140,253					115,503					120,819
Noninterest Income
Service charges and fees	15,551					15,132					13,671					12,725					11,749
Loan servicing income	784					873					838					997					638
Trust fees	6,221					6,039					5,777					5,506					5,357
Brokerage and insurance commissions	866					865					853					779					649
Securities gains/(losses), net	1,535					2,842					(30		)			2,829					1,300
Unrealized gain/ (loss) on equity securities, net	112					83					(110		)			36					155
Net gains on sale of loans held for sale	5,281					4,753					6,420					7,104					8,894
Valuation adjustment on servicing rights	195					(526		)			917					(102		)			(120		)
Income on bank owned life insurance	940					937					829					1,021					868
Other noninterest income	1,239					2,166					1,152					1,726					1,726
Total Noninterest Income	32,724					33,164					30,317					32,621					31,216
Noninterest Expense
Salaries and employee benefits	60,689					57,332					59,062					51,615					50,978
Occupancy	7,366					7,399					7,918					6,849					6,732
Furniture and equipment	3,365					3,501					3,093					3,913					2,500
Professional fees	17,242					16,237					13,490					15,117					12,802
Advertising	1,921					1,649					1,469					1,107					928
Core deposit and customer relationship intangibles amortization	2,295					2,415					2,516					2,501					2,492
Other real estate and loan collection expenses, net	78					414					135					468					335
(Gain)/loss on sales/valuations of assets, net	(3		)			183					194					2,621					1,763
Acquisition, integration and restructuring costs	204					210					2,928					2,186					1,146
Partnership investment in tax credit projects	2,374					1,345					35					1,899					927
Other noninterest expenses	15,096					12,691					11,583					10,993					9,793
Total Noninterest Expense	110,627					103,376					102,423					99,269					90,396
Income Before Income Taxes	69,174					78,086					68,147					48,855					61,639
Income taxes	13,250					16,481					15,333					9,046					13,681
Net Income	55,924					61,605					52,814					39,809					47,958
Preferred dividends	(2,013		)			(2,012		)			(2,013		)			(2,014		)			(2,437		)
Net Income Available to Common Stockholders	$	53,911				$	59,593				$	50,801				$	37,795				$	45,521
Earnings per common share-diluted	$	1.27				$	1.41				$	1.20				$	0.98				$	1.23
Weighted average shares outstanding-diluted	42,415,993					42,359,873					42,335,747					38,534,082					36,995,572

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of
	9/30/2021					6/30/2021					3/31/2021					12/31/2020					9/30/2020
Assets
Cash and due from banks	$	192,247				$	208,702				$	198,177				$	219,243				$	175,284
Interest bearing deposits with other banks and short-term investments	135,158					240,426					269,685					118,660					156,371
Cash and cash equivalents	327,405					449,128					467,862					337,903					331,655
Time deposits in other financial institutions	3,138					3,138					3,138					3,129					3,129
Securities:
Carried at fair value	7,449,936					6,543,978					6,370,495					6,127,975					4,950,698
Held to maturity, at cost, less allowance for credit losses	85,354					85,439					85,293					88,839					88,700
Other investments, at cost	83,332					76,809					74,935					75,253					35,940
Loans held for sale	37,078					33,248					43,037					57,949					65,969
Loans:
Held to maturity	9,854,907					10,012,014					10,050,456					10,023,051					9,099,646
Allowance for credit losses	(117,533		)			(120,726		)			(130,172		)			(131,606		)			(103,377		)
Loans, net	9,737,374					9,891,288					9,920,284					9,891,445					8,996,269
Premises, furniture and equipment, net	221,996					226,358					225,047					226,094					200,028
Goodwill	576,005					576,005					576,005					576,005					446,345
Core deposit and customer relationship intangibles, net	35,157					37,452					39,867					42,383					40,520
Servicing rights, net	6,351					6,201					6,953					6,052					5,752
Cash surrender value on life insurance	190,576					189,619					188,521					187,664					173,111
Other real estate, net	4,744					6,314					6,236					6,624					5,050
Other assets	237,779					246,029					236,754					281,024					269,498
Total Assets	$	18,996,225				$	18,371,006				$	18,244,427				$	17,908,339				$	15,612,664
