Press Release

HEARTLAND FINANCIAL USA, INC. REPORTS QUARTERLY AND YEAR TO DATE RESULTS AS OF JUNE 30, 2020

Company Release - 7/27/2020 4:00 PM ET

Dubuque, IA, July 27, 2020 (GLOBE NEWSWIRE) --

Highlights and Developments

§ Quarterly net income of $30.1 million or $0.82 per diluted common share in comparison with $45.2 million or $1.26 per diluted common share for the second quarter of the prior year  
§ Net interest margin of 3.81% (3.85% on a fully tax-equivalent basis, non-GAAP)(1) during the second quarter of 2020, compared to 3.81% (3.84% on a fully tax-equivalent basis, non-GAAP)(1) during the first quarter of 2020 and 4.06% (4.10% on a fully tax-equivalent basis, non-GAAP)(1) during the second quarter of 2019  
§ Efficiency ratio (non-GAAP)1 of 55.75% compared to 64.13% for the second quarter of 2019  
§ Funded approximately 4,800 Paycheck Protection Program ("PPP") loans totaling $1.20 billion  
§ Arizona Bank & Trust subsidiary entered into a purchase and assumption agreement with Johnson Bank for four banking centers located in Phoenix and Scottsdale, Arizona  
§ Completed the issuance of $115.0 million of preferred equity  
  Quarter Ended
June 30,
  Six Months Ended June 30,
  2020   2019   2020   2019
Net income available to common stockholders (in millions) $ 30.1      $ 45.2      $ 50.2      $ 76.7   
Diluted earnings per common share 0.82      1.26      1.36      2.17   
               
Return on average assets 0.84  %   1.55  %   0.73  %   1.35  %
Return on average common equity 7.69      12.56      6.32      11.13   
Return on average tangible common equity (non-GAAP)(1) 11.97      19.52      9.95      17.49   
Net interest margin 3.81      4.06      3.81      4.09   
Net interest margin, fully tax-equivalent (non-GAAP)(1) 3.85      4.10      3.85      4.14   
Efficiency ratio, fully-tax equivalent (non-GAAP)(1) 55.75      64.13      58.64      64.52   
                  

(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.

"Heartland had a very successful second quarter, which was driven by a solid net interest margin and strong efficiency ratio. In addition, we funded $1.2 billion of Paycheck Protection Program loans, announced the purchase of four banking centers in Phoenix and Scottsdale, Arizona and issued $115 million of preferred stock during the quarter."
Bruce K. Lee, president and chief executive officer, Heartland Financial USA, Inc.

Dubuque, Iowa, Monday, July 27, 2020-Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported the following quarterly results:

  1. net income available to common stockholders of $30.1 million, or $0.82 per diluted common share, for the quarter ended June 30, 2020, compared to $45.2 million, or $1.26 per diluted common share, for the second quarter of 2019.
  2. excluding tax-effected provision for credit losses of $21.2 million and tax-effected acquisition, integration and restructuring costs of $532,000, adjusted net income available to common stockholders (non-GAAP) was $51.8 million, or $1.40 of adjusted earnings per diluted common share (non-GAAP) for the second quarter of 2020, compared to $49.8 million (non-GAAP), or $1.39 of adjusted earnings per diluted common share (non-GAAP), for the second quarter of 2019, which excluded tax-effected provision for credit losses of $3.9 million and tax-effected acquisition, integration and restructuring costs of $734,000.
  3. return on average common equity was 7.69% and return on average assets was 0.84% for the second quarter of 2020, compared to 12.56% and 1.55%, respectively, for the same quarter in 2019.
  4. return on average tangible common equity (non-GAAP) of 11.97% and adjusted return on average tangible common equity (non-GAAP) of 20.02% for the second quarter of 2020 compared to 19.52% and 21.41%, respectively, for the second quarter of 2019.

Heartland reported the following results for the six months ended June 30, 2020:

  1. net income available to common stockholders of $50.2 million or $1.36 per diluted common share, for the six months ended June 30, 2020, compared to $76.7 million or $2.17 per diluted common share for the six months ended June 30, 2019.
  2. excluding tax-effected provision for credit losses of $38.2 million and tax-effected acquisition, integration and restructuring costs of $1.6 million, adjusted net income available to common stockholders (non-GAAP) was $90.0 million, or $2.44 of adjusted earnings per diluted common share (non-GAAP), for the six months ended June 30, 2020, compared to $85.4 million (non-GAAP), or $2.42 of adjusted earnings per diluted common share (non-GAAP), for the six months ended June 30, 2019, which excluded tax-effected provision for credit losses of $5.2 million and tax-effected acquisition, integration and restructuring costs of $3.6 million.
  3. return on average common equity was 6.32% and return on average assets was 0.73% for the first six months of 2020, compared to 11.13% and 1.35%, respectively, for the same period in 2019.
  4. return on average tangible common equity (non-GAAP) of 9.95% and adjusted return on average tangible common equity (non-GAAP) of 17.19% for the six months ended June 30, 2020, compared to 17.49% and 19.37%, respectively, for the six months ended June 30, 2019.

"Heartland had a very successful second quarter, which was driven by a solid net interest margin and strong efficiency ratio. In addition, we funded $1.2 billion of Paycheck Protection Program loans, announced the purchase of four banking centers in Phoenix and Scottsdale, Arizona and issued $115 million of preferred stock during the quarter," said Bruce K. Lee, Heartland's president and chief executive officer.