Liabilities and Equity
Liabilities
Deposits:
Demand	$	6,537,722				$	6,299,289				$	6,175,946				$	5,688,810				$	5,022,567
Savings	8,416,204					8,189,223					8,179,251					8,019,704					6,742,151
Time	1,068,317					1,126,606					1,203,854					1,271,391					1,002,392
Total deposits	16,022,243					15,615,118					15,559,051					14,979,905					12,767,110
Short-term borrowings	265,620					152,563					140,597					167,872					306,706
Other borrowings	371,765					271,244					349,514					457,042					524,045
Accrued expenses and other liabilities	164,345					172,295					139,058					224,289					203,199
Total Liabilities	16,823,973					16,211,220					16,188,220					15,829,108					13,801,060
Stockholders' Equity
Preferred equity	110,705					110,705					110,705					110,705					110,705
Common stock	42,250					42,245					42,174					42,094					36,885
Capital surplus	1,068,913					1,066,765					1,063,497					1,062,083					847,377
Retained earnings	926,834					883,484					833,171					791,630					761,211
Accumulated other comprehensive income	23,550					56,587					6,660					72,719					55,426
Total Equity	2,172,252					2,159,786					2,056,207					2,079,231					1,811,604
Total Liabilities and Equity	$	18,996,225				$	18,371,006				$	18,244,427				$	17,908,339				$	15,612,664

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
	For the Quarter Ended
	9/30/2021					6/30/2021				3/31/2021				12/31/2020				9/30/2020
Average Balances
Assets	$	18,608,775				$	18,293,756			$	17,964,723			$	16,401,152			$	15,167,225
Loans, net of unearned	9,920,047					10,072,071				9,952,152				9,366,430				9,220,666
Deposits	15,817,778					15,576,345				15,044,561				13,518,020				12,650,822
Earning assets	17,123,824					16,819,978				16,460,124				15,042,079				13,868,360
Interest bearing liabilities	9,881,350					9,871,302				9,917,159				9,053,855				8,320,123
Common equity	2,072,593					1,980,904				1,963,674				1,769,575				1,661,381
Total stockholders' equity	2,183,298					2,091,609				2,074,379				1,880,280				1,772,086
Tangible common equity (non-GAAP)(1)	1,460,309					1,366,285				1,346,270				1,238,691				1,172,891
Key Performance Ratios
Annualized return on average assets	1.19			%		1.35		%		1.19		%		0.97		%		1.26		%
Annualized return on average common equity (GAAP)	10.32					12.07				10.49				8.50				10.90
Annualized return on average tangible common equity (non-GAAP)(1)	15.14					18.05				15.90				12.77				16.11
Annualized ratio of net charge-offs/(recoveries) to average loans	(0.05		)			0.12				0.06				0.01				0.92
Annualized net interest margin (GAAP)	3.30					3.37				3.44				3.51				3.51
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)	3.34					3.41				3.48				3.55				3.55
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)	60.38					57.11				56.61				54.93				54.67

	For the Quarter EndedSeptember 30,									For the Nine Months EndedSeptember 30,
	2021					2020				2021				2020
Average Balances
Assets	$	18,608,775				$	15,167,225			$	18,291,444			$	14,239,151
Loans, net of unearned	9,920,047					9,220,666				9,981,306				8,925,016
Deposits	15,817,778					12,650,822				15,482,394				11,972,615
Earning assets	17,123,824					13,868,360				16,803,740				12,957,661
Interest bearing liabilities	9,881,350					8,320,123				9,889,806				8,106,721
Common equity	2,072,593					1,661,381				2,006,123				1,618,811
Total stockholders' equity	2,183,298					1,772,086				2,116,828				1,658,006
Tangible common stockholders' equity	1,460,309					1,172,891				1,391,373				1,127,642
Key Performance Ratios
Annualized return on average assets	1.19			%		1.26		%		1.25		%		0.92		%
Annualized return on average common equity (GAAP)	10.32					10.90				10.95				7.90
Annualized return on average tangible common equity (non-GAAP)(1)	15.14					16.11				16.34				12.10
Annualized ratio of net charge-offs/(recoveries) to average loans	(0.05		)			0.92				0.04				0.43
Annualized net interest margin (GAAP)	3.30					3.51				3.37				3.70
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)	3.34					3.55				3.41				3.74
Efficiency ratio, fully tax-equivalent (non-GAAP)(1)	60.38					54.67				58.05				57.28
(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
	9/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020
Common Share Data
Book value per common share	$	48.79			$	48.50			$	46.13			$	46.77			$	46.11
Tangible book value per common share (non-GAAP)(1)	$	34.33			$	33.98			$	31.53			$	32.07			$	32.91
Common shares outstanding, net of treasury stock	42,250,092				42,245,452				42,173,675				42,093,862				36,885,390
Tangible common equity ratio (non-GAAP)(1)	7.89		%		8.08		%		7.54		%		7.81		%		8.03		%
Other Selected Trend Information
Effective tax rate	19.15		%		21.11		%		22.50		%		18.52		%		22.20		%
Full time equivalent employees	2,163				2,091				2,131				2,013				1,827
Loans Held to Maturity
Commercial and industrial	$	2,538,369			$	2,518,908			$	2,421,260			$	2,534,799			$	2,303,646
Paycheck Protection Program ("PPP")	409,247				829,175				1,155,328				957,785				1,128,035
Owner occupied commercial real estate	2,135,227				1,940,134				1,837,559				1,776,406				1,494,902
Commercial and business lending	5,082,843				5,288,217				5,414,147				5,268,990				4,926,583
Non-owner occupied commercial real estate	2,020,487				1,987,369				1,967,183				1,921,481				1,659,683
Real estate construction	814,001				854,295				796,027				863,220				917,765
Commercial real estate lending	2,834,488				2,841,664				2,763,210				2,784,701				2,577,448
Total commercial lending	7,917,331				8,129,881				8,177,357				8,053,691				7,504,031
Agricultural and agricultural real estate	684,670				679,608				683,969				714,526				508,058
Residential mortgage	840,356				800,884				786,994				840,442				701,899
Consumer	412,550				401,641				402,136				414,392				385,658
Total loans held to maturity	$	9,854,907			$	10,012,014			$	10,050,456			$	10,023,051			$	9,099,646
Total unfunded loan commitments	$	3,583,417			$	3,433,062			$	3,306,042			$	3,246,953			$	2,980,484
(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
	9/30/2021					6/30/2021					3/31/2021					12/31/2020					9/30/2020
Allowance for Credit Losses-Loans
Balance, beginning of period	$	120,726				$	130,172				$	131,606				$	103,377				$	119,937
Allowance for acquired purchased credit deteriorated loans	—					—					—					12,313					—
Provision (benefit) for credit losses	(4,448		)			(6,466		)			16					16,132					4,741
Charge-offs	(1,167		)			(3,497		)			(2,126		)			(1,104		)			(21,753		)
Recoveries	2,422					517					676					888					452
Balance, end of period	$	117,533				$	120,726				$	130,172				$	131,606				$	103,377
Allowance for Unfunded Commitments
Balance, beginning of period	$	14,002				$	14,619				$	15,280				$	14,330				$	17,392
Provision (benefit) for credit losses	(35		)			(617		)			(661		)			950					(3,062		)
Balance, end of period	$	13,967				$	14,002				$	14,619				$	15,280				$	14,330
Allowance for lending related credit losses	$	131,500				$	134,728				$	144,791				$	146,886				$	117,707
Provision for Credit Losses
Provision (benefit) for credit losses-loans	$	(4,448	)			$	(6,466	)			$	16				$	6,572				$	4,741
Provision for credit losses-acquired loans	—					—					—					9,560					—
Provision (benefit) for credit losses-unfunded commitments	(35		)			(617		)			(661		)			(1,372		)			(3,062		)
Provision for credit losses-acquired unfunded commitments	—					—					—					2,322					—
Provision (benefit) for credit losses-held to maturity securities	(51		)			3					(3		)			(10		)			(1		)
Total provision (benefit) for credit losses	$	(4,534	)			$	(7,080	)			$	(648	)			$	17,072				$	1,678

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
	As of and for the Quarter Ended
	9/30/2021					6/30/2021					3/31/2021					12/31/2020					9/30/2020
Asset Quality
Nonaccrual loans	$	82,375				$	85,268				$	91,718				$	87,386				$	79,040
Loans past due ninety days or more	861					97					171					720					1,681
Other real estate owned	4,744					6,314					6,236					6,624					5,050
Other repossessed assets	166					50					239					240					130
Total nonperforming assets	$	88,146				$	91,729				$	98,364				$	94,970				$	85,901
Performing troubled debt restructured loans	$	1,817				$	2,122				$	2,394				$	2,370				$	11,818
Nonperforming Assets Activity
Balance, beginning of period	$	91,729				$	98,364				$	94,970				$	85,901				$	98,537