Responses to COVID-19 

In the first quarter of 2020, Heartland implemented and continues to operate under its pandemic management plan to assure workplace and employee safety and business resiliency while providing relief and support to customers and communities facing challenges from the impacts of COVID-19, which included the following measures:

  1. employees who can work from home continue to do so, while those who come into bank locations are on rotating teams to limit potential exposure;
  2. all in-person events and large meetings are canceled and have transitioned to virtual meetings;
  3. expanded time off program and enhanced health care coverage for COVID-19 related testing and treatments, and
  4. implemented and extended a 20% wage premium for certain customer-facing and call center employees.

"The health and safety of our employees continues to be our top priority. We are monitoring our markets closely and updating our responses accordingly," Lee said.

The continued economic disruption resulting from the COVID-19 pandemic will make it difficult for some customers to repay the principal and interest on their loans, and Heartland's subsidiary banks have been working with customers to modify the terms of certain existing loans.

The following table shows the total loan exposure as of June 30, 2020, and March 31, 2020, to customer segment profiles that Heartland believes will be more heavily impacted by COVID-19, dollars in thousands:

  As of June 30, 2020   As of March 31, 2020
IndustryTotal Exposure(1)   % of Gross Exposure(1)   Total Exposure(1)   % of Gross Exposure(1)
Lodging $ 490,475      4.38  %   $ 498,596      4.47  %
Multi-family properties 474,610      4.24      436,931      3.92   
Retail trade 407,030      3.64      367,727      3.30   
Retail properties 369,782      3.31      408,506      3.66   
Restaurants and bars 255,701      2.29      247,239      2.22   
Nursing homes/assisted living 130,103      1.16      126,267      1.13   
Oil and gas 63,973      0.57      56,302      0.50   
Childcare facilities 44,968      0.40      48,455      0.43   
Gaming 34,618      0.31      34,790      0.31   
Total$2,271,260      20.30 %   $2,224,813      19.94 %
               
(1) Total loans outstanding, excluding PPP loans, and unfunded commitments

As of June 30, 2020, loan modifications have been made on approximately $1.10 billion of loans in Heartland's portfolio. Approximately 58% of these modifications are interest only for 90 days, and the remainder are primarily principal and interest deferments for 90 days. The original loan modifications will be expiring throughout the third quarter, and Heartland expects that the majority will be returning to full payment status. However, it is likely that some of the modifications will be extended for an additional 90 days in order to provide the necessary support for certain COVID-19 impacted customers.

Through June 30, 2020, Heartland's subsidiary banks funded approximately 4,800 PPP loans, totaling $1.20 billion. As of June 30, 2020, deferred fees totaling $35.3 million were recorded associated with the PPP loans, of which $3.7 million was recognized in income during the quarter. 

The ultimate impact of the COVID-19 pandemic on Heartland's financial condition and results of operations will depend on risks and uncertainties, such as the severity and duration of the pandemic, related restrictions on business and consumer activity, and the availability of government programs to alleviate the economic stress of the pandemic. See Heartland's "Safe Harbor Statement" below.

2020 Developments

Adoption of ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)"
On January 1, 2020, Heartland adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326)," commonly referred to as "CECL." The impact of Heartland's adoption of CECL ("Day 1") resulted in the following:

  1. an increase of $12.1 million to the allowance for credit losses related to loans, which included a reclassification of $6.0 million of purchased credit impaired loan discount on previously acquired loans, and a cumulative-effect adjustment to retained earnings totaling $4.6 million, net of taxes of $1.5 million;
  2. an increase of $13.6 million to the allowance for unfunded commitments and a cumulative-effect adjustment to retained earnings totaling $10.2 million, net of taxes of $3.4 million, and
  3. established an allowance for credit losses for Heartland's held to maturity debt securities of $158,000 and a cumulative-effect adjustment to retained earnings totaling $118,000, net of taxes of $40,000.

Entered into a Definitive Merger Agreement with AIM Bancshares, Inc.
On February 11, 2020, Heartland entered into a definitive merger agreement to acquire AIM Bancshares, Inc. and its wholly-owned subsidiary, AimBank, headquartered in Levelland, Texas. In the transaction, all issued and outstanding shares of AIM Bancshares stock will be exchanged for shares of Heartland common stock and cash. Shareholders of AIM Bancshares will receive 207.0 shares of Heartland common stock and $685.00 of cash for each share of AIM Bancshares. The transaction value will change due to fluctuations in the price of Heartland common stock and is subject to certain potential adjustments as set forth in the merger agreement. Simultaneous with the closing of the transaction, AimBank will merge with and into Heartland's Lubbock, Texas-based subsidiary, First Bank and Trust. Heartland and AIM Bancshares are currently reviewing the corporate structure and terms of the transaction. As of June 30, 2020, AimBank had total assets of approximately $1.95 billion, which included $1.19 billion of gross loans outstanding, and approximately $1.69 billion of deposits.

Entered into a Purchase and Assumption Agreement with Johnson Financial Group, Inc.
On June 9, 2020, Arizona Bank & Trust (“AB&T”), a wholly-owned subsidiary of Heartland headquartered in Phoenix, Arizona, entered into a purchase and assumption agreement, pursuant to which AB&T will acquire certain assets and will assume substantially all of the deposits and certain other liabilities of Johnson Bank’s Arizona operations, which includes four banking centers. Johnson Bank is a wholly-owned subsidiary of Johnson Financial Group, Inc. headquartered in Racine, Wisconsin. Johnson Insurance Services is not a part of this transaction.

Under the terms of the purchase and assumption agreement, AB&T will acquire Johnson Bank'sArizona banking centers, which had deposits of approximately $415.3 million and loans of approximately $168.1 million as of June 30. The actual amount of deposits assumed and loans acquired will be determined at closing, which is expected to be in the fourth quarter of 2020.

"We are excited to expand Arizona Bank & Trust's presence in the Phoenix and Scottsdale areas," commented Lynn B. Fuller, Heartland's executive operating chairman.