Net loan (charge offs)/recoveries	1,255					(2,980		)			(1,450		)			(216		)			(21,301		)
New nonperforming loans	6,908					7,989					14,936					8,664					11,834
Acquired nonperforming assets	—					—					—					12,781					—
Reduction of nonperforming loans(1)	(8,581		)			(10,948		)			(8,884		)			(10,811		)			(1,994		)
Net OREO/repossessed assets sales proceeds and losses	(3,165		)			(696		)			(1,208		)			(1,349		)			(1,175		)
Balance, end of period	$	88,146				$	91,729				$	98,364				$	94,970				$	85,901
Asset Quality Ratios
Ratio of nonperforming loans to total loans	0.84			%		0.85			%		0.91			%		0.88			%		0.89			%
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans	0.86					0.87					0.94					0.90					1.02
Ratio of nonperforming assets to total assets	0.46					0.50					0.54					0.53					0.55
Annualized ratio of net loan charge-offs/(recoveries) to average loans	(0.05		)			0.12					0.06					0.01					0.92
Allowance for loan credit losses as a percent of loans	1.19					1.21					1.30					1.31					1.14
Allowance for lending related credit losses as a percent of loans	1.33					1.35					1.44					1.47					1.29
Allowance for loan credit losses as a percent of nonperforming loans	141.20					141.42					141.66					149.37					128.07
Loans delinquent 30-89 days as a percent of total loans	0.12					0.17					0.16					0.23					0.17
(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
	September 30, 2021												June 30, 2021												September 30, 2020
	AverageBalance					Interest				Rate			AverageBalance					Interest				Rate			AverageBalance					Interest				Rate
Earning Assets
Securities:
Taxable	$	6,244,097				$	32,384			2.06	%		$	5,862,683				$	31,546			2.16	%		$	4,125,700				$	25,016			2.41	%
Nontaxable(1)	759,073					5,835				3.05			740,601					5,773				3.13			429,710					4,078				3.78
Total securities	7,003,170					38,219				2.17			6,603,284					37,319				2.27			4,555,410					29,094				2.54
Interest on deposits with other banks and short-term investments	322,430					132				0.16			271,891					60				0.09			215,361					72				0.13
Federal funds sold	—					—				—			—					—				—			—					—				—
Loans:(2)
Commercial and industrial(1)	2,588,270					28,224				4.33			2,469,742					28,562				4.64			2,331,467					27,777				4.74
PPP loans	602,675					11,186				7.36			1,047,559					11,186				4.28			1,128,488					7,462				2.63
Owner occupied commercial real estate	1,990,538					20,048				4.00			1,858,891					20,097				4.34			1,463,538					17,359				4.72
Non-owner occupied commercial real estate	1,964,609					22,129				4.47			1,980,374					21,734				4.40			1,589,073					18,860				4.72
Real estate construction	835,976					9,591				4.55			815,738					9,212				4.53			1,023,490					11,628				4.52
Agricultural and agricultural real estate	674,510					7,415				4.36			672,560					7,267				4.33			514,442					5,968				4.62
Residential mortgage	855,734					9,068				4.20			827,291					9,255				4.49			774,850					8,915				4.58
Consumer	407,735					4,889				4.76			399,916					5,152				5.17			395,318					5,222				5.26
Less: allowance for credit losses-loans	(121,823		)			—				—			(127,268		)			—				—			(123,077		)			—				—
Net loans	9,798,224					112,550				4.56			9,944,803					112,465				4.54			9,097,589					103,191				4.51
Total earning assets	17,123,824					150,901				3.50	%		16,819,978					149,844				3.57	%		13,868,360					132,357				3.80	%
Nonearning Assets	1,484,951												1,473,778												1,298,865
Total Assets	$	18,608,775											$	18,293,756											$	15,167,225
Interest Bearing Liabilities
Savings	$	8,364,326				$	2,240			0.11	%		$	8,234,151				$	2,233			0.11	%		$	6,723,962				$	1,940			0.11	%
Time deposits	1,097,126					1,204				0.44			1,171,266					1,557				0.53			1,035,715					3,022				1.16
Short-term borrowings	139,001					98				0.28			169,822					98				0.23			128,451					78				0.24
Other borrowings	280,897					3,102				4.38			296,063					2,976				4.03			431,995					3,430				3.16
Total interest bearing liabilities	9,881,350					6,644				0.27	%		9,871,302					6,864				0.28	%		8,320,123					8,470				0.40	%
Noninterest Bearing Liabilities
Noninterest bearing deposits	6,356,326												6,170,928												4,891,145