Issued $115.0 Million of Preferred Equity

On June 26, 2020, Heartland issued and sold 4.6 million depositary shares, each representing a 1/400th interest in a share of 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E. The depositary shares are listed on The Nasdaq Global Select Market under the symbol "HTLFP." The net proceeds of $110.7 million are expected to be used for general corporate purposes, which may include organic and acquired growth, financing investments, capital expenditures, investments in wholly-owned subsidiaries as regulatory capital and repayment of debt.

Net Interest Income Increases and Net Interest Margin Decreases from Second Quarter of 2019

Net interest margin, expressed as a percentage of average earning assets, was 3.81% (3.85% on a fully tax-equivalent basis, non-GAAP) during the second quarter of 2020, compared to 3.81% (3.84% on a fully tax-equivalent basis, non-GAAP) during the first quarter of 2020 and 4.06% (4.10% on a fully tax-equivalent basis, non-GAAP) during the second quarter of 2019.

Total interest income for the second quarter of 2020 was $133.8 million compared to $127.0 million recorded in the second quarter of 2019, an increase of $6.8 million or 5%. The tax-equivalent adjustment for income taxes saved on the interest earned on nontaxable securities and loans was $1.4 million for the second quarter of 2020 and $1.3 million for the second quarter of 2019. With these adjustments, total interest income on a tax-equivalent basis was $135.2 million for the second quarter of 2020, an increase of $6.9 million or 5%, compared to total interest income on a tax-equivalent basis of $128.3 million for the second quarter of 2019.

Average earning assets of $13.10 billion increased $2.55 billion or 24% from the second quarter of 2019, which was primarily attributable to recent acquisitions and loan growth, including PPP loans. The average rate on earning assets decreased 73 basis points to 4.15% for the second quarter of 2020 compared to 4.88% for the same quarter in 2019, which was primarily due to recent decreases in market interest rates and the lower yield on PPP loans, which was 2.64% for the second quarter of 2020.

Total interest expense for the second quarter of 2020 was $9.6 million, a decrease of $10.7 million or 53% from $20.3 million in the second quarter of 2019. The average interest rate paid on Heartland's interest bearing liabilities decreased to 0.47% for the second quarter of 2020 compared to 1.18% for the second quarter of 2019, which was primarily due to recent decreases in market interest rates.

Average interest bearing deposits increased $1.28 billion or 20% to $7.79 billion for the quarter ended June 30, 2020, from $6.50 billion in the same quarter in 2019, which was primarily attributable to recent acquisitions and deposit growth. The average interest rate paid on Heartland's interest bearing deposits decreased 67 basis points to 0.32% for the second quarter of 2020 compared to 0.99% for the same quarter in 2019.

Average borrowings decreased $389,000 or less than 1% to $368.9 million during the first quarter of 2020 from $369.3 million during the same quarter in 2019. The average interest rate paid on Heartland's borrowings was 3.80% for the second quarter of 2020 compared to 4.52% in the second quarter of 2019.

Net interest income was $124.1 million during the second quarter of 2020 compared to $106.7 million during the second quarter of 2019, an increase of $17.4 million or 16%. After the tax-equivalent adjustment discussed above, net interest income on a tax-equivalent basis totaled $125.6 million during the second quarter of 2020 compared to net interest income on a tax-equivalent basis of $108.0 million during the second quarter of 2019, an increase of $17.6 million or 16%.

Noninterest Income Decreases and Noninterest Expense Increases from Second Quarter of 2019

Total noninterest income was $30.6 million during the second quarter of 2020 compared to $32.1 million during the second quarter of 2019, a decrease of $1.4 million or 4%. Significant changes by noninterest income category were:

  1. Service charges and fees decreased $3.7 million or 25% to $11.0 million for the second quarter of 2020 compared to $14.6 million for the second quarter of 2019. Overdraft fees and ATM fees for the second quarter of 2020 totaled $3.4 million compared to $7.1 million for the same quarter of 2019. The decrease was primarily attributable to decreased volume due to the COVID-19 pandemic and the impact of the Durbin Amendment, which was effective for Heartland on July 1, 2019.
  1. Loan servicing income totaled $379,000 for the second quarter of 2020 compared to $1.3 million for the second quarter of 2019, which was a decrease of $959,000 or 72%. The decrease was attributable to the sale of the mortgage servicing rights of Dubuque Bank and Trust Company in the second quarter of 2019.
  1. Net gains on sale of loans held for sale totaled $7.9 million during the second quarter of 2020 compared to $4.3 million during the same quarter in 2019, which was an increase of $3.5 million or 81%, primarily due to an increase in residential mortgage loan activity in response to the recent declines in mortgage interest rates.

For the second quarter of 2020, total noninterest expense was $90.4 million compared to $75.1 million during the second quarter of 2019, an increase of $15.3 million or 20%. Significant changes by noninterest expense category were:

  1. Net loss on sales/valuations of assets increased $19.0 million as losses totaled $701,000 in the second quarter of 2020 compared to gains of $18.3 million in the second quarter of 2019. The gains recorded in 2019 were related to branch sales and the sale of the mortgage servicing rights of Dubuque Bank and Trust Company.

Heartland's effective tax rate was 19.75% for the second quarter of 2020 compared to 23.12% for the second quarter of 2019. The following items impacted Heartland's second quarter 2020 and 2019 tax calculations:

  1. Solar energy tax credits of $798,000 and $911,000 for the second quarter of 2020 and 2019, respectively.
  2. Federal low-income housing tax credits of $195,000 and $281,000 for the second quarter of 2020 and 2019, respectively.
  3. New markets tax credits of $75,000 during the second quarter of 2020 compared to $0 in the second quarter of 2019.
  4. Tax-exempt interest income as a percentage of pre-tax income increased to 14.19% during the second quarter of 2020 compared to 8.09% for the second quarter of 2019. 
  5. Tax expense of $66,000 in the second quarter of 2020 compared to $64,000 in the second quarter of 2019 resulting from the vesting of restricted stock unit awards.

Total Assets Increase, Total Loans Increase and Deposits Increase Since December 31, 2019

Total assets were $15.0 billion at June 30, 2020, an increase of $1.82 billion or 14% from $13.21 billion at year-end 2019. Securities represented 28% and 26% of total assets at June 30, 2020, and December 31, 2019, respectively.

Total loans held to maturity were $9.25 billion at June 30, 2020, and $8.37 billion at December 31, 2019, which was an increase of $878.9 million or 11%. Loan changes by category were:

  1. Commercial and business lending, which includes commercial and industrial, Paycheck Protection Program ("PPP"), and owner occupied commercial real estate loans, increased $918.6 million or 23% to $4.92 billion at June 30, 2020, compared to $4.00 billion at December 31, 2019. Excluding $1.12 billion of PPP loans, commercial and business lending decreased $205.8 million or 5% since year-end 2019. 
  2. Commercial real estate lending, which includes non-owner occupied commercial real estate and construction loans, increased $136.5 million or 5% to $2.66 billion at June 30, 2020 from $2.52 billion at year-end 2019. 
  3. Agricultural and agricultural real estate loans totaled $520.8 million at June 30, 2020, compared to $565.8 million at December 31, 2019, which was a decrease of $45.1 million or 8%.
  1. Residential mortgage loans decreased $96.5 million or 12% to $735.8 million at June 30, 2020, from $832.3 million at December 31, 2019.
  1. Consumer loans decreased $34.6 million or 8% to $408.7 million at June 30, 2020, compared to $443.3 million at December 31, 2019.

Total deposits were $12.71 billion as of June 30, 2020, compared to $11.04 billion at year-end 2019, an increase of $1.66 billion or 15%. Deposit changes by category were:

  1. Demand deposits increased $1.29 billion or 36% to $4.83 billion at June 30, 2020, compared to $3.54 billion at December 31, 2019.
  1. Savings deposits increased $502.9 million or 8% to $6.81 billion at June 30, 2020, from $6.31 billion at December 31, 2019. 
  1. Time deposits decreased $125.8 million or 11% to $1.07 billion at June 30, 2020 from $1.19 billion at December 31, 2019. 

Growth in non-time deposits was positively impacted by federal government stimulus payments and other COVID-19 relief programs.

Provision and Allowance for Credit Losses for Loans Increase Since December 31, 2019

Heartland's allowance for credit losses for loans totaled $119.9 million and $70.4 million at June 30, 2020, and December 31, 2019, respectively. The allowance for credit losses for loans totaled $82.5 million after the adoption of CECL on January 1, 2020, which was an increase of $12.1 million since year-end 2019. Provision expense for the second quarter of 2020 totaled $25.0 million compared to $19.9 million for the first quarter of 2020 and $4.9 million in the second quarter of 2019. Heartland recorded $11.6 million of provision expense for one fracking sand company relationship that was individually assessed for allowance for credit losses in the second quarter.

The allowance for credit losses for loans at June 30, 2020, was 1.30% of loans compared to 0.84% of loans at December 31, 2019. Net charge offs for the second quarter of 2020 totaled $2.4 million compared to $3.7 million for the second quarter of 2019, which was a decrease of $1.3 million or 35%. Heartland expects that net charge offs will increase in the second half of 2020 as customers’ ability to repay loans is adversely impacted by economic disruptions caused by the COVID-19 pandemic.

Heartland's allowance for unfunded commitments totaled $13.9 million after the adoption of CECL on January 1, 2020. Heartland recorded $1.9 million of provision for credit losses related to unfunded loan commitments in the second quarter of 2020. At June 30, 2020, the allowance for unfunded commitments was $17.4 million, and unfunded loan commitments totaled $3.06 billion.

The total allowance for credit related lending losses was $137.3 million at June 30, 2020, which was 1.49% of loans as of June 30, 2020.

Nonperforming Assets Increase Since December 31, 2019

Nonperforming assets increased $11.0 million or 13% to $98.5 million or 0.66% of total assets at June 30, 2020, compared to $87.6 million or 0.66% of total assets at December 31, 2019. Nonperforming loans were $93.0 million or 1.01% of total loans at June 30, 2020, compared to $80.7 million or 0.96% of total loans at December 31, 2019. Included in new nonperforming loans at June 30, 2020 was one fracking sand company relationship with an unpaid principal balance of $14.6 million. At June 30, 2020, loans delinquent 30-89 days were 0.22% of total loans compared to 0.33% of total loans at December 31, 2019. Heartland expects that nonperforming assets and delinquent loans will increase through 2020 as customers’ ability to repay loans is adversely impacted by economic disruptions caused by the COVID-19 pandemic.

Non-GAAP Financial Measures

This press 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 Heartland'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 press 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 press release.

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

  1. Annualized return on average tangible common equity is net income available to common stockholders plus core deposit and customer relationship intangibles amortization, net of tax, divided by 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.
  2. 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.
  3. 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 press release.
  4. 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.
  5. 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.
  6. 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.
  7. Adjusted net income, adjusted return on average tangible common equity and adjusted diluted earnings per share exclude tax-effected provision for credit losses and acquisition, integration and restructuring costs. Management believes the presentation of these non-GAAP measures are useful to compare net income, return on average tangible common equity and earnings per share results excluding the variability of credit loss provisions and acquisition, integration and restructuring costs. 