Accrued interest and other liabilities	187,801												159,917												183,871
Total noninterest bearing liabilities	6,544,127												6,330,845												5,075,016
Equity	2,183,298												2,091,609												1,772,086
Total Liabilities and Equity	$	18,608,775											$	18,293,756											$	15,167,225
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)						$	144,257											$	142,980											$	123,887
Net interest spread(1)										3.23	%											3.29	%											3.40	%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets										3.34	%											3.41	%											3.55	%
Interest bearing liabilities to earning assets	57.71			%									58.69			%									59.99			%
(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 Nine Months Ended
	September 30, 2021												September 30, 2020
	AverageBalance					Interest				Rate			AverageBalance					Interest				Rate
Earning Assets
Securities:
Taxable	$	5,935,295				$	94,373			2.13	%		$	3,546,471				$	70,109			2.64	%
Nontaxable(1)	743,534					17,308				3.11			384,026					11,074				3.85
Total securities	6,678,829					111,681				2.24	%		3,930,497					81,183				2.76	%
Interest bearing deposits with other banks and other short-term investments	266,701					258				0.13			202,390					847				0.56
Federal funds sold	4,622					1				0.03			—					—				—
Loans:(2)
Commercial and industrial(1)	2,519,608					85,008				4.51	%		2,463,546					90,990				4.93	%
PPP loans	879,489					32,521				4.94			683,262					13,479				2.64
Owner occupied commercial real estate	1,876,929					59,710				4.25			1,440,981					53,610				4.97
Non-owner occupied commercial real estate	1,961,016					65,984				4.50			1,534,293					57,445				5.00
Real estate construction	819,452					28,501				4.65			1,056,493					37,062				4.69
Agricultural and agricultural real estate	676,091					22,733				4.50			533,290					19,178				4.80
Residential mortgage	844,337					28,153				4.46			796,497					28,922				4.85
Consumer	404,384					15,408				5.09			416,654					17,002				5.45
Less: allowance for credit losses-loans	(127,718		)			—				—			(100,242		)			—				—
Net loans	9,853,588					338,018				4.59			8,824,774					317,688				4.81
Total earning assets	16,803,740					449,958				3.58	%		12,957,661					399,718				4.12	%
Nonearning Assets	1,487,704												1,281,490
Total Assets	$	18,291,444											$	14,239,151
Interest Bearing Liabilities
Savings	$	8,211,478				$	6,903			0.11	%		$	6,564,582				$	14,394			0.29	%
Time deposits	1,166,858					4,726				0.54			1,092,698					11,284				1.38
Short-term borrowings	182,583					348				0.25			117,526					435				0.49
Other borrowings	328,887					9,378				3.81			331,915					10,514				4.23
Total interest bearing liabilities	9,889,806					21,355				0.29	%		8,106,721					36,627				0.60	%
Noninterest Bearing Liabilities
Noninterest bearing deposits	6,104,058												4,315,335
Accrued interest and other liabilities	180,752												159,089
Total noninterest bearing liabilities	6,284,810												4,474,424
Stockholders' Equity	2,116,828												1,658,006
Total Liabilities and Stockholders' Equity	$	18,291,444											$	14,239,151
Net interest income, fully tax-equivalent (non-GAAP)(1)(3)						$	428,603											$	363,091
Net interest spread(1)										3.29	%											3.52	%
Net interest income, fully tax-equivalent (non-GAAP)(1)(3) to total earning assets										3.41	%											3.74	%
Interest bearing liabilities to earning assets	58.85			%									62.56			%
(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.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
	As of and For the Quarter Ended
	9/30/2021			6/30/2021			3/31/2021			12/31/2020			9/30/2020
Total Assets
Arizona Bank & Trust	$	1,808,943		$	1,645,816		$	1,614,740		$	1,529,800		$	1,039,253
Bank of Blue Valley	1,460,751			1,419,003			1,425,434			1,376,080			1,424,261
Citywide Banks	2,685,554			2,611,842			2,632,199			2,628,963			2,639,516
Dubuque Bank and Trust Company	1,968,612			1,990,040			1,932,234			1,853,078			1,838,260
First Bank & Trust	2,855,671			2,882,969			2,991,053			3,171,961			1,289,187
Illinois Bank & Trust	1,680,558			1,671,240			1,584,561			1,525,503			1,500,012