Conference Call Details
Heartland will host a conference call for investors at 5:00 p.m. EDT today. To participate, dial 866-928-9948 at least five minutes before the start time. To listen to the live webcast, log on to www.htlf.comat least 15 minutes before start time. A replay will be available until July 26, 2021, by logging on to www.htlf.com.

Safe Harbor Statement
This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, 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 are detailed below and in the risk factors in Heartland's reports filed with the Securities and Exchange Commission, contained, among others: the impact of the COVID-19 pandemic on Heartland and U.S. and global financial markets; containment measures enacted by the U.S. federal and state governments and by private businesses in response to the COVID-19 pandemic; the deterioration of the U.S. economy in general and in the local economies in which Heartland conducts its operations; increasing credit losses due to deterioration in the financial condition of its borrowers, based on declining oil prices and asset and collateral values, which may continue to increase Heartland’s provision for credit losses and net charge-offs; civil unrest in the communities that Heartland serves; levels of unemployment in the subsidiary banks’ lending areas; real estate market values in the subsidiary banks’ lending areas; future natural disasters and increases to flood insurance premiums; the effects of past and any future terrorist threats and attacks, acts of war or threats thereof; the level of prepayments on loans and mortgage-backed securities; legislative/regulatory changes affecting banking, taxes, securities, insurance and monetary and financial matters; monetary and fiscal policies of the U.S. Government including policies of the United States Department of the Treasury and the Federal Reserve; the quality or composition of Heartland’s loan or investment portfolios; demand for loan products and financial services, deposit flows and competition in Heartland’s market areas; changes in accounting principles and guidelines; the timely development and acceptance of products and services, including products and services offered through alternative delivery channels such as the Internet; Heartland’s ability to implement technological changes as anticipated and to develop and maintain secure and reliable electronic delivery systems; Heartland’s ability to retain key executives and employees and the ability of Heartland and its subsidiaries to successfully consummate acquisitions and integrate acquired operations.

The COVID-19 pandemic is adversely affecting Heartland and its customers, counterparties, employees and third-party service providers. The pandemic’s severity, its duration and the extent of its impact on Heartland’s business, financial condition, results of operations, liquidity and prospects remain uncertain. Continued deterioration in general business and economic conditions or turbulence in domestic or global financial markets could adversely affect Heartland’s net income and the value of its assets and liabilities, reduce the availability of funding to Heartland, lead to a tightening of credit and increase stock price volatility. Some economists and investment banks also predict that a recession or depression may result from the continued spread of COVID-19 and the economic consequences.

All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.

-FINANCIAL TABLES FOLLOW-
###

 

 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
June 30,
  For the Six Months Ended
June 30,
  2020   2019   2020   2019
Interest Income              
Interest and fees on loans $ 107,005      $ 106,027      $ 213,419      $ 206,483   
Interest on securities:              
Taxable 23,362      16,123      45,093      31,999   
Nontaxable 3,344      2,554      5,527      5,647   
Interest on federal funds sold —      —      —       
Interest on deposits with other banks and short-term investments 54      2,299      775      3,591   
Total Interest Income133,765      127,003      264,814      247,724   
Interest Expense              
Interest on deposits 6,134      16,138      20,716      29,351   
Interest on short-term borrowings 61      338      357      1,227   
Interest on other borrowings 3,424      3,819      7,084      7,483   
Total Interest Expense9,619      20,295      28,157      38,061   
Net Interest Income124,146      106,708      236,657      209,663   
Provision for credit losses 26,796      4,918      48,316      6,553   
Net Interest Income After Provision for Credit Losses97,350      101,790      188,341      203,110   
Noninterest Income              
Service charges and fees 10,972      14,629      22,993      27,423   
Loan servicing income 379      1,338      1,342      3,067   
Trust fees 4,977      4,825      9,999      9,299   
Brokerage and insurance commissions 595      1,028      1,328      1,762   
Securities gains, net 2,006      3,580      3,664      5,155   
Unrealized gain/ (loss) on equity securities, net 680      112      449      370   
Net gains on sale of loans held for sale 7,857      4,343      12,517      7,519   
Valuation adjustment on servicing rights     (364)     (1,556)     (953)  
Income on bank owned life insurance 1,167      888      1,665      1,787   
Other noninterest income 1,995      1,682      4,053      3,349   
Total Noninterest Income30,637      32,061      56,454      58,778   
Noninterest Expense              
Salaries and employee benefits 50,118      49,895      100,075      100,180   
Occupancy 6,502      6,426      12,973      13,033   
Furniture and equipment 2,993      3,136      6,101      5,828   
Professional fees 13,676      14,344      26,149      25,366   
Advertising 995      2,609      3,200      4,929   
Core deposit and customer relationship intangibles amortization 2,696      3,313      5,677      6,155   
Other real estate and loan collection expenses, net 203      162      537      863   
(Gain)/loss on sales/valuations of assets, net 701      (18,286)     717      (21,290)  
Acquisition, integration and restructuring costs 673      929      2,049      4,543   
Partnership investment in tax credit projects 791      1,465      975      1,940   
Other noninterest expenses 11,091      11,105      22,845      21,781   
Total Noninterest Expense90,439      75,098      181,298      163,328   
Income Before Income Taxes37,548      58,753      63,497      98,560   
Income taxes 7,417      13,584      13,326      21,894   
Net Income$30,131      $45,169      $50,171      $76,666   
Earnings per common share-diluted$0.82      $1.26      $1.36      $2.17   
Weighted average shares outstanding-diluted36,915,630      35,879,259      36,919,555      35,295,407   


 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Interest Income                  
Interest and fees on loans $ 107,005      $ 106,414      $ 107,566      $ 110,566      $ 106,027   
Interest on securities:                  
Taxable 23,362      21,731      22,581      18,567      16,123   
Nontaxable 3,344      2,183      2,102      2,119      2,554   
Interest on federal funds sold —      —      —      —      —   
Interest on deposits with other banks and short-term investments 54      721      953      2,151      2,299   
Total Interest Income133,765      131,049      133,202      133,403      127,003   
Interest Expense                  
Interest on deposits 6,134      14,582      16,401      17,982      16,138   
Interest on short-term borrowings 61      296      271      250      338   
Interest on other borrowings 3,424      3,660      3,785      3,850      3,819   
Total Interest Expense9,619      18,538      20,457      22,082      20,295   
Net Interest Income124,146      112,511      112,745      111,321      106,708   
Provision for credit losses 26,796      21,520      4,903      5,201      4,918   
Net Interest Income After Provision for Credit Losses97,350      90,991      107,842      106,120      101,790   
Noninterest Income                  
Service charges and fees 10,972      12,021      12,368      12,366      14,629   
Loan servicing income 379      963      955      821      1,338   
Trust fees 4,977      5,022      5,141      4,959      4,825   
Brokerage and insurance commissions 595      733      1,062      962      1,028   
Securities gains, net 2,006      1,658      491      2,013      3,580   
Unrealized gain/ (loss) on equity securities, net 680      (231)     11      144      112   
Net gains on sale of loans held for sale 7,857      4,660      3,363      4,673      4,343   
Valuation adjustment on servicing rights     (1,565)     668      (626)     (364)  
Income on bank owned life insurance 1,167      498      1,117      881      888   
Other noninterest income 1,995      2,058      2,854      3,207      1,682   
Total Noninterest Income30,637      25,817      28,030      29,400      32,061   
Noninterest Expense                  
Salaries and employee benefits 50,118      49,957      50,234      49,927      49,895   
Occupancy 6,502      6,471      5,802      6,594      6,426   
Furniture and equipment 2,993      3,108      3,323      2,862      3,136   
Professional fees 13,676      12,473      11,082      11,276      14,344   
Advertising 995      2,205      2,274      2,622      2,609   
Core deposit and customer relationship intangibles amortization 2,696      2,981      2,918      2,899      3,313   
Other real estate and loan collection expenses, net 203      334      261      (89)     162   
(Gain)/loss on sales/valuations of assets, net 701      16      1,512      356      (18,286)  
Acquisition, integration and restructuring costs 673      1,376      537      1,500      929   
Partnership investment in tax credit projects 791      184      3,038      3,052      1,465   
Other noninterest expenses 11,091      11,754      11,885      11,968      11,105   
Total Noninterest Expense90,439      90,859      92,866      92,967      75,098   
Income Before Income Taxes37,548      25,949      43,006      42,553      58,753   
Income taxes 7,417      5,909      5,155      7,941      13,584   
Net Income$30,131      $20,040      $37,851      $34,612      $45,169   
Earnings per common share-diluted$0.82      $0.54      $1.03      $0.94      $1.26   
Weighted average shares outstanding-diluted36,915,630      36,895,591      36,840,519      36,835,191      35,879,259   


 


HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Assets                  
Cash and due from banks $ 211,429      $ 175,587      $ 206,607      $ 243,395      $ 198,664   
Interest bearing deposits with other banks and short-term investments 242,149      64,156      172,127      204,372      443,475   
Cash and cash equivalents 453,578      239,743      378,734      447,767      642,139   
Time deposits in other financial institutions 3,128      3,568      3,564      3,711      4,430   
Securities:                  
Carried at fair value 4,126,351      3,488,621      3,312,796      3,020,568      2,561,887   
Held to maturity, at cost, less allowance for credit losses 90,579      91,875      91,324      87,965      88,166   
Other investments, at cost 35,902      35,370      31,321      29,042      31,366   
Loans held for sale 54,382      22,957      26,748      35,427      34,575   
Loans:                  
Held to maturity 9,246,830      8,374,236      8,367,917      7,971,608      7,853,051   
 Allowance for credit losses (119,937)     (97,350)     (70,395)     (66,222)     (63,850)  
Loans, net 9,126,893      8,276,886      8,297,522      7,905,386      7,789,201   
Premises, furniture and equipment, net 198,481      200,960      200,525      199,235      198,329   
Goodwill 446,345      446,345      446,345      427,097      427,097   
Core deposit and customer relationship intangibles, net 43,011      45,707      48,688      49,819      52,718   
Servicing rights, net 5,469      5,220      6,736      6,271      7,180   
Cash surrender value on life insurance 172,813      172,140      171,625      171,471      170,421   
Other real estate, net 5,539      6,074      6,914      6,425      6,646   
Other assets 263,682      259,043      186,755      179,078      146,135   
Total Assets$15,026,153      $13,294,509      $13,209,597      $12,569,262      $12,160,290   
Liabilities and Equity                  
Liabilities                  
Deposits:                  
 Demand $ 4,831,151      $ 3,696,974      $ 3,543,863      $ 3,581,127      $ 3,426,758   
 Savings 6,810,296      6,366,610      6,307,425      5,770,754      5,533,503   
 Time 1,067,252      1,110,441      1,193,043      1,117,975      1,148,296   
Total deposits 12,708,699      11,174,025      11,044,331      10,469,856      10,108,557   
Short-term borrowings 88,631      121,442      182,626      107,853      107,260   
Other borrowings 306,459      276,150      275,773      278,417      282,863   
Accrued expenses and other liabilities 174,987      169,178      128,730      149,293      139,823   
Total Liabilities13,278,776      11,740,795      11,631,460      11,005,419      10,638,503   
Stockholders' Equity                  
Preferred equity 110,705      —      —      —      —   
Common stock 36,845      36,807      36,704      36,696      36,690   
Capital surplus 844,202      842,780      839,857      838,543      837,150   
Retained earnings 723,067      700,298      702,502      670,816      642,808   
Accumulated other comprehensive income/(loss) 32,558      (26,171)     (926)     17,788      5,139   
Total Equity1,747,377      1,553,714      1,578,137      1,563,843      1,521,787   
Total Liabilities and Equity$15,026,153      $13,294,509      $13,209,597      $12,569,262      $12,160,290   