Minnesota Bank & Trust	872,291			955,638			995,692			1,000,168			1,007,548
New Mexico Bank & Trust	2,586,951			2,494,257			2,356,918			2,032,637			2,002,663
Premier Valley Bank	1,198,540			1,126,807			1,062,607			1,076,615			1,042,437
Rocky Mountain Bank	718,956			646,821			620,800			616,157			617,169
Wisconsin Bank & Trust	1,209,954			1,252,096			1,264,009			1,267,488			1,262,069
Total Deposits
Arizona Bank & Trust	$	1,617,732		$	1,450,248		$	1,453,888		$	1,357,158		$	886,174
Bank of Blue Valley	1,192,868			1,168,617			1,178,114			1,138,264			1,142,910
Citywide Banks	2,282,703			2,174,237			2,231,320			2,181,511			2,163,051
Dubuque Bank and Trust Company	1,705,753			1,471,564			1,565,782			1,456,908			1,591,561
First Bank & Trust	2,367,353			2,361,391			2,427,920			2,622,716			936,366
Illinois Bank & Trust	1,509,847			1,512,106			1,426,426			1,338,677			1,307,513
Minnesota Bank & Trust	734,292			762,549			813,693			789,555			804,045
New Mexico Bank & Trust	2,206,099			2,195,838			2,077,304			1,749,963			1,747,527
Premier Valley Bank	988,579			963,459			896,715			836,984			855,913
Rocky Mountain Bank	602,155			568,961			549,894			538,012			533,429
Wisconsin Bank & Trust	1,048,367			1,093,119			1,067,735			1,057,369			1,011,843

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND FULL TIME EQUIVALENT EMPLOYEE DATA
	For the Quarter Ended
	9/30/2021				6/30/2021				3/31/2021				12/31/2020				9/30/2020
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	53,911			$	59,593			$	50,801			$	37,795			$	45,521
Plus core deposit and customer relationship intangibles amortization, net of tax(1)	1,814				1,907				1,988				1,975				1,969
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	55,725			$	61,500			$	52,789			$	39,770			$	47,490
Average common equity (GAAP)	$	2,072,593			$	1,980,904			$	1,963,674			$	1,769,575			$	1,661,381
Less average goodwill	576,005				576,005				576,005				488,151				446,345
Less average core deposit and customer relationship intangibles, net	36,279				38,614				41,399				42,733				42,145
Average tangible common equity (non-GAAP)	$	1,460,309			$	1,366,285			$	1,346,270			$	1,238,691			$	1,172,891
Annualized return on average common equity (GAAP)	10.32		%		12.07		%		10.49		%		8.50		%		10.90		%
Annualized return on average tangible common equity (non-GAAP)	15.14		%		18.05		%		15.90		%		12.77		%		16.11		%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	142,543			$	141,218			$	139,605			$	132,575			$	122,497
Plus tax-equivalent adjustment(1)	1,714				1,762				1,761				1,529				1,390
Net interest income, fully tax-equivalent (non-GAAP)	$	144,257			$	142,980			$	141,366			$	134,104			$	123,887
Average earning assets	$	17,123,824			$	16,819,978			$	16,460,124			$	15,042,079			$	13,868,360
Annualized net interest margin (GAAP)	3.30		%		3.37		%		3.44		%		3.51		%		3.51		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)	3.34				3.41				3.48				3.55				3.55
Net purchase accounting discount amortization on loans included in annualized net interest margin	0.08				0.09				0.12				0.10				0.10

Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
Common equity (GAAP)	$	2,061,547			$	2,049,081			$	1,945,502			$	1,968,526			$	1,700,899
Less goodwill	576,005				576,005				576,005				576,005				446,345
Less core deposit and customer relationship intangibles, net	35,157				37,452				39,867				42,383				40,520
Tangible common equity (non-GAAP)	$	1,450,385			$	1,435,624			$	1,329,630			$	1,350,138			$	1,214,034
Common shares outstanding, net of treasury stock	42,250,092				42,245,452				42,173,675				42,093,862				36,885,390
Common equity (book value) per share (GAAP)	$	48.79			$	48.50			$	46.13			$	46.77			$	46.11
Tangible book value per common share (non-GAAP)	$	34.33			$	33.98			$	31.53			$	32.07			$	32.91
Reconciliation of Tangible Common Equity Ratio (non-GAAP)
Tangible common equity (non-GAAP)	$	1,450,385			$	1,435,624			$	1,329,630			$	1,350,138			$	1,214,034
Total assets (GAAP)	$	18,996,225			$	18,371,006			$	18,244,427			$	17,908,339			$	15,612,664
Less goodwill	576,005				576,005				576,005				576,005				446,345
Less core deposit and customer relationship intangibles, net	35,157				37,452				39,867				42,383				40,520