 


               


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
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Average Balances                  
Assets $ 14,391,856      $ 13,148,173      $ 12,798,770      $ 12,293,332      $ 11,708,538   
Loans, net of unearned 9,186,913      8,364,220      8,090,476      7,883,678      7,648,562   
Deposits 12,288,378      10,971,193      10,704,643      10,253,643      9,790,756   
Earning assets 13,103,159      11,891,455      11,580,295      11,102,581      10,552,166   
Interest bearing liabilities 8,155,753      7,841,941      7,513,701      7,174,944      6,872,449   
Common equity 1,574,902      1,619,682      1,570,258      1,541,369      1,442,388   
Total stockholders' equity 1,580,997      1,619,682      1,570,258      1,541,369      1,442,388   
Tangible common equity (non-GAAP)(1) 1,083,834      1,125,705      1,087,495      1,062,568      981,878   
                   
Key Performance Ratios                  
Annualized return on average assets 0.84  %   0.61  %   1.17  %   1.12  %   1.55  %
Annualized return on average common equity (GAAP) 7.69      4.98      9.56      8.91      12.56   
Annualized return on average tangible common equity (non-GAAP)(1) 11.97      8.00      14.65      13.78      19.52   
Annualized adjusted return on average tangible common equity (non-GAAP)(1) 20.02      14.46      16.22      15.76      21.41   
Annualized ratio of net charge-offs to average loans 0.11      0.24      0.04      0.14      0.19   
Annualized net interest margin (GAAP) 3.81      3.81      3.86      3.98      4.06   
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) 3.85      3.84      3.90      4.02      4.10   
Efficiency ratio, fully tax-equivalent (non-GAAP)(1) 55.75      61.82      60.31      60.85      64.13   
(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
June 30,
  For the Six Months Ended
June 30,
  2020   2019   2020   2019
Average Balances              
Assets $ 14,391,856      $ 11,708,538      $ 13,770,015      $ 11,489,095   
Loans, net of unearned 9,186,913      7,648,562      8,775,566      7,531,360   
Deposits 12,288,378      9,790,756      11,629,785      9,574,680   
Earning assets 13,103,159      10,552,166      12,497,307      10,342,229   
Interest bearing liabilities 8,155,753      6,872,449      7,998,847      6,747,990   
Common equity 1,574,902      1,442,388      1,597,292      1,389,612   
Total stockholders' equity 1,580,997      1,442,388      1,600,340      1,389,612   
Tangible common stockholders' equity 1,083,834      981,878      1,104,770      940,217   
               
Key Performance Ratios              
Annualized return on average assets 0.84  %   1.55  %   0.73  %   1.35  %
Annualized return on average common equity (GAAP) 7.69      12.56      6.32      11.13   
Annualized return on average tangible common equity (non-GAAP)(1) 11.97      19.52      9.95      17.49   
Annualized adjusted return on average tangible common equity (non-GAAP)(1) 20.02      21.41      17.19      19.37   
Annualized ratio of net charge-offs to average loans 0.11      0.19      0.17      0.12   
Annualized net interest margin (GAAP) 3.81      4.06      3.81      4.09   
Annualized net interest margin, fully tax-equivalent (non-GAAP)(1) 3.85      4.10      3.85      4.14   
Efficiency ratio, fully tax-equivalent (non-GAAP)(1) 55.75      64.13      58.64      64.52   
               
(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
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Common Share Data                  
Book value per common share $ 44.42      $ 42.21      $ 43.00      $ 42.62      $ 41.48   
Tangible book value per common share (non-GAAP)(1) $ 31.14      $ 28.84      $ 29.51      $ 29.62      $ 28.40   
Common shares outstanding, net of treasury stock 36,844,744      36,807,217      36,704,278      36,696,190      36,690,061   
Tangible common equity ratio (non-GAAP)(1) 7.89  %   8.29  %   8.52  %   8.99  %   8.92  %
                   
Other Selected Trend Information                  
Effective tax rate 19.75  %   22.77  %   11.99  %   18.66  %   23.12  %
Full time equivalent employees 1,821      1,817      1,908      1,962      2,040   
                   
Loans Held to Maturity(2)                  
Commercial and industrial $ 2,364,400      $ 2,550,490      $ 2,530,809      $ 2,388,861      $ 2,325,025   
Paycheck Protection Program ("PPP") 1,124,430      —      —      —      —   
Owner occupied commercial real estate 1,433,271      1,431,038      1,472,704      1,392,415      1,354,996   
Commercial and business lending 4,922,101      3,981,528      4,003,513      3,781,276      3,680,021   
Non-owner occupied commercial real estate 1,543,623      1,551,787      1,495,877      1,378,020      1,372,343   
Real estate construction 1,115,843      1,069,700      1,027,081      980,298      943,109   
Commercial real estate lending 2,659,466      2,621,487      2,522,958      2,358,318      2,315,452   
Total commercial lending 7,581,567      6,603,015      6,526,471      6,139,594      5,995,473   
Agricultural and agricultural real estate 520,773      550,107      565,837      571,596      559,054   
Residential mortgage 735,762      792,540      832,277      823,056      849,576   
Consumer 408,728      428,574      443,332      437,362      448,948   
Total loans held to maturity$9,246,830      $8,374,236      $8,367,917      $7,971,608      $7,853,051   
                   
Total unfunded loan commitments $ 3,065,283      $ 2,782,679      $ 2,973,732      $ 2,659,729      $ 2,530,946   
                   
(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) In conjunction with the adoption of ASU 2016-13, Heartland reclassified loan balances to more closely align with FDIC codes. All prior period balances have been adjusted.


 

 
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of and for the Quarter Ended
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Allowance for Credit Losses-Loans                  
Balance, beginning of period $ 97,350      $ 70,395      $ 66,222      $ 63,850      $ 62,639   
Impact of ASU 2016-13 adoption —      12,071      —      —      —   
Provision for credit losses 25,007      19,865      4,903      5,201      4,918   
Charge-offs (3,564)     (6,301)     (2,018)     (4,842)     (4,780)  
Recoveries 1,144      1,320      1,288      2,013      1,073   
Balance, end of period$119,937      $97,350      $70,395      $66,222      $63,850   
                   
Allowance for Unfunded Commitments(1)                  
Balance, beginning of period $ 15,468      $ 248      $ —      $ —      $ —   
Impact of ASU 2016-13 adoption —      13,604      —      —      —   
Provision for credit losses 1,924      1,616      —      —      —   
Balance, end of period$17,392      $15,468      $—      $—      $—   
                   
Allowance for lending related credit losses$137,329      $112,818      $70,395      $66,222      $63,850   
                   
Provision for Credit Losses                  
Provision for credit losses-loans $ 25,007      $ 19,865      $ 4,903      $ 5,201      $ 4,918   
Provision for credit losses-unfunded commitments 1,924      1,616      —      —      —   
Provision for credit losses-held to maturity securities(2) (135)     39      —      —      —   
Total provision for credit losses$26,796      $21,520      $4,903      $5,201      $4,918   
                   
(1) Prior to the adoption of ASU 2016-13, the allowance for unfunded commitments was immaterial and therefore prior periods have not been shown in this table.
(2) Prior to ASU 2016-13, there was no requirement to record provision for credit losses for held to maturity securities.

 


 
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of and for the Quarter Ended
  6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Asset Quality                  
Nonaccrual loans $ 91,609      $ 79,280      $ 76,548      $ 72,208      $ 79,619   
Loans past due ninety days or more 1,360      —      4,105      40      285   
Other real estate owned 5,539      6,074      6,914      6,425      6,646   
Other repossessed assets 29      17      11      13      39   
Total nonperforming assets$98,537      $85,371      $87,578      $78,686      $86,589   
                   
Performing troubled debt restructured loans $ 2,636      $ 2,858      $ 3,794      $ 3,199      $ 3,539   
                   
Nonperforming Assets Activity                  
Balance, beginning of period $ 85,371      $ 87,578      $ 78,686      $ 86,589      $ 84,399   
Net loan charge offs (2,420)     (4,981)     (730)     (2,829)     (3,707)  
New nonperforming loans 26,857      15,796      13,751      6,818      13,688   
Acquired nonperforming assets —      —      3,262      —      230   
Reduction of nonperforming loans(1) (9,911)     (11,937)     (5,859)     (8,861)     (6,246)  
Net OREO/repossessed assets sales proceeds and losses (1,360)     (1,085)     (1,532)     (3,031)     (1,775)  
Balance, end of period$98,537      $85,371      $87,578      $78,686      $86,589   
                   
Asset Quality Ratios                  
Ratio of nonperforming loans to total loans 1.01  %   0.95  %   0.96  %   0.91  %   1.02  %
Ratio of nonperforming loans and performing trouble debt restructured loans to total loans 1.03      0.98      1.01      0.95      1.06   
Ratio of nonperforming assets to total assets 0.66      0.64      0.66      0.63      0.71   
Annualized ratio of net loan charge-offs to average loans 0.11      0.24      0.04      0.14      0.19   
Allowance for loan credit losses as a percent of loans 1.30      1.16      0.84      0.83      0.81   
Allowance for lending related credit losses as a percent of loans(2) 1.49      1.35      0.84      0.83      0.81   
Allowance for loan credit losses as a percent of nonperforming loans 129.01      122.79      87.28      91.66      79.91   
Loans delinquent 30-89 days as a percent of total loans 0.22      0.38      0.33      0.28      0.31   
                   
(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
  June 30, 2020   March 31, 2020   June 30, 2019
  Average
Balance
  Interest   Rate   Average
Balance
  Interest   Rate   Average
Balance
  Interest   Rate
Earning Assets                                  
Securities:                                  
Taxable $ 3,375,245      $ 23,362      2.78  %   $ 3,132,103      $ 21,731      2.79  %   $ 2,217,863      $ 16,123      2.92  %
Nontaxable(1) 433,329      4,233      3.93      288,535      2,763      3.85      324,164      3,233      4.00   
Total securities 3,808,574      27,595      2.91      3,420,638      24,494      2.88      2,542,027      19,356      3.05   
Interest on deposits with other banks and short-term investments 210,347      54      0.10      181,320      721      1.60      424,262      2,299      2.17   
Federal funds sold —      —      —      —      —      —      —      —      —   
Loans:(2)(3)                                  
Commercial and industrial(1) 2,453,066      30,759      5.04      2,607,513      32,454      5.01      2,436,443      31,991      5.27   
PPP loans 916,405      6,017      2.64      —      —      —      —      —      —   
Owner occupied commercial real estate 1,426,019      17,670      4.98