Total tangible assets (non-GAAP)	$	18,385,063			$	17,757,549			$	17,628,555			$	17,289,951			$	15,125,799
Tangible common equity ratio (non-GAAP)	7.89		%		8.08		%		7.54		%		7.81		%		8.03		%
(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
	9/30/2021					6/30/2021					3/31/2021					12/31/2020					9/30/2020
Net interest income (GAAP)	$	142,543				$	141,218				$	139,605				$	132,575				$	122,497
Tax-equivalent adjustment(1)	1,714					1,762					1,761					1,529					1,390
Fully tax-equivalent net interest income	144,257					142,980					141,366					134,104					123,887
Noninterest income	32,724					33,164					30,317					32,621					31,216
Securities (gains)/losses, net	(1,535		)			(2,842		)			30					(2,829		)			(1,300		)
Unrealized (gain)/loss on equity securities, net	(112		)			(83		)			110					(36		)			(155		)
Valuation adjustment on servicing rights	(195		)			526					(917		)			102					120
Adjusted revenue (non-GAAP)	$	175,139				$	173,745				$	170,906				$	163,962				$	153,768
Total noninterest expenses (GAAP)	$	110,627				$	103,376				$	102,423				$	99,269				$	90,396
Less:
Core deposit and customer relationship intangibles amortization	2,295					2,415					2,516					2,501					2,492
Partnership investment in tax credit projects	2,374					1,345					35					1,899					927
(Gain)/loss on sales/valuation of assets, net	(3		)			183					194					2,621					1,763
Acquisition, integration and restructuring costs	204					210					2,928					2,186					1,146
Adjusted noninterest expenses (non-GAAP)	$	105,757				$	99,223				$	96,750				$	90,062				$	84,068
Efficiency ratio, fully tax-equivalent (non-GAAP)	60.38			%		57.11			%		56.61			%		54.93			%		54.67			%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	—				$	44				$	534				$	232				$	—
Occupancy	—					1					9					—					—
Furniture and equipment	7					41					607					423					496
Professional fees	145					63					670					1,422					476
Advertising	11					6					156					42					8
(Gain)/loss on sales/valuations of assets, net	39					—					—					—					—
Other noninterest expenses	2					55					952					67					166
Total acquisition, integration and restructuring costs	$	204				$	210				$	2,928				$	2,186				$	1,146
After tax impact on diluted earnings per common share(1)	$	—				$	—				$	0.05				$	0.04				$	0.02
(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 EndedSeptember 30,								For the Nine Months EndedSeptember 30,
	2021				2020				2021				2020
Reconciliation of Annualized Return on Average Tangible Common Equity (non-GAAP)
Net income available to common stockholders (GAAP)	$	53,911			$	45,521			$	164,305			$	95,692
Plus core deposit and customer relationship intangibles amortization, net of tax(1)	1,814				1,969				5,709				6,454
Net income available to common stockholders excluding intangible amortization (non-GAAP)	$	55,725			$	47,490			$	170,014			$	102,146
Average common equity (GAAP)	$	2,072,593			$	1,661,381			$	2,006,123			$	1,618,811
Less average goodwill	576,005				446,345				576,005				446,345
Less average core deposit and customer relationship intangibles, net	36,279				42,145				38,745				44,824
Average tangible common equity (non-GAAP)	$	1,460,309			$	1,172,891			$	1,391,373			$	1,127,642
Annualized return on average common equity (GAAP)	10.32		%		10.90		%		10.95		%		7.90		%
Annualized return on average tangible common equity (non-GAAP)	15.14		%		16.11		%		16.34		%		12.10		%
Reconciliation of Annualized Net Interest Margin, Fully Tax-Equivalent (non-GAAP)
Net Interest Income (GAAP)	$	142,543			$	122,497			$	423,366			$	359,154
Plus tax-equivalent adjustment(1)	1,714				1,390				5,237				3,937
Net interest income, fully tax-equivalent (non-GAAP)	$	144,257			$	123,887			$	428,603			$	363,091
Average earning assets	$	17,123,824			$	13,868,360			$	16,803,740			$	12,957,661
Annualized net interest margin (GAAP)	3.30		%		3.51		%		3.37		%		3.70		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)	3.34				3.55				3.41				3.74
Purchase accounting discount amortization on loans included in annualized net interest margin	0.08				0.10				0.10				0.12
(1) Computed on a tax-equivalent basis using an effective tax rate of 21%.

HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
Reconciliation of Efficiency Ratio (non-GAAP)	For the Quarter EndedSeptember 30,										For the Nine Months EndedSeptember 30,
	2021					2020					2021					2020
Net interest income (GAAP)	$	142,543				$	122,497				$	423,366				$	359,154
Tax-equivalent adjustment(1)	1,714					1,390					5,237					3,937
Fully tax-equivalent net interest income	144,257					123,887					428,603					363,091
Noninterest income	32,724					31,216					96,205					87,670
Securities gains, net	(1,535		)			(1,300		)			(4,347		)			(4,964		)
Unrealized (gain)/loss on equity securities, net	(112		)			(155		)			(85		)			(604		)
Valuation adjustment on servicing rights	(195		)			120					(586		)			1,676
Adjusted revenue (non-GAAP)	$	175,139				$	153,768				$	519,790				$	446,869
Total noninterest expenses (GAAP)	$	110,627				$	90,396				$	316,426				$	271,694
Less:
Core deposit and customer relationship intangibles amortization	2,295					2,492					7,226					8,169
Partnership investment in tax credit projects	2,374					927					3,754					1,902
Loss on sales/valuation of assets, net	(3		)			1,763					374					2,480
Acquisition, integration and restructuring costs	204					1,146					3,342					3,195
Adjusted noninterest expenses (non-GAAP)	$	105,757				$	84,068				$	301,730				$	255,948
Efficiency ratio, fully tax-equivalent (non-GAAP)	60.38			%		54.67			%		58.05			%		57.28			%
Acquisition, integration and restructuring costs
Salaries and employee benefits	$	—				$	—				$	578				$	166
Occupancy	—					—					10					—
Furniture and equipment	7					496					655					535
Professional fees	145					476					878					1,977
Advertising	11					8					173					101
(Gain)/loss on sales/valuations of assets, net	39					—					39					—
Other noninterest expenses	2					166					1,009					416
Total acquisition, integration and restructuring costs	$	204				$	1,146				$	3,342				$	3,195
After tax impact on diluted earnings per common share(1)	$	—				$	0.02				$	0.06				$	0.07
(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 AND FULL TIME EQUIVALENT EMPLOYEE DATA
	As of and For the Quarter Ended
	9/30/2021					6/30/2021				3/31/2021				12/31/2020				9/30/2020
PPP I loan balances	$	74,255				$	374,174			$	739,562			$	957,785			$	1,128,035
Average PPP I loan balances	174,930					597,703				841,262				1,064,863				1,128,488
PPP I fee income	$	3,886				$	7,313			$	7,464			$	9,109			$	4,542
PPP I interest income	403					1,445				2,087				2,697				2,920
Total PPP I interest income	$	4,289				$	8,758			$	9,551			$	11,806			$	7,462
PPP II loan balances	$	334,992				$	455,001			$	415,766			$	—			$	—
Average PPP II loan balances	427,745					449,856				151,255				—				—
PPP II fee income	$	5,784				$	1,263			$	223			$	—			$	—
PPP II interest income	1,113					1,165				375				—				—
Total PPP II interest income	$	6,897				$	2,428			$	598			$	—			$	—
Selected ratios excluding total PPP loans and total PPP interest income
Annualized net interest margin (GAAP)	3.15			%		3.31		%		3.39		%		3.44		%		3.59		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)	3.20					3.35				3.44				3.48				3.64
Ratio of nonperforming loans to total loans	0.88					0.93				1.03				0.97				1.01
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans	0.90					0.95				1.06				1.00				1.16
Ratio of nonperforming assets to total assets	0.47					0.52				0.58				0.56				0.59
Annualized ratio of net loan charge-offs/(recoveries) to average loans	(0.05		)			0.13				0.07				0.01				1.05
Allowance for loan credit losses as a percent of loans	1.24					1.31				1.46				1.45				1.30
Allowance for lending related credit losses as a percent of loans	1.39					1.47				1.63				1.62				1.48
Loans delinquent 30-89 days as a percent of total loans	0.12					0.18				0.18				0.25				0.19
After tax impact of total PPP interest income on diluted earnings per common share(1)	$	0.21				$	0.21			$	0.19			$	0.24			$	0.16

	As of and For the Nine Months Ended
	September 30, 2021				September 30, 2020
Average PPP I loan balances	$	535,524			$	683,262
Average PPP II loan balances	343,965				—
PPP I and II fee income	$	25,933			$	8,197
PPP I and II interest income	6,588				5,282
Total PPP I and II interest income	$	32,521			$	13,479
Selected ratios excluding total PPP loans and total PPP interest income
Annualized net interest margin (GAAP)	3.28		%		3.76		%
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1)	3.33				3.80
Annualized ratio of net loan charge-offs to average loans	0.05				0.47
After tax impact of total PPP interest income on diluted earnings per common share(1)	$	0.61			$	0.29
(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

[email protected]

Source: Heartland Financial USA, Inc.